Tamil Nadu
StateCommission
CC/8/2013
P. SUKANYA - Complainant(s)
Versus
STATE BANK OF PATIALA, CHIEF MANAGER - Opp.Party(s)
B.L. LAVANYA
12 Aug 2015
ORDER
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI
BEFORE : THIRU.J.JAYARAM PRESIDING JUDICIAL MEMBER
TMT.P.BAKIYAVATHI MEMBER
C.C. No. 8 / 2013
Dated this the 12th day of AUGUST, 2015
Miss.P.Sukanya,
D/o.late R.Paneerselvam,
15, S.V.Colony, 1st Street, Complainant
P.N.Road,
Tirupur 641 602.
Vs.
1. State Bank of Patiala,
Two Win Chambers,
Pudur Pirivu,
Dharapuram Main Road, 1st Opposite party
Tirupur 641 608,
Rep by its Chief Manager.
2. SBI Life Insurance Company Ltd,
Kapas Bhavan,
Plot No.3 A, Sector No.10,
CBD, Balapur, 2nd opposite party
Navi Mumbai 400 614
Rep by General Manager (Claims).
This case coming up before us for final hearing on 17-7-2015 and on hearing the arguments of both sides and upon perusing the material records, this Commission made the following Order:
Counsel for Complainant : - M/s. B.L. Lavanya
Counsel for 1st Opposite Party : - M/s. M. Devaraj
Counsel for 2nd opposite party : - Exparte
J. JAYARAM, PRESIDING JUDICIAL MEMBER
The case of the complainant is as follows:
1. The complainant’s father Panneer Selvam encountered a premature death on 7.9.2007 due to Cardiac Arrest, leaving behind the complainant, her mother and elder sister as his legal heirs and she was still in the pubescent stage and her mother with a noble view did not deem it fit and proper to bring to her knowledge about the hardship created by the 1st opposite party thus was ingesting insult to herself.
2. For the sake of convenience she is staying in the hostel attached to PSG Institute, Coimbatore and makes it a point to visit her mother and sister on weekends, and during one such visit to her premise a fortnight ago she noticed the 1st opposite party inspecting the complaint schedule property along with an Advocate Commissioner, upon which the complainant quizzed her mother who revealed as to how the 1st opposite party hoodwinked his father and herself, to go for a loan with an package for insurance cover miserably failed in their contractual obligation by not remitting the one time premium amount of Rs.1,73,003/- to the 2nd opposite party, which is leading to worrisome circumstances, thus constraining the complainant to knock at the doors of this commission for relief. The 1st opposite party took coercive measures by initiating proceedings under the SARFAESI Act and have succeeded in their endeavour the details of which are not traversed into as they are not germane to the above proceedings.
3. The complainant’s father Panneerselvam carried on business interalia in the field of yarn and real estate since mid 80’s and like any other fellow citizen he too cherished a vision to reside under his own roof and accordingly he identified 2 number of flats subject matter of complaint and approached the 1st opposite party to render financial assistance.
4. The 1st opposite party being satisfied with her father’s credibility directed her parents to execute Arrangement Letter-Housing Finance in and by which the 1st opposite party agreed to disburse loan to a tune of Rs.31,73,003/-, (out of which Rs.1,73,003/- was towards one time insurance premium) which her parents were obligated to discharge @ Rs.28052/- p.m., either from the date of completion of the construction or 18 months from the date of disbursement of the 1st instalment whichever is earlier.
5. The 1st opposite party at the time of extending loan for the purchase of flats impressed upon her parents to opt for an insurance for the properties floated by SBI Life Insurance Co Limited which as contended above is none other than the subsidiary of State Bank of India and the 1st opposite party too being subsidiary of State Bank of India were under severe pressure to solicit and sell their product thus the 1st opposite party found a novel way out by inducing the complainant’s parent to go for the same which they agreed to go for without any hesitation. The complainant’s parents were called upon to pay a sum of Rs.1,73,003/- the amount being single premium towards the cover of 2 number of flats purchased by them and it was also informed that in the event of untimely death of the borrower, he would not be made accountable for remitting the prospective instalments as the one time premium would make good the loss to the loan account.
