Sri S.K.Sahoo,President.
This is a petition filed by one Suprabha Satpathy U/s. 12 of C.P.Act,1986 for some reliefs.
2. The case of the complainant is that Pramod Kumar Satpathy was her husband who had availed a personal loan of Rs.3,00,000.00 from SBI Main Branch,Angul under express credit scheme on 10.11.2015 while he was posted as Dist. Employment Exchange Officer at Angul. The said loan was sanctioned on 09.11.2015 and a sum of Rs.3030.00 was debited from his A/C. No. 35334972886 .Being motivated by the Branch Manager of SBI,Angul the husband of the complainant purchased a SBI Life Saral Shield policy against the said loan. In order to protect/covered the said loan liabilities in case of his death before liquidation. The borrower Pramod Kumar Satpathy signed the proposal form in good faith being motivated by the sugar coated talks of the opp.parties. An amount of Rs.7779.00 was paid to SBI Life Insurance towards the premium against the said insurance policy. Sum assured for the policy was Rs.7,50,000.00.The 1st premium was deducted from the account of Pramod Kumar Satpathy on 19.11.2015 .After receipt of the premium as per direction of the opp.party No.1,2 & 3 Pramod Kumar Satpathy undergone all the required medical tests on 11.12.2015 at Perfect Clinic, near Millan studio of Bus stand, Angul. Thereafter the said successful pre-insurance medical test relating to proposal No. 47YA019115 Pramod Kumar Satpathy was duly intimated through his registered mobile No. 9861571699 through SMS on 17.12.2015. The husband of the complainant was waiting for the issuance of the bond by opp.party No.1,2 & 3. The specimen signature of Pramod Kumar Satpathy taken by the opp.party No.1,2 & 3 subsequently.
Unfortunately on 02.01.2016 Pramod Kumar Satpathy died, living behind his wife- the present complainant and other legal heirs . The son of the complainant approached opp.party No.4 for settlement of the loan amount standing in the name of his father out of the assured sum of the policy against the proposal submitted by his father. To the utter surprise of the complainant and her son a message was received on 02.02.2016 from the R.M,SBI Life (opp.party No.2) vide registered mobile phone that the proposal submitted by Pramod Kumar Satpathy is cancelled and process has been started for refund of the premium soon. The said cancellation of the proposal is not an accordance with law. After due inquiry the complainant and her son came to know that the cancellation of the proposal was due to non-submission of medical report. Pramod Kumar Satpathy had under gone pre-insurance medical test by the company of opp.party No1,2 & 3 which was successful and accordingly a SMS was sent to the registered mobile number of Pramod Kumar Satpathy bearing No. 9861571699 on 17.12.2015. On 22.04.2016 the complainant requested the R.M,SBI, R.B.O,Angul but no avail. On other hand the S.B.I holdover the bank account of the complainant bearing A/c.No.11636260240 maintained at S.B.I,Joranda Branch-opp.party No.4, who recovered a sum of Rs.3,19,883.00 from the account of the complainant towards the loan availed by the husband of the complainant. The recovered amount was transferred to the account of a dead person and thereafter realised by the S.B.I. The complainant neither the guarantor nor any way related to the loan granted to Pramod Kumar Satpathy. On 30.09.2016 a legal notice was issued by the complainant to the opp.parties for settlement of the claim. In response to such pleader notice the opp.parties wrongly intimated the complainant that the proposal of Pramod Kumar Satpathy was received on 16.11.2016 with initial deposit of Rs.7,813.00. In fact, the premium was transferred to the opp.party No1,2 & 3 on 19.11.2015 from the bank account of Pramod Kumar Satpathy .The opp.party No.1,2 & 3 are playing foul tricks to avoid the liabilities. They also avoid to supply the letter of assignment and loan sanctioned letter as on 06.01.2016 .The proposal was cancelled on 05.02.2016 and the proposal deposit was refunded by the company. The opp.parties cheated the complainant and adopted unfair trade practice along with deficiency in service. The complaint filed by the complainant bearing C.C No. 47 of 2017 before the Hon’ble Forum, Dhenkanal has been disposed off by order dtd. 12.01.2018 . In obedience of such order the present complaint is filed before this Forum/Commission.
