Chandigarh

StateCommission

A/325/2015

Kuldeep Kaur - Complainant(s)

Versus

State Bank of India - Opp.Party(s)

Gurmeet Kaur

12 Feb 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

                                                                 

Appeal No.	:	325 of 2015
Date of Institution	:	01.12.2015
Date of Decision	:	12.02.2016

 

Kuldeep Kaur w/o Late Sh. Mohan Singh r/o House
No.244-A, Sector 43-A, Chandigarh aged about 53 years.

.…Appellant/Complainant.

Versus

1.      State Bank of India,  Chandigarh Main Branch, SCO 43-48, Bank Square, Sector 17-B, Chandigarh through its Zonal Manager/Manager.

2.      State Bank of India Life Insurance Co. Ltd., SCO 127, 29, 29, 3rd Floor, Sector 17-C, Chandigarh through its Branch Manager.

3.      State Bank of India, Life Insurance Co. Ltd., CPC, Kapas Bhavan, Plot No.3-A, Sector 10, CBD Belapur, Navi Mumbai through its Managing Director.

…..Respondents/Opposite Parties.

 

Appeal under Section 15 of the Consumer Protection Act, 1986.

 

BEFORE:   JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                SH. DEV RAJ, MEMBER.

                SMT. PADMA PANDEY, MEMBER.

               

Argued by:

 

Sh. Balwinder Singh, Advocate for the appellant.

Sh. J. K. Babbar, Advocate for respondent No.1.

Sh. Rajneesh Malhotra, Advocate for respondents No.2 & 3.

 

PER DEV RAJ, MEMBER

 

              This appeal has been filed by the complainant (now appellant), against the order dated 21.10.2015, rendered by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (in short ‘the Forum’), vide which, consumer complaint bearing No.654 of 2014 was dismissed.

2.             The facts in brief are that the late husband of the complainant, namely, Sh. Mohan Singh, purchased a new car by getting the same financed from Opposite Party No.1-Bank.  It was stated that as per the Policy of the Bank, he was insured with SBI Life Insurance and an amount of Rs.19,120/- was paid as premium vide cheque dated 12.11.2013. It was further stated that the Bank vide Master Policy No.70000003903, membership No.700383191 loan account No.3347555767 assured the late husband of the complainant under SBI Rinn Raksha New Auto Loan Scheme for the outstanding loan amount. It was further stated that the husband of the complainant died a natural death on 27.12.2013. It was further stated that during his life time, he paid regular monthly loan installments and thereafter, the complainant deposited the same up-to February 2014. It was further stated that after the death of her husband, the complainant requested the Opposite Parties to pay the insured sum or to adjust the same against the outstanding loan amount of the car.  It was further stated that the claim of the complainant was rejected by Opposite Parties No.2 & 3 on the ground that her husband died within 45 days from the date of getting the Policy and an intimation of the same was sent to Opposite Party No.1 vide letter (Annexure C-3). It was further stated that thereafter the complainant filed a claim before the Insurance Ombudsman but the same was wrongly rejected vide letter (Annexure C-4). It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service, and indulgence into unfair trade practice.

3.             When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was filed and prayed that the Opposite Parties be directed to pay/adjust the outstanding amount of Rs.5,02,250/- against the car loan account; pay Rs.50,000/- as compensation for mental and physical harassment; Rs.15,000/- as cost of traveling to the office of the Opposite Parties and Rs.22,000/- as litigation expenses.