6. Though the 1st opposite party diligently calculated and received EMI for a sum of Rs.31,73,003/-, however deprived the complainant to reap the fruit of the said advantage as it emerges that the 1st opposite party completely failed in their duty by not remitting the premium amount of Rs.1,73,003/- to the 2nd opposite party for obtaining the policy. However the 1st opposite party as contended above has been receiving the EMI calculated at Rs.31,73,003/- though the disbursal of the loan to the developer was only to the tune of Rs.30 lakhs inclusive of all charges and the sum of Rs.1,73,003/- ought to have been remitted by the 1st opposite party to the 2nd opposite party by way of one time premium to cover the life till the expiry of the tenure of the loan which is the policy issued by the 2nd opposite party in the course of its business.
7. Though the 1st opposite party obtained the loan document for Rs.31,73,003/- which sum represents, Rs.30 lakhs towards the housing loan and Rs.1,73,003/- towards the one time insurance premium payment and accordingly the EMI was arrived at which the complainant’s father was also scrupulously remitting during his life time and the 1st opposite party had deliberately failed to transfer the policy amount to the credit of the 2nd opposite party. In the course of the business upon execution of the relevant loan documents the 1st opposite party ought to have disbursed the one time premium amount to the insurance company, the 2nd opposite party so that the policy will indemnify the borrower against the payment of loan in the event of death of the borrower.
8. The 1st opposite party who is under contractual obligation to take the policy to cover the loan supposed to have failed to take the policy thus the 1st opposite party is accountable for the glaring lapse. The complainant is entitled to claim the entire loan amount to be set off in lieu of the policy to the extent of the loan which the 1st opposite party failed to take in spite of having indirectly collected the premium amount payable to the insurance company/2nd opposite party in pursuance to the loan document executed in their favour.
9. The 1st opposite party ‘s knowledge that to see the colour of the money owed by her late father the claim ought to have be lodged against all the legal heirs and the 1st opposite party failed to communicate any notice in a manner known to law demanding repayment of the loan on this complainant.
10. The 1st opposite party who had failed to take the policy after having collected the said sum in order to cover up their imperfection, brought pressure upon her mother by resorting proceedings under SARFAESI Act, as against the property and to realize their dues by threat and coercion.
11. The complainant reliably understands that the 1st opposite party vide reply notice dated 7.1.2009 has candidly admitted that the amount paid to the promoter is only Rs.29,68,292/- thus obviously the balance amount is only towards insurance premium.
12. The conduct of the 1st opposite party in sanctioning loan for a sum inclusive of one time insurance premium and calculating and receiving EMI on the said basis, however in turn not forwarding the same to the 2nd opposite party which omission culminated in loss of self-esteem could be certainly be labeled as deficiency in service. The 1st opposite party by failing to conduct themselves in a transparent manner have virtually ended profiting themselves out of the same in a manner not known to law.
13. The conduct of the 1st opposite party by not doing the needful expected out of them in lieu of the Arrangement Letter-Housing finance, dated 28.10.2005, were instrumental in creating immeasurable mental agony and harassment to the complainant, they cannot be compensated by any sum of money, nevertheless the 1st opposite party should not be allowed to go off the hook for their blemish.
14. The 2nd opposite party is only a performa party and hence no relief is sought against them. Therefore it is prayed for direction to the 1st opposite party to pay a sum of Rs.30,00,000/- along with interest @ 18% per annum from 28.10.2005 till date of realization covered under the insurance policy, which the 1st opposite party ought to have taken by virtue of the sum of Rs.1,73,003/- retained by them unlawfully and credit the same towards the loan account and to pay compensation of Rs.10,00,000/- towards the unwarranted mental agony and harassment thrusted upon the complainant and to pay a sum of Rs.25,000/- being costs.
