BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, MYSORE-570023

CONSUMER COMPLAINT NO.241/2021

DATED ON THIS THE 20^th January 2023

Present:      1) Sri. B.Narayanappa

M.A., LL.B., - PRESIDENT  

                   2) Smt.Lalitha.M.K.,

M.A., B.A.L., LL.B., - MEMBER  

                       3) Sri Maruthi Vaddar,

                                          B.A., LLB (Special)  - MEMBER

Sri MARUTHI VADDAR,

MEMBER

This complaint has been brought by the complainant Sri Krishnanayaka resident of Kumbarakoppalu (South), Mysuru alleging deficiency in service against the opposite party Nos.1 to 4 directing the opposite parties to pay Rs.9,62,000/- as policy amount and Rs.1,00,000/- for mental agony and to pass order for return of documents like Hakku patra (Khata extract), registered sale deed, house sketch, tax receipts, demand copy and encumbrance certificate by annulling the mortgaged deed dated 27.08.2018 bearing registration No.4489/18-19 pertaining to House No.17, 8^th Cross, 3^rd Stage, Kumbarakoppalu, Mysuru.

2. The brief facts of the complaint in a nutshell is as here under:-

It is alleged in the complaint that the son of the complainant Mallesha.K has obtained loan of Rs.10,00,000/- on 23.08.2018 from the opposite party No.4 Magma Housing Finance Ltd., The opposite party No.3 is the Central Office of opposite party No.4.Opposite party No.1 is the Head office of opposite party No.2 and the opposite party No.2 has issued insurance policy to the said loan. The premium amount is Rs.23,464/- and the said premium was used to pay to opposite party No.2.The said policy commenced from 28.08.2018 to 28.08.2030 and the total period of premium is 144 months.As per the condition of the policy “Benefit will be payable on death or diagnosis of terminal illness which is earlier”.At the time of availing the loan, the house property belonging to the father of K.Mallesha was mortgaged by way of deposit of title deeds to opposite party Nos.3 and 4.But, on 31.03.2020 K.Mallesh was passed away due to cardiac arrest.As per the condition of the policy, a policy holder who died on twentieth month from the commencement of the policy, policy holder is entitled to Rs. 9,62,000/-.Due to the death of the son of the complainant, opposite party Nos.1 and 2 have to pay the said policy amount to opposite party Nos.3 and 4.In spite of giving legal notice, they have not complied.After issuing legal notice, this complaint was filed.

3. After the registration of the complaint, notices were ordered to be issued to the opposite parties and in pursuance of the notices, opposite party Nos.1 to 4 have appeared through their respective counsels and have filed the written version.  In the written version filed by opposite party Nos.1 and 2, opposite party Nos.1 and 2 have contended that the present complaint is liable to be dismissed as per the Consumer Protection Act, 2019.  The said policy was obtained by the life assured namely K.Mallesha and had nominated his wife Pavitra.M., hence, the said nominee is the beneficiary under the said policy.  The present complaint filed by the complainant being alleged father of life assured is liable to be dismissed as complainant does not have any locus standi to file present complaint for benefits under subject policy.  No claim has been received till date from nominee i.e. Pavithra.M under the said policy.  This insurance company was informed about the death of life assured through legal notice sent by the complainant father only. Without filing of the claim by nominee with requisite documents to this opposite party Nos.1 and 2, the complainant has approached this Hon’ble Commission.  Hence, nominee is a proper and necessary party to present complaint.  However, complainant has failed to implead the nominee and hence present complaint is liable to be dismissed for non-joinder of necessary party.

It is further contended that the opposite party No.4 and opposite party Nos.1 and 2 have entered into contract of insurance vide master policy under the Group Loan Secure plan bearing No.25598759 which is a single premium group term insurance cover (reducing sum assured) linked to the housing loan, for the purpose of insuring customers who are also interested in seeking insurance cover to protect the same and are eligible to be covered under the master policy.That under the said master policy, the opposite party Nos.1 and 2 had received a request from Magma Housing Finance Ltd., and LA to issue a policy covering the life of Mr.K.Mallesha that the proposed policy was issued for a cover of Rs.10,00,000/- bearing policy No.25598759, application No.HM0132H17100015, nominee: Pavitra.M. and premium status is in force.It is submitted that nominee is the person who has been proposed by the policy holder for receiving the claim of the life insurance policy, upon death of life assured.Only in the absence of a nomination, the insurance company calls for a succession certificate from the claimants which is issued by a competent court of law.In the present case, the life assured had chosen his nominee as per his own will and hence benefits if any are payable only to the nominee by insurance company.Thus there is no deficiency in service on the part of insurance company and no mental stress has been caused to the complainant and hence no benefits or cost or compensation is payable to the complainant by insurance company, hence present complaint is liable to be dismissed.