3. Notice was issued to all the opp.parties through Regd. Post with A.D and all the A.Ds are back and available in the record.
4. In pursuance of notice, the opp.party No.1 ,2 & 3 filed a joint written statement/show cause. The case of the opp.parties is that the opp.party No.1 & 2 are located at Mumbai & Bhubaneswar respectively but the complaint has been filed at Angul. This Forum/Commission has no jurisdiction to proceed against opp.party No.1 & 2. The Managing Director is not involved in the day to day activities of the company, hence the complaint be dismissed for joinder of unnecessary parties. There is no concluded contract of insurance in between Pramod Kumar Satpathy and S.B.I, Life during the life time of Pramod Kumar Satpathy. So the complainant being the wife of Pramod Kumar Satpathy is not a consumer. No insurance cover was granted in favour of Pramod Kumar Satpathy during his life time. So the company of opp.party No. 1,2 & 3 are not liable for the claim of the complainant. The granting of insurance is not automatic. Mere submission of proposal form and deposit of premium does not lead to cover the insurance policy. On receipt of the proposal form the insurer assesses the proposal and underwrites the same and if required , raises further requirements from the proposer and after receipt of the requirements and on acceptance of the same the insurance cover is granted and a certificate of insurance is issued. In the present case the proposal form submitted by the deceased has not been accepted.
In case of individual assurances, it is the individual to be insured or his proposer who submits a proposal for insurance to the Company, in the case of group schemes, the individual members do not make any proposal for insurance but it is the Group Policy holder, namely the Financial Institution or the Bank which submits a single proposal to the Company on behalf of all the individual members of the group who apply to Group Policy holder to be covered by the Group Scheme. Also whereas in the case of individual assurances where the proposal for insurance is accepted by the company, the Company issues a policy to the proposer, in the case of Group Schemes, as the proposer is the Group Policyholder, that a Master Policy, covering the eligible members of the group and who apply to the group scheme and whose life has been accepted for granting insurance cover, is issued containing all the terms & conditions of the contract of insurance. The individual members of the group who are covered by the Group Scheme are issued "Certificate of Insurance" as evidence of their membership of the Group Scheme and being covered by the Master Policy .
It is fact that the complainant’s husband Pramod Kumar Satpathy had submitted a duly filled proposal form bearing No. 47YA019115 dtd.16.11.2015 with initial deposit of Rs.7779.00 . The proposer was requested to go for medical examination by the insurer and on receipt of the medical examination form it was observed that the signature on the medical examination form does not match with the signature on the proposal form. Hence there was a requirement for asking for specimen signature of Pramod Kumar Satpathy and accordingly Pramod Kumar Satpathy was asked to submit his specimen signature. The specimen signature of Pramod Kumar Satpathy was received only on 06.01.2016 .As there was mismatched of specimen signature on the proposal form with the medical examination form the proposal submitted by Pramod Kumar Satpathy was not accepted , the policy was not issued in his favour. The proposal was not complete prior to death of Pramod Kumar Satpathy on 02.01.2016. The complainant is not entitled to any reliefs. On the other hand the action taken by all the opp.parties are correct and there is no deficiency in service. The case be dismissed.
