C.C filed on:25.11.2015

 Disposed on:29.07.2016

BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, TUMKUR

DATED THIS THE 29^th DAY OF JULY –  2016

C.C. No. 134 OF 2015

:PRESENT:

SMT. PRATHIBHA. R.K. BAL LLM. PRESIDENT,

SRI. D. SHIVAMAHADEVAIAH, B.A. LLB,  MEMBER

SMT. GIRIJA, B.A. LADY MEMBER

COMPLAINANT/S:

Bhavya .K W/o Late Kumaraiah K.C.

Aged about 28 years

C/o T.P.Shobha, Maruthi Nagara,

Yallapura, Arakere Post,

Tumakuru Taluk, Tumakuru District.

(By Sri/Smt.  Swamy .N - Advocate)

-V/s-

OPPOSITE PARTY/IES

1.     The Manager, State Bank of Mysore,

        Yallapura Branch, Madhugiri Main Road,

        Tumakuru Taluk, Tumakuru District.

2.     The Chief Manager (Advances),

        S.B.M. Regional Office,

        Region – 3, Tumakuru.

(By Sri/Smt.  Vazeer Ahamed K.H.  -  Advocate)

:-O R D E R:-

SMT.PRATHIBHA R.K. - PRESIDENT

The complainant has filed this complaint Under Section 12 of the Consumer Protection Act 1986 against the OPS alleging deficiency in service on the part of OPS and prays to direct the Opposite Parties to release the loan amount of Rs.13,00,000/- and to pay Rs.5,00,000/- towards compensation for deficiency of service together with interest @ 18% Per Annum from the date of complaint to till the date of realization along with cost and such other reliefs as this Hon’ble Forum deems fit to grant in the interest of justice and equity.

The brief fact of the complaint is as under:-

2.     The complainant is a Consumer of the OP/Bank and having obtained loan facility by mortgaging property bearing site No.14, Old Katha No.847/1, current Katha No.1361/14 situated at Yallapura.  The OP No.1 sanctioned loan of Rs.18,00,000/- by mortgaging the above said site.  The complainant and her husband had executed registered mortgage deed dated 27/08/2014 before the Sub-Registrar, Tumkur.  The complainant submitted that, the OP No.2 had collected the premium amount of Rs.20,529/- towards insurance policy by the complainant through OP No.1 on 17/09/2014 issued policy vide No.111No78V02 by name Rinn Raksha and the same was covered the risk of the loan.

        The complainant further submitted that the OP No.1 had released Rs.5,00,000/- as first installment out of sanctioned loan of Rs.18,00,000/-.  Meanwhile, the complainant’s husband Sri.Kumaraiah K.C. died on 27/09/2014 at Nimhans Hospital, Bangalore due to ill-health.  Thereafter the OP No.1 has not released remaining loan amount of Rs.13,00,000/-.  It is contended by the complainant that after the death of the complainant husband, the risk of the loan amount should be covered by OP No.2 and the complainant should be released from the responsibility of the loan in view of the “RinRaksh”, policy.  The OPS have avoided covering the risk of the loan amount.  In this regard the complainant approached the OPS several times, but the OPS have refused to re-pay the loan amount.         

        The complainant further submitted that apart from RiNn Raksha the complainant has one more life insurance policy No.44028621409 issued by SBI Life Insurance Company for Rs.5,00,000/-.  This insurance amount was credited to the complainant’s account No.64086264071  dated 22/12/2014 under claim ID No.66909.  But, the OP No.1 has not released the said amount of Rs.5,00,000/- to the complainant.  Hence, the complainant approached the OPS on several times for releasing the amount and also given written requests to the OP No.1 on 05/02/2015, but the OP No.1 has not released the loan amount and also not released Rs.5,00,000/- of insurance amount.  Hence, the complainant issued a legal notice to the OP No.1, thereafter the OP No.1 has released insurance amount of Rs.5,00,000/- to the complainant’s account on 10/03/2015 and thereby the complainant has suffered loss, damages mental agony and torture.

        The complainant further submitted that the OP No.2 had promised the complainant that the OP No.2 ordered to OP No.1 to release the balance loan amount of Rs.13,00,000/-, but the OP No.1 had not released the balance loan amount of Rs.13,00,000/- to the complainant’s account.  Hence, the complainant filed this complaint to direct the OPS to release the balance loan amount of Rs.13,00,000/- and to pay compensation of Rs.5,00,000/- for the deficiency of service along with 18% P.A.   

3.     Upon service of version notice, the counsel for OPS appeared and filed version.  In the version the OPS admitted about the sanction of loan amount of Rs.18,00,000/- to the complainant and her husband and released of Rs.5,00,000/- to the complainant out of sanctioned loan amount of Rs.18,00,000/-.  After the death of the complainant’s husband, the OPS refused to release the remaining loan amount since the complainant had got the eligibility of only Rs.3,65,000/- and there is no proof of excess additional income to re-pay the mortgaged loan amount.  Hence, the OPS withheld the releasing of the balance housing loan of Rs.13,00,000/-.

