BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.103/2009 Order dated this the 3rd day of December 2009 COMPLAINANT/S Sri.Lakshmana Gowda S/o Late Kempegowda, R/o Devihalli Village, Dadaga Post, Nagamangala Taluk, Mandya District 571 418. (INPERSON) -Vs- OPPOSITE PARTY/S 1. The Manager, State Bank of Mysore, Kadabahalli Branch, Nagamangala Taluk, Mandya District 571 418. 2. The Manager, National Insurance Company, Branch Office, Post Box No.54, No.1576, V.V.Road, Mandya 571401. (By Sri.Shivalingaiah., Advocate for O.P.1 & Sri.S.Sudarshan., Advocate for O.P.2) Date of complaint 29.08.2009 Date of service of notice to Opposite parties 14.09.2009 Date of order 03.12.2009 Total Period 2 Month 19 Days Result The complaint is partly allowed, directing the 1st Opposite party to pay Rs.41,000/- to the Complainant with cost of Rs.2,000/- within two months. The complaint against 2nd Opposite party is dismissed without cost. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 against the Opposite parties for a direction to the 1st Opposite party to refund interest for 23 months and a direction to 2nd Opposite party to pay Rs.2,00,000/- towards the insurance claim. 2. The case of the Complainant is that his father Sri.Kempegowda had taken tractor loan on 12.03.1999 from 1st Opposite party Bank and he was paying installments regularly till his death and died on 12.04.2004. The information of death was furnished to the then Manager of the 1st Opposite party by name Sri.Ramamurthy and also the documents to show that the tractor has fallen to his share in November 2004 requesting to get transfer of the tractor ownership to his name. But, the then Manager informed that only after repayment of the loan, the transfer of the ownership would be obtained. Therefore, they kept quiet. On 25.07.2007 night, the tractor and trailer bearing No.KA.11-T.1903 / KA.11-T-1904 was stolen and complaint was lodged to Bellur Police on 26.07.2007 and also sent a copy to the 1st & 2nd Opposite parties. When they gave petition claiming settlement of the insurance, they furnished some information as sought for by the insurance company. But, for one year they did not get the insurance amount, then he personally enquired the Manager of the Insurance Company and they told that since the owner of the vehicle is dead, the insurance amount cannot be paid. Then he approached the General Manager of 1st Opposite party Bank at Bangalore and gave petition on 04.10.2008 and receiving them, he assured to get the insurance amount and Complainant informed the same to the 1st Opposite party and gave a copy of the petition, but he did not take any action to get the insurance amount and giving one or other reason saying it is a matter left to the insurance company and he could not do anything and a complaint can be filed against the insurance company. Then the Complainant approached the Regional Manager of the Bank at Mandya, 4 or 5 times to get settlement and on 16.06.2009 they received a letter from the 1st Opposite party that they have received the insurance settlement amount and take it. He came to know that only Rs.83,000/- has been received. It is a lower amount compared to market value which is Rs.2,00,000/- and injustice has been caused. Therefore, he gave a petition on 18.06.2009 to waive of the loan and to refund the insurance amount, but the 1st Opposite party Bank adjusted the amount to the loan amount and deposited Rs.62,475/- in short term deposit without notice to the Complainant and after furnishing the documents, the 1st Opposite party Bank refunded the said amount on 25.06.2009. On account of the non-getting transfer of ownership after death of his father, there is delay of 23 months to settle the claim and the bank has to calculate the interest up to the date of theft and the bank shall refund the interest of 23 months and further the insurance company shall pay Rs.2,00,000/- being the market value. 3. The 1st Opposite party has filed version stating that Late Kempegowda, the father of the Complainant and his brothers jointly borrowed loan of tractor and trailer and the Complainants father was paying the loan installments regularly. Since, the Yeshodamma, the mother of the Complainant as legal heir of deceased Kempegowda, on her and on behalf of the Complainant received amount after adjustment of the loan amount and she has not protested the claim amount at the time of receiving. Therefore, the complaint is not maintainable. The 1st Opposite party is not aware that on 12.04.2004 the father of the Complainant died. It is false that the Complainant informed the then Manager about death of his father and documents to get the transfer of ownership of a tractor. It is admitted that on 25.07.2007, the tractor and trailer were stolen and complaint was lodged to Bellur Police Station and Opposite party has also received the copy of the complaint. After receiving the complaint by the Complainant, the 1st Opposite party informed the 2nd Opposite party to settle the insurance