DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

PATIALA.

                                      Consumer Complaint No. 29 of 27.1.2016

                                      Decided on:  14.1.2021

1. Rashmi Aggarwal aged about 54 years wd/o Sh.Ashok Aggarwal
2. Rishabh Aggarwal aged about 28 years s/o Late Sh.Ashok Aggarwal
3. Nikhil Aggarwal aged about 25 years s/o Late Sh.Ashok Aggarwal

All residents of H.No.28-D, Delite Colony, Behind Harbans Cinema,Patiala.

                                                                   …………...Complainants

                                      Versus

1. State Bank of Patiala through its Chairman/Managing Director, Head Office, The Mall, Patiala.
2. State Bank of Patiala, through its Branch Manager, Bhupindra Nagar, Patiala.
3. State Bank of Patiala,Retail Assets Small and Medium Enterprises, City Credit Centre, Pragati Bhawan, Urban Estate, Phase-3, Patiala through authorized representative.
4. SBI Life Insurance Co. Ltd., through its Branch Manager,SCB-7,Chhoti Baradari, Patiala
5. SBI Life Insurance Co. Ltd., through its Chairman/Managing Director, Central Processing Centre, Kapas Bhawan, Plot No.3A, Sector 10, CBD Belapur, Navi Mumbai-400 614.

                                                                   …………Opposite Parties

                                      Complaint under Section 12 of the

                                      Consumer Protection Act, 1986.

QUORUM

                                      Sh. Jasjit Singh Bhinder, President

                                      Sh.Vinod Kumar Gulati, Member

                                      Sh.Y.S.Matta,Member      

ARGUED BY

                                       Sh.Sunny Deep Juneja, counsel for complainants.

                                      Sh.Hemant Nanda, counsel for OPs No.1&2.

                                      Sh.Puneet Gupta, counsel for OPs No.4&5.

                                      ( complaint against OP No.3 not admitted)                

