Karnataka

Bellary

CC-64/2013

HUCHHAPPA - Complainant(s)

Versus

THE MANAGER,MAHINDRA SERVICES LTD - Opp.Party(s)

M.LOKESH

21 Jan 2015

ORDER

FILED ON:	26-03-2013
ORDER ON:	12-02-2015

 

                                                                                                                                                                                                                                                                                                                                                                          

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BELLARY

 

 

C.C.No.64 of 2013

 

Present :  

 

  (1)   Shri. R.Bandachar,

                                          B.Com, LL.B.  (Spl) ……    President

                                                                                            (in-charge)

   

  (2) Smt Mary Havila,

                                          B.A.                       ……        Member

 

DATED THIS THE 12^th DAY OF FEBRUARY 2015  

 

 

COMPLAINANT         By-Shri M. Lokesh,      Advocate, Bellary.                                                                                      //VS/	Huchhappa, S/o late Malleshappa, Age: 27 years, Door No.64, Ward No.2, Shridhara Gadda, Talur road, Bellary Dist.
RESPONDENTS      By Shri.Indushekar S,          Advocate, Bellary,        For respondent no.1.          Smt P Ramadevi,       Advocate, Bellary,       For respondent no.2.	1)The Manager, Mahindra & Mahindra     Financial Service Ltd., D.No.145(5),     17th ward, Kolachalam Compound,     Vattam complex, Bellary-583 101.   2)The Manager, KOTAK Mahindra Life     Insurance Company Limited, Kotak    Mahindra Old Mutual Life Insurance    Company Limited, 8th floor, Godrej    coliseum, Behind Everard Nagar, Sion      (East), Mumbai 400 022.

 

      

        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

//ORDER//

 

Per Shri R Bandachar    

 

          The complainant filed the complaint against the respondents U/Sec-12 of the Consumer Protection Act 1986.   

               2.  The brief facts of the case are that the complainant and his father purchased tractor bearing Regn.No.KA-34/TA-0751 with the financial assistance of the respondent no.1 by hypothecating the said vehicle.  The respondents also issued Mahindra loan suraksha life insurance policy vide certificate CI No.FII-20058465 valid from 14-10-2010 to 13-10-2011.  The complainant and his father entered into loan agreement vide contract no.1333818 dated: 14-10-2010 for which the respondent no.1 sanctioned loan of Rs.3,00,000/- and finance charges is Rs.1,12,500/-, total agreement value being Rs.4,12,500/- which was to be repaid in 6 equal installments of Rs.68,750/- each.  The complainant issued 6 cheques for a sum of Rs.68,750/- each.  The complainant’s father gave his lands as security towards the said loan.   The said policy is trilateral agreement among the respondents and the complainant.  As per the said policy, in the event of death of customer-loanee the legal heirs of loanee need not pay the loan amount to the financier and the same will be paid by the respondent no.2’s insurance company.   The respondent no.1 has charged Rs.1,300/- towards administration of the said policy apart from the premium.  The respondent no.1 assured that the company will take care of renewing the policy as it is trilateral agreement.  The complainant’s father died on 21-01-2013 at Sridharagadda village.  The complainant approached the respondent no.1 on 05-02-2013 intimating the death of his father and requested for closure of loan agreement and to return original RC, insurance policy, no due certificate and 6 cheques.  But the respondents intimated that the said insurance policy is not renewed by mistake.  Non-renewal of the said policy by the respondent no.1 amounts to deficiency in service.  As per respondent no.1, as on                             22-05-2013 the complainant’s father is due a sum of Rs.71,327/- and the sum assured under the policy is Rs.3,00,000/-. Therefore, the complainant is entitled for a sum of Rs.2,28,673/-.    The respondent no.1 is not diligent either in renewing the policy or following the banking regulations.   The complainant got issued legal notice dated: 14-03-2013 to the respondents which was served on the respondents, but they have not given reply to it.  Therefore, the complaint.   

