STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA
Date of Institution: 16.06.2017
Date of final hearing: 09.08.2023
Date of pronouncement: 12.10.2023
First Appeal No.737 of 2017
In the matter of :-
Oriental Bank of Commerce, a Body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 having its head office at E-Block, Harsha Bhawan, Cannaught Places, New Delhi and amongst other places at Branch at Sector-20, Panchkula, through its Branch Manager and Principal Officer Sh. Pardeep Aggarwal. …..Appellant
Versus
- Vijay Kumar S/o Sh. Jugal Kishore, R/o H.No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Dera Bassi.
- Sh. Ishan Bhatnagar S/o Sh. Vijay Kumar (Minor) through his natural guardian Vijay Kumar, R/o H. No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Derabassi.
- Mr. Tanishq Bhatnagar S/o Sh. Vijay Kumar (Minor) through his natural guardian Sh. Vijay Kumar, R/o H. No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Derabassi. ….Respondents
- Canara-HSBC-Oriental Bank of Commerce Life Insurance Company Ltd., through its Branch Manager, SCO 3, Sector 26, above Bharat Mahila Bank, Chandigarh.
....Performa Respondent
Argued by:- Sh. Davinder Kumar, counsel for appellant.
Sh. Anirudh Kush, counsel for respondent No.1 to 3.
Sh. Nitesh Singhi, counsel for respondent No.4.
Date of Institution: 30.06.2017
Date of final hearing: 09.08.2023
Date of pronouncement: 12.10.2023
First Appeal No.845 of 2017
In the matter of :-
Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd., through its Branch Manager, SCO 3, Sector 26, above Bharat Mahila Bank, Chandigarh. …..Appellant
Versus
- Vijay Kumar S/o Sh. Jugal Kishore, R/o H. No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Dera Bassi.
- Sh. Ishan Bhatnagar S/o Sh. Vijay Kumar (Minor) through his natural guardian Vijay Kumar, R/o H. No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Derabassi.
- Mr. Tanishq Bhatnagar S/o Sh. Vijay Kumar (Minor) through his natural guardian Sh. Vijay Kumar, R/o H. No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Derabassi.
- Managing Director, Oriental Bank of Commerce HO 5, Connaught Place, New Delhi.
- Regional Manager, Oriental Bank of Commerce, Oriental Bank Bhawan, Plot No.1-6, Sector-5, Panchkula.
- Oriental Bank of Commerce through its Manager, situated at SCO 392, Sector-20, Panchkula. ….Respondents
CORAM: Mr. Naresh Katyal, Judicial Member
Argued by:- Sh. Nitesh Singhi, counsel for appellants.
Sh. Anirudh Kush, counsel for respondent No.1 to 3.
Sh. Davinder Kumar for respondent No. 4 to 6.
ORDER
NARESH KATYAL, JUDICIAL MEMBER:
By this order; above mentioned two connected appeals are being disposed off. In both these appeals; legality of order dated 19.05.2017 passed by District Consumer Disputes Rederssal Forum, Panchkula (In short “District Commission”) has been questioned.
2. Factual matrix is that: complainant-Vijay Kumar and his wife (Late Smt. Poonam Lata) obtained house loan of Rs.14 Lacs for purchase of Flat No.502, First Floor, Shivam Apartments, Village: Peermuchalla, Zirakpur, Tehsil: Derabassi in name of Smt. Poonam Lata, vide sale deed No.5840 dated 18.09.2013 which was sanctioned on 14.09.2013 by Op No.3-Oriental Bank of Commerce (appellant in Appeal No. 737 of 2017). In loan account; Smt. Poonam Lata was borrower and complainant-Vijay Kumar was co-borrower. After sanctioning loan amount; official of OP No.3-OBC Bank informed complainant and his spouse that: apart from creation of security by way of Mortgage of property being purchased with bank loan, they were required to obtain Life Insurance Policy (Group Secure Policy) in borrower and co-borrower’s names linked to loan amount on reducing balance basis from office of OP No.4-Canara-BSBC-Oriental Bank of Commerce Life Insurance Company Ltd., with whom OP No.3-OBC Bank has tie up arrangement, which was obtained by complainant Vijay Kumar and his wife. As per the scheme, one time premium was payable at the time of disbursement of loan amount, which would be added to equated monthly installment of loan amount and scheme stipulated that: in the event of any mishappening, resulting into death of any of insured borrower(s) or permanently disability in an accident, outstanding amount would be adjusted out of policy claim amount. In last week of September; complainant-Vijay Kumar and his family shifted to purchased Flat No.502, FF, Shivam Apartments, Village: Peermuchalla. One time premium of Life Insurance Policy amounting to Rs.31,823/- was debited by OP No.3/OBC Bank (Appellant in Appeal No. 737 of 2017) from house loan account No.09436015004106 on 26.10.2013. House loan account statement depict debit of insurance amount, besides showing name of complainant/Vijay Kumar as joint borrower. Wife of complainant/Vijay Kumar was principal borrower, so monthly installment of loan was being debited from salary account No.09882040001720 of Late Smt.Poonam Lata maintained by OBC, Sector-6, Panchkula as she was working in Hansraj Public School, Sector-6, Panchkula and died in road accident on 06.04.2016. Complainant/Vijay Kumar informed OP No.3-OBC Bank about death of Poonam Lata vide letter dated 04.05.2016 and requested bank to get outstanding loan, adjusted out from policy claim amount, as she was main borrower in loan account but to no avail. By pleading deficiency in service on the part of OPs, on above facts; complaint was filed.
