State Consumer Disputes Redressal Commission
Magma Fincorp Limited Company & Anr. vs Pratibha Wd/O Nandkishor Bhoyar & Ors. on 16 May, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR 5th Floor, Administrative Building No. 1 Civil Lines, Nagpur-440 001 First Appeal No. A/11/318 (Arisen out of Order Dated 18/04/2011 in Case No. cc/10/435 of District Nagpur) Smt Pratibha Nandkishor Bhoyar R/o House No. 576 Near Kolhe Patil House Pipri Trimurtinagar Ward No 3, Wardha ...........Appellant(s) Versus 1. Kotak Mahindra (Old Mutual Life Insurance Co.Ltd.,) Godrej Collesium 8th Floor Behind Evarardnagar Sion (East) Mumbai-400022. 2. Managing Director Magma Fin Corp Ltd. Magma House 24 Park Shreet Calcultta-700016 3. Branch Manager Magma Fin Corp Ltd. 81, Hill Road, Ramnagar Nagpur 4. Branch Manager Kotak Mahindra Life Insurance Co. Ltd. Dharampeth, West High Court Road, Nagpur ...........Respondent(s) PRESENT: Adv. Mr D P Shouche for the Appellant Adv. Mr A S M Vidyarthi for Respondent Nos.1 & 4 Adv. Mr S Jaiswal for Respondent Nos.2 & 3 First Appeal No. FA/12/292 (Restored No. RBT/14/75) (Arisen out of Order Dated 18/04/2011 in Case No. CC/10/435 of District Nagpur) M/s Kotak Mahindra Old Mutual Life Insurance Ltd. Having Office At 4th Floor, Vinay Bhavya Complex 159a, Cst Road Kalina,Santacruz East Mumbai- 400 098 ...........Appellant(s) Versus 1. Smt. Pratibha W/S Nandkishore Bhoyar H.No 576 , Pimpari Trimurti Nagar Ward No 3 N Kolhe Patil House Wardha 2. Managing Director Megma Fincorp Ltd., Megma House, 24 Park Street Kolkata-700016 3. Branch Manager Megma Fincorp Ltd., 81, Hill Road, Ramnagar Nagpur ...........Respondent(s) PRESENT: Adv. Mr A M S Vidyarthi for the Appellant Adv. Mr D P Shouche for Respondent No.1 Adv. Mr S Jaiswal for Respondent Nos. 2 & 3 First Appeal No. FA/13/99 (Arisen out of Order Dated 18/04/2011 in Case No. CC/10/435 of District Nagpur) 1. Magma Fincorp Limited Company office at Magma House Office at Magma House 24 park street Kolkata 700016 Through its Managing Director 2. Magma Fincorp limited office at 81, Hill Road Ramnagar Nagpur ...........Appellant(s) Versus 1. Pratibha Wd/o Nandkishor Bhoyar R/o House No 576 Near Kolhe Patil House Pimpri Trimurti Nagar Ward No 3, Wardha 2. Kotak Mahindra Old Mutual Life Insurance Co Ltd Godrej Collesium 8 th floor Behind Evari Nagar Sion (E) Mumbai 3. Branch Manager Kotak Mahindra Life Insurance Co Ltd Lotus Building Dharampteh West High Court Road Nagpur ...........Respondent(s) PRESENT: Adv. Mr S Jaiswal for the Appellant Adv. Mr D P Shouche for Respondent No.1 Adv. Mr A M S Vidyarthi for Respondent No.2 & 3 BEFORE: Hon'ble Mr. B.A.Shaikh, Presiding Member Hon'ble Mr. S.B.Sawarkar, Member ORDER
(Passed on 16.05.2014) Per Mr B A Shaikh, Honble Presiding Member
1. These three appeals are being disposed of by this common order as they arise from the same order dated 18.04.2011 passed by District Consumer Forum, Nagpur in Consumer Complaint bearing No.CC/10/435 by which the complaint has been partly allowed.
2. The case of the original complainant as set out in the complaint in brief, is that her husband deceased Nandkishore Bhoyar had purchased a machine called as Back Hoe Loader Telcon JD 315 V, Engine No. DRZ 825641, Chassis No.315V5982, (which is hereinafter referred as the machine) for Rs.13,63,100/- from the company namely M/s Universal Industrial Equipment & Technical Services Pvt. Ltd., of Nagpur. He obtained loan of Rs.13,63,100/- from the opposite party (for short the O.P.) No.2 in the month of Feb.2009 for purchasing the said machine. Said loan was to be repaid in 35 monthly instalments of Rs.48,500/- each.