 ORDER

                                              JASJIT SINGH BHINDER,PRESIDENT

1. This is the complaint filed by Rashmi Aggarwal and others (hereinafter referred to as the complainants) against State Bank of Patiala and others (hereinafter referred to as the OP/s).
2. The brief facts of the case are that complainant No.1 Rashmi Aggarwal and her husband Ashok Aggarwal were the owner of plot No.28-D, Delite Colony, Behind Harbans Cinema, Patiala. Unfortunately husband of complainant No.1 expired on 30.7.2015.
3. It is averred that both Rashmi Aggarwal and her husband applied for loan from State Bank of Patiala for the construction of their house. It is further averred that loan of Rs.14,75,000/- for the construction of house and Rs.56,605/- for the payment of insurance premium totaling Rs.15,31,605/- was sanctioned in favour of them and was credited to their loan account No.65170955032.The loan was sanctioned on 29.6.2013.The loan amount was transferred to the saving bank account No.55143368097 of complainant and her husband and was disbursed. Thereafter another application for the sanction of loan of Rs.5,00,000/- was made which too was sanctioned alongwith Rs.50,620/-for the payment of premium of insurance cover and transferred to their joint account No.65192329906 .This loan amount was transferred to the saving bank account No.55143368097 and was disbursed.
4. It is averred that before sanctioning of loan of Rs.14,75,000/- complainant and her husband were told to get an insurance cover for the loan amount and resultantly they filled forms to obtain insurance cover.The insurance papers were got filled and signed by the officials of the branch, advancing the loan. Monthly installment of Rs.17,170/-was fixed to be paid in 197 equated monthly installments and the amount to be paid as premium, amount for  insurance cover was included in this amount which was mentioned in loan agreement dated 1.7.2013.It is averred that the complainant started returning the loan amount on 1.9.2014 by paying the installment of Rs.17400/- regularly.
5. It is further averred that husband of complainant No.1 died on 30.7.2015.Thereafter letter dated 21.10.2015  was written by complainant No.1 to the Branch Manager, State Bank of Patiala, i.e. OP No.2 for the writing off loan amount due to death of her husband, in reply to which it was written by State Bank of Patiala vide memo No.Rasmecc/ES/UE/1707 dated nil, that loan amount could not be written off as Ashok Aggarwal, was not covered under RIN Raksha Scheme of SBI Life Insurance due to age limit and the complainants were forced to pay the installments which were paid regularly by them and the last installment was paid in December,2015.
6. It is further averred that as loan was sanctioned for Rs.15,31,605/- including the amount of Rs.56,605/- to be paid to SBI Life Insurance, therefore, the premium for the life cover insurance policy was to be paid by the State Bank of Patiala and not by the complainants.
7. It is averred that it was not informed that Ashok Kumar husband of complainant No.1 was not given insurance cover due to age limit. It is averred that as per terms and conditions, a person of 55 years of age with a loan term of 20 years is to be covered for a policy term of 15 years only. It is further averred that husband of complainant No.1 was aged about 55 years and one month at the time of advancement of loan and the loan amount was to be paid back in 197 monthly installments, as such the insurance cover would have been given for a period of 15 years and Ashok Aggarwal could not be denied the insurance cover and the OPs cannot refuse to write off the loan amount.The OPs have wrongly refused to write off the loan amount.There is thus deficiency in service on the part of the OPs. Hence this complaint with the prayer to accept the same by giving directions to the OPs to write off the loan amount, insurance company be directed to pay the balance outstanding amount of Rs.15,56,419/- as on 1.8.2015 to State Bank of Patiala; to pay Rs.1,55,000/-as compensation alongwith interest @18% per annum from the date of filing of complaint till realization.
8. Notice of the complaint was given to the OPs, who appeared through counsel and contested the complaint by filing separate written replies.
9. In the written reply filed by OPs No.1&2 preliminary objections have been raised that the complaint is not maintainable; that the complainants have concealed the real facts from the Court and that there is no deficiency in service on the part of the OPs.
10. On merits/ parawise reply, it is admitted that loan was sanctioned and disbursed in favour of complainant No.1 and her husband Ashok Aggarwal.It is further admitted that the insurance premium was debited to the joint account as per system of the bank in respect of loan account No.65192329906 for Rs. five lacs. In respect of other loan account No.65170955032 for Rs.14,75,000/-the insurance could not be done by the SBI Life, as the complainant did not respond to the queries raised in the letter dated 14.8.2013 and 20.8.2013 of SBI LIC, addressed to complainant No.1.It is submitted that policy was issued in favour of Rashmi Aggarwal in the loan account No.65192329906 for Rs.five lacs, as her husband joint account holder was not eligible for the same because of age factor and accordingly the policy in favour of complainant no.1 was  issued and accepted by her. It is further submitted that eligible person under the policy requires age below 70 years on maturity.
