State Consumer Disputes Redressal Commission
The State Bank Of India vs Deepak Agnihotri on 14 October, 2021
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Appeal No. : 42 of 2021 Date of Institution : 01.07.2021 Date of Decision : 14.10.2021 The State Bank of India, Chandigarh through the Regional Manager, SCO No.103 to 108, Sector 17, Chandigarh. The Branch Manager, State Bank of India, Sector 8 Branch, Chandigarh. .... Appellants/Opposite Parties. Versus Deepak Agnihotri S/o Sh. M. R. Agnihotri, H.No.215, Sector 9-C, Chandigarh. Urvashi Agnihotri W/o Sh. Deepak Agnihotri, H.No.215, Sector 9-C, Chandigarh. ....Respondents/Complainants.. BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT MRS. PADMA PANDEMY, MEMBER
MR. RAJESH K. ARYA, MEMBER Present through Video Conferencing:-
Dr. Deepak Jindal, Advocate for the appellants.
Sh. Uday Agnihotri, Advocate for the respondents.
PER RAJESH K. ARYA, MEMBER This appeal has been filed by the opposite parties (appellants herein) against order dated 12.04.2021 passed by District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (now District Consumer Disputes Redressal Commission-II, U.T., Chandigarh) [in short 'District Commission'] vide which consumer complaint No.388 of 2020 filed by the complainants (respondents herein) was allowed in the following relief:-
"8] From the above facts & circumstances of the case as well as discussion, it is proved that the OP Bank has not only remained deficient in rendering proper service to the complainants but also indulged into unfair trade practice by forcing the complainants to pay for the insurance cover which they never willingly opted and were forced to pay by the Bank by withholding the original documents deposited by the borrower while availing the loan. Therefore, the present complaint is allowed against the Opposite parties. The Opposite Parties are directed as under:-
a] To refund a sum of Rs.3,39,975/- to the complainants along with interest @ 12% p.a. from the date of payment i.e. 19.1.2019 till its realization.
b] To pay a sum of Rs.25,000/-, as compensation along with litigation cost of Rs.10,000/-, to the complainants.
This order shall be complied with by the OPs within 30 days from the date of receipt of its certified copy, failing which, they shall also be liable to pay additional cost of Rs.20,000/- apart from the above relief."
2. Briefly stated the facts are that the complainants availed Home Loan of Rs.24.40 lakh from State Bank of Patiala vide Loan Account No.65162996761 on 8.3.2013 by depositing all necessary documents and Title Deeds with State Bank of Patiala, which Bank was later on merged with State Bank of India with all its assets and liabilities amalgamated therein. On issuing 'Long Term Home Insurance Policy' valid from 7.5.2013 to 6.5.2013, by the Bank, the complainants requested the opposite parties to close the Insurance Policy vide Annexure B but the Bank refused the same saying that in case the loan is pre-paid, the premium of residual period on prorata basis would be refunded by Insurance Co. The complainants repaid the entire loan within five years and intimated the Bank on 17.9.2018 to return Title Deed along with NOC. However, the official of the opposite parties told that in addition to mandatory House Insurance, the Bank also issued another Insurance Policy known as 'SBI Suraksha Policy' for which an amount of Rs.3,39,975/- was outstanding. It was further stated the complainants agitated the matter with the opposite parties and told that they never opted/applied for such insurance policy nor was it ever issued by the Bank. The opposite parties refused to return the original Title Deeds etc. unless the entire amount of premium amounting to Rs.3,39,975/- and interest thereon of Suraksha Policy were first paid. Under compelling circumstances, the complainants deposited Rs.3,39,975/- under protest and got the Suraksha Insurance Policy closed, reserving right to claim refund of the amount and interest thereon, vide letter dated 19.1.2019. Thereafter, the Bank issued NOC of the Home Loan Account by closing SBI Suraksha Policy and also cancelled lien over the property. It was stated that the complainants never applied for any Suraksha Insurance Policy from OP Bank nor was it ever issued to them yet the Bank of its own issued such policy without informing the complainants. Hence, a complaint was filed before the District Commission.