Deceased Nadkishore Bhoyar, the husband of the complainant paid four instalments till the month of June 2009 to the O.P.No.2. Thereafter he fell ill and could not pay further instalments. The O.P.No.2 as per its agreement with O.P.No.1 Insurance Company, obtained insurance policy to cover the risk of life of deceased Nadkishore Bhoyar. The period of that policy was from 18.02.2009 to 18.02.2012 i.e. for three years only. As per condition of that policy, in case of death of life assured, the amount due from him towards the aforesaid loan would be paid by O.P.No.1 to O.P.No.2. The life assured Mr Nadkishore Bhoyar died on 11.08.2009 due to disease namely Gastrointestinal Bleeding with Metabolic Acidosis in Acharya Vinobabhave Rural Hospital of Sawangi (Meghe), Dist. Wardha. The complainant, at the instance of O.P.No.2, paid instalment of July 2009 to the O.P.No.2 as O.P.No.2 said that the O.P.No.1-Insurance Company will pay the balance amount of loan to O.P.No.2. The agent of O.P.No.2 collected the necessary documents for submitting the claim to O.P.No.1. However, on 10.06.2010 the officers of O.P.No.2 without giving any intimation to the complainant, took away the aforesaid machine. The complainant lodged report with the police against the same. The O.P.No.1 did not settle the claim of the complainant for payment of balance loan amount to O.P. No.2. Moreover, O.P.No.2 had initiated Arbitration proceeding against the deceased Nandkishore Bhoyar and obtained exparte award in that proceeding from Arbitrator Mr Das and on the strength of that award O.P.No.2 obtained right to repossess the machine. The said award was passed after the death of Nandkishore Bhoyar and hence, it is illegal and not binding on the complainant. The O.P.No.2 had no right to repossess the machine. The O.P.No.3, who is Branch Manager of O.P.No.1
- Insurance Company sent a letter date 14.06.2010 to the complainant which was addressed to her husband Nandkishore Bhoyar. As per the said letter intimation was given to pay Rs.15,31,610/- to O.P.No.2 within 7 days. It was also stated in that letter that in case of default, the machine would be sold by an auction. Therefore, the complainant through her advocate sent notice dated 21.06.2010 to the O.P. Nos.1 & 2. The O.P. No.2 did not give its reply. However, O.P.No.1 gave reply of that notice on 15.07.2010 to the complainant, making allegation that deceased Nandkishore Bhoyar was suffering from disease namely AIDS and he had suppressed the same from the O.P.No.1. However, the deceased Nandkishor Bhoyar was not suffering from that disease. The complainant has suffered a loss of Rs.5,000/- per day due to taking away of that machine by O.P.No.2 without intimation to her. The remaining amount of the loan was to be paid by O.P.No.1 - Insurance Company but it has not paid the same and repudiated the claim on untenable ground. Therefore, the complainant filed consumer complaint and prayed that O.P.No.1 - Insurance Company may be directed to pay to the O.P.No.2 the balance amount of loan and O.P.No.2 may be directed to pay her compensation of Rs.5,000/- per day w.e.f. 10.06.2010 and the proposed auction of the machine may be stayed and the machine be returned to her and all the O.Ps may be directed to pay her jointly and severally Rs.50,000/- as compensation towards mental harassment and Rs.10,000/- towards cost of complaint.