15. The 1st opposite party contended in their written version and proof affidavit that the complaint would not come under the definition of Consumer Protection Act and the complaint is frivolous and is liable to be dismissed and the complaint is also barred by limitation as such the same is liable to be dismissed.
16. The complainant’s father and mother had approached this opposite party for a housing term loan of Rs.30,00,000/- through an application dated 24.10.2005. The 1st opposite party has sanctioned a term loan of Rs.31,73,003/- on 28.10.2005 and the parents of the complainant had signed various documents to avail the loan amount. The two flats were purchased Flat No.1A measuring 1185.36 sq.ft with proportionate undivided share and interest in the land in S.No.57, TS.No.23 Thottipalayam village was purchased by the father R.Panneerselvam and Flat No.1B measuring 1185.36 sq.ft with proportionate undivided share and interest in the land in S.No.57, TS.No.23 Thottipalayam village was purchased by the 2nd borrower and mother of the complainant.
17. The parents of the complainant jointly executed the loan documents namely loan agreement for Rs.28052/- agreeing to repay the same with interest at the rate of 7.50 % per annum.
18. The loan was sanctioned for the amount inclusive of insurance premium to facilitate the deceased Panneerselvam. However, based on the request of the borrowers namely the parents of the complainant, the loan amount was disbursed in stages to the builder for the construction of the flat based on the improvement made in the structures.
19. Though the parents of the complainant have obtained the loan amount inclusive of the insurance amount, they have not availed the said amount and paid the same to the insurance the 2nd opposite party through the proper application. The father of the complainant had not authorized the bank to pay the insurance premium to the 2nd opposite party nor had made any application for the insurance. Even the letter written by the Late Shri.R.Paneerselvam before his death on 11.8.2007 and 13.8.2007 would clearly show that he was fully aware of the non-proposal of the insurance cover. The EMI does not cover any insurance premium and as per the request of the deceased, the EMI was fixed.
20. The said R.Paneerselvam have not submitted any application or proposal to cover the risk nor authorized this opposite party to pay the insurance premium which has been accepted by the 2nd opposite party. In the present case, covering the huge risk, the 2nd opposite party will enroll the person only after completing the due formalities such as medical verification etc which has not been done in the present case since no request was made by the deceased for enrolling himself in the insurance scheme floated by the 2nd opposite party. Mere sanctioning of the amount would not automatically enroll the deceased in the insurance cover.
21. In the absence of any request and in the absence of any charges collected in this regard, the above complaint is not maintainable. The mother of the complainant and the co-borrower had already made the claim of insurance through the letter dated 1.12.2007 which was duly rejected by this opposite party through the letter dated 5.7.2008 stating that no application was made by the deceased and no request for the payment of the premium was made. In the absence of validly enrolling in the insurance scheme, no such claim can be entertained.
22. The loan sanctioned to the parents of the complainant was regularly paid till the death of R.Panneerselvam on 2.9.2007. By this time the parents have availed Rs.29,68,292/- out of the sanctioned loan of Rs.31,73,003/- for which the EMI was calculated. Since the loan account was defaulted, the mother of the complainant was reminded about the same and requested her to settle the dues. However, the mother of the complainant had been taking on various defenses in order to avoid payment and protracted the recovery proceedings. Hence the bank was forced to initiate recovery proceedings under the securitization and reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 by issuing a demand notice dated 3.9.2008 followed by the possession notice dated 26.11.2008 and sale notice dated 29.1.2009.
23. Since the property in question was in occupation of the borrowers, there were no bidders in the auction. Hence the Bank has moved the Chief Judicial Magistrate, Tirupur in MP.No.49 of 2012 to appoint Advocate Commissioner to take physical possession of the property under Section 14 of the Act. Only to prolong and defeat this opposite party from taking lawful action, in recovering the loan dues, the complainant has chosen to file the above complaint.
