DATE OF FILING : 20/01/16
IN THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI
Dated this the 27th day of April 2018
Present :
SRI. S. GOPAKUMAR PRESIDENT
SRI. BENNY. K. MEMBER
CC NO. 21/2016
Between
Complainant : Saseendran M.D.,
Mettayil House,
Koovakandam P.O.,
Thodupuzha.
(By Adv: K.M.Sanu)
And
Opposite Party : The Manager,
Federal Bank Ltd.,
Velliyamattam Branch,
Velliyamattam P.O
(By Adv:Sijimon K.Augustin)
O R D E R
SRI. S. GOPAKUMAR (PRESIDENT)
The case of the complainant is that,
Complainant's son Sasikanth had availed an educational loan of
Rs. 1,55,000/- from the opposite party bank and the complainant was the co-obligant in that loan, in the year 2009. At the time of granting the loan the manager of the opposite party bank intimated that, the life of the son of the complainant shall be covered under an insurance policy, for the loan period. At that time the complainant informed to the opposite party that they already availed an LIC policy and showed its certificate to the opposite party. Along with the loan application the opposite party Manager obtained some signed papers from the complainant without his consent. From the education loan, opposite party bank transferred an amount of Rs.25,000/- as insurance premium in favour of a private insurance company and took an investment policy in the name of the borrower and the policy certificate was kept with them. Neither the complainant nor his son permitted the opposite party to take such a policy in his name.
(Cont....2)
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Complainant further stated that, complainant had caused a loss of Rs.25,000/- by way of interest, due to the transfer of such a huge amount from the loan account which bears 14.5% interest, and invested it in an investment policy. For that the complainant had to find out other sources for remitting the balance course fee. When the complainant enquired this matter with the opposite party, opposite party convinced that the interest of the policy premium will be adjusted at the time of closing the loan. When the complainant approached the opposite party in the year 2015 for closing the loan, opposite party withdrawn from his words, and denied to provide any subvention in the interest. Complainant further stated that opposite party has no authority to transfer any amount from the education loan, to other investment policies. Due to the act of the opposite party, complainant had to suffer much financial loss and it amount to gross deficiency in service and unfair trade practice on the part of the opposite party bank.
Complainant further stated that even though he intimated the matter of a LIC policy which covers more than the loan amount in the name of the complainant, the opposite party's manager wilfully opted to availed such a policy and due to that the complainant had suffered a loss of Rs.25,000/- by way of interest along with loss in this policy, due to its surrender. Against this act of the opposite party, complainant filed this petition alleging deficiency in service against the opposite party bank and for directing the opposite party to repay Rs.25,000/- to the complainant as interest which the complainant had to paid in the loan account due to the irresponsible act of the opposite party along with cost and compensation.
Upon notice, opposite party entered appearance and filed detailed reply version. In their version opposite party contented that, as per the terms of the loan, the life of the student, borrower shall be caused under the insurance policy having sufficient period and such amount to cover the loan amount together with accrued interest. More over the policy holder should assign the said policy in favour of the bank from which he had availed education loan towards security for the loan amount together with occurred interest. As a part of banking business the manager of the opposite party explained all these facts to the complainant and his son. The complainant or his son did not produced or has discussed with the officials of the bank regarding the assignment of LIC policy as alleged in the complaint. The insurance policy from
(Cont....3)
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IDCB- Fortis, was taken absolutely with the consent of the complainant and his son. Among the various schemes of different insurance companies, the complainant opted an ULIP market linked insurance policy from the above company having a single premium of Rs.25,000/- and having an insurance coverage period of ten years. The complainant and his son opted the policy voluntarily after understanding the terms and conditions of the policy and there was no compulsion from the side of the opposite party, and they had taken the policy for the purpose of investment and insurance after being fully convinced. The premium amount was transferred from the savings bank account of the complainant's son, as per the mandate issued by them. After the insurance of policy, the policy holder assigned the policy in favour of the opposite party. In case the complainant felt that he was being misrepresented, miscommunicated or that certain information was not being provided to him, he had all the means to submit a cancellation request or to proceed for for closure much earlier. The insurance policy was closed on 01/12/15 under the instructions from the complainant's son. The contract of insurance was entered with the borrower and insurance company and the insurance company alone is liable to provide the services to the complainant as per the norms of the IRDA. The relationship between the complainant and the opposite party is only that of a debtor and creditor and this opposite party is fully entitled to recover the loan amount. Opposite party further contented that the allegation that the opposite party had not closed the insurance policy when the value of the policy, went above Rs.35,000/- is unsustainable, as the opposite party has no control over the policy, as the contract of insurance policy was between complainant's son and the IDBI-Fortis company. However the complainant at his own choice surrendered the policy before the expiry of policy term. ie, before 10 years, these happened to get the lower benefit. Opposite party further contented that as per the direction of the complainant and his son, opposite party transferred the policy premium from their SB account to the insurance company. Hence there is no deficiency in service on the part of the opposite party and opposite party is not liable to any manner of loss, if any suffered by the complainant or his son.
On the above pleading following issues were settled for consideration.
1 . Whether the complainant had proved that there was deficiency in service
on the part of the opposite party?
(Cont....4)
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2 . Whether the opposite party is liable to pay compensation to the
complainant as alleged.
3 . Reliefs and costs.