5. The opp.party No. 5 filed a separate written statement which has been accepted by opp.party No.4 , which appears from order dtd. 07.08.2019 of this Forum/Commission .Their case is that the complaint filed by the complainant is not maintainable in fact or in law. There is no cause of action to file this case. This Forum/Commission has no jurisdiction to accept the complaint. It is also barred by limitation. The complainant is not a consumer. The allegations made in paragraph- 3 is false. At no point of time the branch Manager,SBI persuaded Pramod Kumar Satpathy for the policy. The deceased Pramod Kumar Satpathy requested opp.party No.5 by submitting prescribed form to transfer a sum of Rs.7779.00 from his account in favour of SBI Life Insurance Co. Ltd, and accordingly on 19.11.2015 the said amount was transferred to SBI Life Insurance Co. Ltd. Pramod Kumar Satpathy had availed a personal loan of Rs.3,00,000.00 under SBI Express credit Scheme which was sanctioned on 09.11.2015 after execution of agreement and other required documents. Thereafter, the loan was sanctioned and the loan amount was disbursed to the account of the Pramod Kumar Satpathy. The disbursing authority/employer of the borrower execution an undertaking to obtain NOC from the Bank before settling the dues of the borrower on transfer, resignation, retirement etc. During pendency of the loan Pramod Kumar Satpathy died. After death of Pramod Kumar Satpathy his son came to the Bank of the opp.parties and requested to settle the loan amount out of the insurance. The opp.parties” bank asked the son of Pramod Kumar Satpathy to submit the valid insurance policy ,who failed to supply the same. He only supplied the proposal form No. 47YA019115 of SBI Life Insurance . As there was no valid insurance policy issued in favour of Pramod Kumar Satpathy the opp.parties” bank could not settle the loan outstanding dues against Pramod Kumar Satpathy. Subsequently the opp.parties” Bank came to know that the proposal given by Pramod Kumar Satpathy has been rejected. SBI and SBI Life Insurance Company Ltd. are two different organisations. So the SBI has no control and authority over SBI Life. The SBI is not liable for non-supply of policy by opp.party No.1,2 & 3 .As Pramod Kumar Satpathy died without clearing the dues, according to the terms and conditions of the loan agreement the SBI has right of lien on all moneys, accounts, securities, deposits, goods and other assets and properties belonging to the borrower. Therefore, the bank has preferential right over the terminal monetary benefit and other monetary benefit out of such employment of the borrower which was to be received by borrower or his legal heirs. The opp.parties’ bank came to know that the complainant has received the terminal monetary benefit through her account, for which the SBI holdover the bank account of the complainant bearing A/C. No. 11636260240 and recovered an amount of Rs.3,19,833.00 and adjusted the same amount toward the outstanding loan of Pramod Kumar Satpathy. Absolutely there is no deficiency in service on the part of opp.party No.4 & 5.
6. The complainant has filed affidavit evidence on 19.03.2019, where as Sri Chandrasekhar Maharana, Chief Manager, SBI,Angul has filed his affidavit evidence on 29.01.2020 .
7. Admittedly the complainant Suprabha Satpathy is the wife of Late Pramod Kumar Satapathy who was serving as District Employment Officer, Angul. On 10.11.2015 Mr.Satapathy had availed a personal loan of Rs.3,00,000.00 from S.B.I., Main Branch,Angul under SBI Xpress Credit Scheme . The loan was sanction on 09.11.2015 and a sum of Rs.3030.00 was debited from the account of Mr.Satpathy bearing A/C. No. 35334972886.Mr.Satapathy purchased one S.B.I Life Salaral Sheild Policy against the aforesaid loan to protect/cover the loan liabilities in case of his death. Mr.Satapathy has also signed the proposal form in good faith having been assured by the opp.parties for protection of the loan . A sum of Rs.7,779.00 was paid towards the 1st premium which was deducted from the account of Mr. Satapathy and paid to the account of SBI Life on 19.11.2015. It is admitted that Mr.Satapathy died on 02.01.2016, leaving behind his legal heirs. The complainant has proved the payment of 1st premium from the account of her husband on 19.11.2015. From the photo copy of the mobile messages produced by the complainant, it is clear that on the direction of SBI Life Insurance, Sri Pramod Kumar Satapathy was examined by the Doctor on 11.12.2015 at Perfect Clinic, Angul. After the death Mr.Satapathy a message was received in the mobile phone on 02.02.2016 that the proposal submitted by Mr.Satapathy has been cancelled and the premium will be returned within a short period. From the photo copy of the of the account information of Mr.Pramod Kumar Satapathy it transpires that on 05.02.2016 the proposal form submitted by Mr.Satapathy was cancelled and an amount of Rs.7,779.00 has been refunded to Mr.Satapathy.
