BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL COMMISSION, JALANDHAR.
Complaint No.93 of 2018
Date of Instt. 06.03.2018
Date of Decision: 04.03.2022
Deepak Kumar Verma S/o Late Devi Datta, 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 Standard Life Insurance Company Limited, Through its Branch Manager, 1st Floor and 2nd Floor, Gupta Chamber, Opposite Kalika Mandir, Civil Lines, Jalandhar (Punjab)-144001
Also at 362/363, Fourth Floor, Shakti Mall, Lajpat Nagar, Opp. Gymkhana Club, Jalandhar.
….….. 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. A. K. Gandhi, 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.PB-01-B-7755 from the OP No.1 on 14.10.2017 to the tune of Rs.15,12,750/- and the complainant was the guarantor/co-borrower 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.38,730/- per month upto December 2017. That as per the guidelines the OPs got insurance of Sh. Devi Ditta at the time of disbursement of the said vehicle 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.1,10,472/- to the loan account of Sh. Devi Ditta being the lump-sum insurance premium which was paid by the bank to the HDFC Life CP Plus-Supplier 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 treatment 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 06.12.2018 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. 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 non-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.3026523 and to get the loan secure had paid a sum of Rs.1,10,472/- to HDFC Standard Life Insurance Company Limited out of the loan disbursed by the OP. M/s HDFC Standard Life Insurance Company Limited had not got the loan secured as Sh. Devi Ditta had failed to attend his medical examination as such HDFC Standard Life Insurance Company Limited terminated the policy and has refunded the amount of Rs.1,10,472/- in the account of the OP and the OP has adjusted the said amount against the principal amount of the said account. The complainant was aware about the above said facts and despite having the knowledge of the same, the complainant has filed false and frivolous complaint against the OP to avoid and evade the loan liability pending against the complainant. The complainant is obliged to make payment as per the terms of the agreement. A sum of Rs.16,25,925/- is still payable as per foreclosure stated dated 30.04.2018 against the said loan account. The complainant is liable to pay the due outstanding amount to the answering OP qua to the loan facility as per the terms of the loan agreement. 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. The dispute was referred to Ld. Arbitrator and subsequently award has been passed by the Ld. Arbitrator. On merits, the factum in regard to raising a loan by Sh. Devi Ditta and the complainant is admitted and it is also admitted that Sh. Devi Ditta had died on 25.12.2017, 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 false, vexatious and has been filed with a malafide intention to harass the OP No.3 by misusing the process of law and to avail undue advantages. It is further averred that the present complaint is not maintainable against the answering OP and the same is liable to be dismissed as no policy of insurance has produced on record by the complainant alleged to be purchased by the deceased from the OP No.3. That without policy number and copy of insurance policy, the record of the OP is not traceable. Moreover, as per the reply filed by the OP No.2, no premium was paid by the deceased to the OP No.3 for issuing of any policy, so the question of issuing of the policy without consideration does not arise. So, the present complaint is liable to be dismissed. It is further averred that the complainant has not come before the Commission with clean hands and suppressed the material facts from the Commission. So, the present complaint is liable to be dismissed on this score. That the complainant is stopped by his own acts and conduct from filing the present complaint. So, the present complaint is liable to be dismissed. That the complaint is false and vexatious to the knowledge of the complainant. That the present complaint is barred by limitation. So, the present complaint is liable to be dismissed. That the Commission has no territorial jurisdiction to try and entertain the present complaint. So, the present complaint is liable to be dismissed for want of territorial jurisdiction. On merits, all the averments 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.
4. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence his affidavit Ex.CA alongwith some documents Ex.C-1 to Ex.C-7 and then closed the evidence.
5. In order to rebut the evidence of the complainant, the counsel for the OPs No.1 & 2 tendered into evidence affidavit Ex.OP1/A alongwith some documents Ex.OP1/1 to Ex.OP1/5 and then 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 14.10.2017 and the OP No.1 obtained insurance cover on the life of the father of the complaint in order to get secured the repayment of the loan in the event of the death of borrower. Premium of Rs.1,10,472/- 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 not maintainable as the arbitration award has already been passed against the complainant. The award has also been challenged by the complainant in Civil Court and the consumer complaint is not maintainable as this Forum has no jurisdiction. 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 Fora after passing of final Award by Arbitrator under Arbitration and Conciliation Act, 1996 – Appeal dismissed.”
