BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MYSORE-570023

CONSUMER COMPLAINT NO.181-2018

DATED ON THIS THE 8^th March 2019

      Present:  1) Sri. H.M.Shivakumara Swamy

B.A., LLB., - PRESIDENT   

                     2) Sri. Devakumar.M.C.           

                                        B.E., LLB., PGDCLP   - MEMBER

Sri DEVAKUMAR.M.C,

MEMBER

1.     The complainant filed the complaint under section 12 of the C.P.Act 1986, against the opposite parties, alleging deficiency in service and unfair trade practice and seeking a direction to cancel the insurance policy with opposite party No.1 and to re-credit the entire amount debited from his loan account to S.B. account maintained with opposite party No.2 with interest at 24% p.a. and Rs.1,00,000/- towards cost of the proceedings and to pay Rs.50,000/- to legal aid account with such other reliefs.
2.     The complainant submitted that, he intending to purchase a residential house approached opposite party No.2 to borrow a loan of Rs.25,00,000/- in the year 2016 and clearly instructed that, he was not interested in taking any insurance policy.
3.     When he took his loan account statement in May 2018, found that, a sum of Rs.68,605/- was debited from his loan account between 17.06.2016 to 30.06.2016 towards SBI General Insurance, with opposite party No.1 without any intimation/consent to him.
4.     The opposite party No.1 intimated the amount has been sent by opposite party No.2, through RASMECC to insure the property and the same was not done voluntarily.  Further, the complainant submitted that, he has not signed any proposal form nor any terms and conditions have been narrated to him and also no insurance policy has been issued to him till date.  Thus, vide letter dated 17.05.2018, called both the opposite parties to furnish the proposal form and other relevant documents.
5.     Opposite party No.1 informed over the phone that, the policy covers the earthquake and loss due to terrorism, landslides, rockslides and some other damages, but the same was not provided any protection against fire, burglary etc.,  Further, the opposite party No.2 got insured the house property for a sum of Rs.60,00,000/-, as against the loan borrowed of Rs.25,00,000/-. The same has been alleged as deficiency in service and for not giving any intimation relating to insurance of the property, as unfair trade practice.  Hence, filed the complaint, seeking reliefs. 
6.     Opposite party No.1 filed version and submitted that, they came to know about availing loan by complainant, only on submission of proposal form by opposite party No.2 and on that basis only they issued “Long Term Home Policy” for a sum insured of Rs.60,00,000/-.  A sum of Rs.48,438/- has been paid by opposite party No.2 as premium and denied the payment of Rs.68,605/- towards premium amount.  As standard practice only, the insurance policy has been sent to opposite party No.2, who paid the premium.  The receipt of premium through RASMECC on 18.06.2016 vide cheque with duly filled and signed proposal form from opposite party No.2, is admitted.  The notice dated 17.05.2018, has been suitably replied through their counsel on 30.05.2018.  The persons who borrows loan from opposite party No.2, need not be compulsorily required to be insured from opposite party No.1.  The property was insured based on the sum assured i.e. Rs.60,00,000/- as quoted in the proposal form and also based on premium amount paid.  Thus, the deficiency in service and unfair trade practice is denied and prays for dismissal of the complaint.
7.     Opposite party No.2 filed version and denies the allegations and submits, based on the request letter, they have waived off the life insurance.  A sum of Rs.48,438/- has been debited towards premium for general insurance not Rs.68,605/-, as alleged.  The complainant has signed the sanction communication letter after going through the terms and conditions.  Thus the deficiency in service is denied as false and prays for dismissal of the complaint. 
8.     To prove the facts, the complainant and opposite party No.2 filed affidavit evidence and relied on several documents.  Opposite party No.1 not lead its evidence, but filed two documents only.  Written arguments filed.  Heard the counsel for complainant and opposite party No.2.  Perused the material on record and posted for orders.   
9.    The points arose for our consideration are:-

1. Whether the complainant establishes deficiency in service and unfair trade practice by opposite parties, for debiting amount from his loan account towards insurance policy, without his consent and thereby he is entitled for the reliefs sought?
2.  What order?

10.    Our findings on the aforesaid points are as follows:

Point No.1 :- Partly in the affirmative.