8. It is clear from all the documents available on the case record that the SBI Main Branch,Angul is the financial institution, who has disbursed loan of Rs.3,00,000.00 to Mr.Satapathy which was protected by an insurance of SBI Life. The SBI main branch is the Corporate agent of the policy. Admittedly Mr.Satapathy has submitted the proposal form to SBI Life Insurance through SBI main Branch. The name of the corporate agent was Satyajeet Bhoi, having CIF Code-990060468.SBI Main Branch is the sourcing branch and a standing instruction was issued by Mr. Satapathy to remit the renewal premium to SBI Life Insurance on due date by SBI Main Banch,Angul.
9. The Learned Counsel for the opp.party No.4 & 5 submitted that SBI Life Insurance is a different legal entity than Sate Bank of India. There is dispute that SBI Life is having a separate legal entity and State Bank of India is separate legal entity. However, State Bank of India is a major share holder of SBI Life and at the instance of SBI Main Branch, Mr. Satapathy had paid the 1st premium along with proposal form to SBI Life. It is also clear that at the instruction of SBI Life Mr.Satapathy was subjected to pre-insurance medical test and the SBI Life congratulates Mr. Satapathy for his successful medical examination .There is no dispute that Mr.Satapathy has executed the proposal form in presence of the proposer. It has been clearly mentioned in the proposal form that the proposer Mr.Satapathy understand and agreed that no physical policy documents will be issued to him, if he was requested for issuing the insurance policy in electronic format to his E.Insurance account and he also agreed to receive all policy related communication through electronic means i.e Email, messages, call etc. From the aforesaid contents of the proposal form it is clear that SBI Life is free to communicate Mr. Satapathy everything regarding the policy through Email, SMS,Calls etc. and there is no need of issuance of physical policy documents. In view of such condition of the proposal form all the communications were made to Mr.Satpathy by S.B.I Life relating to medical test and cancellation of proposal. If that is so, why the opp.party No.1,2 & 3 did not supply the insurance policy to Mr. Satpathy within a reasonable time. On perusal of the signature of the proposer- deceased Pramod Kumar Satpathy, it is clear that the proposal form was signed on 16.11.2015. The premium was deposited with opp.party No.1,2 & 3 on 19.11.2015 .From the photo copy of the medical examination report, it appears that the pre-insurance medical test of Pramod was done on 14.12.2015. From the said medical examination form it is clear that the doctor who has conducted the examination of Pramod has verified the employment identy card at the time of his examination. The signature of the doctor is not available in medical examination form of opp.party No.1,2 & 3. However, it is clear from the said documents that after verification of identity Pramod was examined by the doctor. However from the documents available on the record it is clear that after pre-medical examination on 19.11.2015 the premium was received by opp.party No.1,2 & 3. It is the claim of opp.party No.1,2 & 3 that the signature of Mr.Satpathy in the proposal form submitted by him did not tally with his signature on the medical test form, for which a letter was issued to Pramod for his reply. Admittedly Pramod died on 02.01.2016 and thereafter the opp.party No.1,2 & 3 tried to create certain documents. However, there is unreasonable delay of issuance of the policy by opp.party No-1,2 & 3. The insurance contract being a contract of utmost good faith is a two way door and the standards of contract as expected under the utmost good faith/obligation should be made by either party to such contract. Very fact of acceptance of premium by the insurer caste a duty to issue the policy to Mr.Satpathy in time.
10. The Learned counsel for the complainant relied on a decision reported in D.Srinivas Vrs. SBI Life Insurance Co.Ltd., passed on 16.02.2018 by the Hon’ble Supreme Court of India in support of the claim. On the other hand the Learned Counsel for the opp.party No,1,2 & 3 relied on the decision of Hon’ble Supreme Court of India reported in 1984 AIR 1014 LIC of India Vrs. Raja Vasireddy Komallavalli Kamba & others. passed on 27.03.1984.