3. The said complaint was resisted by the O.P.Nos.1, 2 & 3. O.P. No.1 - Insurance Company in its Written Version admitted that the policy was obtained by O.P.No.1 to cover the risk of the life of deceased Nandkishore Bhoyar for the period from 18.02.2009 to 18.02.2012 and that Nandkishore Bhoyar died on 11.08.2009 i.e. within a period of six months of issuance of that policy. The O.P.No.1 has come with a case in brief that Nandkishore Bhoyar had given a declaration of his good health, though he was suffering from the serious ailment namely Abdominal pain, backache and breathlessness with diagnosis of Chronic Renal failure on maintenance haemodialysis with congestive cardiac failure and he died due to Gastrointestinal Bleed with Metabolic Acidosis Septicemia with spontaneous peritonitis with Chronic Renal Failure with CCF with Systemic Hypertension with Anemia. The life assured was also previously treated in Orange City Hospital from 04.11.2008 to 14.11.2008 for haemodialysis. Moreover, it was also found on 06.11.2008 from the report of Sonography that Nandkishore Bhoyar was suffering from Bilateral Renal Parenchymal disease (Chronic congestive hepatomegaly with bilateral pleural effusion and colitis). The documents are obtained by investigator during investigation about his aforesaid pre-existing disease and diagnosis. However, the life assured supplied false information to O.P.No.1 while obtaining the policy. He gave false declaration that his health is good. The investigator also recorded the statement of the complainant in which she stated that her husband was admitted to Orange City Hospital from 04.11.2008 and he had taken dialysis and that he was then shifted to the hospital at Sawangi (Meghe), Dist. Wardha where he was treated on dialysis for two months and that then he died in the same hospital at Sawangi. The life assured had declared that his health was good and therefore, he was not medically examined before issuance of the policy. The O.P.No.1, therefore, repudiated the claim and accordingly gave intimation of repudiation with all reasons to O.P.No.2. It is, therefore, submitted that the complainant is not entitled to claim any compensation from O.P.No.1 and hence, complaint as against O.P.No.1 may be dismissed.
4. O.P.Nos.2 & 3 in their common Written Version submitted in brief that on the request of Nandkishore Bhoyar, the husband of the complainant they had granted him loan for purchasing aforesaid machine and agreement dated 24.02.2009 was entered into with Nandkishore Bhoyar and O.P.No2 and complainant has acted as a guarantor. Nandkishore Bhoyar had obtained insurance policy from O.P.No.1 and as per that policy after the death of Nandkishore Bhoyar, balance amount of loan was to be paid by O.P.No.1 to O.P.No.2. However, O.P.No.1 repudiated the claim of the complainant on 28.12.2009. The complainant did not transfer the machine in her name as per Clause No.14(3) of the agreement after the death of Nandkishore Bhoyar. The deceased Nandkishore Bhoyar had paid only four instalments from 12.03.2009 to 30.06.2009. The complainant did not pay remaining instalments after his death, though O.P.Nos. 2 & 3 had requested her to pay the same. She paid only one instalment on 25.11.2009, after it was told to her that the agreement dated 24.02.2009 would be cancelled. O.P.Nos. 2 & 3 initiated Arbitration proceeding as the complainant did not pay the balance amount as per agreement. The intimation of the said proceeding was given to her on 10.12.2009, 14.01.2010 and lastly on 15.02.2010. She gave no response. Therefore, the Arbitrator passed exparte award on 12.03.2010. After passing of that order also, the complainant did not pay the amount with interest, though she was requested to pay the same. Therefore, on 10.06.2010 O.P. Nos. 2 & 3 gave information of proposed seizure of said machine to the concerned Police Station and then repossessed the machine and then on 14.06.2010 gave notice to the complainant to pay entire amount with interest. She did not show readiness to pay the said amount. Therefore, O.P. Nos.2 & 3 sold the said machine to Mr A Sharma on 03.08.2010. It is also submitted by O.P. Nos.2 & 3 that the Forum has no jurisdiction to decide the claim as it is purely commercial transaction. It is therefore, prayed by O.P. Nos. 2 & 3 that the complaint may be dismissed with penalty of Rs.50,000/-.
5. O.P.No.4 failed to appear before the Forum below though duly served with notice.
Therefore, the Forum proceeded exparte against it.