amount and repeatedly demanding, but the 2nd Opposite party informed that the tractor and trailer are in the name of Sri.Kempegowda, the father of the Complainant and insurance is taken in the name of dead person and rejected for the claim and then the Complainant approached the General Manager of Central Office, Bangalore. So, 1st Opposite party Bank convinced the 2nd Opposite party to settle the claim. It is false that 1st Opposite party has not at all attempted to get the insurance amount and informed the Complainant to lodge a complaint against the insurance company. At the instance of the 1st Opposite party, the 2nd Opposite party has settled the claim. It is false that the market value was Rs.2,00,000/-. The settlement of the claim is as per the market value prevailing at the time of getting insurance, after examining the vehicle and deducting the depreciation, the insurance is obtained. Though the Complainant gave a petition to waive off loan, but there was no Government Circular. The balance of loan was adjusted from the insurance amount and Complainant was informed to obtain the remaining amount. It is false that due to negligence of the 1st Opposite party there is delay of 23 months and 1st Opposite party is liable to pay interest of 23 months. Therefore, the complaint is liable to be dismissed with costs. 4. The 2nd Opposite party has filed version pleading that the Complainant informed the Opposite party about the theft of the tractor and trailer occurred on 25.07.2007 and claim was lodged. On receipt of the claim, the Opposite party sought for certain documents and Complainant furnished some documents. Thereafter, the Opposite party as a routine procedure initiated investigation and the policy stood in the name of dead person on the date of theft and the date of theft was confirmed by the Complainant during the course of investigation and further, the policy was being renewed regularly every year, even after death of insured keeping 2nd Opposite party in dark. The death of the insured was informed to Opposite party by the Complainants letter dated 30.07.2007. Even the 1st Opposite party Bank who had taken the responsibility of renewing the policy as a Financier was not deligent in informing the fact of death of insured. Since, the contract of insurance was entered in to with a dead person by misrepresentation of 1st Opposite party, 2nd Opposite party sought for clarification from the 1st Opposite party, but 1st Opposite party gave evasive reply by letter dated 02.12.2008. The 2nd Opposite party was absolved from his liability of paying the insurance amount because of obtaining the policy in the name of dead person. As an exgratia amount of perks with humanity, this Opposite party settled the claim for Rs.83,000/- as the insured declared value is Rs.85,000/- after deducting the due amount of Rs.2,000/- under the head Policy Excess was paid to Smt.Yashodamma, wife of the insured and she has executed a discharge voucher. Therefore, Smt.Yashodamma, nor any other legal heirs is entitled to claim any amount from the Opposite party. There is no cause of action. The Complainant has no locus-standi to file the complaint. The 2nd Opposite party has not committed any deficiency in service. Therefore, the complaint is liable to be dismissed. 5. During trial, the Complainant and 1st & 2nd Opposite parties are examined and the Complainant has produced the documents Ex.C.1 to C.10. The Opposite parties have produced the documents Ex.R.1 to R.25. 6. We have heard both the sides. 7. Now the points that arise for our considerations are:- 1. Whether the Complainant proves that due to the negligence of the 1st Opposite party in not getting transfer of the ownership of the vehicle with insurance company there was delay in settling the claim? 2. Whether the 1st Opposite party has committed negligence in getting the insurance of the tractor and trailer only for Rs.85,000/-? 3. Whether the 1st & 2nd Opposite parties have committed deficiency in service? 4. Whether the complaint is maintainable? 5. Whether the Complainant is entitled to the relief sought for? 8. Our findings and reasons are as here under:- 9. POINT NO.1:- The undisputed facts are that the deceased Kempegowda, the father of the Complainant and his two brothers jointly borrowed loan of tractor and trailer from the 1st Opposite party Bank as per the application Ex.R.4 and the 1st Opposite party got insured the tractor and trailer bearing No.KA-11-T-1903 and 1904. It is proved that on 12.04.2004, the insured Kempegowda died and it is established by the death certificate Ex.R.24. The 1st Opposite party got insured the vehicle for the period from 18.05.2006 to 17.05.2007 for Rs.1,35,000/- as per Ex.R.4 insurance policy and again 1st Opposite party got insured the tractor and trailer for Rs.85,000/- for the period from 18.05.2007 to 17.05.2008. According to the Complainant, after death of the borrower Kempegowda, the Complainant furnished the death certificate and the document to show