Punjab

StateCommission

FA/1012/2013

Taranjit Singh - Complainant(s)

Versus

Punjab & Sind Bank - Opp.Party(s)

Pawan Kumar Gupta & Munish Gupta

12 Nov 2014

ORDER

          2ND ADDITIONAL BENCH

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

First Appeal No. 1012 of 2013

Date of Institution : 20.09.2013.

     Date of Decision : 12.11.2014.

Taranjit Singh son of Sh. Sher Singh resident of Village Mirzapur Dalhiwal, P.O. Kotla Naudh Singh, District Hoshiarpur.

                                                                              ….. Appellant/Complainant.

Versus

Punjab & Sind Bank, Branch Bullowal, District Hoshiarpur through its Branch Manager.

….. Respondent /Opposite Party

First Appeal under Section 15 of Consumer Protection Act, 1986 for setting aside the order dated 05-08-2013 passed by the Ld. District Consumer Disputes Redressal Forum, Hoshiarpur, Punjab.

Quorum:-

          Shri Gurcharan Singh Saran, Presiding Judicial Member.

          Shri Vinod Kumar Gupta, Member.

Shri H.S. Guram, Member.

Present:-

          For the appellant                             :         Sh. Bhupinder Singh for

Sh. Munish Gupta, Advocate.

          For the respondents             :         Sh. B.P.S. Dhaliwal, Advocate

 

SH. HARCHARAN SINGH GURAM, MEMBER:-

 

ORDER

                   This appeal has been filed by the appellant/complainant (hereinafter called as “complainant”) against the order passed by the District Consumer Disputes Redressal Forum, Hoshiarpur (in short, “the District Forum”), vide its order dated 05.08.2013, by which the complaint of the complainant was dismissed on the ground that the amount paid by the OPs towards the insurance cover to safeguard the interest of the OP and action taken by the OP cannot be held to be deficiency in service on their part and after the receipt of the complainant’s letter dated 21.02.2012. The OPs had not taken the insurance cover and thus there was no deficiency on their part.

2.                Brief facts of the case are that complainant purchased a Mahindra Scorpio bearing registration number PB-07-V9152, which was financed to the extent of Rs. 3,50,000/- from the OPs bank. At the time of taking delivery of his vehicle. He got his vehicle comprehensively insured from Bajaj Allianz Insurance Company for the period 25^th February, 2009 having validity upto 24.02.2010. It was stated that the OPs at the time of sanction of loan had obtained signatures of the complainant on various forms and agreement. As per the agreement signed between the complainant and OPs, it was the primarily duty of the complainant to get his vehicle insured. Accordingly, he got his vehicle reinsured from 25.02.2010 to 24.02.2011 from ICICI Lombard General Insurance. The copy of the said note was given to the OPs. It was stated that the OPs took the insurance cover of the financed vehicle for the year 2010 and 2011 by debiting premium amount from his loan account.  On 28.05.2012, the complainant filed an RTI application seeking details in respect of Insurance premium debited by the OPs from his loan account. On 16.08.2012, complainant made a request to the OP seeking copies of insurance certificate which were taken by the OPs from different insurance companies along with dispatch number, letter number vide which these insurance policies were sent to the complainant. The complainant again wrote a letter to the OPs for seeking copy of the agreement executed by him with the OPs vide which the premium amount was debited by the OPs bank from his loan account. He received a reply to his RTI application and received a letter dated 29.12.2012 that at the time of handing over the policy copies, no signatures were obtained nor any entry was made in dispatch register. The policy covers were handed over to the complainant when he visited the OPs bank. On receipt of this information aggrieved with the amount debited from his loan account by the OPs, he filed his consumer complaint in the District Forum.

3.                Upon receipt of notice, OPs filed their written reply taking preliminary objections with regard to limitation and alleging that the complainant concealed material facts and was estopped from filing the complaint. It was admitted that the complainant got financed his Mahindra Scorpio on 24.02.2009 for a sum of Rs. 3,50,000/-. It was stated that initially the insurance was taken from Bajaj Allianz by the OPs on 25.02.2009 by paying a premium of Rs. 21,631/- and the said insurance was valid from 25.02.2009 to 24.02.2010 and the insurance cover was handed over to the complainant.  It was further stated that as per the agreement of hypothecation executed between the complainant and the OPs. it was the duty of the complainant to get his vehicle insured and to supply the cover note to the bank within three days of getting his vehicle insured. As per the agreement in complainant failed to provide the insurance cover within three days, the OP bank was entitled to get the financed vehicle insured by debiting the amount of the insurance premium from his loan account. The OPs were getting vehicle reinsured from the Bajaj Allianz Insurance Company on the expiry of the previous insurance cover and the premium paid by the OPs was being debited to the loan account of the complainant. It was wrong on the part of the complainant to state that he came to know of the amount debited by the OP bank from his loan account statement only in the year of 2012. OPs further stated the complaint of the complainant was false and prayed for dismissal of the same with heavy cost.