6. The Forum below after hearing advocates of both the parties and considering the evidence brought on record, passed the impugned order on 18.04.2011 and thereby partly allowed the complaint. The Forum observed under the impugned order that the complainant is beneficiary of the policy of the deceased / life assured Nandkishore Bhoyar and therefore, she is consumer of the O.Ps. The Forum also observed that the certificate produced on record by the complainant, itself shows that cause of the death of diseased / life assured as due to Gastrointestinal Bleed with Metabolic Acidosis Septicemia with spontaneous peritonitis with Chronic Rena Failure with CCF with Systemic Hypertension with Anemia. The Forum did not believe the case of the O.P.No.1 as the deceased life assured Nandkishore Bhoyar gave declaration about his good health, he was not medically examined. The Forum also came to the conclusion that there is no document to prove that the deceased life assured had pre-existing disease and the affidavit of the investigator, appointed by O.P.No.1, is also not filed. The Forum also observed that there is no document to prove that the deceased life assured was suffering from disease namely AIDS and therefore, there is no reason for repudiation of the claim of the complainant by O.P.No.1. Moreover, the Forum below also observed that Arbitration award was passed on 12.03.2010 i.e. after the death of deceased / life assured, who died on 11.08.2009 and that obtaining of said award by O.P. No.2 after the death of the life assured amounts to Unfair Trade Practice on its part and the said award is also illegal and not binding on it. Moreover, the Forum also observed that the O.P.No1 ought to have filed execution application before District Court for seizure of the machine and that it has not done so and illegally seized the machine. Therefore, the Forum directed the O.P.No.1 - Insurance Company to pay O.P.No.2 the arrears of the loan amount after the death of life assured. The Forum also directed the O.P.No.2 to return the machine to the complainant within 30 days of receipt of copy of that order and in case of default, the O.P.No.2 shall pay her compensation of Rs.1,000/- per day till return of the machine to her. The Forum also directed the O.P.Nos. 2 & 3 to pay to the complainant Rs.15,000/- as compensation towards mental & physical harassment and Rs.5,000/- towards cost of the complaint.
7. Feeling aggrieved by the said order, the original complainant has preferred appeal No.A/11/218 for enhancement of compensation. Moreover, feeling aggrieved by the said order the original O.P.No.1 has preferred appeal No.FA/12/292 (RBT/ 14/75). So also, the original O.P.Nos.2 & 3 feeling aggrieved by the said order, have preferred appeal No.FA/13/99.
8. Both the parties in all these three appeals are hereinafter referred by their original status as above as the complainant and O.P.Nos.1 to 4 for the sake of convenience.
9. We have heard learned advocates of the complainant, O.P. Nos. 1, 2 & 3. We have also perused the Written Notes of Arguments and other documents and papers filed by them in all these appeals.
10. Learned advocate of the complainant supported the impugned order to the extent of holding O.P.No.1 liable to pay the arrears of loan amount to O.P.No.2 and also holding O.P.No.2 liable to return the seized machine to the complainant. However, he argued that the compensation of Rs.1,000/- per day granted by the Forum below w.e.f. expiry of the period of 30 days from the receipt of copy of that order, is not just & proper and hence the direction may be given to O.P.No.2 to pay compensation of Rs.1,000/- to the complainant with w.e.f. 10.06.2010 i.e. date of wrongful seizure of the machine till it is returned to her. He further argued that the O.P.No.1 - Insurance Company may be directed to pay to the complainant compensation of Rs.50,000/- as compensation of Rs.15,000/- granted under the impugned order, is meager and not just & proper. He also relied upon the observations made in the following cases:-
i. Citicorp Maruti Finance Ltd Vs. S Vijayalaxmi, 2012 (1) Supreme Court Cases -1.
In that case it is held that hirer is not entitled to take back possession of mortgaged vehicle or goods using force for default of payment, even though hirer continues to be owner of goods as long as ownership is not transferred to purchaser.
ii. Citicorp Maruti Finance Ltd Vs. S Vijayalaxmi, III (2007) CPJ-161 (NC).
It is observed that practice of hiring musclemen as recovery agent is deprecated and needs to be discouraged and recover of loan of seizure of vehicle is permitted only through legal means.
iii.
Natarajan Bohidar Vs. Citibank N.A.,II(2014) CPJ 19 (NC) In that case vehicle was sold on throwaway price, just equivalent to outstanding amount of 4 to 5 instalments and there was forcible repossession of the vehicle without any intimation or prior notice to the complainant and hence, compensation was awarded.
iv.
Life Insurance Corporation of India & Anr. Vs. Manik Sudhakar Dahale & Ors., II (2010) CPJ 15 (MSCDRC, Mumbai, Circuit Bench, Aurangabad).
In that case the claim was repudiated due to non-disclosure of previous policies. It is held that misrepresen-tation is a sufficient ground for claim repudiation and as suppression of facts is proved, repudiation is justified.
v.
Manish Jain Vs. Mama Srachi Finance Ltd & Anr., I(2010) CPJ-255, Chattisgarh SCDRC, Raipur.
