ORDER
Complaint under Sec.12 of the CPA 1986 as amended upto date
Ms. Nipur Chandna, Member
The case of the complainant is that he had applied for a loan of Rs.14,00,000/- from OP – 1 and the same was released by the OP – 1 on 26.11.2008. It is alleged by the complainant that just two days after i.e. on 28.11.2008, the OP bank released a further loan by Rs.2,61,974/- to him without any request from him. Thereafter, the complainant has applied for another loan of Rs.4,00,000/- with the OP bank, the same was also released to him and an amount of Rs.70,000/- was further added to the loan account on account of Insurance.
It is alleged by the complainant that a loan of Rs.2,61,974/- was forced on him without explaining the terms and conditions of the loan in question. It is further alleged by the complainant that the officials of the OP bank took his signatures on blank papers and when he objected to the same, they replied that it is a practice followed in the bank, and if he wants to avail of the loan facility, he has to sign on blank papers. As the complainant was in great financial hardship, he had signed the papers in blank. It is alleged by the complainant that he was forced to pay an amount of Rs.70,000/- to the OP despite the fact that he never applied for the insurance policy, and the same was intentionally and with an oblique motive fastened on him. It is alleged by the complainant that the OP s are hand in gloves with each other and are bent upon to exploit money from the public under the garb of providing financial assistance. Hence, this complaint.
Perusal of record shows that Sh. C M Meena, Branch Manager of OP -1 had appeared in this Forum on 3.9.2013. where after none had appeared for OP – 1 and hence OP – 1 was ordered to be proceeded with exparte on 13.1.2014.
The complaint has been contested by OP -2. OP -2 has filed W.S. and has alleged that the complaint is without any cause of action and the complaint is not entitled to any relief. Para No. 3,4,5, 6 and 10 of the Brief facts of the W.S. are relevant for the purpose of the decision of this complaint and are re-produced as under:-
3. The OP had received a request for refund of balance premium under loan account no. 61059481012 as the loan account was foreclosed. A copy of the letter received from the Master Policyholder is appended as Annexure – E.
4. As per the clause 6 of Schedule IV, General Conditions, “ In case of premature repayment of the entire loan amount ahead of the agreed EMI repayment schedule, the unexpired portion of the single premium would be refunded after deduction of the administrative expenses to the borrower through the Grantees and the cover stands extinguished. No further liability whatsoever would vest on the Company either to the Grantees or to the Member”. In the instant case, the balance of the premium amounts on the life of Shri Parbodh Kumar Sharma amounting to Rs.79317/- and Rs.51833/- respectively were paid vide cheque nos.635266 and 635267 dated 29.6.2010 as per the terms and conditions of the Master Policy. A cop) appended as ANNEXURE-F. The calculation of the refund amount is given below:
Refund amount = Basic premium amount x 60% x (N-D)/N |
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Where, Basic premium = Total premium paid –ST |
N=Original term (in months) of insurance cover |
D=period elapsed between cover start date and date of closure of loan account (in months) |
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In the instant case, |
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Lan61059481012 Name: PRABODH KUMAR SHARMA |
N i.e. Original Term = 240 months |
D i.e. Elapsed period = 28/11/2008 – 17/02/2010 = 15 months |
Basic premium=total premium paid-service tax=141008-17429=141008 |
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Refund amount=141008*0.6*(240 -15)/240=Rs.79137/- |
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Lan61059481012 Name: RAJ RANI SHARMA |
N i.e. Original Term = 240 months |
D i.e. Elapsed period =28/11/2008 – 17/02/2010 = 15 months |
Basic premium=total premium paid-service tax=103538-11390=92148 |
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Refund amount=92148*0.6*(240-15)/240=Rs.51833/- |
5. The OP – 2 has further received a request for cancellation of insurance cover dated 21.5.2010 under loan account no. 61071149829 from the Master Policy holder, OP – 1 on 26.5.2010. Copy of the request for cancellation of insurance cover under loan account no. 61071149829 is appended as ANNEXURE – G.