3. The opposite parties, while contesting the complaint, stated that at the time of availing of Home Loan, the complainants also opted for "SBI Life Rinn Raksha Policy" for both of them. It was further stated that out of the total loan amount of Rs.26,56,150/-, an amount of Rs.24,40,000/- was sanctioned towards Home Loan and remaining amount of Rs.2,16,150/- was sanctioned towards loan for premium of SBI Life Suraksha Policies availed by both the complainants. It was further stated that in the arrangement letter, Rs.24,40,000/- was mentioned as Principal Loan amount and amounts of Rs.1,18,135/- and Rs.98,015/- were mentioned as SBI Life Premium of both the complainants and as such, the entire loan amount depicted in the loan agreement was Rs.26,56,150/-. It was further stated that two separate loan accounts were opened in the name of the complainants i.e. one loan account No.65162996761 was opened in respect of Home Loan amounting to Rs.24,40,000/- and similarly, another Loan Account No.65163001981 was opened in respect of SBI Life Rinn Raksha Policies availed by both the complainant since the complainants opted for loan facility to pay the premium of SBI Life Policies. It was further stated that as per account statement of SBI Surakasha Policy, an amount of Rs.3,39,075/- was due towards the complainants as on 19.1.2019, therefore, the complainants paid the said amount towards liquidation of the loan amount. It was further stated that the complainants were trying to project the SBI General Long Term Home Policy as SBI Life Raksha Policy in the present complaint. It was further stated that SBI General Long Term Home Policy was mandatory and SBI Life Rinn Raksha Policy was optional. It was further stated that the complainants paid Rs.13,803/- vide receipt dated 15.5.2013 towards premium for SBI General Long Term Home Policy, being mandatory at the time of availing of Home Loan, whereas the SBI Life Finn Raksha Policy was availed by them voluntarily at the time of availing of the Home Loan and its validity was for 204 months i.e. entire loan duration period, however, the premium paying term was for 5 years, which was to be paid annually from the loan account of the complainants. It was further stated that the complainants never approached the Bank for cancellation of the SBI Life Rinn Raksha Policies issued in their names at any point of time.
4. The parties led evidence in support of their case.
5. After hearing arguments of the parties and going through the record, the District Commission allowed the complaint, as stated above.
6. We have heard the Counsel for the parties and have also gone through the record and written arguments of the parties carefully.
7. The appellants/opposite parties have assailed the order of the District Commission on the ground that in their replication, the respondents/complainants have admitted the fact of the execution of the loan agreement dated 07.03.2013, Annexure R-1/2 between the parties but strangely they denied the contents of the said loan agreement on the mere ground that loan agreement was not supplied to them. It has been stated that had there been any dispute regarding the loan amount or any other aspect in the loan agreement, then they should have immediately approached the Bank, which they have not during the entire loan tenure. It has further been stated the District Commission did not appreciate and completely ignored the loan agreement wherein terms and conditions of repayment of loan amount were mentioned. It has further been stated that the respondents were fully aware that the total loan amount was Rs.26,56,150/- and not Rs.24,40,000/- as alleged by them. It was further stated that at this stage, the respondents have no right to allege any kind of discrepancy in the loan arrangement letter, neither they can deny the fact that they have opted for SBI Life Rinn Raksha Policies by duly filing the SBI Life Rinn Raksha Policy membership forms. It has further been stated that the respondents nowhere either in the complaint or in the replication have denied their signatures on the documents i.e. loan agreement and loan arrangement letter. It was further stated that the respondents never approached the bank for cancellation of the SBI Life Rinn Raksha Policies. It was further stated that the District Commission failed to appreciate that at the time of sanctioning of the loan amount, the bank had followed due standard procedure while executing the documents and there was no concealment on the part of the appellants bank.
