BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL COMMISSION, JALANDHAR.
Complaint No.89 of 2018
Date of Instt. 05.03.2018
Date of Decision: 04.03.2022
Deepak Kumar Verma S/o Late Devi Ditta, R/o 31, New Ujala Nagar, Jalandhar.
..........Complainant
Versus
1. The Branch Manager, HDB Financial Services Ltd. 188-A, Second Floor, Above Kaya Skin Care Centre, Near Model Town Gurudwara Sahib, Jalandhar.
2. The Chairman, HDB Financial Services Ltd., Radhika, 2nd Floor, Law Garden Road, Navrangpura, Ahemdabad, Gujarat-380009.
3. HDFC ERGO General Insurance Company Limited, Through its Branch Manager, 3rd Floor, Eminent Mall, 261, Lajpat Nagar, Near Guru Nanak Mission Chowk, Jalandhar, Punjab-144001
….….. Opposite Parties
Complaint Under the Consumer Protection Act.
Before: Dr. Harveen Bhardwaj (President)
Smt. Jyotsna (Member)
Sh. Jaswant Singh Dhillon (Member)
Present: Sh. Karan Seth, Adv. Counsel for the Complainant.
Sh. Gurcharan Singh, Adv. Counsel for the OPs No.1 & 2.
Sh. R. K. Sharma, Adv. Counsel for the OP No.3.
Order
Dr. Harveen Bhardwaj(President)
1. The instant complaint has been filed by the complainant, wherein it is alleged that the complainant Sh. Devi Ditta raised a vehicle loan against the vehicle No.UP-31-T-3797 from the OP No.1 on 19.11.2016 to the tune of Rs.9,38,750/- against a loan amount for Rs.9,48,827/- and the complainant was the guarantor in the above said loan, whereas the OP No.2 is the controlling office. That Sh. Devi Ditta and the complainant executed various security documents in favour of the OPs and the monthly installments payable is Rs.30,654/- per month w.e.f. 04.03.2016 and accordingly, Sh. Devi Ditta, the father of the complainant paid the monthly installments regularly upto December, 2017. That as per the RBI guidelines, the OPs got insurance of Sh. Devi Ditta at the time of disbursement of the said loan to cover the risk of the bank loan in case of the death of the borrower till the adjustment of the said loan and debited Rs.5827/- to the loan account of Sh. Devi Ditta being the lump-sum insurance premium which was paid by the bank under Sarv Suraksha Premium-Refin Scheme, but the OP No.1 has neither provided the copy of insurance cover note containing the terms and conditions nor given the detailed address of the HDFC LIFE CP PLUS SUPPLIER in the letter dated 14.10.2017 as such the complainant is unable to array the insurance company as the OP. That as per the terms and conditions of the loan agreement Sh. Devi Ditta paid the monthly loan installments regularly, but Unfortunately, Sh. Devi Ditta died on 25.12.2017 and the said information was conveyed to the OPs through the complainant. That after the death of Sh. Devi Ditta, the complainant visited the office of the OP No.1 for completing the various formalities to lodge the insurance claim with the insurance company so that the account be got adjusted but the OPs are not paying any heed to the genuine request of the complainant in completing the formalities for the claim of the outstanding loan amount as the complainant is unable to pay the monthly installments. The OPs inspite of oral requests made by the complainant failed to complete the formalities for lodging the claim with the insurance company, the reasons best known to the OPs rather threatened the complainant for attachment of the vehicle, if the loan installments are not deposited regularly. Ultimately, the complainant was compelled to serve a legal notice dated 23.01.2018, but the OPs failed to file the reply, rather sent a demand notice dated 16.12.2018 for making the payment of installments due and also threatened to impound the said vehicle. That the OPs No.1 & 2 have obtained the insurance cover from OP No.3 in order to cover the risk of repayment of the loan in the event of the death of the borrower Sh. Devi Ditta and the OPs No.1 & 2 being the Master Policy Holder of the insurance paid the insurance premium to the said insurance company after debiting the amount from the loan account. The insurance cover was provided to OPs No.1 & 2 by OP No.3, vide policy No.2999201378577300. Therefore, the OP No.3 is liable to release the insured sum to OPs No.1 & 2 or in the alternative in favour of complainant. That due to the above said facts, there is deficiency in service, negligence and unfair trade practice on the part of the OPs and as such, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to claim the insurance from the insurance company, the amount outstanding in the loan as per RBI norms and OP No.3 be directed to pay and release the insured sum in favour of OPs No.1 & 2 for adjustment of loan amount or in the alternative in favour of the complainant and further OPs be directed to pay a compensation of Rs.1,00,000/- for causing mental tension and harassment to the complainant and Rs.25,000/- as litigation expenses.