        The OPS further submitted that the property mortgaged in favour of the OP No.1 Bank is considered only as a “Security” for the loan amount and itself will not empower the complainant to plea that it is a prerogative right to entitle for release of the balance mortgage/housing loan.

        The OPS further submitted that the OP No.1 has debited the account of the complainant on 17/09/2014 for Rs.20,529/- towards payment of insurance premium, but it is not correct to say that the said loan amount of Rs.18,00,000/- is covered under the said premium since the said insurance premium amount has been refunded by the SBI Life Insurance due to non-receipt of the requirement within permissible processing time.

        The OPS further submitted that the amount of Rs.5,00,000/- which has been withheld by the OP No.1 towards settlement of arrears of mortgaged loan amount. On the basis of the letter issued by the complainant, the OP No.1 has approached its Higher Authority so as to permit the OP No.1 to release the said death claim insurance to the complainant and after obtaining permission from the Regional Office, the OP No.1 immediately credited the said amount to the account of the complainant and thereby there is no deficiency of service on the part of OPS and prays to dismiss the complaint with exemplary costs in the interest of justice and equity. 

4.     Both parties have filed their affidavit evidence. The complainant has not marked the documents at Ex.C1 to C11.  The OP has marked the document at Ex.R1 to R9.  Heard the arguments and then posted the case for orders.

5.     Based on the above materials, the following issues will arise for our consideration.

1. Whether the complainant is entitled for the remaining loan amount of Rs.13,00,000-00?

2. Whether the complainant is entitled for the coverage of risk of loan under policy RiNn Raksha

3. Whether there was deficiency in service on the part of the OPS with regard to withholding of insurance amount of Rs.5,00,000-00 pertaining to the policy No.44028621409?

4. What Order?

6.     Our answer to the above issues are as under:-

Issue No (1)     :       In the Negative

Issue No (2)     :       In the Negative

Issue No (3)     :       In the Affirmative

Issue No (4)     :       As per final order below

:-REASONS:-

Issue Nos.(1) & (2):-

7.     On perusal of the pleadings, evidence and documents produced by both the parties, it is an undisputed fact that the complainant had mortgaged the property bearing site No.14, Old Katha No.847/1, Current Katha No.1361/14 to obtain loan from the OP No.1.  It is also not in dispute that the OP No.1 has sanctioned housing loan of  Rs.18,00,000/- to the complainant and her husband.  Further, it is also not in dispute that the OP No.1 has released Rs.5,00,000/- to the complainant as first installment out of sanctioned loan amount of Rs.18,00,000/-. 

8.     The contention raised by the complainant is that the OP No.1 had sanctioned Rs.18,00,000/- towards housing loan and released only Rs.5,00,000/- to the complainant and the OP No.1 has not released the remaining balance of loan amount.  The complainant further contended that the risk of the loan amount is covered by the RiNn Raksha Policy No.UNI:111No78V02 and in that regard the premium of Rs.20,529/- was debited on 17/09/2014, but the OPS avoiding to cover the loan amount from the insurance.

9.     Per-contra, the OP Nos. 1 & 2 submitted that they have sanctioned Rs.18,00,000/- on the basis of income of the complainant’s husband Sri.Kumaraiah.  Further, the complainant and her husband late Sri.Kumaraiah had mortgaged their property in favour OP No.1 as a security for the loan amount. Due to the death of the husband of the complainant, the OP No.1/Bank has assessed the income of the complainant and declared that she is eligible for only Rs.3,65,000/-.  In this regard, the OP Nos. 1 & 2 have produced the document as Ex.R8.  The OPS further submitted that though the OPS have sanctioned housing loan of Rs.18,00,000/- and released Rs.5,00,000/- as first installment, the complainant cannot claim to release the remaining loan amount of Rs.13,00,000/- as her prerogative right.  In this regard, the OPS have produced two citations as under:-

 In the case between S.Sarasu Vs. Branch Manager, The Catholic Syrian Bank Limited, reported in I (1999) CPJ 648, wherein the Hon’ble Tamil Nadu State Consumer Disputes Redressal Commission, Chennai has held as under:-

“Consumer Protection Act, 1986 – Section 2(1)(c) - complaint – Bank Loan – Complainant requested for loan of Rs.25,000/- - First loan of Rs.5,000/- paid with great difficulty – Loan of Rs.25,000/- if granted, opposite party would never be able to recover it – Discretion of opposite party in granting loan depends upon various circumstances – Fear of opposite party quite reasonable – complaint dismissed”.

In the case between Jasvinderkaur Vs Delhi Financial Corporation, reported in III (2001) CPJ 540, wherein the Delhi State Consumer Redressal Commission, Delhi has held as under:-

“Complainant applied for sanction of loan for expanding business activity – completed all the formalities – loan amount not released – Refusal of loan after duly taking into consideration all the relevant aspects not amount to deficiency in service”

10.   On perusal of the document produced by the OPS as Ex.R8, it is clear that the complainant is eligible for Rs.3,65,000/-.  Hence, on the above facts and circumstances and citations produced by the OPS, this Forum cannot direct the OPS to release the remaining loan amount of Rs.13,00,000/- as the OPS/Bank is the public Authority in order to safe guard their interest, the OP No.1 has made an assessment and given an opinion that the complainant is eligible for Rs.3,65,000/-.  Hence, under the circumstances, the complainant cannot claim over and above her eligibility. 

