DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

SOUTH 24 – PARGANAS,

AMANTRAN BAZAR, BARUIPUR, KOLKATA-700 144

C.C. CASE NO. 78 OF 2008

DATE OF FILING: 16.4.2008     DATE OF JUDGEMENT:  25.7.2019

Present :   President       :   Ananta Kumar Kapri

Member            :   Jhunu Prasad

COMPLAINANT            :  1.  Smt. Sanchita Chakraborty, wife of late

 Arup Kumar Chakravarty of 14, West Street, Modern Park, Santoshpur, Kolkata-75, P.S Survey Park, formerly Purba Jadavpur, Dist. South 24-Parganas.

                                           2.     Aranyak Chakravarty

                                           3.  Anushtup Chakravarty

Both sons of late Arup Kumar Chakravarty, of 14, West Street, Modern Park, Santoshpur, Kolkata-75, P.S Survey Park, formerly Purba Jadavpur, Dist. South 24-Parganas.

• VERSUS  -

O.P/O.Ps                         :   1. The Manager, United Bank of India, Alipore Branch,  

                                            at 27/1, Baker Road, P.S Alipore, Kolkata-27.

   2.     United Bank of India, at 11, Hemanta Basu Sarani, Kolkata-700 001.

3.    Tata AIG Insurance Company Limited, Horizon, 1^st Floor, 57, J.L. Nehru Road, Kolkata-20.

__________________________________________________________________

                                                   JUDGMENT

Sri Ananta Kumar Kapri, President

           Once this case was dismissed on contest by this Forum on 10.8.2009 and the said order of dismissal has been set aside by the Circuit Bench , Kolkata,  National Commission  in R.P no. 2320 of 2010 on 23.6.2017, directing the complainant to implead the Insurance Company as a party to this case. Accordingly, the Insurance Company has been made a party i.e O.P-3 and the deck is now all clear for passing judgment.

           Facts leading to the filing of the instant case, as it transpires in the amended version of the complaint, runs as follows.

           The complainant no.1 is the wife of deceased Arup Kumar Chakravarty and complainant nos. 2 and 3 are the sons of the said deceased. One loan was sanctioned on 11.4.2007 in favour of the deceased, amounting to Rs.3,47,823/- by O.P-1 bank and the said loan amount also included a one time insurance premium of Rs.12,823/- . The loan was taken by the deceased for the purpose of purchasing a flat for residential purpose. EMI of the loan was fixed at Rs.7180/- per month. The loan was granted to the deceased on deposit of Title Deed of the flat as security. The deceased paid EMI on and from May 2007. Thereafter, on 21.8.2007 the deceased passed away all on a sudden. After passing away of the deceased, the complainants have also paid a few EMIs to the bank. Thereafter, one day, they came to know from the documents and sanctioned letter that the loan amount is covered by insurance and ,therefore, they stopped payment of EMI and this fact was also brought to the notice of the O.P bank by letter dated 26.11.2007. But the O.P Bank has directed to the complainants to pay all the outstanding dues of the bank and, therefore, the complainants have filed the instant case ,praying for passing an order directing the O.P Bank to close the realization of the loan amount and also to hand over their Title Deed to them and to pay compensation etc. Hence, this case.

            O.P nos. 1 and 2 have filed written version to contest herein admitting disbursement of loan and payment of installment premium to O.P-3 i.e the Insurance company. It is submitted by those O.Ps that  O.P-3 i.e the insurance company did not hand over insurance policy to them and, therefore, they wrote to the insurance company vide their letter dated 28.8.2007. They also claimed for outstanding amount of Rs.3,22,833/- as on 21.8.2007, but the insurance company has repudiated the claim for the reason that deceased did not undergo medical test as required by the Insurance company. The premium amount received by the Insurance company has also been returned to them. It is submitted by the O.P Bank that the bank cannot suffer due to negligent conduct of the deceased and, therefore, the complainants are bound to pay the outstanding dues of the bank. There is no deficiency in service on their part and, therefore, the case should be dismissed in limini against them.

            The O.P-3 Insurance company has also filed written version, wherein it is contended by them that they received an application form for insurance along with one time premium from O.P-1 bank. But, the deceased failed to comply with the requirements of medical tests and to provide medical documents inspite of their letter dated 27.7.2007 given to him . For the negligent act of the deceased, policy was not issued and premium amount was returned to the bank. The deceased was  not consumer of insurance company and, therefore, the complainants are not entitled to the benefit of insurance.