24. The complainant noticed the 1st opposite party inspecting the schedule mentioned property etc are all made only for the purpose of this complaint and nothing as alleged had happened. The 1st opposite party has initiated recovery proceedings against the mother of the complainant from the year 2007 onwards and no payments were made till the conditional order was passed by the Hon’ble High Court in WP.No.35171 of 2012.
25. It is an admitted fact that the loan was sanctioned for Rs.31,73,003/- which includes the insurance premium. But the insurance premium was not availed by the complainant’s father for the reasons best known to him. The deceased had neither requested for the disbursement of the insurance amount nor signed any policy with the 2nd opposite party for disbursement. In fact no interest has been charged in respect of the balance sanctioned amount that has not been disbursed. Only for the amount disbursed, the interest has been charged.
26. The sanction only contained the option for SBI Life Insurance. To enroll the policy, the complainant’s deceased father will have to make necessary application to the 2nd opposite party and submit relevant documents for the same to cover the risk. To say that the 2nd opposite party is a subsidiary of State Bank of India is not correct. The 2nd opposite party is a different entity, a company incorporated under the Companies Act. The complainant herself admits that her parents were called upon to pay Rs.1,73,003/- being single premium towards the cover of 2 number of flats. But the same was not paid and the risk covered in the manner known to law. Hence the flats were not covered under the insurance.
27. The EMI calculated for Rs.31,73,003/- is not correct. The first opposite party completely failed in their duty to remit the premium amount is not correct and the same is denied. There was no request from the deceased to remit the amount for any application was submitted to the 2nd opposite party in that respect. The 1st opposite party once again reiterates the sanction for the insurance premium has been made. But unless there is a request from the borrower to disburse the same to the concerned person, the same will not be done as per the agreements executed. Mere sanctioning the insurance premium in the loan amount will not automatically cover the risk.
28. The loan amount of Rs.31,72,033/- was sanctioned is correct. The loan amount was disbursed in stages to the builder on the request of the borrower. Interest was charged only for the loan amount disbursed and not the entire amount sanctioned. In the absence of any specific request by the deceased, the allegation that the 1st opposite party had deliberately failed to transfer the policy amount to the credit of the 2nd opposite party is not correct. No application has been signed by the deceased with the 2nd opposite party to take the policy.
29. The 1st opposite party is under contractual obligation to take the policy to cover the loan is specifically denied. There is no contractual obligation on the part of the 1st opposite party to take the policy. In order to facilitate the borrower to take the policy to cover the risk, the loan is sanctioned for the policy amount and there is no obligation on part of the 1st opposite party to take the policy which depends on various factors such as the health condition, eating habits and other habits of the insured. Infact, the mother of the complainant had informed the death of the father of the complainant. The mother of the complainant had not furnished any particulars as to the legal heirs. Hence the proceedings were initiated against the mother of the complainant who represents the estate of the deceased R. Panneerselvam.
30. The taking of the policy is only in the hands of the deceased who had not opted for the same inspite of the loan being sanctioned. Further this opposite party is duty bound to recover the due amount from the borrowers. Accordingly, the opposite parties had invoked SARFAESI proceedings against the mother and others as per law to realize the loan dues. The sanctioning of the loan inclusive of the insurance premium and not forwarding the same to the 2nd opposite party amount to deficiency of service is specifically denied. As per the request and the eligibility of the borrower the loan amount was sanctioned. The same was disbursed as per the request of the borrowers. Since the borrower did not opt to pay the insurance premium and had not given any requisition. The borrower died after the entire disbursal and the commencement of the repayment by which time he was aware of the non-disbursal. If really the borrower was interested in obtaining the policy, he would have taken steps for the same by making requisition and making the application to the 2nd opposite party. Therefore there is no deficiency of service. In fact the entire transaction was transparent and the borrower was aware of all the transactions and the consequences. In fact the 1st opposite party has done what was to be done and has sanctioned the loan amount. The failure on the part of the deceased to utilize the same cannot be the blame of this opposite party.
