DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA (PUNJAB)<br /> <br /> CC. No.33 of 29-01-2007<br /> Decided on : 21-05-2007 <br /> <br /> 1.Jaswinder Kaur W/o Sh. Piara Singh Dhillon<br /> 2.Piara Singh Dhillon S/o Sh. Hamir Singh<br /> both residents of Street No. 26, Ajit Road, Bathinda, now residing at House No. 77, Housefed Colony, Opposite Milk Plant,. Dabwali Road, Bathinda, Tehsil & District Bathinda.<br /> ... Complainants<br /> Versus <br /> 1.State Bank of India, Branch Kikar Bazar, Bathinda through its Branch Manager.<br /> 2.Assistant General Manager, State Bank of India, Home Finance Limited 62/191 Barmi Chambers, Gurdwara Road, Karol Bagh, New Delhi.<br /> 3.Life Insurance Corporation of India, Mumbai, through its Managing Director.<br /> 4.Life Insurance Corporation of India, Bibiwala Road, Bathinda through its Branch Manager.<br /> 5.Life Insurance Corporation, Mandi Dabwali, Distt. Sirsa through ts Branch Manager. <br /> ... Opposite parties<br /> <br /> Complaint under Section 12 of the Consumer<br /> Protection Act, 1986.<br /> <br /> QUORUM<br /> Sh. Lakhbir Singh, President<br /> Sh. Hira Lal Kumar, Member<br /> Dr. Phulinder Preet, Member<br /> <br /> For the Complainant : Sh. G.S. Chugh, Advocate.<br /> For the Opposite parties : Sh. S.M. Goyal, Advocate for opposite parties No. 1 & 2.<br /> Sh. Sandeep Baghla, Advocate, for opposite parties No. 3 to 5. <br /> O R D E R<br /> <br /> LAKHBIR SINGH, PRESIDENT<br /> 1. A loan of Rs. 2.50 Lacs was sanctioned to complainant No. 1 by opposite party No. 2 on 21.3.98. Her husband i.e. complainant No. 2 was having Life Insurance Policy No. 170660903 dated 15.8.92 for Rs. 1.00 Lac. He assigned all the rights in the policy in favour of bank till repayment of the entire loan amount. Entire amount was repaid. Certificate dated 19.12.05 was issued by State Bank of India to the effect that amount of housing loan has been liquidated and nothing is due towards complainant No. 1. This certificate was submitted to opposite party No. 5 with the request that entire amount under the policy on account of premature release be issued as complainants are in dire need of money to defray some urgent expenses. Opposite party No. 5 insisted to get a clear cut certificate from opposite parties No. 1 & 2 that there was no lien of the bank or State Bank of India Home Finance Limited. Despite repeated requests and notice dated 7.3.06 issued to opposite parties No. 1 & 2, requisite certificate has not so far been issued. Opposite party No. 5 was requested many a times to release the premature payment under the policy, but to no effect. Complainants had to raise loan from their relatives to defray the urgent and essential expenses on account of which their economic prestige has been lowered in their eyes. They allege deficiency in service and unfair trade practice on the part of the opposite parties. In these circumstances, complaint under Section 12 of the Consumer Protection Act, 1986 (here-in-after referred to as `Act') has been preferred by them seeking direction from this forum to the opposite parties to arrange to make payment of the money due to them on account of premature release of Life Insurance Policy and pay Rs. 50,000/- as compensation besides Rs. 3,000/- as cost.<br /> 2. On being put to notice, opposite parties No. 1 & 2 filed their version stating that complainants have no locus standi and cause of action to file the complaint; complainant No. 2 is not borrower or consumer as he simply stood guarantee for repayment of the loan amount alongwith interest and cost to them; complaint is not maintainable; complainants have not come to this forum with clean hands; complaint is false and frivolous and it has been filed to humiliate them ; complainants are estopped from filing the complaint by their act and conduct; material and intricate questions of fact and law are involved for which oral and documentary evidence is required which can only be taken in civil court; complaint is bad for mis-joinder of them and non-joinder of State Bank of India Home Finance Limited and there is no deficiency in service on their part. On merits, they admit that loan was sanctioned. Complainant No. 2 became guarantor. Policy was assigned by complainant No. 2 in favour of the bank. Entire loan amount has been repaid by complainant No. 1. No due Certificate was issued on 19.12.05. Policy in question was duly delivered to opposite party No. 2. Even thereafter letter dated 7.2.07 clarifying that bank has no charge or due against policy was issued. There is no prescribed form of opposite party No. 5 for issuing No Due Certificate by them. They deny that they received any notice from the complainants for getting issued No Due Certificate. They were always ready and willing and are still ready and willing to issue any other certificate which may be found necessary for release of LIC Policy by opposite parties No. 3 to 5 in favour of complainant No. 2. They deny remaining averments in the complaint.