National Consumer Disputes Redressal
Sbi Life Insurance Co. Ltd. vs Asha Dixit on 10 December, 2010
Challenge in this revison petiton is to the order dated 05 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2884 OF 2010 (From the order dated 05.07.2010 in Appeal No.299/07 of the State Commission, Madhya Pradesh) SBI Life Insurance Co. Ltd. ........ Petitioner 2nd Floor, Turner Morrison Building G.N. Vidya Marg, Fort Mumbai 400 023 Vs. 1. Smt. Asha Dixit W/o Late Pramod Swarup Dixit C-28, Patel Nagar City Center Gwalior Madhya Pradesh 2. The Manager ........Respondents State Bank of India Personal Banking Division Housing Sale Main Branch Jivagi Chowk Gwalior (Madhya Pradesh) BEFORE: HON'BLE MR. JUSTICE B.N.P. SINGH, PRESIDING MEMBER HONBLE MR. SURESH CHANDRA, MEMBER For the Petitioner : Mr. G.L. Chawla, Advocate For the Respondent No.1 : Mr. Garvesh Kalra, Advocate Pronounced on : 10th December, 2010 ORDER
PER SURESH CHANDRA Challenge in this revision petition is to the order dated 05.07.2010 passed by the M.P. State Consumer Disputes Redressal Commission, Bhopal (State Commission for short), the operative portion of which is reproduced below:-
Under these circumstances, respondent No.1-SBI is responsible, even for not getting the documents prepared and therefore, SBI should bear the loss. Under these circumstances, although, the SBI Life has disowned its liability, as financial institution has deducted a sum on promise that in the event of the death of the borrower, the amount would be paid to the Bank to mitigate the loan liability, we find that that its SBI/SBI Life responsible for the balance amount of loan left to be paid by the deceased borrower.
The appeal is, therefore, allowed and it is directed that the Bank shall not recover any amount towards the loan, as the same has been satisfied under the insurance created concurrently with regard to loan. There shall be no order as to costs.
2. Respondent No.1 herein is the complainant and the petitioner herein was OP No.2 along with Respondent No.2 herein being OP No.1 before the District Forum. The husband of the complainant applied for a housing loan to OP-1, i.e., the State Bank of India, Gwalior for purchasing a house for a sum of Rs.6,50,000/-. Out of this amount, Rs.2,50,000/- was to be paid by the husband of the complainant and Rs.4,00,000/- was to be paid by OP-1 Bank as housing loan. However, the deceased borrower had obtained Rs.4,25,000/- as loan because out of this amount, Rs.25,000/- was being paid to OP-2, namely, SBI Life Insurance Co. Ltd. Mumbai. It was indicated to the deceased borrower that OP-2 Company would provide insurance cover to the effect that if the death of the borrower takes place due to any reason, in that case, entire outstanding loan will get liquidated. Accordingly, 174 equated monthly installments of Rs.4,250/- were fixed by OP-1 Bank for a total loan amount of Rs.4,25,000/-. The borrower of the housing loan, i.e., husband of the complainant died on 10.02.2006 after paying 25 installments. OP-1 Bank demanded the payment of the outstanding balance of loan to which the complainant requested the Bank to get the balance amount from the OP-2 Company since the loan was fully insured. The OP-1 Bank, however, vide its letter dated 17.03.2006 informed the complainant that her husband was not granted any insurance cover by OP-2 Insurance Co. because no document was executed at the time of loan being taken by her husband from OP-1. Feeling aggrieved by the negative response from OP-1 to her request for liquidating the loan by the insurance claim, the complainant lodged a complaint with the District Forum which was resisted by both the OP-1 Bank and the OP-2 Insurance Co. Based on the pleadings of the parties, the District Forum dismissed the consumer complaint finding no deficiency of service on the part of OPs. The complainant having gone in appeal before the State Commission challenging the order of the District Forum, the State Commission allowed the appeal vide its impugned order against which OP-2 has now filed the present revision petition.
3. In spite of notice, OP-1 Bank who is Respondent 2 herein has chosen to remain absent and nobody has appeared on its behalf. We have heard learned counsel for the petitioner and Respondent No.1. It is not in dispute that the housing loan of Rs.4,00,000/- was sanctioned by OP-Bank to the husband of the complainant. It is also not in dispute that Rs.25,000/- was added to the loan amount of Rs.4,00,000/- on account of the insurance premium being paid to the OP-2 Insurance Co. Not only this, admittedly the equated monthly installments were also fixed after taking into consideration the total amount of Rs.4,25,000/- and the same were being repaid by the husband of the complainant regularly till he suddenly died on 10.02.2006 on account of heart attack. It has, however, been argued on behalf of the petitioner that even if it is assumed that the OP-Bank had debited an amount of Rs.25,000/- in the loan account of the deceased borrower (this fact is not admitted by the petitioner Insurance Co.) still the petitioner Insurance Co. cannot be held liable to pay the outstanding loan because the said premium of Rs.25,000/- was never remitted to the petitioner Insurance Co. and no documents were ever filed for the grant of insurance cover. It is further submitted that OP-1 Bank is a separate legal entity and is not the agent of the petitioner Insurance Co. and hence the petitioner Insurance Co. cannot be held liable for the acts of omission and commission, if any, on the part of OP-Bank so as to make it to pay the outstanding loan. In the circumstances, it is the submission of the petitioner Insurance Co. that there is no deficiency on its part in the matter and hence it cannot be held responsible for payment of outstanding loan. The impugned order, therefore, is liable to be set aside.
4. We have carefully considered the submissions of the parties and those made at bar and also considered the record before us. As per the admitted factual position, the insurance premium of Rs.25,000/- has been debited by OP-1 Bank for providing insurance cover for recovering the outstanding loan amount in case of untoward incident taking place. Not only this, the deceased borrower had been regularly paying the EMI calculated on the total amount of Rs.4,25,000/- which included the premium amount as well. In the circumstances, the State Commission has rightly held OP-1 Bank as responsible for not completing the documentation, if any, in this regard and, therefore, the OP-1 should bear the loss. However, it is not in dispute that the OP-1 Bank did not remit the premium amount to OP-2 Insurance Co. In such a situation even though OPs 1 & 2 are sister concerns belonging to the same SBI group, since they are separate legal entities, OP-2 Insurance Co. cannot be held responsible for the fault of the OP-1 Bank. To this extent, we agree with the submissions made on behalf of the petitioner and set aside the impugned order against the OP-2/Peitoner Co. Consequently, the revision petition stands partly allowed and subject to this modification in respect of the liability of the petitioner Insurance Co., the remaining part of the impugned order regarding the liability of OP-1 Bank is hereby confirmed. In the facts and circumstances of this case, there shall be no order as to costs.
(B.N.P. SINGH, J) PRESIDING MEMBER .......................
(SURESH CHANDRA) MEMBER SS/