4.                District forum allowed the parties to lead their evidence, in order to prove their version of their pleadings.

5.                The complainant tendered his evidence by way of affidavit Ex. C1, copy of the R.C. Ex. C2, cover notes Ex. C3, Ex. C4, Ex. C5, Ex. C6 and Ex. C7, statement of account Ex. C8 copy of letter Ex. C9, reply of the OPs Ex. C10, application submitted to the OP bank Ex. C11 and correspondence between complainant and the OPs from Ex. C12 to Ex. C18 and closed his evidence.

6.                In order to prove their averments, OPs tendered in evidence affidavit of Davinder Singh, Ex. R1, copy of letter addressed to complainant Ex. R2, account statement Ex. R3, letters written to the OPs Ex. R4 and R5, Insurance policies Ex. R6 and Ex. R7, letters written intersee Ex.R8 to Ex. R18.

7.                District Forum heard the arguments of the counsel for the parties and perused the documents filed on the District Forum’s file and dismissed the complaint of the complainant as stated above.

8.                Aggrieved with the order of District Forum, the complainant has filed the present appeal and stated that the order passed by the District Forum was based on surmised and conjectures and was primarily based on the evidence of the OPs and his view was not looked into. It was stated that the complainant made a request to the OPs to supply a statement of his loan account and found that a sum of Rs. 22,645/- and another amount of Rs. 19,134/- was debited in his loan account on 02.02.2010 and on 12.02.2011 respectively towards insurance premium paid by the OPs. It was stated that on 28.05.2012, the complainant made an application under RTI Act with the OPs for providing the details in regard to debiting the amount from his account. He received a reply vide the OPs letter dated 05.06.2012, wherein it was stated that the cover note of the insurance policy was not submitted by the complainant to the bank. In view of this fact the bank got the insurance policy for the insured vehicle. It was further stated that copy of the agreement was supplied by the OP to the complainant on 04.10.2012. OPs vide its letter dated 29.12.2012, replied that the insurance policy was handed over to the complainant during his visit to the bank. At the time of handing of these cover notes, no signatures were ever obtained from him, not the same were entered in dispatch register. The first insurance policy of the vehicle expired on 24.02.2010. The bank without giving any intimation debited the amount of Rs. 22,645/- on 02.02.2010 i.e. 22 days prior to the expiry of the said policy. As per the agreement entered between the complainant and OPs, it was the duty of the complainant to get his vehicle insured and inform the bank within three days. It was further stated that without giving any information, the bank of his own debited his account and thus indulged into unfair trade practice and prayed for setting aside the order of District Forum.

9.                We have heard the counsel for the parties and perused the record placed on file and have also gone through the exhibits of the agreement entered between the complainant and the OPs and perused Ex. C18 written by the Punjab and Sind Bank to the complainant. The last para of the said letter, stated as under : “on 21.02.2012 you handed over letter to the bank saying that you will get the insurance cover for the year 2012-2013 and you have handed over to the bank copy of the insurance cover on 24.02.2012, so the bank did not get insurance cover for your vehicle this year”. In the same letter it was stated that no signatures were obtained on any debit slip for paying the premium to the insurance policy and the cover note were sent to you through different dispatch numbers.

10.              From the perusal of the written reply submitted by the OPs, it was admitted by them that the cover notes of the insurance policies were handed over to the complainant during his visit to the Branch and no signatures were taken from him for acknowledging the receipt of the insurance cover given to him. No letters were written by the bank to the complainant by entering the said letters in the dispatch register and there was no entry to this effect in their records. However if we go through their letter dated 29.12.2012, it states that the insurance covers were sent under dispatch numbers.