3. OPs raised contest. In written statement; OPs No.1 to 3 (Bank) in preliminary objections have pleaded that complainant along with his wife applied for housing loan for purchase of independent floor on 13.09.2013 and after verification; bank sanctioned loan on 14.09.2013 for Rs.14 lacs. On 17.10.2013; complainant-Vijay Kumar purchased policy and filled ‘member enrolment form’ for Canara HSBC Oriental Bank of Commerce Life Insurance Group Secure-Home Loan Scheme i.e. OP No.4 for his life and Smt.Poonam Lata had been made nominee of sum insured. In form, there was column of joint life, which had been opted only for complainant-Vijay Kumar and not for his wife Poonam Lata and said form was signed by complainant-Vijay Kumar, which means that he was in full knowledge that: insurance was only for him and not for his wife. Wife of complainant-Vijay Kumar had died and as per insurance policy/group secure policy; she was not insured through insurance cover. OPs have not got any form signed from borrower/complainant. Complainant-Vijay Kumar has only signed member enrolment form, in which, he consented for his life insurance and not for his wife, therefore, complainant-Vijay Kumar is not entitled to any claim, after death of Poonam Lata. OPs No.1 to 3 have granted loan against flat purchased by complainant. Premium was debited for life insurance of complainant-Vijay Kumar, and not for his wife Poonam Lata. There is no deficiency in service on its part.
4. OP No.4 filed separate written statement. In preliminary objections; it is pleaded that complainants have concealed material facts. They have got no cause of action. OP No.4 has received duly filled and signed Member Enrolment Form dated 17.10.2013 for product namely “Oriental Bank of Commerce Group Secure-Death & TPD Plan” signed by complainant-Vijay Kumar. Policy was single premium policy and accordingly he has paid single premium of Rs.31,822.60 to cover his home loan of Rs.14,00,000/- taken from Oriental Bank of Commerce. Life assured had made his wife Poonam Lata, as nominee in policy. OP No.4 issued Certificate of Insurance (COI) bearing No.GP000005-0045000 under Master Policy No.GP000005 with Risk commencement date as: 26.10.2013 in favour of complainant-Vijay Kumar. COI along with welcome letter and policy terms and conditions were sent to group member i.e. Vijay Kumar vide Blue Dart AWB No.43608110033. Certificate of Insurance, all features of plan were provided to Life Assured with respect to group policy. In life insurance policy, life of Vijay Kumar has been assured, not the nominee or other family members. Nominee is only the person, who receives death benefit amount as per terms and conditions of policy, in case of death of life assured. Since life assured (Vijay Kumar) is alive, no claim arises. OP No.4 has not received any claim intimation from complainant. There is no deficiency in service on its part.
5. Parties to this lis led evidence; oral as well documentary.
6. On critically analyzing the same, learned District Consumer Commission-Panchkula vide order dated 19.05.2017 by allowing the complaint; directed OPs to calculate principal amount due from complainant No.1 and his deceased wife, on date of death and remit half of amount. OPs shall calculate interest on remaining half amount payable by complainant No.1 (Vijay Kumar) which he claims to have been paid through installments. Installments paid by him shall be adjusted to satisfy said half amount of loan, payable by complainant. OPs have also been directed to pay Rs.10,000/- to complainant, as compensation, for mental agony and harassment and Rs.5,000/- as cost of litigation.