In that case, the agreement did not mention that notice prior to repossession is required to be given to the complainant and said agreement was not executed in presence of both parties. It is held that O.P. committed deficiency in service in not making proper entries in their statement of account after receiving amount, as per receipts and in repossessing vehicle without notice to complainant as well as guarantor. Therefore, O.Ps were directed to jointly and severally pay compensation with interest and cost.
vi. LIC of India & Ors. Vs. Laddu Lal Luhar, III(290) CPJ-227, RSCDRC-
Jaipur.
It is observed that suppression of fact must be conscious operation of giver of answer which he knowingly not disclosed and in case of declaration form filled up by agent of LIC and deceased was illiterate and putting thumb impression on papers. Therefore, it is held that repudiation of claim is unjustified.
vii. Aviva Life Insurance Co India Ltd Vs. Manohar Bhogawat, IV(2011) CPJ 112, RSCDRC- Jaipur.
It is observed that once accepting premium and having entered into an agreement without verifying the facts, Insurance Company cannot wriggle out of liability merely by saying that contract was made by misrepresentation and concealment. It is also observed that insurance policies should not be issued and repudiated in such a casual and mechanical manner and the agent of the Insurance Company is required to explain all details and conditions of insurance policy sought by the customer.
11. Thus, relying on the said decisions, the learned advocate of the complainant submitted that the appeal No.A/11/318 filed by original complainant may be allowed and appeal Nos. FA/12/292 and FA/13/99 filed by original O.P.Nos.1, 2 & 3 may be dismissed.
12. On the other hand, the learned advocate of O.P.No.1 - Insurance Company submitted that the original complainant did not dispute that the deceased / life assured Nandkishore Bhoyar was suffering from Bilateral Renal Parenchymal disease (Chronic congestive hepatomegaly with bilateral pleural effusion and colitis) and that it was pre-existing disease and that therefore, there was no question of proving the same by O.P. No.1 He further submitted that otherwise also documents collected by the investigator during the investigation produced before the Forum below, were sufficient to prove that deceased / life assured was suffering from serious ailment prior to his taking policy and though he was having knowledge of the same he gave declaration about his good health and therefore, O.P. No.1 relying on his declaration, issued the policy to cover the risk of his life. Thus, he submitted that as contract of insurance is based on utmost good faith and as deceased / life assured furnished false information to O.P.No.1, that he was having good health and as he suppressed his pre-existing disease, the contract of insurance is vitiated and that this material fact was not properly considered by the Forum below. He also submitted that the O.P.No.1 has rightly repudiated the claim on the aforesaid ground and hence, the impugned order passed against O.P.No.1 is illegal and it may be set aside. He relied upon the observations made in the following cases.
i. Ram Lal Aggarwalla Vs, Bajaj Allianz Life Insurance Co Ltd & Ors., Revision Petition No.658/2012 decided on 23.04.2013 In that case, the petitioner was an advocate and having vast experience of notary and he took policies from his wife, who was registered agent of Bajaj Allianz Life Insurance Company. The proposal form was signed by him and he answered Yes against the question that the spouse, child / parent / relatives of IC or of employee or Bajaj Allianz Life Insurance Company. The Forum below had observed that the money was invested for commercial purpose. Therefore, the complaint was dismissed. The State Commission also dismissed the appeal.
The revision petition was also dismissed with cost of Rs.10,000/- by Honble National Commission.
ii. Satwant Kaur Sandhu Vs. New India Assurance Co Ltd, IV (2009) CPJ-8 (SC).
In that case it is also held that the policy holder was suffering from chronic diabetes and renal failure, which was not disclosed by him and therefore claim was repudiated by the insurer. It is observed that contract of insurance is a contract of uberrimae fidei.
Therefore, insured is under obligation to make true and full disclosure of information, within his knowledge. As insured was on regular hameodialysis, fully aware of state of health.
Statement made in his proposal form as to state of health palpably untrue to his knowledge and hence, suppression of material fact is proved. Thus, Honble Supreme Court held that the repudiation of claim is justified.
iii.
P C Chacko & Anr Vs. Chairman, Life Insurance Corporation of India & Ors., 2008 (1) All, MR 408.
It is observed by Honble Supreme Court that if wrong statement is made with knowledge of consequence thereof, such person is estopped from pleading that even if such a fact had been disclosed, it would not have made any material change. In that case, insured died within six months of taking policy.
It is further observed that LIC was not expected to establish that the suppression of information was fraudulent and hence, repudiation of policy was proper.
iv.