11. It is admitted that after the death of Ashok Aggarwal, letter was addressed to the bank for writing off the loan amount due  and bank replied that it could not be written off as it is not covered under the insurance as the policy was not in favour of Ashok Aggarwal. It is also admitted that loan was sanctioned to the tune of Rs.15,31,605 which includes the insurance premium for the insurance cover issued in favour of Rashmi Aggarwal.As per policy the minimum age for coverage is 16 years and maximum 69 years with the overriding clause of maturity age (last birthday) 70 years. The complainant has wrongly mentioned the maturity age as 75 just to misguide the court and to get the undue benefits. There is no deficiency in service on the part of the OPs. After denying all other averments of the complainant the OPs prayed for the dismissal of the complaint.
12. In the written reply filed by OPs No.4&5, it is submitted that they have a master policy bearing No.70000011705 issued to State Bank of Patiala covering the Home loan borrowers who have satisfied the eligibility criteria and who have applied for the insurance cover individually and who have paid the requisite premium and whose application for insurance has been accepted by OPs No.4&5.A master policy containing all the terms and conditions of the insurance coverage was issued to the master policy holder and are binding on all the insured members of the scheme.
13. In the preliminary objections it is submitted that the OP received a membership form bearing No.7003363176 dated 9.7.2013 alongwith a proposal deposit of Rs.11,321/- under loan account No.65171472907 from complainant No.1. In the instant membership form, under clause No.2, loan details , the co-borrower is mentioned as “No”. The OP sent a letter dated 29.8.2013 to complainant No.1 under a copy to OP No.3 requesting to confirm the moratorium option and premium payment option. The said requirement was not received by the OPs as such proposal deposit was refunded vide cheque No.919680 dated 24.10.2013. In the instant case complainant No.1 had submitted the membership form. It is further submitted that OPs had received another membership form bearing No.7003783295 dated 22.3.2014 under loan account No.65192329906 alongwith proposal deposit of Rs.10,124/- in the name of complainant No.1 and on the basis of the same insurance cover was granted to the complainant with date of commencement of risk as 24.3.2014. It is further submitted that there is no contract between Mr.Ashok Aggarwal and the SBI Life Insurance Co. Ltd. i.e. OPs No.4&5.
14. On merits, the OPs reiterated the facts as raised in the preliminary objections and after denying all other averments made in the complaint have prayed for the dismissal of the complaint.
15. In evidence the ld. counsel for the complainant has  affidavit of the complainant , Ex.CA alongwith documents Exs.C1 to 11 and closed the evidence.
16. The ld. counsel for OPs No.1&2 tendered affidavit Ex.OPB of Sh.Mukesh Bansal,Chief Manager alongwith documents Exs.OP7 and OP8 and closed the evidence.
17. The ld. counsel for OPs No.4&5 tendered in evidence Ex.OPA of Ms.Dhanya K.P. alongwith documents Exs.OP1 to OP6 and closed the evidence.
18. The ld. counsel for the complainant has argued that the complainant No.1 and her husband Ashok Aggarwal were the owner of plot No.28-D, Delite Colony, Behind Harbans Cinema, Patiala. Unfortunately Ashok Aggarwal, husband of Rashmi Aggarwal expired on 30.7.2015.The ld. counsel further argued that complainant Rashmi Aggarwal and her husband Ashok Aggarwal applied for loan to State Bank of Patiala for the construction of the house on the above said plot. The ld. counsel further argued that loan of Rs.14,75,000/- for construction of house and Rs.56,605/- for payment of insurance premium  totaling Rs.15,31,605/- was sanctioned on 29.6.2013 in favour of Rashmi Aggarwal and her husband.The ld. counsel further argued that loan amount was disbursed to the account of Rashmi Aggarwal and Ashok Aggarwal. The ld. counsel further argued that thereafter another application for  sanctioning  of loan amount of Rs.5,00,000/- was made which was also sanctioned. Rs.50620/- was also sanctioned for the payment of premium of insurance and the insurance papers were got filled and signed by the officials of the branch, advancing the loan.The ld. counsel further argued that sum of Rs.56605/- was claimed as premium to be paid to the SBI Life Insurance Co.Ltd. The ld. counsel further argued that premium installment of Rs.17,170/-was fixed to be paid in 197 equated monthly installment. The ld. counsel further argued that Sh. Ashok Aggarwal died on 30.7.2015 and a letter dated 21.10.2015 was written to Branch Manager, State Bank of Patiala, Bhupindra Nagar, Patiala for writing off the loan but they refused to do so.
19. On the other hand, the ld. counsel for OPs No.1&2 has argued that admittedly loan was disbursed in favour of Rashmi Aggarwal and her husband Ashok Aggarwal.The ld. counsel further argued that insurance premium was debited to their joint  account as per system of the bank.The ld. counsel further argued that insurance could not be done by SBI Life Insurance as the complainant had not responded to the queries raised in the letter dated 14.8.2013 and 20.8.2013 of SBI Life insurance addressed to Rashmi Aggarwal.The ld. counsel further argued that policy was issued in favour  of Rashmi Aggarwal in the loan amount of Rs.5,00,000/- and her husband was not eligible because of age factor.The ld. counsel further argued that Ashok Aggarwal was never covered by the insurance, so the complaint be dismissed.