7. Feeling aggrieved, against aforesaid order (19.05.2017); OPs have questioned the same through separate appeals as detailed in title of this judgment.
8. Learned counsel for parties have been heard at length. With their able assistance; record too has been perused.
9. On behalf of appellant/OBC Bank (FA 737 of 2017) it has been contended that impugned order dated 19.05.2017 is erroneous. Appellant has sanctioned loan of Rs.14.00 lacs to complainant and his wife on 14.09.2013. One month thereafter, Vijay Kumar/Complainant purchased policy from Canara HSBC Oriental Bank of Commerce (appellant in FA No. 845 of 2017). In the ‘member enrolment form’ while obtaining said policy; Vijay Kumar has expressed only himself, to be life insured and not his wife. He made his wife Poonam Lata as nominee for sum insured. His wife died. As per contention, since Poonam Lata was not life assured, therefore, impugned order containing direction to recalculate the principal amount due from complainant Vijay Kumar and his wife on the date of death and to remit half there from, is grossly illegal. It is urged that single premium was paid by Vijay Kumar while obtaining policy. Had there been insurance for his wife too; then premium amount would have been more. Vijay Kumar was well aware that he has purchased insurance policy from OP No. 4 only for himself and made his wife as nominee.
10. On behalf of appellant/Canara HSBC OBC Life Insurance Ltd. in FA No. 845 of 2017, it is urged that Vijay Kumar has paid single premium of Rs.31,822.60 to cover his home loan of Rs.14.00 lacs taken from OBC Bank. Only he was life assured and his wife Poonam Lata was nominee. Accordingly certificate of insurance was issued in his favour. Learned counsel has also urged that there arose no situation, warranting payment of half of the amount (because of death of Poonam Lata), since life assured Vijay Kumar is still alive.
11. On the other hand, learned counsel for complainants has supported the impugned order dated 19.05.2017 by urging that it is outcome of proper appreciation of facts and evidence by learned District Consumer Commission-Panchkula and same warrants no interference, in both appeal.
12. Undisputedly, vide document Annexure C-1 dated 14.09.2013 OBC Bank had sanctioned loan of Rs.14.00 lacs, jointly in name of Smt. Poonam Lata and Vijay Kumar/complainant which was to be repaid in 150 EMIs of Rs.16,590/- each. Loan account No. 09436015004106-Annexure C-4 is in joint name of Poonam Lata and Vijay Kumar, so mentioned in statement of account Annexure C-4 for period of 17.01.2013 to 31.03.2015, which also recites about insurance premium of amount of Rs.31,823/- under column: “Dr. Amount”. Request for enrolment in “Group Loan Protection Plan”, vide Annexure C-2 was also signed jointly by Vijay Kumar and Poonam Lata. Co-relating with this fact is document Annexure R-1/1 describing as “Member Enrolment Form for Canara HSBC-Oriental Bank of Commerce Life Insurance Group Secure-Home Loan Scheme”. This member enrolment form (Annexure R-1/1) dated 17.10.2013 has been signed by Vijay Kumar alone at two places, in his individual capacity and it recites Poonam Lata as his ‘nominee’. Poonam Lata, had unfortunately expired on 06.04.2016 due to accident resulted on 31.03.2016. It means that: she had died two years and five months, after executing member enrolment form Annexure R1/1 by Vijay Kumar-complainant (which was executed on 17.10.2013). It cannot be believed that during all this period, Vijay Kumar had remained unaware that he had, in his own wisdom, made his wife Poonam Lata as ‘nominee’ in Member Enrolment Form Annexure R-1/1.
13. Annexure C-8 is letter written by complainant Vijay Kumar to Branch Manager, Oriental Bank of Commerce, Sector-20, Panchkula mentioning that his wife Poonam Lata had met with an accident on 31.03.2016 and died on 06.04.2016. Request has thus been made to adjust/waive off the loan amount, in accordance with provision of insurance plan.