Oriental Insurance Co Ltd. Vs. Munimahesh Patel, IV (2006) CPJ 1 (SC).
It is observed by Honble National Commission that when Commission accepted that there was wrong declaration on nature of occupation of person insured, it should not have granted relief.
v.
Ajay Prakash Mittal Vs. Life Insurance Corporation of India, 1(1998) CPJ 2 (NC).
In that case, the complainant obtained Jeevan Sathi Policy alongwith his wife, who was pregnant. The Pregnancy was concealed and she died after four months of Jaundice.
Claim was repudiated as the fact of pregnancy was concealed. Honble National Commission held that the deceased suppressed the fact, which it was material to disclose and hence, the dismissal of the complaint by the State Commission is held to be right.
vi.
Sr. Divisional Manager, LIC of India Vs. Smt Gangama & Anr., III(2002) CPJ 56 (NC).
In that case, deceased had malignancy and she had taken treatment and it was proved by documents on record and therefore, Honble National Commission held that there is suppression of material fact and therefore, order of the State Commission allowing the claim, was set aside.
vii.
Angoori Devi Vs. LIC of India, CPJ 187 (NC).
In that case, there was suppression of pre-existing disease. The deceased insured was suffering from chronic renal disease and he had willfully suppressed the same at the time of taking policy. Insured expired within five months of taking of policy. The complaint was allowed by Forum in total disregard and improper appreciation of evidence. Therefore, the said order was set aside by the State Commission. The Honble National Commission found that no interference is required in revision.
viii.
Diptiben Rajeshkumar Soni Vs. LIC of India & Anr., in RP No. 1188 of 2004 decided on 09.03.2009 by Honble National Commission.
In that case, it was stated in a certificate issued by Dr Vasant Patel that patient was suffering from diabetes mellitus and infective hepatitis for the past three years, meaning thereby that the deceased had been suffering from diabetes mellitus as well as infective hepatitis for the last three years, i.e. around March 1997. It is observed that if we correlate with the policies taken in April and August 1999, the deduction would be obvious that the deceased / insured knowingly concealed this information in the proposal form, which is clearly violation of the principle of utmost good faith between the parties. Therefore, the Honble National Commission found no ground to interfere with the well reasoned order passed by the State Commission by which the complaint was dismissed.
13. The learned advocate of O.P.Nos. 2 & 3 also argued that admittedly the hire purchase agreement showed that in case of default in payment of instalments, the machine could be repossess by O.P.No.2 and as admittedly the deceased / husband of the complainant paid only four instalments and the complainant paid only one instalment out of 35 instalments, and she was in huge arrears of instalment O.P. No.2 rightly repossessed that machine and sold it after giving prior sale notice to the complainant. He further submitted that the award passed by Arbitrator, cannot be said to be illegal as the complainant did not challenge the same by filing appeal before the District Court. He further submitted that due to communication gap, O.P.No.2 did not intimate the Arbitrator about the death of complainants husband and complainant also did not intimate the Arbitrator after taking the notice that her husband has died. He also argued that as the machine has been already sold, the Forum below erred in giving direction to return that machine to the complainant. He further submitted that O.P.Nos. 2 & 3 did not repossess the machine forcibly and therefore, observation made by the Forum below, cannot be sustained in law. He further submitted that the complainant used the machine for a period of one year but paid only one instalment after the death of her husband and she did not pay the balance amount though O.P.No.2 had requested her to pay the same. Therefore, as per the condition of hire purchase agreement, O.P.No.2 has rightly repossessed the machine and sold it. These facts were not properly considered by the Forum below. He thus, submitted that the impugned order passed against O.P.No.2 & 3 may be set aside.
14. It is, thus, not disputed that the complainants husband had obtained loan of Rs.13,63,100/- from O.P.No.2 and from said loan amount he purchased the aforesaid machine and the said loan was to be repaid in 35 instalments, each of Rs.48,500/-.