                3.   The respondent no.1 filed the written version stating that all the allegations made in the complaint, except those which are specifically admitted, are denied.  This Forum has no jurisdiction to deal with the complaint. The complaint is not maintainable for non-joinder of necessary party i.e. Kotak Life Insurance Company.  There is no cause of action to file the complaint. The allegation that the complainant’s father purchased the tractor bearing No.KA-34/TA-0751 with the financial assistance of the respondent no.1 and hypothecated it in favour of the respondent no.1 by executing loan agreement for Rs.3,00,000/- repayable in 6 installments of Rs.68,750/- each, is true.  But remaining allegations made in the same are denied.  As per the terms of the loan agreement, the financer has got right to seize the vehicle with due process and to appropriate the sale proceeds towards the loan amount and to safeguard the hypothecated property.   The complainant’s father had taken the loan suraksha policy No.CI Certificate No.FII 20058465 for risk covered from 14-10-2010 to 13-10-2011.  The said policy has not been renewed. The loan amount due is Rs.1,39,670/-.  It is the primary duty of the borrower to pay the premium of any policy on or before the expiry date and renew the policy.  Such duty is not obligatory upon the financial institution.  It is not the duty of the respondent no.1 to send intimation or to inform about the date of renewal of the policy.  If the borrower had desired to renew the policy then the respondent no.1 would do it by collecting the necessary premium on or before expiry of the policy subject to declaration of good health.  But the complainant has approached the respondent no.1 after the death of main borrower without renewing the policy.  As per Claue-8 of Mahindra Loan Suraksha Policy, in no case would a member be covered beyond the cover termination date mentioned overleaf i.e. 13-10-2011.  The legal notice of the complainant is duly replied by the respondent no.1.   The said policy is covered only for future principal amount as on date of death of the borrower.  In the instant case the borrower expired after expiry of the policy.  The administration fee/service charge collected as per IRDA guidelines pertains to only one year not for entire tenure.  The claim of the complainant was sent to the concerned department, but they sent it back stating that the policy was not in force at the time of death of the borrower.  The same has been intimated to the complainant.  There is no deficiency in service on the part of the respondent no.1.  Therefore, the complaint be dismissed.   

4.   The respondent no.2 filed the written version stating that the complaint filed is false, frivolous and vexatious.  There is no cause of action alleged against the respondent no.2.  The agreement dated:                 15-11-2002 is entered by the Mahindra & Mahindra Financial Service Ltd                (MMFSL-respondent no.1) with the respondent no.2.  The respondent no.2 agreed to provide the Group Credit Life Cover policy to MMFSL’s borrowers/members. On the request of MMFSL under the said agreement, the respondent no.2 issued the certificate of insurance to customer/member Malleshappa S/o Lakshmappa for the period from                     14-10-2010 to 13-10-2011.  In the certificate of insurance, MMFSL was a policy holder and the premium was also received from MMFSL on behalf of the member subscribed.  As the cover period of the above certificate of insurance stands terminated on 13-10-2011 and the request of renewal for the same was not received as such the liability of the respondent no.2 to pay the cover amount to the MMFSL or to the complainant does not arise.  The contents of para-1 need no reply.  The contents of para-2 to 8 of the complaint are denied.  There is no deficiency in service on the part of the respondent no.2.   Therefore, the complaint be dismissed.  

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          5.  The complainant to prove his case, as his evidence, filed his affidavit, which are marked as P.W.1 & Pw.1(a) and got marked 09 documents as Ex.P.1 to Ex.P.9. The respondents to prove their case, filed two affidavits, which are marked as R.W.1 and R.W.2 and got marked 10 documents as Ex.R.1 to Ex.R.10.

                 6.  The written arguments are filed by the complainant as well as by the respondents and heard arguments on both sides.    

1. The points that arise for our consideration are;

2. Whether the complainant has proved deficiency in

                       service on the part of the respondents towards him?

               2.  Whether the complainant is entitled for the reliefs    

                    prayed for in the complaint?                                     

3. What order?

                   8.     The findings on the above points are as under.

               Point No.1:    In the affirmative.                                                                   Point No.2:     Partly in the affirmative.  

               Point No.3:    As per final order.

// R  E A S O N S //

Point No.1 : -

                9. The respondents without disputing the issuance of Mahindra Loan Suraksha Life Insurance Policy to the complainant’s father and in the said policy the respondent no.1 is the policy holder covering the risk amount of Rs.3,00,000/- for the period from 14-10-2010 to 13-10-2011,  repudiated the claim of the complainant to pay the amount assured under the policy on the ground of the said borrower/member stated to have been died on 21-01-2013 i.e. after expiry of the said cover termination date i.e.    13-10-2011 and therefore, the repudiation of the claim of the complainant by the respondent no.2 is in accordance with the terms and conditions of the policy.