20. On the other hand, the ld. counsel for OPs No.4&5 i.e. SBI Life Insurance Co. Ltd. has argued that Ashok Aggarwal was not eligible for criteria of the insurance. As such insurance was not given to Ashok Aggarwal.The ld. counsel further argued that various letters were written to Rashmi Aggarwal but no reply was sent by her.The ld. counsel further argued that even otherwise this complaint is barred by limitation. The ld. counsel further argued that as Ashok Aggarwal was not covered by the insurance so no amount can be paid, as such complaint be dismissed.
21. To prove this case Smt.Rashmi Aggarwal has tendered her affidavit,Ex.CA and she has deposed as per his complaint. She has prove on file,Ex.C1 document of SBI Life Insurance,Ex.C2 death certificate of Ashok Aggarwal, Ex.C3 is the loan application-cum- appraisal form for all ‘PER’ schemes, which bears photographs of both Rashmi Aggarwal and Sh.Ashok Aggarwal,Ex.C4 is arrangement letter of State Bank of Patiala branch in which home loan amount of Rs.15,31,605/- was sanctioned,Ex.C5 is specimen of memorandum of agreement for home loan,Ex.C6 is another arrangement letter of housing finance. This loan was sanctioned for Rs.5,00,000/- with insurance cover of Rs.50620/-,Ex.C7 is specimen of memorandum of agreement for home loan,Ex.C8 is letter written by Rashmi Aggarwal to the Branch Manager,State Bank of Patiala, Bhupindra Nagar, Patiala for writing off the loan amount, Ex.C9 is the important document . It was written by Chief Manager, State Bank of Patiala, Bhupinder Nagar, Patiala to the complainant , in which it is stated that Sh.Ashok Aggarwal was not covered under RIN Raksha Scheme of SBI Life Insurance due to age limit as per record of sanction, so their request was declined.Ex.C10 is bank statement,Ex.C11 is also bank statement.
22. Ex.OPA is affidavit on behalf of Insurance company of Ms Dhanya K P and she has deposed as per the written statement, Ex.OP1 is policy document of SBI Life Insurance Co. Ltd.Ex.OP2 is document of SBI Life-RIN Raksha Membership Form in the name of Rashmi Aggarwal and was also signed by her,Ex.OP3 is the important document,it was sent to Smt.Rashmi Aggarwal, but the ld. counsel of the complainants argued that it was sent on wrong address. In this letter, it is mentioned that they have received the proposal for insurance and have examined the same. Three documents were demanded from Smt.Rashmi Aggarwal. It is stated that the compliance of the above requirements must be made within 21 days from the date of receipt of this letter.But no reply was given to this letter by Rashmi Aggarwal. Ex.OP4 is also important document for disposal of this complaint.It was written by SBI Life Insurance to the Branch Manager, State Bank of Patiala, Bhupinder Nagar Branch, Patiala. It is mentioned in this letter that they are unable to provide insurance cover to the borrower due to non receipt of the requirement within permissible processing time.They are refunding the proposal amount to Rashmi Jagdish Aggarwal and the amount of Rs.11321/- was deposited  in their account  vide cheque No.919680 dated 24.10.2013.It is also mentioned that the above mentioned borrower was not covered under Group Insurance RiN Raksha Scheme.It is also mentioned that in case the premium was funded by the bank, arrange to close the corresponding loan plus account and copy was sent to Smt.Rashmi Aggarwal.
23. So it is clear that amount of Rs.11321/- was refunded and Rashmi Jagdish Aggarwal was not entitled to the insurance cover.Ex.OP6 is document of SBI Life Insurance vide which Rs.5,00,000/-was again taken and it was insured with SBI Life Insurance.Ex.OP7 is the document of State Bank of Patiala vide which loan of Rs.5,00,000/- was sanctioned in favour  of Ashok Aggarwal and Rashmi Aggarwal.Ex.OP8 is document vide which loan of Rs.14,75,000/- was sanctioned.
24. On behalf of State Bank of Patiala, Sh.Mukesh Bansal, Chief Manager has tendered his affidavit, Ex.OPB and he has deposed as per his written statement.
25. So due to our above discussion, vide letter Ex.OP3, written to Smt.Rashmi Aggarwal, three points were raised which are as under:

1. Kindly provide premium payment option whether bank paid or self paid and fill question No.9 accordingly.
2. Kindly clarify moratorium option.
3. Kindly clarify premium payment option

and Smt.Rashmi Aggarwal was directed to file reply within 21 days but the reply was not filed by her. Vide letter,Ex.OP4, the bank refunded the proposal deposit amount to Rashmi Jagdish Aggarwal as already stated above vide cheque No.919680 dated 24.10.2013.It was made clear that Sh.Ashok Aggarwal was not covered under RIN Raksha scheme.

26. So due to our aforesaid discussion as Ashok Aggarwal was not insured with SBI Life under the loan amount of Rs.14,75,000/-, so now after his death insured Smt.Rashmi Aggarwal is liable to repay the amount. As such the complaint is dismissed. Parties are left to bear their own costs.

ANNOUNCED

DATED:14.1.2021

          Y.S.Matta               Vinod Kumar Gulati                    Jasjit Singh Bhinder

          Member                         Member                                   President