The said loan was disbursed in the month of Feb. 2006 by O.P.No.2. Deceased Nandkishore Bhoyar paid four instalments only i.e. for the months of March, April, May & June of the year 2009 and thereafter he died on 11.08.2009. Thus he died within a period of six months only from issuance of the policy. The complainant, after his death, paid only one instalment i.e. for the month of July 2009 to O.P. No.2. It is also not disputed that insurance policy was issued by O.P.No.1 to cover the risk of life of decease Nandkishor Bhoyar and the premium was paid by him. The period of that policy was from 18.02.2008 to 18.02.2012 i.e. for three years. As per condition of that policy, in case of death of life assured, the balance amount of loan was to be paid by O.P.No.1 Insurance Company to O.P.No.2. It is also not disputed that the deceased / life assured had given declaration of his good health while obtaining the said policy. It is also seen that the complainant has not disputed about pre-existing disease of the lifer assured. She herself had handed over the medical papers about the pre-existing disease of her husband to O.P.No.1 - Insurance Company for getting the claim. Moreover, the investigator, appointed by the O.P. No.1, also collected the medical papers which proved that the deceased / life assured was suffering from serious ailment prior to obtaining the policy from O.P.No.1. Moreover, it is also clear from those papers that the cause of death of life assured is having nexus with his pre-existing disease. It is the case of the complainant that the scribe of O.P.No.1 did not explain the contents of the proposal form and obtained his signatures on that form without giving information about its contents. It is not the case of the complainant that deceased Nandkishore Bhoyar was illiterate person. There is no evidence to show that the signature of life assured was obtained on the proposal form and declaration about his good health without his knowledge about the contents of the same. The deceased / life assured appears to be educated person and he signed the proposal form and declaration form in English. Therefore, it can be presumed that he signed the said proposal form after knowing fully their contents. Hence, it cannot be said that the scribe of O.P.No.1 by misrepresenting the life assured, obtained his signatures.
15. The O.P.No.1 repudiated the claim as per the letter dated 28.12.2009 on the following grounds :-
As per Clause 3 of the said Policy Contract titled Cover, cover shall be subject to the person being in good health and duly completing and submitting the Evidence of Good Health. Here, the member had signed Declaration of Good Health (DOGH) on February 18, 2009.
As per the provisional discharge card provided by the Orange City Hospital & Research Institute, the insured was admitted to the said hospital on November 04, 2008 and discharged on November 14, 2008, and he was diagnosed for Renal Parenchymal disease with Chronic congestive hepatomegaly.
As per the certificate provided by Dr. S J Aharya, Consultant Nephrologist, Nagpur, the insured was under his treatment and supervision from November 04, 2008 to November 14, 2008 at the Orange City Hospital, as he was suffering from Chronic kidney disease (Bilateral Rena Parenchymal disease).
As per the case summary provided by the Acharya Vinob Bhave rural Hospital, the insured died on August 11, 2009 due to cardio respiratory arrest with chronic renal failure with congestive cardiac failure with metabolic acidosis with GIT bleed with systemic hypertension with anaemia with septicemia.
16. The Forum has not properly considered the admission of complainant about the pre-existing disease of the life assured and about the documents filed on record by the O.P. showing aforesaid pre-existing disease. The said documents are sufficient to prove that the deceased / life assured was suffering from Bilateral Renal Parenchymal disease (Chronic congestive hepatomegaly with bilateral pleural effusion and colitis). The death certificate handed over by the complainant to the investigator, itself shows that the cause of death of life assured as Gastrointestinal Bleed with Metabolic Acidosis Septicemia with spontaneous peritonitis with Chronic Renal Failure with CCF with Systemic Hypertension with Anemia. Thus, the cause of death is having clear nexus with the aforesaid pre-existing disease of the life assured. Thus, we hold that the deceased / life assured knowingly suppressed the material fact of his suffering from aforesaid serious disease and he gave false declaration of his good health for obtaining the insurance policy from O.P.No.1. It is well settled law that contract of policy is based on utmost good faith in between both the parties and as deceased / life assured suppressed the material facts of his pre-existing disease, the contract of insurance is vitiated. We, thus, hold that the aforesaid decisions relied upon by the learned advocate of O.P.No.1 are applicable to the present case. Thus, applying the same to the present case, we hold that the Forum below has erred in holding that the repudiation of the claim is illegal. We, thus, hold that the repudiation of the claim vide letter dated 28.12.2009 by the O.P.No.1 is legal and justified.
17. We hold that the Forum below has not properly considered the evidence and erroneously directed O.P.No.1 - Insurance Company to pay the arrears of the loan amount to O.P.No.2 and hence, the said direction needs to be set aside.