                 10.  However, the respondent no.1 contented that it is the primary duty of the borrower to pay the premium of any policy on or before the expiry date and renew the policy and such duty is not obligatory upon the financial institution as such it is not the duty of the respondent no.1 to send intimation or to inform about the date of renewal of the policy and if the borrower had desired to renew the policy then the respondent no.1 would do it by collecting the necessary premium on or before expiry of the policy subject to declaration of good health.  Further it is contended that the complainant has approached the respondent no.1 after the death of main borrower without renewing the policy and therefore, as per Claue-8 of Mahindra Loan Suraksha Policy, in no case would a member be covered beyond the cover termination date mentioned overleaf i.e. 13-10-2011.    

                11.  We have gone through the documents produced by both parties.  As per the policy document, the respondent no.1 is the policy holder of Mahindra Loan Suraksha Life Insurance Policy issued in favour his member i.e. the complainant’s father.  When there is agreement between the respondent no.1 and the complainant regarding availment of the loan, hypothecating the subject vehicle as well as Loan Suraksha Life insurance policy, it is duty of the respondent no.1 to inform his borrower/member with regard to the renewal of the policy.   At the time of sanctioning the loan, the respondent no.1 collected annual premium including the administration fee/service charges towards the said policy from the borrower/member.   Therefore, the respondent no.1 knew well that the said policy is annual premium.  That means it is the primary duty of the respondent no.1 atleast to inform his member about the date of expiry of policy well before.   But the respondent no.1 has not produced any document to show that he had intimated about the renewal of the policy to the complainant’s father before expiry of it.  Therefore, the contention of the respondent no.1 that it is the primary duty of the borrower to pay the premium of any policy on or before the expiry date and renew the policy and such duty is not obligatory upon the financial institution as such it is not the duty of the respondent no.1 to send intimation or to inform about the date of renewal of the policy, is not accepted. Therefore, the respondent no.1 cannot be escaped from liability under the said policy. Non-intimation/renewal of the subject policy by the respondent no.1 amounts to deficiency in service.  The decision relied on by the counsel for the respondent no.1 reported in IV (2005) CPJ 112 (NC) is not applicable to the facts of this case.   

                  12.  In the certificate of subject insurance policy the respondent no.1 is the policy holder and the policy has been lapsed due to non-payment of the premium by the respondent no.1 as such the respondent no.2  cannot be held for deficiency in service towards the complainant, as rightly contended by the respondent no.2. Hence, the complaint is liable to be dismissed against the respondent no.2.   

                  13.  Considering all the aspects discussed above, this point is answered in the affirmative. 

   

  Point No.2:-

         14.  The complainant has prayed to direct the respondents to issue RC of the subject vehicle, six cheques and clearance/no due certificate apart from praying to pay the sum assured of Rs.3,00,000/- after deducting loan amount due.   But the complainant has not produced any receipts to show that he had cleared the entire loan amount.  Therefore, the prayer for issue of RC, six cheques and clearance/no due certificate, cannot be considered. As per the respondent no.1, the loan amount due is Rs.1,39,670/-. After deducting the amount of Rs.1,39,670/- out of Rs.3,00,000/- the balance comes to Rs.1,60,330/-. Therefore, the complainant is entitled for Rs.1,60,330/- with interest, compensation towards deficiency in service as well as cost of the proceedings, which shall be as per final order.   Accordingly, this point is answered partly in the affirmative.

Point No.3:-

                  15.  In view of the discussions made under point No. 1 and 2, we pass

the following;

// ORDER //

 

                     The complaint filed by the complainant is partly allowed as against the respondent no.1 only.    

The complainant is entitled to recover Rs.1,60,330/- with interest @ 9% p.a. from 26-03-2013 till its realization,  from the respondent no.1 only.

The complainant is entitled to recover Rs.3,000/- towards compensation for deficiency in service, from the respondent no.1 only.

The complainant is also entitled to recover Rs.2,000/- towards cost of the proceedings, from the respondent no.1 only.

The respondent no.1 is liable to pay the above said amounts to the complainant within two months from the date of this order.

The complaint filed by the complainant against the respondent no.2 is dismissed.    

Inform the parties accordingly.

 

(Dictated to the Stenographer, typescript edited, corrected and then pronounced in the open court this 12th day of February 2015)

 

 

 

	(R.BANDACHAR) PRESIDENT.
	(MARY HAVILA) MEMBER.