The evidence in this case consists of oral evidence of PW1 and Ext.P1 on side of the complainant and the oral evidence of DW1 and Ext.R1 on the side of the opposite party.
Ext.P1 is the statement of loan account and Ext.R1 is the withdrawal form dated 18/08/09.
We have heard both sides in detail. The issues stated above are considered together for the sake of brevity and convenience. According to the complainant at the time of availing the educational loan, the opposite party concealed the matter of insurances. Thereafter it is came to know that the opposite party availed an insurance policy, by transferring an amount of Rs.25,000/- from the loan amount, as insurance premium and took the investment. Insurance policy of a private agency, without the consent of the complainant or his son. Further allegation of the complainant is that at the time of sanctioning the loan, the complainant had shown the policy certificate issued from LIC, having sufficient sum insurance and period to cover the loan period. Due to the withdrawal of Rs. 25,000/- from loan account complainant had to remit 14.5% interest for the whole loan amount, including the amount transferred for the insurance premium. This caused much financial loss to the complainant. The learned counsel further argued that, the policy under question, availed by the opposite party manager is a unit linked one and it affect the market fluctuation. While getting information about this, the complainant approached opposite party bank and requested his willingness to surrender the policy, at that time the market value of the policy was more than Rs.30,000/-, but the opposite party bank denied his request. Hence the complainant suffered loss by way of policy amount and by way of loan interest. These things are happened due to the irresponsible act of the opposite party bank and the opposite party bank is liable to compensate the complainant adequately.
According to the learned counsel who appeared for opposite party stated that after having convinced with the terms and conditions,
(Cont....5)
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the complainant's son voluntarily took this policy as an investment and insurance. The premium amount was transferred from the savings bank account of the complainant's son as per the mandate issued by him. The complainant and his son after well understanding the contents of proposal form and the terms and condition of the policy his own choice opted their policy which is having zero surrender and maturity values. Further argued that the contract of insurance is entered between the complainant's son with IDBI-Fortis, Insurance company and the insurance company is alone liable to provide the services to the complainant as per the norms and guide lines of the IRDA.
The facts brought out in evidence in the case would go to show that the amount for the insurance premium was transferred from the savings bank account of the complainant's son through the Ext.R1 withdrawal form which is duly signed by the complainant and his son, dated 18/08/09. As per Ext.P1, the loan account statement, it is seen that part of the loan was sanctioned on 31/07/09, and also there is no entry regarding the transfer of an amount of Rs.25,000/- from the loan account to the insurance company as alleged by the complainant. Except the loan statement, no loan account pass book is produced by the complainant, for convincing the Forum that whether the amount is transferred from loan amounts which was sanctioned for education purpose alone. In this case the opposite party specifically stated that after the issuance of the policy, the policy holder assigned the policy in favour of the opposite party bank. This contention of the opposite party is not denied by the complainant. If the complainant felt that he was being cheated by the bank, in taking such a policy, without his consent, he had all the means to submit a cancellation request or to proceed for closure much earlier, or he can withdraw from assigning it in favour of the opposite party bank. Like wise the complainant had failed to produce any LIC policy certificate before this Forum to fortify their version that, at the time of availing the above loan, complainant had shown the policy certificate to the opposite party bank manager. More over it is evident that the complainant having no knowledge about the basic detail of this policy. On going through the deposition of the PW1, the complainant, in cross examination the complainant deposed that all the details needed for the policy was given by his son. He has no knowledge about the facts of the case. At this juncture it is very pertinent to note that the loan was availed by the son of the complainant, whereas the complainant was only a
(Cont....6)
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co-obligant in the loan, and policy was issued in favour of the son of the complainant. The son of the complainant has not arrayed as a party in this case and not even examined him as a witness.
Then regarding the allegation of loss sustained to the complainant, no evidence is produced by the complainant, to convince that how much loss is caused to him in this matter and by what way it is suffered. At the same time, an evaluation of the evidence in this matter, as per the terms and conditions of education loan scheme under which the loan was availed by the complainant and his son, the life of the student borrower shall be covered under an insurance policy having sufficient period and sum assured to cover the loan amount together with accrued interest. As per the complaint, the complainant took the policy in the year 2009. The complainant enjoyed all the benefit and cover of the policy up to the date of closing the education loan, and after collecting the surrender value also in premature stage, the complainant approached this Forum and filed this complaint. Hence the Forum cannot believe the version of the complainant that he has sustained any loss in this matter and the act of the opposite party bank is warranting any deficiency in service.
On the basis of above discussion the Forum is of a considered view that the allegation of the complainant against the opposite party is not sustainable and hence the complaint is dismissed. No cost or compensation is ordered.
Pronounced in the Open Forum on this the 27th day of April, 2018.
Sd/-
SRI. S. GOPAKUMAR (PRESIDENT)
Sd/-
SRI. BENNY. K. (MEMBER)
(Cont....7)
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APPENDIX
Depositions :
On the side of the Complainant :
PW1 - Saseendran M.D.
On the side of the Opposite Party :
Nil
Exhibits :
On the side of the Complainant :
Ext.P1 - The statement of loan account
On the side of the Opposite Party :
Ext.R1 - The withdrawal form dated 18/08/09.
Forwarded by Order,
SENIOR SUPERINTENDENT
