DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

PATIALA.

                                      Consumer Complaint No.2 of 3.1.2020

                                      Decided on:                   10.1.2023

Daljit Kaur Cheema wife of Sh.Daljit Singh, resident of House No.70, Salaria Vihar, Urban Estate, Phase-1, Patiala.

                                                                   …………...Complainant

                                      Versus

1. State Bank of India, Branch:-Urban Estate, Phase-II, Patiala through its Branch Manager.
2. State Bank of India, Branch:- Bhupinder Nagar, Bhupinder Road, Patiala through its Branch Manager.
3. State Bank of India, Head Office, The Mall, Patiala through its General Manager.                                             …………Opposite Parties

Complaint under the Consumer Protection Act

QUORUM

                                      Hon’ble Mr. S.K.Aggarwal, President

                                      Hon’ble Mr. G.S.Nagi, Member       

PRESENT:                             Sh.H.P.S.Verma, counsel for complainant.

                                      Sh.P.S.Mann, counsel for OPs.                 

 ORDER                                          

1. The instant complaint is filed by Daljit Kaur (hereinafter referred to as the complainant) against State Bank of India (hereinafter referred to as the OP/s) under the Consumer Protection Act (for short the Act).
2. The averments of the complainant are as follows:

That she obtained home loan of Rs.11,50,000/- in the year 2011, which was sanctioned by OP No.1 jointly in the name of complainant and her husband S.Daljit Singh S/o S.Baljinder Singh and the said loan was having account No.65146908490 .Theinstallment for the repayment of the loan amount was Rs.12,900/- per month. It is further averred that at the time of sanctioning home loan, OP No.1 obtained blank cheques and also got signed various documents from complainant and her husband. OP No.1 issued an insurance policy i.e. SBI Suraksha having account No.65146909709, executed from SBI Life, without the consent of the complainant. In the month of February,2013, complainant and her husband, fully repaid the loan amount. OP No.1 thereby closed loan account No. 65146908490 and issued “No Due Certificate”.

3. Earlier to the above said loan, complainant had also availed another home loan facility starting from the year 2010, from OP No.2 having loan account No.65089758718, for an amount of Rs.8,50,000/-, to be paid in equal installments of Rs.7200/- per month, which was later on increased to Rs.10,000/- per month, from the year 2018.
4. OP No.1 instead of ending the above said insurance policy given for loan account No. 65146908490, attached the same  with first home loan account No.65089758718 illegally. After coming to know this fact, complainant moved an application dated 3.2.2018 with the request to the OPs to close the said insurance policy.
5. The OPs in connivance with each other, got an amount of Rs.155/- withdrawn vide cheque No.847369 dated 30.1.2014, an amount of Rs.8255/- vide cheque No.244036 dated 14.8.2013, Rs.8410/- vide cheque No.266357 dated 14.8.2012, Rs.8410/- vide cheque No.1008944 dated 22.8.2014, Rs.8410/- vide cheque No.614710 dated 30.10.2015 and Rs.8410/- vide cheque No.1214789 dated 12.8.2016. The OPs had also withdrawn/deducted an amount of Rs.70,000/- to Rs.80,000/- from the account of the complainant without any right or authority to do so. OPs have falsely shown amount of Rs.1,00,000/- outstanding towards the account of complainant and the name of the complainant has figured in the list of defaulter in CIBIL, which caused mental agony and harassment to the complainant
6. Complainant wrote so many letters to the OPs with the request to refund the amount so deducted from her account and also to close the aforesaid insurance policy and also to remove her name from the list of defaulters in CIBIL but no heed was paid to the request of the complainant by the OPs. The complainant also got served legal notice upon the OPs but of no use. It is further averred that OPs wrote letter No.269 to the counsel for the complainant informing that the matter regarding refund of money is under consideration but no amount was credited in the account of the complainant. There is thus deficiency in service and unfair trade practice on the part of the OPs. Consequently, prayer for acceptance of this complaint has been made.
7. Upon notice, OPs appeared through counsel and filed their written reply by taking various preliminary objections. On merits, it is admitted that the complainant and her husband jointly raised loan of Rs.12,29,435/-( Rs.11,50,000/- for purchase of plot from PUDA, Patiala allotted to the husband  of the complainant and Rs.79435/- for payment of premium to SBI Life in five annual installments for insurance cover) and account No.65146908490 was opened in the joint name of complainant and her husband and account No.65146909709 was opened for payment of premium.
8. OPs have also averred as follows:

The complainant and her husband signed the loan documents as well as other documents after understanding the nature and purpose of the said documents. A sum of Rs.15887/- was paid to SBI Life as first installment of premium on behalf of the complainant and her husband by debit to the account No.65146909709 on 14.8.2012 . Subsequently annual premiums were paid by debit to the said account to keep the cover alive as complainant never made any request for discontinuation of insurance cover.