4. Further, the opposite party Nos.3 and 4 have also filed their written version contending that that complaint is not maintainable as the complainant has suppressed the true material facts.  The main allegations are pertaining to the opposite party Nos.1 and 2, hence the complaint against the answering opposite party Nos.3 and 4 suffers from misjoinder of parties.

It is further submitted that the complainant along with applicant Mr.K.Mallesha and co-applicants Mrs.Chandramma, Mrs.Pavithra.M., Mr.Madesha.K. had obtained Home Loan top-up for Rs.10,00,000/- vide loan agreement No.HM/0132/H/17/100015 dated 08.08.2018 from opposite party Nos.3 and 4 and agreed to pay in 165 equated monthly installments starting from 07.08.2018 till 07.06.2032, in the said agreement, it is stated that the complainant is liable to pay the EMI on the due date and mortgaged the scheduled property by creation of equitable mortgage and registered memorandum of deposit of title deeds dated 27.08.2018 in respect of complaint schedule property and hence it is the duty of the complainant to clear the loan amount and redeem from the opposite party Nos.3 and 4 company.Despite agreeing to abide by all terms and conditions of the said finance facility, the complainant/borrowers herein failed and neglected to repay the dues of the said finance facility.Thereafter, opposite party Nos.3 and 4 were constrained to terminate the said finance facility by issuing a demand notice under Section 13(2) of the SARFAESI ACT 2002 dated 31.05.2021 to the complainant/borrowers asking them to repay the total balance outstanding amount of Rs.12,11,072/- which include outstanding principal, arrears (including accrued late charges) and interest till 29.05.2021 is due and payable along with future interest at 14.80% p.a. in addition to the said outstanding dues.Hence, this Hon’ble Commission does not have the jurisdiction to entertain the present complaint as per Section 34 of SARFAESI Act.

As per loan agreement terms and conditions, the complainant is liable to clear all loan amount in the opposite parties finance company when the outstanding due is till pending in respect of the complaint schedule property the question of issuing NOC does not arise, hence present complaint is liable to be dismissed.

5. The complainant has filed the affidavit towards his chief-examination and the same was taken as P.W. 1 and got marked the documents as Ex.P.1 to Ex.7.  On the other hand, opposite party Nos.1 and 2 have filed their affidavit towards the chief examination and the same was taken as R.W.1 and got marked documents as Ex.R.1 to Ex.R.4.  opposite party Nos.3 and 4 have also filed their affidavit towards the chief examination and the same was taken as R.W.2 and did not choose to mark any documents.
6. Heard the arguments of the complainant and perused the materials placed with the records.  
7. The points that would arise for our consideration are as here under:-  

1. Whether the complainant proves the alleged deficiency in service on the part of the opposite parties and thereby he is entitled to the reliefs as sought for?
2.  What order?

8. Our findings on the aforesaid points are as follows:

      Point No.1 :- In the negative.

      Point No.2 :- As per final order for the following

:: R E A S O N S ::