He has further submitted that M/s HDFC Standard Life Insurance Company Limited had not got the loan secured as Mr. Devi Ditta had failed to attend his medical examination, therefore the policy was terminated by HDFC Standard life and the amount of Rs.1,10,472/- was refunded in the account of the OP and the said amount has been adjusted against the principal amount of the loan account. 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 no policy of insurance has been produced on record by the complainant as well as by the OPs No.1 & 2. Without policy number and copy of insurance, no record is traceable. No premium was paid by the deceased as per the written reply filed by the OPs No.1 and 2. Therefore, no policy was ever issued as per the reply filed by the OPs No.1 and 2. Therefore, the complaint is liable to 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 14.10.2017 and the borrower died on 25.12.2017. Registered notice was sent on 23.01.2018. The present complaint has been filed on 06.03.2018. 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 08.05.2018 and the award was passed on 20.07.2017. 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 Commission 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. Therefore, the present complaint is maintainable.
12. It is admitted fact that the father of the complainant took a vehicle loan against the vehicle no.PB-01-B-7755 for Rs.15,12,750/- from OP No.1. 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.1,10,472/- as per Ex.C-2. It has been alleged by OPs No.1 & 2 that since the father of the complainant never appeared before the insurance company for his medical examination, therefore the policy was terminated and the amount of Rs.1,10,472/- was refunded in the loan account of the complainant and which was adjusted on 23.04.2018 as per Ex.OP1/3. The father of the complainant died on 25.12.2017 and the amount was refunded on 23.04.2018 i.e. after about four months of the payment of premium received by OPs No.1. No document has been filed on record by the OP No.1 to show that the policy was terminated by the OP No.3 as the borrower never appeared for medical examination. No such letter has been produced to show that the borrower was ever asked to appear for the medical examination. No intimation was given to the complainant regarding the termination of the policy by the OP No.3 nor there is any such document on the record. It has been held by the Hon’le Supreme Court, cited in 2019 (5) R.C.R. Civil 384, in a case titled as “Äshatai w/o Anand Duparte Vs. Shriram City Union Finance Ltd.”, which is as under:-
“ Consumer Protection Act, 1986 Section 23 Insurance Act, 1938 Section 64 VB (2) Loan – Insurance- Deficiency in service – Complainant’s husband obtained personal loan from respondent Finance Company – Husband died – Complainant requested Finance Company to recover loan from Insurer – Finance Company alleged no insurance premium paid by borrower – Perusal of documents shows Finance Company provided loan which was secured by insurance – It was composite interlinked transaction – Company itself admitted to have received draft from borrower towards insurance premium- Finance Company, however, delayed in forwarding amount to Insurance Company – There was clear deficiency of service on part of Finance Company – Order of NCDRC set aside.”
In the present case also as per the case of OP No.3, no policy of insurance has been produced on record by OPs No.1 & 2 allegedly purchased from OP No.3. As per record, the premium was paid by the deceased to secure the loan. Though the amount of premium has been deposited in the account of the deceased and adjusted in loan, but that was done wrongly. The complainant is directed to pay the amount of premium i.e. Rs.1,10,472/- and the risk would be covered from the date of the insurance premium. The loan was secured from the date on which the insurance premium was paid. The premium was paid by the deceased during his life time and no document has been filed by OP to show that he was ever called for medical examination, therefore the loan was to be adjusted from insurance policy. There is clear cut deficiency in service on the part of the OPs No.1 and 2. So, in view of the law laid down by the Hon’ble Supreme Court, there is clear cut deficiency in service and unfair trade practice on the part of the OPs No.1 and 2.
13. The OPs No.1 and 2 are directed to get the insurance policy from OP No.3 after receiving fresh payment of premium of Rs.1,10,472/- from complainant as was received on 14.10.2017 and further to purchase policy to secure the repayment of loan and the complainant is directed to approach the OP No.1 within 10 days from the date of receipt of the copy of this order and make the payment of premium 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 directed to lodge the claim after filling the form accompanied by the required documents further 10 days before the OP No.3 and the OP No.3 is further directed to settle the claim within 15 days and the amount of the policy be adjusted in the loan amount 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. 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