9. Husband of the complainant requested for close of insurance cover for the first time on 3.2.2018. It is admitted that house loan account No.65146908490 was closed on 26.2.2013 and No Due Certificate was issued by the OPs, for housing loan. The complainant and her husband never closed the loan account opened for the payment of insurance premium. It is also admitted that the complainant had also raised housing loan from OP No.2 and the surrender value of the insurance policy was credited in the account of the complainant. It is denied that insurance cover taken by the complainant and her husband was attached to loan availed by the complainant from Bhupindra Road Branch of the OP Bank rather the loan account No.65146909709 was transferred to Bhupinder Nagar Branch for operational convenience only and as the insurance cover could be continued even after payment of entire outstanding loan, complainant and her husband choose to continue the cover till 3.2.2018 where after the cover was closed as requested and surrender value was paid. It is denied that any amount was paid to SBI Life by debit to the savings account of the complainant rather premium was paid by the OP Bank to the SBI, Life Insurance Company on behalf of the complainant, out of the loan sanctioned by the OP bank for payment of premium. The complainant made a request to surrender insurance cover only on 3.2.2018, for the first time, where after the policy was got cancelled from SBI Life. The complainant and her husband have authorized the OP bank to deduct loan installment from their salary accounts. Since the complainant has not paid any amount in the loan account opened for payment of insurance premium of insurance policy as such her name was figured in CIBIL. After denying all other averments made in the complaint, the OPs have prayed for the dismissal of the complaint.
10. In support of the complaint, Ld. counsel for the complainant has tendered in evidence Ex.CA affidavit of the complainant alongwith documents, Ex.C1 copy of statement of account, Ex.C2 copy of letter,Ex.C3 copy of statement of account, Ex.C4 copy of NO Due Certificate, Ex.C5 copy of application, Exs.C6 & C20, copies of statements showing encashment of cheques of the complainant, Ex.C7 & C8 copies of surrender detail, Ex.C9 copy of statement of account showing withdrawal of amount, Exs.C10 & C11 copies of legal notices,Exs.C12 to C18, postal receipts, Ex.C19 copy of letter and closed the evidence of complainant.
11. On the other hand, Ld.counsel for OPs has tendered in evidence Ex.OPA affidavit of Karan Chadha, Branch Manager, SBI alongwith documents Exs.OP1 & OP2, copies of loan documents, Ex.OP3 copy of statement of account, Ex.OP4 & Ex.OP5 copies of particulars of insurance cover, Ex.OP6 copy of instruction of SBI Life regarding pre closure of loan, Ex.OP7 copy of authority letter and closed the evidence.
12. We have heard the ld. counsel for the parties and have also gone through the record of the case, carefully.
13. From the perusal of record it transpires that the complainant had taken a loan of Rs.12,29,435/-  which was to be repaid in 180 EMIs of Rs.12,900/-each. As per the  arrangement letter, Ex. OP1 and loan agreement, Ex.OP2, a single loan was sanctioned for Rs.12,29,435/, which does not indicate any amount  in respect of actual loan to be disbursed to the complainant vis a vis loan for the insurance policy alleged to have been issued by the OPs. From the above, it is clear that the loan was for Rs.12,29,435/- and was to be repaid @ Rs.12,900/- per month. The said documents do not indicate any separate provision for the recovery of the loan meant for the insurance policy, issued to the complainant. It has further been observed that an amount of Rs.6,61,571/- only was disbursed against the said loan to the complainant and Rs.79435/-which was sanctioned  as that for the insurance policy was never disbursed. Although the EMI for loan of Rs.12,29,435/- was Rs.12,900/- even then an installment of Rs.12,900/- was continuously deducted from the saving bank account of the complainant till the time of issue of NDC against the disbursal of Rs.6,61,571/-.This fact is further proved by the letter of authority, Ex.OP7 as per which the complainant had authorized the bank to deduct a sum of Rs.12,900/- per month from his saving bank account. No different arrangement whatsoever was made by the OPs for deduction of any installment for the loan of Rs.79435/- alleged to have been sanctioned/disbursed against the insurance policy.   
14. As such installment of Rs.12900/- per month covers both the loans. So once the NDC (No Due Certificate), Ex.C4 was issued by the OPs against the loan of Rs.11,50,000/- the letter of authority for deduction of Rs.12,900/- per month had become redundant. The blank signed cheques issued by the complainant without the name of the beneficiary against the said loan account have also become redundant, once the loan is settled. It was the duty of OP No.2 to check any outstanding against the loan account before issuing the NDC and as such the amount shown to be outstanding against the insurance policy even after the issue of NDC should have been taken care of by OP No.2 before issuing of NDC. The transfer of the loan account against insurance from one branch to the other without the consent of the complainant and irregular/late payment of insurance premiums against insurance policy and even altering the amount of premium without the consent of the complainant is again deficiency in service on the part of the OPs.