11.   Further, as far as the coverage of risk with regard to housing loan obtained by the complainant and her husband, the OPS submitted that they have informed the complainant vide letter dated: 20/12/2014/Ex.R1 stating that “we regret to inform you that we are unable to provide insurance cover to the below mentioned borrower due to non receipt of the requirement within permissible processing time.  Therefore, we are refunding the proposal deposit amount”.  On the other hand, the complainant has stated that the OP No.2 had collected an amount of Rs.20,529/- dated: 17/09/2014towards coverage of loan amount under the name RiNn Raksha policy through OP No.1.  After the death of the complainant’s husband, the OP Nos. 1 & 2 have avoided to cover the loan amount from the insurance.  The Ops have refunded back the premium amount on 27/11/2014.  On perusal of Ex.R2 i.e. statement of account of the complainant’s husband Sri.Kumaraiah, it is clear that the OPS have refunded the amount.  Further, on perusal of Ex.R1 it is clearly mentioned that “the borrower is not covered for insurance under Group insurance scheme RiNn Raksha”.  In this regard, the complainant failed to show how she is entitled for the coverage of the risk towards housing loan.  Further, in the prayer column the complainant has not claimed to direct the OPS to cover the risk of the loan obtained by her and her husband and the complainant has only claimed to direct the OPS to release the remaining loan amount and compensation of Rs.5,00,000/- together with interest @ 18% P.A.  Hence, in this regard we hold that the complainant failed to show that she is entitled for coverage of risk for loan amount.  Accordingly, we answer the point Nos. 1 & 2 in the Negative.  

Issue No.(3)

12.   Further, with regard to the withholding of SBI Life Insurance amount of Rs.5,00,000/-, the complainant has alleged that the OP No.1 had withheld SBI Life Insurance amount of Rs.5,00,000/- for nearly three months and thereby the OPS caused deficiency of service and due to the deficiency of service the complainant suffered mental agony and loss.

13.   On the contrary, the OPS submitted that they have put a hold to the complainant’s life insurance amount of Rs.5,00,000/- which was deposited in the OP No.1’s Bank on the basis of re-payment of loan amount which was already been released to the complainant towards housing loan.  To support their contention, the OPS have produced the document as Ex.R4

14.   On perusal of the evidence and documents produced by both the parties with regard to life insurance amount of Rs.5,00,000/- it is seen that the complainant purchased the life insurance policy bearing No.44028621409 three years back from the SBI Life Insurance Company for an amount of Rs.5,00,000/- and due to the death of complainant’s husband late Sri.Kumaraiah, the said amount came to be deposited in OP No.1 Bank. The OP No.1 Bank without giving notice to the complainant put on hold the insurance amount for which the complainant was legitimately entitled.  No doubt, the OP No.1 had issued a notice on 20/02/2015 after lapse of two months.  The OP No.1 did not have any right over the insurance amount of the complainant.  The complainant was entitled to the insurance amount on the death of her husband.  The said policy would ensure to the benefit of the legal representatives of the deceased person.  The OP Nos. 1 & 2 cannot have a right over the insurance amount in lieu of the loan amount due to the OP.  The best possible remedy available to the OP Nos. 1 & 2 was to recover the loan amount in case the complainant had committed default from the mortgaged property bearing site No.14, Old Katha No.847/1, Current Katha No.1361/14 situated at Yallapura. By not doing so, the OPS have committed deficiency of service.  The said action of the OPS is an arbitrary exercise of power since the OPS have put on hold to the insurance amount without any authority of law.  Accordingly, we answer the point No.3 in the Affirmative.             

Issue No.(4):-

15.   In the result, the OPS are liable to compensate the complainant due to deficiency of service by the OPS in not releasing the insurance amount to the complainant in time and thereby the complainant suffered mental agony as the complainant lost her husband and she was need in money.  But the OPS instead of releasing the insurance amount to the complainant with regard to policy No.44028621409, dodged the matter for two and half months and thereafter released the said amount that too after several requests made by the complainant.  Hence in this regard there is a deficiency of service on the part of OPS.  Therefore, it is just and proper to direct the OPS to pay Rs.10,000/- to the complainant towards compensation.  Further, the complainant is also entitled for the litigation cost of Rs.5,000/-.  Accordingly, we proceed to pass the following:- 

: O R D E R :

1. The complaint filed by the complainant is allowed in part.
2. The OPS are directed to pay Rs.10,000/- to the complainant towards compensation and Rs.5,000/- towards cost of the litigation.
3. Further the OPS are directed to comply the above order within 30 days from the date of receipt/knowledge of the order, failing which the OPS are directed to give interest @ 9% P.A. on the payable amount from the date of complaint to till realization.
4. Supply free copy of the order to the parties.

(Dictated to the stenographer, transcribed and typed by him, then corrected and pronounced in the open Forum on this the         29^th Day of JULY 2016).

LADY MEMBER              MEMBER                      PRESIDENT   

Tss