Point No.2 :- As per final order, for the following

:: R E A S O N S ::

11. Point No.1:- The complainant borrowed house loan of Rs.25,00,000/- from opposite party No.2 bank and intimated that, he does not want any kind of insurance policy for availing loan.  He paid the EMI as and when it became due.
12. The loan account maintained with opposite party No.2, revealed the debit of a total sum of Rs.68,605/- from his loan account between 17.06.2016 to 30.06.2016 towards premium for SBI general insurance.  The same was done without any intimation or any consent of the complainant.  The opposite party No.2 voluntarily insured the house property with opposite party No.1, even though no proposal form was submitted by affixing signature by the complainant.  Further, insurance policy was not forwarded to him. Thereby, vide letter dated 17.05.2018, called for the proposal form and other relevant documents.
13. The opposite party No.1 officials intimated the policy provides protection against earthquake, terrorism, land slide, rockslide and other damages, though there might be accidental fire, burglary, which was not covered. Further, the house property was insured for a sum of Rs.60,00,000/- as against the loan borrowed of Rs.25,00,000/-, with intention to make unlawful gain.  Hence, alleged the deficiency in service and unfair trade practice by opposite parties and sought for the reliefs.
14. Opposite party No.2 contended that, based on the written consent from complainant, the life insurance was waived off, but not the general insurance.  Accordingly, a sum of Rs.48,438/- has been debited towards premium for general insurance, not Rs.68,605/-.  The complainant accepted the terms and conditions narrated in “Sanction Communication letter’, the house property was insured comprehensively, for the market value covering the risk of fire, flood etc., in the joint name of the bank and the borrower (Annexure-C).  Thereby, the allegation of making unlawful gain is denied as baseless.
15. The opposite party No.2 relayed on housing loan master circular of State Bank of Mysore, dated 13.04.2015, and contended that, it was mandatory for every housing loan borrower should insure his house property against the risk of fire, riots, earthquakes, lightening, floods etc., in the joint name of the bank and the borrower for full market value of the property or outstanding loan amount, whichever is higher.  Thus, the deficiency in service and unfair trade practice is denied and prayed for dismissal of the complaint against them.
16. The material on record established that the complainant borrowed a housing loan of Rs.25,00,000/- from opposite party No.2.  Admittedly, the complainant intimated the opposite party No.2 that, he does not want any kind of insurance towards availing the housing loan.  The opposite party No.2 accepted the request of the complainant and sanctioned the loan in March 2016.
17. However, the opposite party No.2 voluntarily submitted a proposal form to opposite party No.1, without affixing their signature nor obtaining the signature or consent of the complainant and obtained a general insurance policy.  A sum of Rs.48,438/- has been debited from complainant’s loan account and paid as premium towards general insurance.  But, the same was not communicated to the complainant, till he raised objection for the same.
18. The opposite party No.1 issued general insurance policy, upon receipt of the premium amount through RASMECC from opposite party No.2 and delivered the insurance policy to opposite party No.2.  The house property has been insured for a sum of Rs.60,00,000/- in respect of which the complainant availed loan of Rs.25,00,000/-.  Thus, the allegation of deficiency in service and unfair trade practice by opposite party No.2 is justified and hence opposite party No.2 is liable to compensate the complainant for the illegal act committed by them with compensation.  Accordingly,    point No.1 is answered partly in the affirmative.      
19. Point No.2:- with the above observations, the complaint is to be allowed in part with a direction to opposite party No.2 to get cancelled the general insurance policy obtained from opposite party No.1 and re-credit the amount debited from his loan account with interest, apart from payment of compensation for the deficiency in service and unfair trade practice with cost of the proceedings.  Hence, we proceed to pass the following:-

:: O R D E R ::

1. The complaint is hereby allowed in part.
2. The opposite party No.2 is hereby directed to get cancelled the general insurance policy obtained from opposite party No.1 and to re-credit Rs.48,438/- to the loan account of the complainant with interest at 12% p.a. from the date of debiting till re-crediting the amount in 45 days of this order.  Failing to comply, the opposite party No.2 is liable to pay penalty of Rs.1,000/- per month until compliance. 
3. The opposite party No.2 shall pay compensation of Rs.50,000/- for the deficiency in service and unfair trade practice and Rs.5,000/- for the mental agony, hardship, Rs.5,000/- towards litigation expenses to the complainant in 45 days of this order.  In default, the opposite party No.2 shall pay interest at 12% p.a. on the said sum of Rs.60,000/- until payment made.   
4. The opposite party No.2 shall deposit Rs.10,000/- towards Consumer Legal Aid Account in 45 days of this order.
5. In case of default to comply this order, the opposite party No.2 to undergo imprisonment and also liable for fine under section 27 of the C.P.Act, 1986.
6. Complaint against opposite party No.1 is dismissed.
7. Give the copies of this order to the parties, as per Rules.

(Dictated to the Stenographer transcribed, typed by her, transcript corrected by us and then pronounced in open court on this the 8^th March 2019)