31. The complainant’s mother’s claim was rejected as early as on 5.7.2008 and the complainant is aware of the same from the beginning. The complainant herself has not claimed any relief as against the 2nd opposite party since no policy has been taken for which any premium is to be paid. Since the 1st opposite party has initiated recovery proceedings, the complaint has been filed which clearly shows the motive for the present complaint.
32. The total due in the loan account of the borrowers in respect of the property purchases is Rs.52,86,784.81 as on 25.2.2013 plus charges, incidental expenses thereon and a sum of Rs.5,00,000/- has been remitted by way of complying with the condition order in WP.No.35171 of 2012 and as on date the remaining outstanding is Rs.47,86,784.81 plus charges and incidental expenses thereon which the borrower of the successor in interest will have to pay. Hence the claim is not maintainable and the same is liable to be dismissed and the complaint is also liable to be dismissed.
33. The Points for consideration are as follows:
i) Whether the complaint is barred by limitation?
ii) Whether the complaint is maintainable under the Consumer Protection Act, 1986?
iii) Whether there is deficiency in service on the part of the 1st opposite party as alleged in the complaint?
iv) Whether the complainant is entitled to claim compensation from the opposite parties ?
v) To what relief the complainant is entitled ?
34. The complainant and the 1st opposite party filed their proof affidavits reiterating their averments. Exhibits A1 to A10 have been filed by the complainant, and Ex.B1 to B16 have been filed on the side of the 1st opposite party.
35. Point No.1: The complaint has been filed by the complainant alleging deficiency in service on the part of the 1st opposite party in having failed to remit a sum of Rs.1,73,003/- to the credit of the 2nd opposite party towards one time insurance premium collected from the complainant’s father at the time of sanctioning the loan for the purchase of 2 flats.
36. A sum of Rs.31,73,003/- was sanctioned as housing loan, out of which, Rs.1,73,003/- was towards one time insurance premium and the same was not remitted by the 1st opposite party to the 2nd opposite party towards the one time insurance premium.
37. It is pertinent to note that the complainant was a minor at the time of availing loan by her father, and she was staying in the hostel of PSG Institute, Coimbatore, and the 1st opposite party ought to have claimed the arrears of the loan impleading all the legal heirs of her deceased father, but the 1st opposite party failed to communicate any notice to the complainant demanding repayment of the loan. The cause of action for the complaint arose only when the 1st opposite party was impleaded in the SARFAESI proceedings in CMP No.49 / 2012 before the Chief Judicial Magistrate Tiruppur on 07-09-2012 and therefore the complaint filed on 10-01-2013 is well within the statutory period of two years from the date of cause of action as contemplated under Sec 24-A of the Consumer Protection Act, 1986 and therefore, the contention of the 1st opposite party that the complaint is barred by limitation is untenable, and the point is answered accordingly.
38. Point No.2: The further contention of the 1st opposite party is that the complaint is not maintainable under the Consumer Protection Act. It is seen from the complaint that the complaint comes under the definition of Sec. 2(1)(d)(ii) of the Consumer Protection Act, 1986 and we hold that the complainant is a consumer and that the complaint is maintainable under the Consumer Protection Act, 1986. The 1st opposite party has not stated how and why the complaint is not maintainable under the Consumer Protection Act, and the contention of the opposite party in this regard is not sustainable and the point is answered accordingly.
39. Point No.3 & 4: Admittedly, the 1st opposite party has sanctioned loan of Rs.31,73,003/- and only a sum of Rs.30,00,000/- was disbursed towards the housing loan and the balance amount of Rs.1,73,003/- was apportioned by the 1st opposite party towards payment of the onetime premium of the insurance policy to the 2nd opposite party and EMI was fixed at Rs.28,052/- which was arrived at by the 1st opposite party by taking into account the sum of Rs.31,73,003/- which included the sum of Rs.1,73,003/- towards the onetime insurance premium which is evidenced by the letter of undertaking Ex.A3, dated 17-01-2006 executed by the complainant’s father in favour of the 1st opposite party. However, the 1st opposite party failed to transfer the one time insurance premium of Rs.1,73,003/- to the 2nd opposite party which amounts to deficiency in service on the part of the 1st opposite party. The 2nd opposite party is a subsidiary of State Bank of India and the 1st opposite party also being a subsidiary of the State Bank of India, the 1st opposite party pressurized the complainant’s father to avail insurance policy from the 2nd opposite party and the complainant’s father opted for it and agreed to avail the policy and hence the 1st opposite party sanctioned the loan of Rs.31,73,003/- out of which Rs.1,73,003/- was towards one time insurance premium amount.