             Upon the averments of the parties, the following points are formulated for consideration.

                             POINT FOR DETERMINATION

1. Are the O.Ps  guilty of deficiency in service as alleged by the complainant?
2. Are the complainants entitled to get relief or reliefs, if any,  as prayed for?

                                    EVIDENCE OF THE PARTIES   

         All the parties including the complainant have led evidence on affidavit and all these are kept in the record. Questionnaires, Replies and BNA filed by the parties are also kept in the record after consideration.                            

                        DECISION WITH REASONS

Point no.1 & 2 :

           Already heard the submissions of Ld. Lawyers ,appearing for the parties. Perused the petition of complaint, written versions, evidence and other materials on record. Considered all these.

           Ld. Lawyer appearing for the complainants has contended that the Insurance company should have directed the deceased for medical examination within 15 days of receipt of the insurance application form. But the Insurance company did not do so within 15 days in compliance of the ruling of the Hon’ble Apex Court. According to him, the Insurance Company received one time premium from the deceased and with the acceptance of such premium by the insurance company, the policy had been effective and as the policy was effective, it remained in force till the death of the deceased and, therefore, the complainant being the legal heirs of the deceased are entitled to get the benefit of insurance. The insurance company can never turn down the policy of the deceased by merely returning the premium amount at its whims and caprices.

           Ld. Lawyer for the O.P Bank has submitted that the O.P Bank has no negligence. According to him, the O.P Bank submitted the claim before the Insurance company for realizing its outstanding dues and the insurance company has repudiated the bank’s claim. So, in the circumstances as goes his submission, the O.P Bank has no other option but to claim their dues from the complainants and the complainants are bound to pay off the said dues of the O.P Bank.

           Ld. Lawyer appearing for the Insurance Company i.e O.P-3 has contended that the deceased did not undergo the medical tests inspite of the direction of the Insurance company and, therefore, insurance proposal has not been given any effect and the insurance premium has already been returned to the Bank. The Insurance company is not liable in any manner  to pay the outstanding dues of the O.P Bank as there was no valid policy of the deceased with them.

         It is admitted fact that one time premium of the insurance policy is paid to the insurance company by the O.P Bank and the insurance company has also received the same on 26.5.2007. Also admitted is the fact that insurance application form was submitted to O.P-3 on 20.4.2007 by the O.P Bank i.e UBI. It also goes undisputed that the deceased died on 21.8.2007. It is the case of the insurance company that they directed the deceased to undergo medical tests and to submit medical report. But the deceased did not undergo such tests and did not submit any such report. So, the policy has not been accepted by them and that the policy has become ,as goes their submission, ineffective.

             On perusal of the materials on record it is found that the insurance company directed the deceased to undergo medical tests by their alleged letter dated 27.7.2007 i.e three months after receipt of the application form. There is no explanation as to why the insurance company slept for three months. If they were at all interested in the medical examination of the deceased, they could have asked him to go through such tests within the reasonable time. That reasonable time is 15 days at the most. But, they did not inform the deceased of such tests for long 3 months. This inordinate delay on the part of the insurance company appears to be very much doubtful. It is submitted on behalf of the Insurance company that they informed the deceased of such medical tests by their letter dated 27.7.2007. Not a single document has been produced by the insurance company to prove that any such letter was given to the deceased. Even no copy of such letter addressed to the deceased has been produced before the Forum by the insurance company. The insurance company banks upon a copy of letter dated 27.7.2007 which was given to the O.P-1 bank. This letter is marked as Annexure D to written version filed by the O.P Bank. On perusal of this letter it is found that this letter is addressed to the Branch Manager of U.B.I (O.P:-1) . The O.P Bank has not also filed any document on record to prove that the O.P Bank informed the deceased of the requirement of such medical tests. In absence of all these vital evidences, we are the last person to hold that the insurance company ever made it informed to the deceased that the deceased would have to undergo medical tests. Such a plea of the insurance company appears to be an afterthought in order to evade the liability of the insurance policy of the deceased.

          Further, it is found that the Insurance company i.e O.P-3 has also flouted the mandatory guideline of IRDA ( Protection of Policy Holders’ interest) Regulations, 2002, Regn.4(6) thereof reads as follows:-

         “4.(6):   Proposals shall be processed by the insurer with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposals by the insurer”.