15. A perusal of statement of account, Ex.OP3, indicates that the first installment of Rs.15887/- against the loan of Rs.79435/- for insurance against a/c No.65146909709 was debited on 14.8.2012.This loan account was maintained by the OPs for making payments against insurance premium to SBI Life. This loan account was being operated and maintained by the OPs without the knowledge of the complainant. The OPs were custodian of this loan account and the same was to be managed by them but the OPs kept on sleeping over this account. Had they been alive, they would have made arrangements for recovery of amount/installments from the complainant from time to time. However, no such effort was made by them. No notice whatsoever was issued to the complainant by the bank and matter came to light only when lumpsum deduction was made from the saving bank account of the complainant  and issue of NDC, after a period of almost five years from the date of closure of loan. If timely action at the time of payment of 2^nd premium would have been taken by the OPs to settle the dues of loan against insurance, the disputed amount would have been much less or even zero. Further, the OPs were irregular in making the payments against insurance policy and the payments which should have been made on 14/8 of each month have been made on 9.10.2014, 16.3.2016, 18.4.2016 and 19.11.2016. Even the premium amount has been changed by the OPs on their own and against the premium of Rs.15887/- amount of Rs.10,000/- has been debited to this account on 22.3.2018, 22.5.2018 and 22.5.2018, which clearly amounts to deficiency in service on the part of the OPs as they have acted willfully without the consent of the complainant. Whereas on one hand these deductions are unauthorized on the other hand these are irregular deductions and subsequently irregular payments of premiums have led to a gross depreciation in the amount of surrender value. Had the installments against premium been paid regularly by the OP, the surrender value after five years would have been equal to/more than the premium paid and there would have been no dispute. It is surprising that the surrender request given by the complainant for the same insurance policy issued in the name of complainant and her husband were processed separately on 28.3.2018 and 15.1.2019, after a gap of almost 10 months from each other, which again shows callous attitude of the OPs and also deficiency in service on their part. This also defeats the very purpose for which the loan was sanctioned in first instance.
16. We are of the opinion that if the OPs had been alive to the situation they would have made separate entries for loan amount and loan against insurance in the agreement letter as well as in the loan agreement as has been mentioned in para No.4 of the affidavit submitted by the OPs, indicating separate amount of deductions for loan account and insurance premium. Further no separate authority was taken from the complainant for payment of insurance premium, which was annual in nature as is evident from the documents i.e. arrangement letter, Ex.OP1 loan agreement,Ex.OP2 and letter of authority ,Ex.OP7.
17. From the perusal of record, it transpires that installment of Rs.12900/- per month covers both the loans. Further once the NDC (No Due Certificate) was issued by the OPs against the loan of Rs.11,50,000/- the letter of authority for deduction of Rs.12,900/- per month had become redundant.
18. Thus, keeping in view the entire facts, circumstances and evidence of this case, we are of the opinion that the above action of the OPs is made to cover up their own wrong doings. There is thus, deficiency in service and unfair trade practice on the part of the OPs. Accordingly, we partly allow the complaint and the OPs are directed to refund the entire amount of Rs.70,000/-/Rs.80,000/- debited to the Saving Bank Account of complainant after 26.2.2013  when ‘No Due Certificate’ was  issued to the complainant. The OPs are further directed to pay the surrender value of the insurance policy, if any, on 26.2.2013, when the loan account is deemed to have been closed. The OPs are at liberty to claim the surrender value credited to the complainant i.e. Rs.9445/- and Rs.7371/-(Exs.C7&C8) respectively. The OPs are further directed to clear the name of the complainant from the list of defaulters i.e. CIBIL as far as relating to the present case is concerned. Parties are left to bear their own costs.
19. Compliance of the order be made by the OPs within 30 days from the date of the receipt of the certified copy of this order.  
20. The instant complaint could not be disposed of within stipulated period due to heavy rush of work, Covid protocol and for want of Quorum from long time.
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                                             G.S.Nagi                               S.K.AGGARWAL

                                              Member                          President