<br /> 3. Opposite parties No. 3 to 5 filed separate reply taking legal objections that complaint is not maintainable in the present form; complainants have no cause of action against them; nature of the allegations do not attract any provisions of the Act; this forum has got no jurisdiction to try and decide the complaint and complaint is false and frivolous. Policy in question was assigned by complainants in favour of opposite parties No. 1 & 2 and endorsement to that effect has been made on the policy. Unless the assignment is got released from opposite parties No. 1 & 2, complainants have no legal entity for seeking any amount in respect of the policy in question which was issued in favour of complainant No. 2. Fact that alleged certificate has been issued by opposite party No. 2 does not provide any benefit to the complainants. Complainants themselves are wrong doer and they have failed to comply with the procedure for the release of assignment of the policy. They deny the remaining averments in the complaint.<br /> 4. In support of his allegations contained in the complaint, complainant has produced in evidence his two affidavits (Ex. C-1 & Ex. C-2), photocopy of certificate dated 19.12.05 (Ex. C-3), photocopy of letter dated 21.3.98 (Ex. C-4), photocopy of policy (Ex. C-5), photocopy of legal notice (Ex. C-6), photocopy of letter dated 7.2.07 (Ex. C-7) and photocopies of postal receipts (Ex. C-8 & Ex. C-9).<br /> 5. In rebuttal, on behalf of opposite parties No. 1 & 2 affidavit of Sh. Sham Lal Garg, Chief Manager (Ex. R-1) and on behalf of opposite parties No. 3 to 5 affidavit of Sh. Shanti Lal Yadav, Manager (Ex. R-2) have been tendered in evidence.<br /> 6. We have heard the learned counsel for the parties. Besides this, we have gone through the record and written briefs of arguments submitted on behalf of the parties.<br /> 7. Some facts are not in dispute in this case. They are that loan of Rs. 2.50 Lacs was sanctioned by State Bank of India to complainant No.1. Complainant No. 2 is policy holder of policy No. 170660903 for Rs. 1.00 Lac. It was purchased by him on 15.8.92. Date of maturity is 15.8.07. Complainant No. 2 stood guarantee for repayment of the loan amount by complainant No. 1 to the bank. He assigned insurance policy, copy of which is Ex. C-5, in favour of the bank. Opposite parties No. 1 & 2 admit that entire loan amount has been repaid.<br /> 8. Learned counsel for the complainant urged that there is deficiency in service on the part of the opposite parties as entire loan amount was repaid but despite repeated requests and notice dated 7.3.06, copy of which is Ex. C-6, opposite parties No. 1 & 2 did not issue the certificate as demanded by opposite party No. 5 and opposite party No. 5 has not released the payment of the amount due on account of premature withdrawl of the Life Insurance Policy. He further argued that complainants have to raise loan from their relatives to defray the urgent and essential expenses. Opposite parties No. 4 & 5 are working under the supervision and control of opposite party No. 3.<br /> 9. Mr. Goyal, learned counsel for opposite parties No. 1 & 2 vehementally argued that there is no deficiency in service on the part of the opposite parties No. 1 & 2 at all. After repayment of the loan amount, they have already issued requisite certificate dated 19.12.05, copy of which is Ex. C-3 according to which assignment of the policy stands automatically released. Even on 7.2.07, another certificate has been issued by opposite parties No. 1 & 2 to the Life Insurance Corporation for releasing the policy in favour of the policy holder on account of the fact that loan has been liquidated on 30.5.05.<br /> 10. Mr. Baghla, learned counsel for opposite parties No. 3 to 5 argued that Life Insurance Policy was assigned with opposite party No. 1 and endorsement has been made on the policy. Assignment is to be got released by policy holder and he has failed to get it done.<br /> 11. We have considered the rival arguments.<br /> 12. As is clear from the record available on the file, loan amount was repaid by complainant No. 1 on 30.5.05. Affidavit Ex. R-1 is of Sh. Sham Lal Garg, Chief Manager, State Bank of India, Kikar Bazar, Bathinda. According to it the policy in question in original has been returned to complainant No. 2. Assignor of the policy in favour of opposite party No. 1 & 2 was policy holder. Assignment is to be got cancelled by him. Certificate from the opposite parties was obtained copy of which is Ex. C-3. Opposite parties No. 1 & 2 made it clear that Smt. Jaswinder Kaur has liquidated housing loan account and nothing is due towards her. No evidence is on the record that either complainant No. 2 or opposite parties No. 3 to 5 ever demanded cancellation of the assignment of the policy in any specific form. There is no such request to this effect. Mere fact that complainant got issued legal notice dated 7.3.06, copy of which is Ex. C-6, is no ground to hold that certificate from opposite parties No. 1 & 2 regarding cancellation of the assignment in specific form was demanded through it. Again opposite parties No. 1 & 2 have made it clear to Life Insurance Corporation of India that loan account has been liquidated by Smt. Jaswinder Kaur on 30.5.05 and that policy be released in favour of policy holder. This is evident from Ex. C-7. Learned counsel for opposite parties No. 3 to 5 failed to show us any prescribed form for getting the assignment cancelled/released by the assignor i.e. policy holder when opposite parties No. 1 & 2 delivered original policy to the policy holder on liquidation of the housing loan account and delivered the certificate that assignment made on the policy came to an end. No malafide intention, negligence and carelessness and deficiency in service on the part of opposite parties No. 1 & 2 can be concluded in this case.