         In the instant case, O.P-3 did not inform anything to the deceased or to the Bank within mandatory period of 15 days of the date, i.e 20.4.2007 on which the proposal form was admittedly received by O.P-3.

           This violation of the guideline of IRDA Regulation, 2002 is a glaring instance of deficiency in service on the part of the Insurance company.

           Now to see whether the insurance policy was made effective and/or whether the medical examination of the deceased was at all necessary.  The medical examinations of the deceased were not at all necessary for giving effect to the insurance policy. There is on record a Circular of Head Office of U.B.I, bearing no. BANCASSU/C-12/0 and M-611/2006 dated 31.1.2006 filed on behalf of the O.P Bank . Clause 5 of that Circular appears to be very much important and it is reproduced as hereunder:

         “Clause 05.  The coverage will be effective from the date of dispatch of full premium as calculated from UBI Branch to Tata AIG Life Insurance Co. Ltd. However, such effective date will not be earlier than the actual commencement date of the loan after its approval and the insurance application approval date”.

       The group insurance scheme of Tata AIG for insurance coverage of the life of the borrowers of United Housing Loan , Annexure 1 to the above Circular, is also filed on record and the relevant portion thereof is quoted as hereunder:

          From the above provisions of the Circular it is crystal clear that the insurance policy takes effect as soon as the insurance premium is received by the Insurance company. It is admitted fact that insurance premium was received by the Insurance company on 26.5.2007 and this being so, the insurance policy became effective on and from 26.5.2007. As regards medical examinations of the insured, medical examination in such cases, as a general rule, is not required and it is so provided in the provisions of Annexure 1as noted above, but however, in exceptional cases, insurance company can ask the insured to undergo medical tests. Regards being had to all these provisions of Insurance Company, we do say that there was no necessity of the deceased to undergo medical tests and that the insurance policy of the deceased also became effective since 26.5.2007. The insurance company never informed the deceased of any requirement of medical tests and, therefore, the question of the deceased undergoing medical tests does never arise.

          Now, it has been contended on behalf of the Insurance company that the insurance premium which was received by the company has been returned to the O.P Bank and that the insurance policy has thus been brought to an end. When an insurance policy becomes valid the agreement between the parties becomes effective and once the insurance agreement becomes effective and binding upon the parties, it is immaterial whether insurance company retains or returns the insurance premium. Now , it is found that the insurance cover of the deceased as regards the loan amount taken by him from the O.P Bank was valid on the date of his death and, therefore, the complainants being the legal representatives of the deceased are entitled to get the benefits of the insurance policy. It is O.P-3 who is liable to pay back all outstanding dues of the loan taken by the deceased from the O.P Bank and the O.P Bank cannot realize unpaid dues from the complainants. The complainants are entitled to get back the Title Deed which was deposited with the O.P bank as security by the deceased at the time of taking loan from the bank.

           The O.P Bank took the leading part for effecting an insurance policy in the name of the deceased. O.P-1 sent the insurance application of the deceased to O.P-3. It is he who paid the insurance premium to O.P-3 and all these were done by O.P-1 for the reason that he has a business tie-up with O.P-3. There is no wrong so far on the part of O.P-1. But, the question is why O.P-1 went in slumber for about 4 months immediately after submission of application form for insurance. It is only on 28.8.2007 , he woke up after death of the deceased and wrote to O.P-3 for sending the policy. This kind of lethargy on the part of O.P-Bank is deficiency in service on its part, causing harassment and mental anguish to the complainants.

           In the  result, the case succeeds.

            Hence,

                                                                   ORDERED

            That the complaint case be and the same is decreed on contest against the O.Ps with a cost of Rs.10,000/-  to be paid equally by Bank and O.P-3.

            The O.P Bank i.e O.P nos. 1 and 2 are directed not to recover the outstanding dues of the bank from the complainants and also to return the Title Deed of the deceased to the complainant, within a month of this order and also to pay a sum of Rs.30,000/- as compensation to the complainant for harassment and mental agony suffered by them, within the aforesaid period, failing which the compensation amount and the cost amount will bear interest @10% p.a till full realization thereof. At the same time, O.P-3 is directed to liquidate the liabilities of the complainants towards the Bank, i.e O.P-1 & O.P-2 within the aforesaid period of one month.  

                        Registrar-In-Charge of this Forum is directed to send a copy of the judgment free of cost at once to the parties concerned by speed post.

                                                                                                                   President

I / We agree

                            Member

   Dictated and corrected by me

                             President