BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 767/2008 against C.C. 36/2006, Dist. Forum, Rajahmundry
Between:
1) Union Bank of India
Rep. by its Chairman & Managing Director
Near Vidhan Bhavan Marg
Mumbai-400 021.
2) Regional Manager,
Union Bank of India
Dwarakanagar,
Visakapatnam
3) Branch Manager
Union Bank of India
Innispeta, 7-22-4
Baruvari Street
Rajahmundry. *** Appellants/
Opposite Parties
And
Smt. Anjana Rani
W/o. Late Kumar Divakar Kashyap
D.No. 73-21-15/1, Bab Nagar
A.V. Appa Rao Road
Rajahmundry. *** Respondent/
Complainant
Counsel for the Appellant : M/s. Ghanta Rama Rao
Counsel for the Respondent: M/s. E. Murali Sridhar Babu.
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT. M.SHREESHA, MEMBER.
THURSDAY, THE TWENTY FIFTH DAY OF NOVEMBER TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)
***
1) This is an appeal preferred by the insurance company against the order of the Dist. Forum directing it to close the loan account by adjusting the amount covered under the policy together with costs of Rs. 2,000/-.
2) The case of the complainant in brief is that she and her husband jointly availed housing loan from Op3 branch of appellant bank in the year 2004 for construction of a house at Rajahmundry. The loan facility covers the risk of the accountholders in view of tie up with S.B.I. Life Insurance. In fact they had submitted all the necessary papers covering the risk under the policy. While so her husband Mr. Kumar Diwakar Kashyap died on 14.11.2005 due to massive cardiac arrest. She informed to the bank and requested to settle the claim and square up the liability under the housing loan in view of terms of the policy. In fact it had collected Rs. 7,674/- towards premium by debiting to loan account on 23.3.2005 towards SBI Life Insurance Policy. Curiously the appellants alleged that age of proof of both of them was not submitted as such they could not be covered by terms of the policy. At no time they demanded date of birth extract, if really they were to produce it. Alleging that this amounts to deficiency in service, she filed the complaint. She sought the amount due under the house loan be waived or in the alternative direct it to pay Rs. 2,50,696/- being the amount due under the house loan besides damages of Rs. 50,000/- towards mental agony and costs.
3) The appellant bank resisted the case. It alleged that the complainant was one of the co-mortgagees of immovable asset and therefore the relationship between them was that of mortgagor and mortgagee and the remedy lies in the Civil Court. The Dist. Forum has no jurisdiction. The allegation that the complainant and her husband had submitted all the necessary papers to cover SBI Life Insurance Scheme is not true. Despite repeated requests and reminders and importantly by their letter dt. 10.4.2005 to submit proof of age they did not respond. They had informed about their liability to produce proof of age in terms of directions contained in circular No. 6880 dt. 21.4.2004. Only on acceptance of the age of the borrower the insurance company would undertake to cover the risk relating to such borrower by admitting him to the benefits of the scheme. There was minimum and maximum age prescribed. The coverage would seize on attaining 71st birth day of the insured/borrower. Therefore the proof of age is mandatory. It had collected Rs. 7,674/- towards premium, with a view to give coverage as per the instructions, provided they furnish the relevant documents, viz., proof of date of birth etc When the complainant had failed to fulfil the mandatory obligation on their part, mere debiting of amount would not fasten any liability on it. After coming to know that they did not furnish, they had informed the complainant that the insurance coverage will not apply to them. In fact one of the staff members Sri Satya Sekhar working in Rajahmundry who happened to be a patient of Dr. Kashyap requested him to submit the age proof in order to enable to process it. However, he did not respond to his request. Therefore the complainant was not entitled to the relief sought for and prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed her affidavit evidence and got Exs. A1 to A12 marked while the bank filed Exs. B1 & B2.
5) The Dist. Forum after considering the evidence placed on record opined that there was tie up with S.B.I. Life Insurance for the loans contracted by the borrowers and since the bank had evidently collected the premium and at no time the borrowers were directed to submit proof of age for coverage of insurance and would amounts to deficiency in service and therefore directed the bank to close the loan account.
6) Aggrieved by the said order the opposite party bank preferred the appeal contending that the Dist. Forum did not consider the facts or law in correct perspective. It had failed to see that the complainant and her husband had failed to submit the proof of age in order to obtain insurance coverage. In fact the complainant could not prove that they had submitted such age proof certificates. Ex. A3 is a self-created document. Non-coverage of insurance scheme is due to latches and lapses on the part of complainant and therefore prayed that the complaint be dismissed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) Indisputably there was a tie up between the appellant bank and the SBI Life Insurance and covering the life risk of the accountholder. The complainant and her husband had borrowed Rs. 2,47,436/-. The bank did not file the proposal form etc. in order to verify whether the dates of births were made a mention and whether proof of age was sought. The complainant and the deceased are having joint S.B. account and they had borrowed the amount for which the bank had obtained insurance policy by deducting premium of Rs. 7,674/-. One of the accountholders Mr. Kumar Diwakar Kashyap died on 14.11.2005 evidenced under death certificate Ex. A4. He was born on 21.3.1965 evidenced under school certificate Ex. A1. The complainant was born on 15.11.1974 evidenced under certificate Ex. A2. The complainant informed the said fact enclosing the death certificate, medical certificate in regard to cause of his death etc. in order to claim the benefit of waiver of loan. Curiously the bank by letter Dt. 21.12.2005 Ex. A6 made a mention that earlier they had requested the deceased on several occasions to furnish the age proof for obtaining the life policy from SBI Life Insurance Company Ltd. The fact that said letters were received by the complainant or her husband was not evidenced by any document. The complainant denies that such letters being addressed received. In fact she gave legal notice under Ex. A7 mentioning “To cover up your laches, you have falsely created a story throwing blame on my client and her husband in your reply. My client already submitted age proof and as such the question of resubmitting the age proof by my client as requested by you in your reply dt. 21.12.2005 does not arise.” She also filed a complaint before the Banking Ombudsman vide Ex. A9 which was closed directing the complainant to comply with all the formalities vide Ex. A10 order.
9) The bank did not file other terms and conditions of the policy in order to show the necessity of proof of age for settling the claim. Having agreed to cover the insurance it cannot not turn round and seek some irrelevant information in order to settle the claim. No doubt there could be a condition wherein the assured would not be entitled to claim if he crosses 71 years of age. Ex. A1 & A2 undoubtedly would show that deceased was hardly aged about 40 years by the date of death. Therefore undoubtedly it is a ruse to deny the justifiable claim of the complainant. We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard. We do not see any merits in the appeal.
10) In the result the appeal is dismissed with costs computed at Rs. 2,000/-. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 25. 11. 2010.
*pnr
“UP LOAD – O.K.”