40. Indisputably, the loan amount sanctioned is Rs.31,73,003/- and the EMI covers the total loan amount of Rs.31,73,003/-. However, quite strangely, in the version filed by the 1st opposite party, in para 6 there is a false averment that the EMI does not cover any insurance premium and also in the reply notice Ex.A6, addressed by the 1st opposite party to the complainant’s father, it is falsely stated as follows: “In para No.1 of your legal notice, that the sanction of the housing loan to the tune of Rs.31.73 Lakhs represents Rs.30 Lakhs towards purchase of flat and the remaining Rs.1.73 Lakhs was towards payment of insurance premium”. This plea is absolutely false and untenable.
41. The contention of the 1st opposite party that the EMI does not cover any insurance premium as stated in the version and in the reply notice Ex.A6, is totally baseless and unacceptable at any cost.
42. In paragraph 5 of the version itself, it is clearly admitted by the 1st opposite party, as “it is relevant to state that the loan was sanctioned for the amount inclusive of insurance premium” and in paragraph 10 of the version it is stated as follows: “It is submitted that the loan sanctioned to the parents of the complainant was regularly paid till the death of Shri R. Panneerselvam on 2-9-2007. By this time, the parents have availed Rs.29,68,292/- out of the sanctioned loan of Rs.31,73,003/- for which the EMI was calculated”. As a matter of fact, the 1st opposite party has calculated and received EMI for a sum of Rs.31,73,003/- but the 1st opposite party failed in their duty by not remitting the premium amount of Rs.1,73,003/- to the 2nd opposite party towards the insurance policy, and the 1st opposite party deliberately failed to transfer the policy amount to the credit of the 2nd opposite party.
43. We have to note that the 1st opposite party in the course of the business while execution of the relevant loan documents by the complainant’s parents, the 1st opposite party ought to have disbursed the one time premium amount of Rs.1,73,003/- to the insurance company / 2nd opposite party so that the policy would have indemnified the borrower against the payment of loan in the event of death of the borrower. The 1st opposite party admits that the loan amount is Rs.31,73,003/- and that a sum of Rs.30 Lac was disbursed towards the housing term loan which means that the balance amount of Rs.1,73,003/- was apportioned by the 1st opposite party towards premium for one time insurance policy.
44. We have to further note that the onetime insurance premium under the existing policy is not the only option exclusively for the benefit of the person availing housing loan and the policy is one of its kind wherein the 2nd opposite party agrees to indemnify the 1st opposite party towards housing loan sanctioned by them.
45. The 1st opposite party prevailed upon the borrower to avail the premium cover for the loan released by the 2nd opposite party; whereas the 1st opposite party ought to have forwarded the premium amount Rs.1,73,003/- to the 2nd opposite party, but the failure of the 1st opposite party to remit the one time premium amount to the 2nd opposite party defeated the very purpose of availing the insurance policy.
46. Ex.A2 is the arrangement letter addressed to the borrower stating that a term loan of Rs.31,73,003/- (inclusive of S.B.I. Life) had been sanctioned to the borrower for purchasing flats and that the house / flat shall be insured comprehensively for the market value, covering fire, flood etc. in the joint name of the bank and the borrower; In Ex.A3 which is the letter of undertaking executed by the borrower to the 1st opposite party it is reiterated that the loan amount is Rs.31,73,003/-; It is seen from Ex.A9 statement of account that the loan amount is Rs.31,73,003/-. All these go to establish the fact that the total loan amount of Rs.31,73,003/- which includes the premium amount of Rs.1,73,003/-.