6.As per clause no.6, Surrender Value of Schedule III, Terms and conditions of the Master Policy, “A Member may choose to surrender his/her insurance cover for the Surrender Value at any point of time from the start of the cover, provided the cover is in force, by making a request in writing. The Surrender Value will be calculated as follows:
Cover Term | Surrender Value Amount |
Year 1 onwards | (45% of the Premiums paid less taxes) x (Unexpired term/Total term) x ( Sum Assured benefit at the time of surrender/Sum Assured at inception) |
10. The complainant and his wife has made declarations in the proposal form/membership form vide Para no. 6 that “I would like to become a member of the SBI Life- Dhanaraksha Plus LPPT group Insurance scheme for the borrowers of the Master Policy holder and I agree to abide by the terms and Conditions of the scheme and join the Scheme and join the Scheme for life insurance cover for the duration of the loan as per the Prevailing EMI Schedule and that I understand that the grant of the loan will be assessed independently of life insurance Cover which is optional. ”Hence it is very clear that the complainant was aware of the terms and conditions of the Master Policy and agreed to abide by the terms and conditions of the Master Policy.
It is stated by the counsel for the OP that the amount paid on foreclosure and surrender are as per the terms and conditions of the master polices. It is also stated by the OP that there is no unjustified deductions made while paying the balance premium and the surrender value. It has been claimed that there is no cause of action for filing the present complaint.
The complainant has filed rejoinder to reiterate the facts as pleaded in the complaint.
The complainant has filed his evidence by way of his affidavit.
Ms. Dhanya, A.R. of the OP – 2 filed evidence on behalf of OP – 2 by way of her affidavit.
We have heard the arguments advanced at bar and have perused the record.
The counsel for the OP has contended that, the complainant was forced to pay an amount of Rs.70,000/- to the OP on account of Insurance policy, which was never applied for by him. It has been contended that the insurance policy was intentionally and with an oblique motive fastened on the complainant by the OP .
It is further contended by the counsel for the complainant that, as the complainant was in great financial hardship having no other option, he had consented to sign on blank papers, which was subsequently converted into loan documents/insurance policy.
We however are not in agreement with the contention of the Ld. counsel for the complainant. In our opinion when a person signs a document, there is a presumption that he has read the documents properly and understood it and only then he has affixed his signatures thereon.
A similar view has been taken by the Hon’ble Supreme Court in Civil appeal No. 5994 of 2004, wherein the Hon’ble Court has observed as under:-
When a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the documents properly and understood it and only then he has affixed his signatures thereon, otherwise no signature on a document can even be accepted. In particular, businessmen, being careful people (since their money is involved) would have ordinarily read and understood a document before signing it. Hence, the presumption would be even stronger in their case. There is no allegation of force or fraud in this case. Hence it is difficult to accept the contention of the respondent while admitting that the document Ex.D-8 bears his signatures that it was singed under some mistake.
In the present case, the complainant has himself admitted that he had signed the loan papers.
OP – 2 had issued the insurance cover to the complainant on the basis of the membership form duly signed and premium received by it. Hence, the allegation of the complainant that the insurance cover were granted without his consent and approval is baseless.
The counsel for OP – 2 has placed on record, the copies of membership Form i.e. Annexure B 1 and B 2, the copies of certificates of Insurance Containing the terms and conditions of payment letters i.e. Annexure F and H. The copies of request letter for refund of Balance payment and cancellation of insurance cover i.e. Annexure E & G.
From the documents placed on record, it is clear that while making the payments to the complainant OP – 2 has strictly followed the terms and condition of the Master Policy. There is therefore no deficiency in service on the part of the OP – 2.
Even otherwise, the complaint is barred by limitation and as such is not maintainable. The alleged loan was taken by the complainant in the year 2008. He was allegedly made to sign the papers in blank in 2008 and was allegedly issued with an insurance policy at the same time. The cause of action had therefore arisen at the time of grant of loan/issuance of policy of insurance. The complaint had approached this Forum in the year 2013 i.e. after about 5 years of the accrual of the cause of action. We, therefore, also hold that the complaint is barred by time and is not maintainable on this score as well.
Consequently, we dismiss the present complaint.
Copy of the order be made available to the parties as per rule.
File be consigned to record room.
Announced in open sitting of the Forum on.....................