2. Notice of the complaint was given to the OPs and accordingly, OPs No.1 & 2 appeared through its counsel and filed its joint written reply, whereby contested the complaint by taking preliminary objections that the present complaint is not legally maintainable. The complainant has no cause of action to file the present complaint. The complaint is bad for jon-joinder and mis-joinder for necessary parties. That the complainant cannot be permitted in law and equity to avoid and evade the consequences of his own breach by resorting to the present complaint. The true facts are that Sh. Devi Ditta alongwith complainant availed loan from the answering OP vide loan agreement no.1947273 and the loan was got secured from HDFC ERGO General Insurance Company Limited. The copy of insurance policy schedule cum certificate of insurance vide master policy number 2999201378577300 was handed over to Sh. Devi Ditta by the OP, after the issuance of same by the HDFC ERGO Gen. Insu. Co. Ltd. Moreover, it is also evident from the welcome letter issued to the complainant wherein it is specifically mentioned the name of the insurance company i.e. HDFC and this facts was within the knowledge of the complainant as he has duly received the welcome letter. The complainant averments regarding the insurance claim is not a valid excuse for the default and the complainant is obliged to make payment as per the terms of the agreement. At present a sum of Rs.8,02,216/- is still payable as per foreclosure statement dated 30.04.2018 against the said loan account which the answering OP is entitled to recover from the complainant. The complainant has filed this false and frivolous complaint against the answering OP in order to avoid and evade the loan liability pending against the complainant. There is no deficiency in service, negligence and unfair trade practice on the part of the answering OPs. It is further averred that the complaint of the complainant is liable to be dismissed as the loan agreement contains an Arbitration Clause where under all disputes and differences arising out of touching or concerning the said agreement or in any way relating to or arising there from are to be referred to arbitration and the Hon’ble Commission has no jurisdiction to entertain and try the complaint. On merits, the factum in regard to raising a loan by Sh. Devi Ditta and the complainant is admitted, but the other allegations as made in the complaint by the complainant are categorically denied and lastly submitted that the complaint of the complainant is without merits and the same may be dismissed.
3. OP No.3 filed its separate written reply and contested the complainant by taking preliminary objections that the present complaint is premature because the complainant never lodged/registered any claim with the respondent and without registration of any claim, the complainant cannot claim any compensation from the OP. Thus, there is no deficiency on the part of the OP because the complainant themselves never lodged any claim with the OP and also never submitted any documents towards processing of claim. It is also worthwhile to mention here that it is an admitted fact that no claim has been lodged with the answering OP till date. It is further averred that no claim was lodged with this answering OP, in regard to death of the insured. That prima facie no cause of action has arisen in favour of the complainant and against the OP to file the present complaint, as no intimation has ever been received in any form enabling this OP to lodge the claim against the policy, thereby depriving this OP from the opportunity to decide the claim on merits. It is further averred that there is no deficiency in service on the part of the OP as no intimation was given by the complainant nor any claim was lodged nor any correspondence was ever made by the complainant. On merits, the factum in regard to issuance of insurance policy under the Plan Sarv Suraksha Advantage in the name of Devi Ditta is admitted, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.
4. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavit of the complainant Ex.CA alongwith some documents Ex.C-1 to Ex.C-8 and closed the evidence.
5. In order to rebut the evidence of the complainant, the counsel for the OPs No.1 and 2 tendered into evidence two affidavits Ex.OP1/A and Ex.OP1/B alongwith some documents Ex.OP1/1 to Ex.OP1/5 and closed the evidence.
6. Counsel for the OP No.3 tendered into evidence affidavit Ex.OP3/A and closed the evidence.
7. We have heard the argument from learned counsel for both the parties and have also gone through the case file as well as written arguments submitted by complainant and OP No.3, very minutely.
8. The case of the complainant is that the father of the complainant raised a vehicle loan from OP No.1 on 19.11.2016 and the OP No.1 obtained insurance cover on the life of the father of the complainant in order to get secured the repayment of the loan in the event of the death of borrower. Premium of Rs.5827/- was also debited towards payment of lump-sum insurance premium to insurance company for insurance cover. The details of insurance cover was never provided to the borrower. The father of the complainant died on 25.12.2017. After the death of the father of the complainant, the complainant approached OP No.1 to lodge claim, but the OP No.1 did not pay any heed to his request. It has been submitted by counsel for the complainant that the legal notice was also sent to OP No.1 and 2, but despite receiving the notice, no efforts were made by the OPs No.1 and 2 nor claim was lodged to the insurance company nor reply to the notice was sent. He has further submitted that OP No.1 & 2 and OP No.3 are interconnected being group companies of HDFC. The insurance cover was obtained by OP No.1 and 2 from OP No.3 and they had full knowledge about the death of the father of the complainant, but no claim was ever lodged. Thus, there is deficiency in service and unfair trade practice on the part of the OPs. Request has been made to allow the complaint by giving directions to OPs No.1 to 2 to claim insured sum from OP No.3 and OP No.3 be directed to release the insured sum in favour of OPs No.1 and 2 for adjustment of the loan amount.