the tractor and trailer fell to the share of father of the Complainant and requested to get the transfer of ownership of the vehicle and the then Manager, Ramamurthy informed that until the loan is cleared, the ownership of the vehicle cannot be transferred and without any knowledge, Complainant kept quiet. But, the 1st Opposite party has denied the same in the version and evidence. But, as per Ex.R.8, the 1st Opposite party has written letter to 2nd Opposite party on 02.12.2008 that the death of the borrower was reported to the branch by the legal heirs, as per the Bank Norms, the loan document and the registration of the vehicle will remain in the name of the deceased borrower till closure of the loan. The legal heirs of the borrower have given undertaking to pay the loan as per the condition of the Bank, the non-reporting of the death of the borrower to his office unintentional. The branch has financed the said tractor and trailer and was insured under the Bank clause. The premium has been paid regularly by the bank and the bank is having insurable interest. This letter is in response to the Ex.R.14 by 2nd Opposite party Insurance Company, wherein it is stated that the policy is in the name of Kempegowda since 2004 and renewed the same on 18.05.2007 to 17.05.2008, whereas, the said Kempegowda had expired on 12.04.2004, they are given to understand, the demise of late Kempegowda was to informed to you during the year 2004 itself. Please let us know the reason for renewing the policy in the name of deceased, even after intimation was received by yourselves and therefore, they are need of details as the contract with a deceased person is void. So, it is admitted by 1st Opposite party by his letter mentioned above that the fact of death of borrower and ownership of the tractor was informed to the Opposite party Bank. But, he did not take any action and kept quiet, but got renewal of the policy in the name of dead person which according to the 2nd Opposite party, it is a contract with a deceased person is void. Therefore, the 1st Opposite party has committed negligence and deficiency in service. 10. POINT NO.2:- According to the Complainant, though the tractor and trailer were worth of Rs.2,00,000/- in the year 2007, 1st Opposite party Bank without information to the Complainant or legal heirs of Kempegowda have got renewed the policy by paying premium and when the theft of tractor and trailer was informed to 1st & 2nd Opposite party, they came to know that the insurance is obtained for only Rs.85,000/-, though the market value is Rs.2,00,000/- and 1st Opposite party has also committed negligence. It is proved that as per Ex.R.3, the tractor and trailer was insured for Rs.1,35,000/- for the year 18.05.2006 to 17.05.2007 in the name of dead person and further renewed for the year 18.05.2007 to 17.05.2008 for Rs.85,000/- only as per insurance policy produced by 2nd Opposite party and it is not disputed by 1st Opposite party. According to the Complainant, the value of the vehicle was Rs.2,00,000/-. The 1st & 2nd Opposite parties have contended that in the police complaint the value of the tractor is mentioned as Rs.1,00,000/-. Of course in Ex.C.9 copy of the complaint, the value of the tractor and trailer is mentioned as Rs.1,00,000/- and the tractor was stolen in the night of 25.07.2007 and the tractor was purchased in during 1999. According to the Complainant, the police got written the complaint mentioning the value of the tractor and therefore, he kept quiet. The Complainant is a villager and he cannot raise voice against the police, because according to the Complainant, the police got written the complaint through somebody and he signed it. It is pertinent to note that when during the year 2006-07 the value of the vehicle is shown as Rs.1,35,000/- in the insurance policy and in he next year all of sudden how the 1st Opposite party has furnished the value at Rs.85,000/- cannot be understood. Even though, every year the value of the vehicle should be depreciated while getting the insurance and in the present case, though the tractor and trailer are of the year 1999 and stolen in 2007 and therefore, it is 8 years old, but the decrease of the value of tractor at Rs.50,000/- for a year cannot be accepted. There is no evidence that the 1st Opposite party had secured the tractor and trailer by sending letter to the Complainant for renewal of the policy and the officials of the insurance company examined the vehicle and determined the market value of the vehicle at the time of issuing the policy. It has come in the evidence that 1st Opposite party got renewal of the policy of the tractor every year and not the owner of the vehicle. Even deducting the 20% from the value of the vehicle as depreciation for the next year, the value of the tractor and trailer, would come to Rs.27,000/-. So, deducting Rs.27,000/- from Rs.1,35,000/- the vehicle should have been insured for Rs.1,08,000/- we cannot understand how the 1st Opposite party got insured