4.             Opposite Party No.1, in its written version, admitted that the deceased husband of the complainant had got financed a car from it. It was stated that the life insurance policy, in question, was issued by Opposite Parties No.2 & 3 who are separate entities.  It was further stated that since the Policy, in question, had been issued by Opposite Parties No.2 & 3 after receiving the premium, it was in their hands to give any claim to the family of the deceased, if at all entitled under the Policy terms and conditions. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

5.             Opposite Parties No.2 and 3, in their written version, did not dispute that the deceased husband of the complainant had availed a loan from Opposite Party No.1 and had applied for the Policy in question.  It was further stated that in Group Insurance Scheme, the privity of contract is between the Master Policyholder and the Insurer. As an evidence of contract, a Master Policy containing all terms and conditions of the insurance coverage is issued to the Master Policyholder and all the terms and conditions of the same are binding on all the members of the scheme. It was further stated that in the instant case, the date of commencement of the risk on the life of Sh. Mohan Singh was 14.11.2013 and the date of death was 27.12.2013 i.e. the death happened within 43 days from the date of commencement of risk due to natural cause. It was further stated that as per the terms and conditions of the Master Policy, the company was not liable to pay any claim amount, except for a claim arising out of death due to accident, during the first 45 days from the date of commencement of the cover for the insured member.  It was further stated that on receipt of the membership form dated 12.11.2013, the same was accepted and insurance cover was granted w.e.f. 14.11.2013.  It was further stated that since the DLA had died within 45 days from the date of commencement of the Policy, therefore, the claim was rightly repudiated. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.2 & 3, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

6.             The complainant filed replication where she reiterated all the averments contained in the complaint and repudiated those as contained in the written statement of the Opposite Parties.

7.          The parties led evidence, in support of their case.

8.           After hearing the Counsel for the parties and, on going through the evidence, and record of the case, the District Forum, dismissed the complaint, vide the impugned order, as stated above.

9.           Feeling aggrieved, the complainant had filed the instant appeal.

10.           We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.

11.           It is evident on record that Sh. Mohan Singh, late husband of the appellant, purchased a new car, which was financed by Opposite Party No.1 - State Bank of India.  Admittedly, Opposite Parties No.2 & 3 issued a master policy No.70000003903 to Opposite Party No.1 for the grant of insurance cover to the loan borrowers of Opposite Party No.1 – Bank.  The husband of the complainant had applied for grant of insurance cover with regard to his loan account No.33447555767 through  proposal Form No.7003835191 dated 12.11.2013 alongwith premium of Rs.19,120/-. He (Sh. Mohan Singh) was granted an insurance cover under SBI Life RiNn Raksha group insurance scheme in the sum of Rs.5,15,000/- and a certificate of insurance (Annexure C) was granted. Sh. Mohan Singh, husband of the complainant, died a natural death on 27.12.2013 as per the death certificate (Annexure C-2).

12.           Annexure - A is the Policy Document, bare perusal whereof, reveals that Opposite Party No.1 (State Bank of India), being  an intermediary, was the proposer and Master Policy holder. The Master Policy commenced on 10.7.2013. The husband of the complainant, Sh. Mohan Singh, paid premium of Rs.19,120/- vide cheque dated 12.11.2013. The date of commencement of member Policy, as per the certificate of insurance (Annexure C), was 14.11.2013 and the insurance cover started on 14.11.2013.

13.           Annexure B, is the copy of SBI Life RiNn Raksha Membership Form and this form had duly been signed by Sh. Mohan Singh, who gave a clear declaration on 12.11.2013 that he had understood the terms and conditions of the plan and agreed to abide the same and joined the plan for life insurance cover for the duration of the loan as per the prevailing EMI schedule.

14.           Opposite Parties No.2 and 3 in their written statement in Para 4 under the heading “Brief facts of the case” have stated as under:-

“4. In the instant case, the proposal form was dated 12.11.2013 and the premium was debited from the account of Sri. Mohan Singh on 12.11.2013. Thus, even if considering the date of proposal form as date of commencement of insurance cover, the death is on 45^th day of the date of commencement of insurance cover due to natural cause, the claim is not payable.”                                    