8. On the other hand, Counsel for the respondents vehemently argued that the District Commission, after fully appreciating the facts and documentary evidence available on record, rightly allowed the complaint of the complainants. However, it was argued that the respondents expedited the repayment of loan amount and after repaying the entire loan within five years, intimated the Bank on 17.09.2018 that as the entire loan had been repaid, the title deeds deposited with the Bank should be returned alongwith the NOC yet neither the original documents were returned nor was the NOC issued by the appellants Bank unless the premium amount of Rs.2,16,150/- and interest thereon was first paid by the respondents, which, the respondents, deposited under protest. It was further stated that SBI Life Application forms were not part of the pleadings and were produced only subsequently at the evidence stage, hence, these documents were rightly rejected to be received in evidence by the District Commission in accordance with Order VIII, Rule 1A(2) of Code of Civil Procedure, 1908. It was further stated that be that as it may, even taking these documents into account and considering that the respondents gave their consent for the SBI Life Rinn Raksha Policy, there is still abject deficiency of service on the part of the appellants Bank as they failed to supply the terms and conditions of the SBI Life Rinn Raksha Policy to the respondents. It was further stated that it is settled law that awareness of the existence of the insurance policy is one thing and being aware of the contents and meaning of the clauses of the policy is another. It was further argued that it is the utmost duty of the insurer to supply the insurance policy and terms and conditions thereof to the insured and failure to supply the same amounted to deficiency in service. It was further argued that since, the appellants Bank failed to show that the policy documents and the terms and conditions thereof were ever supplied to the respondents, the appellants Bank is deficient in rendering service. Lastly, prayer for dismissal of appeal was made by the Counsel.
9. So far as the grounds and contentions raised by the appellants - Bank in appeal are concerned, it may be stated here that perusal of Annexure C-1, which is letter dated 06.04.2013, transpires that vide the said letter, the respondents, after applying for grant of Home Loan to purchase flat, in question, also deposited the documents i.e. Conveyance Deed (Sale deed dated 11.3.2013), Conveyance deed by DDA, Agreement to Sell dated 11.3.2013, allotment letter and possession slip issued by DDA and DDA's entitlement Certificate for obtaining electric and water connection. No doubt, alongwith the loan, the appellants- Bank also issued a SBI General's "Long Term Home: Policy vide letter Annexure C-2 and premium of Rs.13,803/- was charged from the respondents. Further, vide letter dated 21.05.2014, Annexure C-3, the respondents specifically wrote to the AGM, State Bank of Patiala, Sector 8, Chandigarh to discontinue the aforesaid Insurance Policy and close the same immediately and returned the said policy in original to the Bank. Below this letter, the official of the Bank appended a note dated 27.05.2014 that since the insurance of house was mandatory, so, it could not be refunded or cancelled and further in case, the respondents prepay the loan, the premium of residual period on pro-rata basis would be refunded by the Insurance Company. Subsequently, vide letter dated 17.09.2018, the complainants after paying off the entire loan amount, wrote to the Chief Manager, State Bank of India, Sector 8 (Branch), Chandigarh to return the original documents lying deposited with the said Bank. On 19.01.2019 vide Certificate, Annexure C-8, the appellants - Bank certified that the House Loan Account in the name of respondent No.1 (Sh. Deepak Agnihotri) sanctioned on 08.03.2013 has been adjusted on 20.07.2018 and there is nothing outstanding in the said account. It was further certified that SBI Suraksha Account No.6516300198 was closed on 19.01.2019. Admittedly, the complainants deposited Rs.3,39,975/- under protest and got the Suraksha Insurance Policy closed. Only, thereafter, the Bank issued NOC of the Home Loan Account by closing SBI Suraksha Policy and also cancelled lien over the property.