11. Perused the judgement possessed by the Hon’ble Apex Court , relied on by both the parties. The decision relied on by the complainant is the later one. From the materials on record it is crystal clear that the opp.party No.1,2 & 3 have not issued the policies to the complainant’s husband within a reasonable time and only after his death they tried to avoid the responsibility by creating certain documents by themselves. There is deficiency in service on the part of opp.party No.1,2 & 3. The complainant is entitled to get the insurance amount after death of her husband.
12. The Learned Counsel for opp.party No.4 & 5 submitted that SBI is an agent of SBI Life Insurance .During argument the Learned Counsel for opp.party No.4 & 5 submitted that they have no responsibility at all regarding the issuance of insurance policy in favour of Pramod and only on the request of complainant’s husband premium was deposited to SBI Life .Admittedly SBI i.e opp.party No.4 &5 are the agent of SBI Life Insurance Company. In bancassurance the insurance company used the bank’s distribution channel to sale products and the bank in return receive a certain fee from the insurance company. The corporate entities representate an insurance company and sales its policy. Usually they are engaged in a particular business and sale insurance policies to their existing customer based on the satisfaction. When the bank became the corporate agent of an insurance company it is covered to as a bancassurance arrangement or partnership. Normally the bank offers insurance policy to their customers based on their knowledge, satisfaction and need. The banks are the largest distributors of private life insurers’ channel mix ,accounting for 43.6% of the sales of the bank who used to sale policy are liable for the policies they sell. This is the cost they will pay for being corporate agents and they will be expected to take onus and ownership of the sales. SBI Life is an Indian life insurance company which was started as a joint venture between State Bank of India (SBI) and French financial institution BNP Paribas Cardit SBI has a 55.50% stake in the company and BNP Paribas Cardif owns a 0.22% stake. Other investors are Value Line Pte. Ltd. and MacRitchie Investments Pte. Ltd. holding a 195% stake each while the remaining 12% is free float stake with public investors it has Assets under management (AuM) worth 307,300 crore (US$38 billion) and a Gross Within Premium(GWP) of 167,320 crore (US$8 4 billion) as of March 2023 SBI Life has an authorized capital of $20 billion (US$250 million) and a paid up capital of $10 billion (US$130 million). The Learned Counsel for the opp.party No.4 & 5 relied on the decision reported in Shipra Sedngupta Vrs. Mridul Sengupta & others. passed by the Hon’ble Supreme Court in Civil Appeal No. 809 of 2002 ,Civil Appeal No. 10264-10266 of 2013 Balwant Rai Saluja & anothers Vrs, AIR India Ltd. & others and the decision of Hon’ble National Consumer Disputes Redressal Commissin,NewDelhi in First Appeal No. 221 of 2012 in Tata Marine Agencies & another Vrs. L.W.S Knitwear Ltd.& another .
13. There is no dispute that the financing bank is authorised to have financing lines over the accounts and property of the borrowers for outstanding loan amounts. It is also settled principle of law that the bank can recover the outstanding loan amount out of the property of the deceased or from the legal heirs who inherited the property of the decided borrower inherited by the. In the present case Mr.Satpathy was borrower . He was a govt. employee and he died during his service. The amount disbursed to his account by the govt. which was due to him. So the bank has right to take away the outstanding loan amount from the money received in his account from the govt. So opp.party No.4 & 5 have rightly withdrawn the outstanding amount from the account of Mr. Satpathy or his wife. For the aforesaid reasons, we hold that the opp.party No. 1,2 & 3 are jointly and severally liable for the claim of the complainant. There is deficiency in service by all of them.
14. Hence order :-
: O R D E R :
The case be and the same is allowed in part on contest against the opp.party No. 1,2 & 3 . The opp.party No. 1,2 & 3 are directed to pay an amount of Rs.7,50,000.00 (Rupees Seven Lakh Fifty Thousand) only along with interest @ 6% per annum from the date of filing of the complainant till payment is made. They are further directed to pay compensation of Rs.50,000.00 (Rupees Fifty Thousand )only towards harassment , mental agony and Rs.10,000.00 (Rupees Ten Thousand) only towards cost of litigation to the complainant . Comply the order by the opp.parties within one month from the date of receipt of this order, failing which pay an penal interest @12% per annum from the date of default till payment is made.