15.           The definition of “Insurance Cover Start Date” in the Policy (Page 56 of the Forum file) reads as under:-

Insurance Cover Start Date

the insurance cover start date for a member will depend on the date of underwriting acceptance of proposal and date of receipt of premium. If the elapsed period between the two dates is more than 45 days, then the insurance cover would commence from the date of underwriting acceptance of the proposal. If the elapsed period between the two dates is less than or equal to 45 days, the insurance cover will commence from the date of receipt of premium.

               

16.           In the case in hand, when Opposite Parties No.2 and 3 admitted that premium was debited from the account of the deceased on 12.11.2013, it means that they received the premium on 12.11.2013. As per later part of the definition of ‘Insurance Cover Start Date’, in the instant case, since the elapsed period between two dates is less than 45 days, the insurance cover would commence from the date of receipt of premium. The statement of Opposite Parties No.2 and 3 that even considering the date of proposal form as date of commencement of Insurance cover, the death was on the 45^th day of the commencement of insurance cover due to natural cause, the claim was not payable, is not correct. Whereas 45 days period (from 12.11.2013 to 26.12.2013) was complete on 26.12.2013 and since Sh. Mohan Singh (deceased) husband of the complainant died on 27.12.2013, the period exceeded 45 days. Not only this, the Consumer Protection Act, 1986 is a beneficial legislation and the interpretation, which is in favour of the complainant, has to be considered. As such, in our considered opinion, the complainant is entitled to the insurance cover. Thus the action of the respondents No.2 & 3/Opposite Parties No.2 & 3 in repudiating the genuine claim of the appellant/complainant, was a clear deficiency in rendering service and unfair trade practice on their part. The Forum erred in not appreciating this aspect of the matter. Since, admittedly the appellant/complainant was refunded an amount of Rs.16,913/- in respect of the premium amount, therefore, in our considered opinion, the respondents No.2 & 3/Opposite Parties No.2 & 3 are, jointly and severally, liable to pay an amount of Rs.4,85,337.00 i.e. (Rs.5,02,250.00 – Rs.16,913.00) alongwith interest @9% per annum from the date of filing the complaint. Thus, the impugned order passed by the District Forum needs to be set aside.

17.           No other point was urged by the Counsel for the parties.

18.           For the reasons recorded above, the appeal filed by the appellant/complainant is accepted with costs. The impugned order passed by the Forum is set aside. Consequently, the complaint is partly accepted against respondents No.2 & 3/Opposite Parties No.2 & 3 and they (respondents No.2 & 3/Opposite Parties No.2 & 3) are, jointly and severally, directed as under:-

(i)     to allow the claim and pay the outstanding amount of Rs.4,85,337.00 i.e. (Rs.5,02,250.00 – Rs.16,913.00), alongwith interest @9% per annum from the date of filing the complaint i.e.30.09.2014, to the appellant/complainant, within a period of one month from the date of receipt of a certified copy of this order, failing which, respondents No.2 & 3/Opposite Parties No.2 & 3 shall pay the aforesaid amount alongwith interest @12% per annum from the date of default till actual payment.

(ii)    Respondent No.1/Opposite Party No.1, who advanced the car loan to the deceased husband of the appellant/complainant, shall have first charge on the amount to be paid, to the complainant by respondents No.2 & 3/Opposite Parties No.2 & 3, to the extent, the amount is due to it against the appellant/complainant.

(iii)   to pay an amount of Rs.10,000/- to the appellant/complainant within a period of one month from the date of receipt of a certified copy of this order, failing which, respondents No.2 & 3/Opposite Parties No.2 & 3 shall pay the aforesaid amount alongwith interest @12% per annum from the date of default till actual payment.

19.           However, the complaint against respondent No.1/Opposite Party No.1 stands dismissed with no order as to cost.

20.           Certified Copies of this order be sent to the parties, free of charge.

21.           The file be consigned to Record Room, after completion.

Pronounced

February 12, 2016.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

(DEV RAJ)

MEMBER 

 

 

 

(PADMA PANDEY)

      MEMBER