10. It is settled law as already discussed by the District Commission in the impugned order that every loan is governed by the agreement mutually agreed upon between borrower and lender, with agreed terms and conditions specified therein. If any of the parties repudiates any terms and conditions later on citing the example of "one sided" or coercive" in nature, then it becomes a cause of dispute, In this case, borrower objected to the coercive method of taking insurance from the specific insurer to enhance their "other Income" portfolio, is a clear case of breaking the sanctity of the agreement and against the "fair practice codes "implemented/guided by RBI under BCSBI Rules (Banking Codes and Standards Board of India). Hence, the charging of insurance cover against the borrowers' will is coercive method being adopted by the bank and against the sanctity of terms and conditions and also against the law of natural justice. After going through the material available on record, we agree with the contention of the respondents that the policy, in question, i.e. The Suraksha Insurance Policy was issued by the appellants - Bank of its own without informing the respondents. Further the respondents were compelled to take SBI Life Rinn Raksha Policy and it cannot be ignored that it is the categorical case of the respondents that the policy documents and the terms and conditions thereof were never supplied to the respondents.
11. Further, there is nothing on record to show that whether the policy terms and conditions were ever supplied to the respondents and in case, the same were supplied, what was the mode and manner, in which, the same were supplied. Once a specific averment qua non-supplying of the terms and conditions of the Policy, in question, was taken by the respondents, the onus to refute the said averment by leading cogent and convincing documentary evidence was upon the appellants, which they failed to prove. Not only above, the Hon'ble Supreme Court in the case of United India Insurance Company Ltd. Vs. M.K.J. Corporation, Appeal (civil) 6075-6076 of 199 decided on 21.08.1996 has held as under:-
"It is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their Knowledge, since obligation of good faith applies to them equally with the assured."
12. It may be stated here that most of the banks press into service long-running documents wherein the borrowers fill in the blanks, at times without caring to read what has been provided therein, and bind themselves by the stipulations articulated by the best of legal brains. In our view, such practice also would be an unfair trade practice. Though it is essential to buy an insurance cover while taking a loan, the consumers are under no obligation to do so, neither from any bank nor non-banking finance company. It is not mandatory to purchase home loan protection plans. Neither the law nor the regulatory bodies such as Reserve Bank of India nor IRDAI have made the purchase of home loan protection (suraksha) plan with a loan mandatory. Purchasing an insurance plan is the sole discretion of the buyer and borrowers cannot be forced to purchase such plans. Further, in the absence of any cogent and convincing evidence led by the appellants - Bank, it can very well be said that the respondents never received the copy of arrangement letter dated 07.03.2013. Perusal of the loan agreement shows that the entire agreement was with respect to the home loan for purchasing a flat and there was not a single word, let alone a sentence, indicating anything even remotely related to SBI Life Rinn Raksha Policy or Life Insurance. Therefore, the plea of the appellants - Bank that the respondents availed the SBI Life Rinn Raksha Policy by executing and signing the loan agreement dated 07.03.2013 cannot be accepted and stands rejected being devoid of any substance. Thus, per record, it is proved that in addition to the House Insurance Policy, the appellants - Bank sue moto issued an additional Insurance Policy know as SBI Suraksha Police, for which, the said amount of Rs.3,39,075/- was outstanding, which the respondents were forced to deposit under protest and got the said Suraksha Insurance Policy closed. This act of the appellants - Bank amounted to deficiency in rendering service and indulgence into unfair trade practice on their part. In our considered opinion, the District Commission righty observed that the appellants - Bank failed to honour the "fair practices code" mooted out by Reserve Bank of India and is liable to refund the insurance charges charged in the account and the interest there upon on that amount besides litigation charges etc. Thus, the District Commission vide the impugned order rightly ordered refund of Rs.3,39,975/- to the respondents along with interest @ 12% p.a. from the date of payment i.e. 19.1.2019 till its realization besides payment of Rs.25,000/-, as compensation and litigation cost of Rs.10,000/-.
13. For the reasons recorded above, it is held that the order passed by District Commission-II allowing the consumer complaint did not need any interference and as such, is upheld. Resultantly, this appeal, being devoid of merit, stands dismissed with no order as to costs.
14. Certified copies of this order be sent to the parties, free of charge.
15. The file be consigned to Record Room after completion.
Pronounced 14.10.2021 [RAJ SHEKHAR ATTRI] PRESIDENT (PADMA PANDEY) MEMBER (RAJESH K. ARYA) MEMBER Ad