9. Point No.1:- To substantiate the allegations carved out in the complaint, the complainant himself was examined as P.W.1 by filing his affidavit towards the chief examination and got marked the documents as Ex.P.1 to Ex.P.7.  The complainant has reiterated the averments of the complaint in his affidavit.  Ex.P.1 is the ICICI Prudential Life Insurance Policy Copy.  Ex.P.2 is the death certificate of Mallesha.K.,  Ex.P.3 is the medical certificate of cause of death.  Ex.P.4 is the copy of equitable mortgage.  Ex.P.5 is the copy of the loan sanctioned by OP Nos.3 and 4.  Ex.P.6 is the copy of legal notice.  Ex.P.7 is the copy of the acknowledgement by OP Nos.1 and 2 for having received the legal notice.  After the testimony of the complainant, OP Nos.1 and 2 have also filed their affidavit towards the chief examination and the same was taken as R.W.1 and got marked Ex.R.1 to Ex.R.4.  The opposite party Nos.1 and 2 have reiterated the averments of the version in the affidavit.  Ex.R.1 is the declaration form.  Ex.R.2 is the Group Loan Secure copy.  Ex.R.3 is the legal notice.  Ex.R.4 is the reply notice by opposite party Nos.1 and 2. Thereafter, opposite party Nos.3 and 4 have also submitted the affidavit towards chief examination and the same was taken as R.W2 and did not choose to mark any documents.  The opposite party Nos.3 and 4 have reiterated the averments of the version in the affidavit.  After the evidence of both sides, both the complainant counsel and opposites party Nos.1 and 2 counsels have filed written arguments and complainant counsel submitted his oral arguments.  The complainant counsel has strenuously argued the matter at length.  After perusing the pleadings and documents submitted by both sides, it is not in dispute with regard to the taking of the group term insurance master policy linked to the housing loan for the coverage of Rs.10,00,000/- bearing policy No.25598759 commencing from 28.08.2018 to 28.08.2030 and the premium was used to pay by the policy holder K.Mallesha till his demise.  But, the very dispute is with regard to the claim amount of Rs.9,62,000/- by the death of the insured K.Mallesha.  As per the complainant, the opposite party Nos. 1 and 2 have issued the policy on 23.08.2018 to Mallesh.K and it was commenced from 28.08.2018 and end on 28.08.2030.  At the time of availing the loan, the schedule property belonging to the father (the complainant) has mortgaged in favour of opposite party Nos.3 and 4 for security.  But, on 31.03.2020 the insured K.Mallesh was expired, thereafter the opposite party Nos.1 and 2 have not issued the claim amount in spite of giving legal notice by the complainant.  According to the opposite party Nos.1 and 2, the said policy was obtained by the insured K.Mallesha and made his wife as nominee, hence the said nominee is the beneficiary of the policy.  The present complaint filed by the complainant being the father of the life assured and has no locus standi to claim benefits under the policy.  Only in the absence of nomination, the insurance company calls for succession certificate from the competent court of law.  Upon perusal of the insurance policy, Ex.P.1 and Ex.R.1 issued by opposite party Nos.1 and 2 in the nominee column the name of Mrs.Pavitra has been mentioned.  Hence, the contention of the opposite party Nos.1 and 2 is genuine and note worthy.  But, it is the contention of the opposite party Nos.3 and 4 that the present complainant along with K.Mallesha, Co-applicants Mrs.Chandramma, Mrs.Pavithra and Mr.Madesha.K. had obtained house loan for Rs.10,00,000/- from opposite party Nos.3 and 4 by creation of equitable mortgage on registered memorandum of deposit of title deeds in respect of the complaint schedule property and it is the duty of the complainant to clear loan amount and redeem from opposite party Nos.3 and 4.  But, they failed and neglected to repay the dues of the loan.  Thereafter, the opposite party Nos.3 and 4 have terminated the said finance facility by issuing a demand notice under Section 13(2) of the SARFAESI Act 2002 dated 31.05.2021 asking them to repay total balance outstanding amount of Rs.12,11,072/- which includes principal, arrears (including accrued late charges) and interest till 29.05.2021 is due and payable along with future interest @ 14.80% p.a. in addition to the said outstanding dues.  Hence, this Hon’ble Commission does not have the jurisdiction to entertain the present complaint as per Section 34 of the SARFAESI Act.  On perusal of the complaint, it is noticed that the complaint filed by the complainant being the father of the deceased K.Mallesha.  He has no right to file the complaint against opposite parties as there is nominee by name Pavithra who is the wife of the life assured.  She has to file the complaint.  The complaint filed by the complainant is bad for non-joinder of necessary party as per the contention of opposite party Nos.1 and 2.  Further, opposite party Nos.3 and 4 contended that they have already issued demand notice under Section 13(2) of the SARFAESI Act 2002 for the failure of the repayment of the loan amount.  When the proceedings have been initiated under SARFAESI Act, this Commission lost its jurisdiction to entertain such type of complaints.  It is to be noted that when the opposite party Nos.3 and 4 have initiated the proceedings under SARFAESI Act 2002 on 31.05.2021 thereafter, this complaint was filed on 30.09.2021 and the same is not maintainable.  Hence, the complaint of the complainant is liable to be dismissed. The complainant has failed to prove the case against opposite parties and hence, it is devoid of merits and the same is sans merit.  Hence, we answered the point No1.1 in the negative.
10. Point No.2:- For the aforesaid reasons, we proceed to pass the following

:: ORDER ::

1. The complaint of the complainant is hereby dismissed with a liberty to approach proper tribunal.
2. There shall be no order as to costs.
3. Furnish the copy of order to both parties at free of cost.

(Dictated to the Stenographer transcribed, typed by her, corrected by us and then pronounced in open Commission on this the 20^th January 2023)