11.              As per the agreement placed on the file along with the written arguments, it is observed that primarily it was the complainant who was to get the insurance done for his vehicle. As per Para 7 of the hypothecation of goods to secure the demand cash credit, wherein, it is stated that the “hypothecated goods shall be insured against fire risk by the borrowers with some insurance office or offices approved by the bank and in the name and for the sole benefit of the bank, for their full market value and the borrower shall forthwith and from time to time deliver to the bank all policies and receipts for premia paid on such insurance endorsed and assigned with the full benefit thereof in favour of the bank. Should the Borrower fail to so insure or fail to deliver the policies of receipts for the premia duly endorsed as aforesaid within three days of their receipts, the bank shall be at liberty though not bound, to effect such insurance at the expense of the Borrowers. The Borrowers further agree that the bank shall be at liberty at any time in its discretion (without being bound to do so) to insure the securities for their full market value against riot, fire theft and civil commotion risks or any other type of insurance risk at the expense of the Borrowers with any insurance company. It was primarily a condition entered in the agreement to safeguard the interest of the bank by getting a insurance cover from an insurance company, as per the choice of the bank. However, as per the terms of para 7 of the Agreement of Hypothecation, the insurance of the vehicle was to be handed over after getting the insurance cover taken by the complainant within a period of three days to the bank

12.              In the instant case, if we look into the documents and also the account statement, it is observed that the bank did not write any letter to the complainant directing him to place the copy of insurance cover of the vehicle with them. Rather the bank of its own had taken a decision to get the insurance policies much prior to the expiry date and debited the premium ahead of the date of expiry of the insurance policy. It was the duty of the bank to provide the copy of cover to the complainant under letter duly entered in their dispatch register in order to prove their stand and their bonafides.  No such letter was placed by the bank on the file, only written averments and plea were taken by pleading that under para no. 7, they were to protect their interest for having got the insurance cover and paying of the insurance premium by debiting the loan account. If we go through the letter dated 29.12.2012,  wherein it was admitted that the vehicle was got insured by the complainant himself on 24.02.2012, and the insurance cover was received by the bank on 24.02.2012 i.e. on the same day.

13.              We do not agree to the contentions raised by the bank wherein they did not wait for the expiry of the insurance policies, rather debited the insurance premium from the complainant’s loan account before the expiry of the policies. As per clause 7 of the hypothecation Agreement a duty was thrust upon the borrower to get the insurance cover on his failure to hand over the insurance cover within three days of the getting the insurance cover, then the bank was to get insurance cover of the vehicle at their own. But on the contrary it is seen that the bank did not wait for expiry period of the insurance policies, rather debited the premium of the renewal policies from the loan account of the complainant to the extent of 22 to 12 days in advance, which also resulted into charging of interest on the such insurance premium before due date of the insurance policies.

14.              In view of the above observations, we are of the opinion that the bank out rightly overtook the right of the complainant to get his vehicle insured without even bothering to get his consent for the same. A letter of consent appended by the OP bank vide Ex. R2 is dated 24.02.2009 and no other authorization except this one was taken by the bank, wherein some other para meters were mentioned on the letter head of the bank. No authority letter was taken by the bank for debit of the insurance premium after 24.02.2009. Thus, we find there was a deficiency on the part of the bank on account of debiting of the insurance premium without any authority letter from the borrower and without waiting for the insurance cover to expire, and debited the insurance premium before the due date of the expiry of the insurance cover. Their act of debiting the insurance premium before expiry of the policy amounted to unfair trade practice and also deficiency of services and was not within the purview of condition no. 7 of the Hypothecation Agreement.  The complainant had also got his vehicle insured by getting the insurance cover from ICICI Lombard General Insurance for the years 2010 and 2011 and the cover note of these policies were given to OPs by him on 23.02.2010 and 21.02.2011 respectively as per Ex.C-5 and Ex.C-6.

15               Sequel to the above observation, the appeal of the complainant is allowed and bank is directed to refund the amount of insurance premiums debited from the loan account of the complainant without any authority and without providing the same to him under a written letter duly entered in the dispatch register for having delivered the cover note to the complainant in time, for the period of 2010-11 and 2011-12. The OPs are directed to pay a sum of consolidated compensation of Rs. 10,000/- including litigation costs within a period of 45 days from the receipt of copy of the order. If premium amount is not refunded within 45 days from the date of the order, the OPs are liable to pay an interest @ 12.75% per annum which was charged by them on the amount of insurance premium for the years of 2010-2011 and 2011-2012 debited by them from the dates of debits till realization.

16.              Arguments in this appeal were heard on 30.10.2014 and the order was reserved. Now the order be communicated to the parties as per rules.

17.              Appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                             (GURCHARAN SINGH SARAN)

                                                             PRESIDING JUDICIAL MEMBER

 

 

                                                                   (VINOD KUMAR GUPTA)

                                                                             MEMBER

                                                            

 

(HARCHARAN SINGH GURAM)

                                                                                 MEMBER

November ,12  2014.                                                                     

(MM)