This is an application under Section 35 of Consumer Protection Act, 2019.
Brief facts of the complainants’ case is that, the complainant No. 1 being a Group ‘D’ staff, of Bhubhan Mayee Junior High School, at Korani Para and complainant No. 2, being a primary school teacher, attached with Kharibeche Para RR Primary School at Sen Para, had obtained a Home Loan of Rs. 2150000/-(Rupees Twenty One Lakh Fifty Thousand Only), after mortgaging their property, to the satisfaction of the O.P. No. 1 Bank. A Home Loan Insurance coverage to the tune of Rs. 102698/- (Rupees One Lakh Two Thousand Six Hundred Ninety Eight Only) had been sanctioned under the S.B.I. Life RiNn Raksha, vide Master Policy No. 70000018311 dt. 24.11.2020, taking the total Home Loan amount to (Rs.2150000/- + Rs. 102698/-) =Rs. 2252698/-(Rupees Twenty Two Lakh Fifty Two Thousand Six Hundred Ninety Eighty Only).
The O.P. Bank had imposed the above Home Loan Insurance coverage, without explaining the same to the complainants properly and the complainants in good faith had agreed for the above Home Loan Insurance coverage. After the issuance of the said Policy Certificate and fifteen (15) days from the date of the receipt, of the said policy Certificate, ‘Free Look’ option was available to the complainants, where by the option to terminate the Policy and return the Certificate of Policy, had been provided. But due to financial crunch payment of extra E.M.I. of Rs. 777/- (Rupees Seven Hundred Seventy Seven Only) under the Home Loan Insurance coverage became a burden and therefore, the complainants intended to close the Home Loan Insurance coverage and the matter had been brought to the notice of O.P. No. 1 & 2 and also to the higher authorities, by email. Despite receiving the emails the O.P’s. did not respond after much dilly-dallying. Finding no alternative the complainants issued a Legal Notice dt. 16.12.2020. In response to the legal correspondence, the O.P. No. 1, through their Advocate stated that the Home Loan Insurance coverage Policy ones accepted, would be binding and therefore, the same could not be terminated. As a result, in spite of being legally entitled to terminate the policy and not being allowed to do so, the complainants filed this instant case. Hence this case.
The O.P’s. entered appearance vide order dt. 15.03.2021 and did not file Written Version till order dated 03.12.2021, on which date the case was fixed for ex-parte hearing, after the O.P’s. failed to file Written Version on seven (7) dates being 19.04.2021, 03.05.2021, 18.06.2021, 31.08.2021, 08.10.2021, 23.11.2021and 03.12.2021 respectively. Most of the above dates were not affected by Lock Down and therefore, the O.P’s. contention about the Pandemic being the reason behind the non-filing of the Written Version cannot be accepted.
In support of their case, the complainants has examined complainant no. 1 on affidavit and filed certain documents, being one (1) Photo Copy of arrangement letter of Home Loan dt. 16.10.2020 as Annexure-1, one (1) Photo Copy of regular savings Bank Account bearing no. 39679387952 as Annexure-2, one (1) Photo Copy S.B.I. S.B.I. Life RiNn Raksha vide Master Policy No. 70000018311 dt. 24.11.2020, as Annexure-3, one(1) Photo Copy E-mail sent by complainant no. 1 as Annexure-4, one(1) Photo Copy legal correspondence dt. 16.12.2020 as Annexure-5, one (1) Photo Copy of the Postal Receipt dt. 17.12.2020 as Annexure-6, one (1) Photo Copy of the proof of delivery through track consignment dt. 18.12.2020 and 19.12.2020 as Annexures-7 & 8, and one(1) Photo Copy of the reply letter dt. 24.12.2020 as Annexure-9.
Therefore, from the above testimony and the Annexures, it becomes crystal clear that the loan component is not disputed. Hence the only short question that needs to be answered is whether the complainants, were bound to honour the Home Loan Insurance Coverage under the S.B.I. Life RiNn Raksha Policy. In this regard, the policy dt. 24.11.2020 clearly provides a Free Look Option as produced below:-
“You can review the terms and conditions of the insurance contract within 15 days from the date of receipt of this Certificate of Insurance. In case you are not satisfied or disagree with any of the terms and conditions. You have the option to return the Certificate of Insurance stating the reasons for your objection. Any such request should come through the Master Policyholder.
Your request for cancellation of the insurance contract under the free look option must reach our SBI Life office within a period of 15 days as mentioned above.”
Therefore, from the above Free Look Option, the only criteria for refusing the above Home Loan Coverage under the S.B.I. Life RiNn Raksha Policy, is that the reasons for refusal, has to be cited within 15 days, from the receipt of the certificate of Insurance Policy. Annexure-4 document of the complainants, clearly satisfies this criteria and therefore, their intention to return the certificate of Insurance Policy, ought to have been honoured by the O.P. Banks. But, in spite of receiving the Annexure-4, the O.P. Banks failed to honour the legal request and on the contrary, bound the complainants to the Life Home Loan Coverage under the S.B.I. Life RiNn Raksha Policy. Therefore, this tantamount to not only, deficiency of service by the O.P. Banks, but also unfair trade practice, done by the O.P. Banks. As a result the instant case succeeds and the O.P. Banks are directed to cancel the Home Loan Coverage under the S.B.I. Life RiNn Raksha vide Master Policy No. 70000018311 dt. 24.11.2020 and revise the E.M.I. component of the Home Loan after cancellation of the above Policy. Thereafter, they are directed to pay a sum of Rs. 20,000/-(Rupees Twenty Thousand Only) for mental pain and agony and Rs. 5,000/- (Rupees Five Thousand Only) toward litigation costs.
It is therefore,
O R D E R E D
That the case be and the same is allowed ex-parte against the O.P. No. 1 & 2 with costs.
The O.P. No. 1 & 2 are jointly and severally directed to cancel the Home Loan Coverage under the S.B.I. Life RiNn Raksha vide Master Policy No. 70000018311 dt. 24.11.2020 and revise, the E.M.I. component of the Home Loan, after cancellation of the above Policy and adjustment of the interest already paid.
O.P. No. 1 & 2 are jointly and severally, directed to pay a sum of Rs. 20,000/-(Rupees Twenty Thousand Only), for mental pain and agony and Rs. 5,000/- (Rupees Five Thousand Only) toward litigation costs with interest @ 8 % p.a., till the date of payment.
Copies of the Judgement/ Final Order be handed over to the parties free of cost.