14. Irrespective of fact that request for enrolment in Group Loan Protection Plan vide document Annexure A-2 was jointly signed by Poonam Lata and Vijay Kumar-complainant, yet, fact remained that: in member enrolment form Annexure R1/1, complainant Vijay Kumar while consciously exercising his own domain put his signature at two places in his individual capacity and conferred status of ‘nominee’ upon his wife Poonam Lata. Document Annexure R1/1 which strictly has attired a status of proposal made by insured formed a formidable and acceptable base, in creation of insurance contract. Certificate of Insurance (COI)-Annexure A-2 (appended as such with appeal No. 845 of 2017) has been issued on 30.10.2013 in favour of Vijay Kumar only, in which his wife Poonam Lata has been shown as nominee. Premium received was Rs.31,822.60/- (Rs.31,823/- figures in statement of account Annexure C-4). Thus, it is established in strict legal sense that complainant-Vijay Kumar was single borrower/purchaser of certificate of insurance. Vijay Kumar must have been in knowledge of fact, throughout since 31.10.2013, that: his wife’s name does not figure in certificate of insurance in her capacity as an insured along with him. Consequently, it is held that Poonam Lata was not borrower/purchaser of certificate of insurance, as she was only a nominee of her insured husband-Vijay Kumar.
15. Certificate of Insurance will began to operate with full force, only on death/permanent disability of member i.e. Vijay Kumar and at legal pedestal all contractual obligations and legal consequences will flow accordingly. No contractual obligations/legal implications will emerge on death of nominee of an insured member. Just because of fact that: EMI amount was being deducted from account No. 09882040001720 of Poonam Lata, will not, ipso facto, create any indefeasible right in favour of complainant-Vijay Kumar to assert through his application Annexure C-8 to OBC Bank about adjustment/waiver off loan amount, in accordance with provision of insurance plan. Consequently, it is held that his request Annexure C-8 to this effect was wholly unjustified. This request is also bereft of credence, particularly when complainant could not point out any clause from certificate of insurance dated 30.10.2013 that all contractual obligations upon OPs have arisen in his favour, to claim waive off/adjustment in loan amount on account of death of his wife-Poonam Lata who was merely his nominee.
16. It was never any obligation on the part of OPs to see, check and ensure as to whether borrowers have correctly filled the form or not. No such duty cast upon OPs. After all, complainant-Vijay Kumar was not a rustic villager, totally unmindful of what he has done earlier. He was not novice and neophyte of ground realities, as he pretended himself to be that he, in his own wisdom and domain, has conferred status of ‘nominee’ upon his wife in member enrolment form Annexure R1/1 dated 17.10.2013.
17. Meaning of term “Joint Borrower in Loan Account” cannot, in legal parlance, be stretched too far and wide, to include within its compass and ambit; the phrase “Joint Borrower of Certificate of Insurance”, in wake of scenario, where certificate of insurance has been purchased/borrowed by husband only, (as it is so in case in hand) and he (husband) has consciously made his wife as nominee (as in this case). Nominee, in certificate of insurance, cannot attire any status of purchaser/borrower/insured in policy. More so, it is also evident from record that: single premium of Rs.31,823/- has been paid in relation to insurance and this amount also find mentioned in member enrolment form. Even, certificate of insurance Annexure A-2 (appended with appeal No. 845 of 2017) recites that Rs.31,822.60 has been received as premium. Had, Poonam Lata (wife of Vijay Kumar-complainant) been also insured, along with her husband-Vijay Kumar, than premium amount would have been much higher.
18. As a result of subjective analysis of all relevant facets of these appeals; this Commission has arrived at an inescapable conclusion that direction given to OPs/appellants to calculate principal amount due from complainant and his wife, on the date of death, and remit half of the amount, was legally unsustainable, warranting interference in these appeals. All other allied directions given in impugned order dated 19.05.2017 also have no legal effect and same cannot be allowed to stand. Accordingly, impugned order dated 19.05.2017 of District Consumer Commission-Panchkula is set aside, in toto. As a legal corollary so flowing; both these appeals are allowed.
19. Statutory amount of Rs.25,000/- deposited by appellants, separately while filing their separate appeals be refunded to them, after due identification and verification, as per rules and on expiry of period meant for further appeal /revision, if any.
20. Application(s) pending, if any in both appeals stand disposed of in terms of the aforesaid judgment.
21. Original copy of this judgment be attached with First Appeal No. 737 of 2017 and certified copy thereof be attached with First Appeal No. 845 of 2017.
22. Copy of this judgment be provided to all the parties, free of cost, as mandated by the Consumer Protection Act, 1986/2019. This judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
23. Files of both appeals be consigned to record room.
Date of pronouncement: 12th October, 2023
Naresh Katyal
Judicial Member
Addl. Bench-II