47. We have to take note of the fact that, the onetime insurance premium under the existing policy was insisted by the 1st opposite party as an additional security for the housing loan in view of Clause 7 of the agreement, wherein it is clearly stated that the insurance would stand in the joint name of the bank and the borrower, and an obligation is cast upon the 1st opposite party to ensure that the process of loan is completed with the transfer of one time policy amount to the insurer / 2nd opposite party.
48. The 1st opposite party failed to conduct themselves in a transparent manner in having failed to transfer the one time premium amount to the 2nd opposite party for insurance.
49. In this context, we have to note the guidelines on fair practices code for HFCs as found in Ex.A10, where it is stated as follows:
“1. Objectives & Application.
1.1 Promote good and fair practices by setting minimum standard in dealing with the customers.
1.2. Increase transparency so that the customers can have a better understanding of what help he / she can reasonably expect of the services.
1.3. Application of the code – all the products and services, whether they are provided by the HFCs or subsidiaries across the counter, over the phone, by post, through interactive electronic devices, on the internet or by any other method.
2.1. Their dealings with customers rest on ethical principles of integrity and transparency;
2.2. To help customers understand how their financial products and services work by: giving customers information on what are the benefits to them, how they can avail of the benefits, what are their beneficial implications and whom they can contact for addressing their queries.
2.3. To help customers to use the products and services by providing them regular, appropriate updates.
3.3. To those who have become customers of HFC shall provide extra information on his / her rights and responsibilities especially regarding availing of nomination facility offered on all deposit accounts.”
50. In this background, it is significant to note that the 1st opposite party having scant regard for the above guidelines, has not followed the guidelines at all, and he has failed to contact the complainant’s father / borrower and the 1st opposite party has not sent any communication regarding the one time policy premium amount in order to complete the formalities for effecting the policy. Even then, had the 1st opposite party transferred the one time policy amount of Rs.1,73,003/- to the 2nd opposite party, the 2nd opposite party would have taken up the matter with the borrower, and the policy would have been effected.
51. The Hon’ble National Commission in the following judgments, has laid down that in cases where the 1st opposite party / bank has collected and retained the policy premium amount and it was not transferred to the 2nd opposite party / insurer before the crucial date, the 1st opposite party / bank is liable for the deficiency in service and the decisions relied on by the complainant are squarely applicable to the instant case before us.
1. State Bank of India vs. Joice Johny
Revision Petition No.216 of 2012, dated 27-07-2012
National Consumer Commission, New Delhi
2. Sundaram BNP Paribas Home Finance Ltd. & Anr. Vs.
Consumer Guidance Society & Anr.
I (2013) CPJ 115
3. SBI Life Insurance Co. Ltd. vs. Smt. Kursheed Jahan Begam & Anr.
Revision Petition No.4098 of 2011, dated 16-07-2012
National Consumer Commission, New Delhi
4. SBI Life Insurance Co. Ltd, vs. Smt. Asha Dixit & Anr.
Revision Petition No.2884 of 2010, dated 10-12-2010
National Consumer Commission, New Delhi
5. State Bank of Hyderabad vs. Nirmala & Anr.
II (2012) CPJ 10 (NC)
6. Union of India & Anr. Vs. Anita Singhvi
IV (2011) CPJ 170 (NC)
52. On considering the entire materials on record, we hold that there is negligence and deficiency in service on the part of the 1st opposite party in not transferring the one time policy amount of Rs.1,73,003/- to the 2nd opposite party towards the policy and not sending any communication to the borrower in this regard, depriving the borrower of the benefits of the policy, and that the complainant is entitled to claim compensation from the 1st opposite party and the complaint is liable to be dismissed as against the 2nd opposite party since the 2nd opposite party is only a formal party and no relief is sought against them, and the points are answered accordingly.