18. So far as repossession of machine by O.P.Nos. 2 & 3 is concerned, we find that hire-purchase agreement entered into between O.P.No.2 and deceased Nandkishore Bhoyar, is not disputed. Its Clause No.14(ii)(b) reads to the effect that In case of hirer/s during the continuance of this Agreement fail to pay in time any of the hire instalments or part thereof herein reserved or any other sum of money payable under this Agreement, MAGMA (O.P.No.1) shall be entitled to take possession of the said asset(s) / vehicle(s) and sell and / or cause to be sold or otherwise dispose of all or any part of the said asset(s) / vehicle(s) or any fittings thereof in such manner and / or mode as prescribed more fully and particularly in appendix A hereto and apply the net sale proceeds of such sale in or towards liquidation of the amount outstanding due to MAGMA (O.P.No.1) from the said hirer(s) as on the date of such sale.
19. In this context, useful reference may be made to the order dated 01.10.2012 passed by Honble National Commission in case of Surendra Kumar Sahoo Vs. Branch Manager, Indusind Bank Ltd in RP No.3319 of 2012.
In that case the contention was raised by the advocate of the petitioner that the Honble Supreme court has held that no force can be used for repossessing the vehicle and the vehicle should be obtained as permitted by law.
The Honble National Commission observed that this ground does not endure in favour of the petitioner. As per agreement there was no need to give the prior notice. The petitioner waddled out of his commitments and indisputably he was the defaulter.
The moment he did not pay the instalment it gives the legal right to the financier to repossess the vehicle.
20. The Honble National Commission in that case also referred to the judgement of Honble Supreme Court in the following cases:-
a. Managing Director, Orix Auto Finance ( India) Limited Vs. Shri Jgamandar Singh and Another, (2006) 1 SCC 708.
b. Suryapalsing Vs. Siddha Vinayak Motors & Anr., III(2012) CPJ 4 (SC).
c. Surendra Kumar Agarwal Vs. TELCO Finance Limited and Anr. [ (II) (2010) CPJ 163 (NC) ].
The ratio of the aforesaid decisions is that the financer has right to repossess the vehicle in case of non-payment of instalments as per the terms of hire-purchase agreement.
21. Admittedly, out of 35 instalments of Rs.48,500/- each, the deceased life assured had paid initial four instalments from 12.03.2009 to 30.06.2009 and the complainant had paid only one instalment of the month of July 2009.
She though used the machine, did not pay monthly instalment from the month of August 2009 to May 2010 and hence the O.P.No.2 was entitled to repossess the said machine as per aforesaid condition of the said hire purchase agreement. The machine was repossessed on 14.06.2010. There is no clause in that hire-purchase agreement that any prior notice was required to be served to the life assured or to the complainant before repossession of the machine.
Moreover, we find that the machine is not forcibly repossessed by O.P.No.2. Therefore, in view of aforesaid term of the agreement and lack of evidence about the forcible repossession of the machine, we hold that the Forum below has erred in holding that repossession of the machine by O.P.No.2 is illegal.
22. As regards passing of the award by Arbitrator against the deceased / husband of the complainant, we find that the complainant had got course of law opened to challenge the said award. Moreover, we also find that merely because the award was passed by the Arbitrator against the deceased / husband of the complainant on that ground that it cannot be said that the repossession of the machine by the O.P.No.2 on 14.06.2010 is illegal.
23. We also find that the aforesaid all the decisions relied by the learned advocate of the original complainant are not applicable to the facts & circumstances of the present case since as discussed above, they are totally different from those of the said cases, which are cited above.
24. Thus, we hold that impugned order cannot be sustained under law and hence, it needs to be set aside. Accordingly, we proceed to pass the following order:-
ORDER i. Appeal No. A/11/318 filed by the original complainant is dismissed.
ii. Appeal No.FA/12/292 filed by the original O.P.No.1 and Appeal No. FA/13/99 filed by original O.P.Nos. 2 & 3 are hereby allowed.
iii. Impugned order dated 11.04.2011 passed by District Consumer Forum, Nagpur in Consumer Complaint No. CC/10/435 against O.P.Nos. 1 to 4 is hereby set aside.
iv. The complaint stands dismissed.
v. No order as to cost in all these three appeals.
vi. Copy of this order be furnished the parties free of cost.
[ B. A. SHAIKH ] PRESIDING MEMBER [ S. B. SAWARKAR ] MEMBER sj