the vehicle for Rs.85,000/- only without examining the tractor and trailer by the insurance company and according to the 2nd Opposite party, as per the value given by the insured, the Insurance Company will issue the policy collecting the premium. Merely because, in the complaint the value of the tractor is stolen Rs.1,00,000/-, but he is a villager and he cannot assess the market value of the tractor and trailer, because throughout he has given petition that the vehicle was worth of Rs.2,00,000/- at the time of theft . Therefore, there is ample evidence to prove that the 1st Opposite party is negligent in getting the insurance for proper market value of the tractor and trailer during the relevant period after examining by the insurance company and therefore, 1st Opposite party has committed deficiency in service. 11. POINT NO.3:- The grievance of the Complainant is that the 1st Opposite party has committed deficiency in service in not getting transfer of the ownership of the vehicle in time and that caused delay in settlement of the claim and secondly the 2nd Opposite party should have settled the claim for Rs.2,00,000/- for the stolen tractor and trailer as per the market value during the relevant year and therefore, the 1st Opposite party is liable to refund the interest for 23 months and 2nd Opposite party is liable to settle the claim for Rs.2,00,000/-. 12. Now, we cannot attribute any negligence or deficiency in service on the part of the 2nd Opposite party for two reasons, 1) the 1st Opposite party failed to get the transfer of the ownership of the vehicle in spite of furnishing the death of owner Kempegowda and the document of ownership and continued to obtain the policy in the name of dead person from the year 2004 to 2007. Secondly, the 1st Opposite party got insured the vehicle for only Rs.85,000/-, though the market value should have been Rs.1,08,000/- without exercising proper diligence. Therefore, the 1st Opposite party has committed deficiency in service and therefore, the 1st Opposite party is liable to pay the compensation. 13. POINT NO.4:- It is contended by the Opposite parties that the complaint is not maintainable by the Complainant, because his mother has executed discharge voucher of the insurance claim and she has not protested about the settlement and all the legal heirs of Kempegowda have not filed the complaint. The documents produced by the 1st & 2nd Opposite parties i.e., the complaint before the police and letters to 1st & 2nd Opposite parties as per Ex.C.8, C.9, Ex.R.1, R.2, R.7, R.10, R.18 clearly go to show that this Complainant being the legal heir of Kempegowda and head of the family has taken action for claiming the insurance amount. Though the insurance company has paid the insurance amount to Yashodamma, the mother of the Complainant, but she is a illiterate lady and the Complainant is responsible for all these transaction and in fact, he has given petitions after settlement about the lesser amount of the insurance amount and inaction by the 1st Opposite party Bank. After cross-examination of the Complainant, the Complainant has produced the letter of his mother and brother stating that they have given consent to the Complainant to lodge the complaint and Complainant has also produced the copy of the register document to show that the tractor and trailer fell to the share of Complainant and his mother and brother. Therefore, as a head of the family has lodged a complaint and therefore, it cannot be said that the complaint is not maintainable. 14. POINT NO.5:- The Complainant has sought for refund of interest of 23 months due to the delay of settlement of the claim due to the negligence of the 1st Opposite party Bank and it has charged interest up to the settlement of the claim. So, if actually proper insurance had been obtained by the 1st Opposite party Bank for proper valuation of the vehicles and in the proper name of the owner, the Insurance Company would not have made delay in settling the claim and it has taken two years from the date of theft of the vehicle and claim of the insurance. It is known that obtaining the policy in the name of dead person is void. In spite of it, 2nd Opposite party Insurance Company has settled the claim for Rs.83,000/- deducting Rs.2,000/- as excess premium. Therefore, for the negligence and deficiency in service, 1st Opposite party is liable to refund Rs.20,500/- towards the value of the tractor and refund the interest deducted from the insurance amount i.e., Rs.20,525/- and totally rounded off to Rs.41,000/-. Therefore, the 1st Opposite party is liable to pay refund of interest. 15. In the result, we proceed to pass the following order; ORDER The complaint is partly allowed, directing the 1st Opposite party to pay Rs.41,000/- to the Complainant with cost of Rs.2,000/- within two months. The complaint against 2nd Opposite party is dismissed without cost. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 3rd day of December 2009). (PRESIDENT) (MEMBER) (MEMBER)