53. Point No.5: Having regard to the facts and circumstances of the case, and considering all the relevant factors, we hold that the complainant is entitled to the benefits of the policy, had it been properly ensured and is further entitled to award of reasonable compensation for mental agony, and the point is answered accordingly.
54. In the result, the complaint is partly allowed as against the 1st opposite party and directing the 1st opposite party to pay a sum of Rs.30 Lac (Rupees Thirty Lakh only) with interest @ 12 % p.a. from 28-10-2005 till realization, and to pay a sum of Rs.5 Lac (Rupees Five Lakh only) as compensation for mental agony and harassment, and to pay costs of Rs.25,000/- (Rupees Twenty Five Thousand only);
Time for compliance – Two months from the date of receipt of copy of this order.
The complaint is dismissed as against the 2nd opposite party without costs.
TMT. P. BAKIYAVATHI J. JAYARAM
MEMBER PRESIDING JUDICIAL MEMBER
LIST OF DOCUMENTS FILED BY THE COMPLAINANT :
SL.NO | DATE | DESCRIPTION |
Ex.A1 |
13.10.92 |
Copy of Complainant’s birth certificate issued by Tirupur Municipality |
Ex.A2 | 28.10.05 | Copy of Arrangement letter – Housing Finance executed by the complainant’s parents |
Ex.A3 | 17.01.06 | Copy of letter of undertaking executed by the complainant’s parents favouring the 1st opposite party |
Ex.A4 | 08.10.07 | Copy of Death Certificate of Complainant’s father issued by Tirupur Municipality
|
Ex.A5 | 05.11.07 | Copy of Legal Heirship certificate issued by Tashildar |
Ex.A6 | 07.01.09 | Copy of Reply addressed by the 1st opposite party |
Ex.A7 | 07.09.2012 | Copy of CMP No.49 of 2012 filed by the 1st opposite party before the Chief Judicial Magistrate, Tirupur |
Ex.A8 | 20.11.2012 | Copy of Order passed Chief Judicial Magistrate, Tirupur in CMP No.49 of 2012 |
Ex.A9 | 17.01.06 | Copy of Statement pertaining to the complainant’s parents’ loan account |
Ex.A10 |
| Copy of Relevant extracts from Guidelines on Fair Practices Code for HFCS |
LIST OF DOCUMENTS FILED BY THE 1st OPPOSITE PARTY :
SL.NO | DATE | DESCRIPTION |
Ex.B1 |
24.10.2005 |
Copy of Loan application by the parents of the complainant |
Ex.B2 | 28.10.2005 | Copy of Arrangement letter by the parents of the complainant |
Ex.B3 | 17.01.2006 | Copy of Housing term loan agreement by the parents of the complainant |
Ex.B4 | 06.11.2001 | Copy of Circular regarding group insurance |
Ex.B5 | 21.03.2003 | Copy of Master policy |
Ex.B6 | 11.08.2007 | Copy of letter by the father of the complainant |
Ex.B7 | 13.08.2007 | Copy of letter by the father of the complainant |
Ex.B8 | 01.12.2007 | Copy of letter by the mother of the complainant |
Ex.B9 | 05.07.2008 | Copy of Rejection of the claim of the mother of the complainant |
Ex.B10 | 03.09.2008 | Copy of Notice under Section 13 (2) of the SARFAESI Act |
Ex.B11 | 26.11.2008 | Copy of Possession notice |
Ex.B12 | 29.01.2009 | Copy of Sale Notice |
Ex.B13 | 16.03.2012 | Copy of order in SA No.23 of 2009 passed by DRT Coimbatore |
Ex.B14 | 26.07.2012 | Copy of order passed in WP.No.18942 of 2012 |
Ex.B15 | 20.11.2013 | Copy of order passed in MP No.49 of 2012 by CJM, Tiruppur |
Ex.B16 | 28.03.2013 | Copy of order passed in WP.No.35171 of 2012 |
TMT. P. BAKIYAVATHI J. JAYARAM
MEMBER PRESIDING JUDICIAL MEMBER
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