9. Ld. Counsel for the OPs No.1 and 2 has submitted that the complaint is liable to be dismissed as the loan agreement contains an Arbitration Clause where under all disputes and differences arising out of touching or concerning the said agreement or in any way relating to or arising there from are to be referred to arbitration and this Forum has no jurisdiction to entertain and try the complaint. He has relied upon a judgment of Hon’ble Himachal Pradesh State Consumer Disputes Redressal Commission, cited in FA No.167 of 2017, date of decision 08.01.2018, titled as “Ami Chand @ Amin Chand and Others Vs. Shriram Transport Finance Company Ltd. and Others”, which is as under:-
“Consumer Protection Act, 1986 Sections 12 and 15 Arbitration and Conciliation Act, 1986 – Hire purchase agreement – Repossession of vehicle – Complainant filed a consumer complaint alleging that his vehicle has been wrongly respossessed and wrongly auctioned by them – Arbitration proceedings initiated by OPs for securing the loan and arbitrator passed an award of Rs.4,17,525/- - Whether same tenable? – Held, remedy available to the complainant is to challenge the arbitration award in accordance with law- It is not expedient in the interest of justice to decide the present appeal on merit keeping in view that final award relating to similar facts already stood passed by the Arbitrator under Arbitration and Conciliation Act- Consumer complaint could not be decided by Consumer For a after passing of final Award by Arbitrator under Arbitration and Conciliation Act, 1996 – Appeal dismissed.”
He has further argued that the policy schedule-cum-certificate of insurance vide master policy No.2999201378577300 was handed over to Devi Ditta after the issuance of the same by the OP No.3. He has further submitted that welcome letter was also issued and the name of the company was also mentioned in it. He has further submitted that no valid legal notice was served upon the OPs. The death of the father of the complainant was never reported to the OPs No.1 and 2. The claim was to be lodged by the complainant and not by the OPs No.1 and 2. Therefore there is no deficiency in service and unfair trade practice on the part of the OPs No.1 and 2. Request has been made to dismiss the complaint.
10. The Ld. Counsel for OP No.3 has submitted that the complaint of the complainant is not maintainable as it is premature. No claim was ever registered or lodged with the OP No.3. Without lodging the claim, no disbursement of any loan could be possible. No cause of action has arisen in favour of the complainant against the OP No.3. There is no deficiency in service. Therefore the complaint being pre-mature be dismissed.
11. The contention of the OP No.1 and 2 is that the complaint is not maintainable as the arbitration award has already been passed and that award has been challenged in the Civil Court by the complainant, is not tenable. It has been held by the Hon’ble Himachal Pradesh State Consumer Disputes Redressal Commission, cited in FA No.167 of 2017, date of decision 08.01.2018, titled as “Ami Chand @ Amin Chand and Others Vs. Shriram Transport Finance Company Ltd. and Others”, which is as under:-
“Consumer Protection Act, 1986 Sections 12 and 15 Arbitration and Conciliation Act, 1986 – Hire purchase agreement – Repossession of vehicle – Complainant filed a consumer complaint alleging that his vehicle has been wrongly respossessed and wrongly auctioned by them – Arbitration proceedings initiated by OPs for securing the loan and arbitrator passed an award of Rs.4,17,525/- - Whether same tenable? – Held, remedy available to the complainant is to challenge the arbitration award in accordance with law- It is not expedient in the interest of justice to decide the present appeal on merit keeping in view that final award relating to similar facts already stood passed by the Arbitrator under Arbitration and Conciliation Act- Consumer complaint could not be decided by Consumer For a after passing of final Award by Arbitrator under Arbitration and Conciliation Act, 1996 – Appeal dismissed.”