<br /> 13. So far as opposite parties No. 3 to 5 are concerned, deficiency in service on their part is writ large. Complainant No. 1 repaid the loan amount. Original insurance policy was delivered to complainant No. 2 who had become guarantee for complainant No. 1. Not to speak of this, opposite parties No. 1 & 2 issued certificate to the effect that complainant No. 1 has liquidated the housing loan account and nothing is due towards her. Affidavit Ex. C-2 is of complainant No. 2. He has made clear in it that certificate regarding the liquidation of loan account was submitted to opposite party No. 5 with the request that entire loan amount has been repaid and that entire amount payable on account of premature release of the insurance policy be paid as they were in dire need of money. This does not stand rebutted. Rather Sh. Sham Lal Yadad, Manager L&HPF, Division Office of Life Insurance Corporation of India in his affidavit Ex. R-2 has stated that issuance of the alleged certificate does not provide any benefit to the complainants as assignment is to be released as per terms and conditions, Insurance Act and statute. Learned counsel for the opposite parties No. 3 to 5 made reference of Section 38 Sub Section (v) of the Insurance Act, 1938. This section does not prescribe any specific form for cancellation/release of the assignment from the Insurance Policy. It appears to us in this case that opposite parties No. 3 to 5 became hyper technical. When opposite parties No. 1 &2 issued certificate dated 19.12.05 and it was submitted to opposite party No. 5 for getting the amount on account of premature release of the insurance policy by complainant No. 2, Life Insurance Corporation of India should have accepted the request. Assignment on the insurance policy stood automatically released/cancelled with the issuance of the certificate of the concerned bank. Non-release of the amount on account of the withdrawl of the insurance policy prematurely, certainly amounts to deficiency in service on the part of opposite parties No. 3 to 5.<br /> 14. Now question arises for determination is to which relief should be accorded to the complainant in the given situation. In our view opposite parties No. 3 to 5 deserve direction for release of the payment on account of withdrawl of Life Insurance Policy prematurely by complainant No. 2/policy holder. As discussed above, record speaks that request was made for premature release of the amount under the policy by complainant No. 2 immediately on receipt of the certificate dated 19.12.05, copy of which is Ex. C-3. Opposite parties No. 5 without any solid basis did not accede to his request and continued putting of the matter on hypertechnical and baseless grounds. Had the amount been released, complainants could use it as they were facing financial crunch. Evidence has been led by them that they have to raise loan from their relatives to meet their urgent needs. All this must have caused harassment and mental tension to them for which complainant No. 2 deserves some compensation which we assess as Rs. 5,000/- in the facts and circumstances of this case. For this, we are fortified from the observations of Hon'ble State Commission of Madhya Pradesh in the case of J. Radhakrishnan Vs. A Basheera & Another 2001(2) CLT 225 wherein it has been held that award of compensation always involves some sort of speculation and it is very difficult to quantify the amount of compensation on a rationale basis.<br /> 15. No other point was urged before us at the time of arguments.<br /> 16. In the premises written above, complaint is dismissed qua opposite parties No. 1 &2. It is accepted against opposite parties No. 3 to 5 with cost of Rs. 1,000/-. Opposite parties No. 3 to 5 are directed to do as under :-<br /> i) Make payment of the due amount to complainant No. 2/policy holder on account of premature release of Insurance Policy No. 170660903 for Rs. 1.00 Lac.<br /> Pay Rs. 5,000/- to complainant No. 2 as compensation under Section 14(1)(d) of the Act.<br /> Compliance of this order be made within 30 days from the date of receipt of its copy failing which the amount of compensation under Section 14(1)(d) of the Act would carry interest @9% P.A. till realisation.<br /> Copy of this order be sent to the parties concerned free of cost and file be consigned to record room. <br /> Pronounced :<br /> 21-05-2007 <br /> (Lakhbir Singh)<br /> President<br /> <br /> <br /> (Dr.Phulinder Preet) (Hira Lal Kumar)<br /> Member Member