But this law is not applicable to the facts of the present case. In the present case, the loan was obtained on 19.11.2016 and the borrower died on 25.12.2017. Registered notice was sent on 23.01.2018. The present complaint has been filed on 05.03.2018. The OPs No.1 & 2 were served and the counsel appeared on behalf of OPs No.1 and 2 on 27.03.2018. Written statement alongwith documents was filed on 30.04.2018. The death certificate of the borrower is Ex.C-1. The arbitration petition was filed before arbitrator on 25.05.2018 and the award was passed on 04.08.2018. The borrower had died prior to the filing of the arbitration petition before the arbitrator. Meaning thereby that the present complaint is prior institution from filing the petition before the arbitrator. The OPs also appeared in the consumer Forum prior to filing the petition before arbitrator. Arbitration award has already been challenged, therefore no findings can be given regarding the legality and illegality of the award. However, the award has been passed regarding the recovery of loan and not regarding the insurance claim of the complainant after the death of the borrower. It has been held by the Hon’ble National Commission, cited in 2020(3) CPR 71, in a case tiled as “J. Abhilash Krishna Vs. Competition Review Pvt. Ltd.”, which is as under:-
“Consumer Protection Act, 1986 Section 11 Territorial jurisdiction of District Forum – Any provision in respect of resolution of dispute through arbitration in agreement would not debar a party to avail jurisdiction of a consumer forum – Complaint under Consumer Protection Act 1986 – Once complaint is entitled to file a consumer complaint under Consumer Protection Act 1986, all provisions of this Act will apply – Respondent OP directed to pay Rs.10,100/- to complainant within a period of 30 days.”
Thus, as per the above law laid down by the Hon’ble National Commission, the present complaint is maintainable.
12. It is admitted fact that the father of the complainant took a vehicle loan against the vehicle no.UP-31-T-3797 from OP No.1 for Rs.9,38,750/- and the amount sanctioned was Rs.9,48,827/- The complainant Deepak Kumar is the guarantor. It is also admitted fact that in order to secure the repayment of loan, the OP No.1 obtained insurance cover on the life of borrower Mr. Devi Ditta. It is also admitted by all the OPs that the amount of premium of Rs.5827/- was debited in the loan account towards the payment of lump-sum insurance premium as per Ex.C-2. It has been alleged by OPs No.1 & 2 that the insurance cover alongwith terms and conditions and schedule was handed over to Sh. Devi Ditta, the father of the complainant, who has since expired. It is admitted that the insurance policy and cover was handed over to OP No.1 by the OP No.3 for further handing over the same to the complainant. It has been submitted by the OPs that the terms and conditions were given to the complainant, but it has not been proved by the OPs that terms and conditions were ever given to the complainant. No document is there on the record to prove this fact. Thus, this shows that these terms and conditions were never given to the complainant. It has been held by the Hon’ble National Commission, in case FA No.2011 of 2019, titled as “National Insurance Co. Ltd. Vs. M/s Saraya Industries Ltd.”, that where there is no evidence on the record showing that the copies of terms and conditions of insurance policy had been supplied to the complainant, no presumption can be raised regarding the supply of terms and conditions under the law. From the documents, it is proved that the terms and conditions were never supplied to the complainant. It is also admitted that no claim has been lodged with the OP No.3 after the death of Devi Ditta. That non-issuance and non-delivery of policy document by OPs No.1 and 2 to the insured complainant constitute deficiency provisions of the Consumer Protection Act, 1986 as amended up to in rendering service and negligence as date (hereinafter in short The Act), besides violation of mandatory and statutory binding Protection of Policy Holders' Interests Regulations, 2017 (for brevity Regulations, 2017) of Insurance REGULATORY AND DEVERLOPMENT AUTHORTY OF INDIA (IRDAI).
13. Ex.C-8 has been proved as Certificate of insurance. As per Ex.C-8/OP1/2, the insurance policy is master policy and the master policy holder is OPs No.1 and 2 i.e. HDB Financial Services Limited. In the cases of Master Policy, the master policy holder receives the master policy certificate and further issue in the name of the insured. In the cases of death of the borrower the master policy holder is to issue the claim form to the LRs of the borrower for further furnishing the same to the insurance company and the insurance company is to settle the claim as per the terms and conditions of the insurance policy. In the present case, it is alleged that the complainant approached OPs No.1 and 2 after the death of the borrower, but no action was taken, when it is the duty of the OPs No.1 to provide the claim form to the complainant for further submitting the same to OP No.3 alongwith required documents. Since no claim was lodged, therefore the present complainant is premature. The complainant is directed to approach the OP No.1 within 10 days from the date of receipt the copy of this order and the OP No.1 is further directed to provide the complainant the necessary claim form and copy of insurance policy with terms and conditions within further 10 working days from the date of approaching the complainant. The complainant is further directed to lodge the claim after filling the form accompanied by the required documents within 10 days before the OP No.3 and the OP No.3 is further directed to settle the claim within 15 days from the date of submitting the claim form and the amount of the policy be adjusted in the loan amount and if the loan is settled, the same be disbursed to the complainant and accordingly, the complaint of the complainant is disposed off. This complaint could not be decided within stipulated time frame due to rush of work.
14. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.
Dated Jaswant Singh Dhillon Jyotsna Dr. Harveen Bhardwaj 04.03.2022 Member Member President
