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Judgment
Niranjanbhai Dhulabhai Soni, Proprietor of M/s. Dhulalal Nanalal Choksi, since deceased, now represented by his LR, Ritesh Niranjanbhai Soni, son and Smt. Hansaben Niranjanbhai Soni, wife of deceased, took a personal loan in the sum of Rs.7,65,000/- from Indiabulls Finance Services, OP1, on 27.07.2001. Out of the said loan amount, the OP1 charged a sum of Rs.15,000/- as processing charges, Rs.1,854/- as service tax and Rs.15,000/- as amount against company (MNYL) and sent a cheque in the sum of Rs.7,33,146/- as loan amount. The Borrower was required to repay the loan amount in monthly instalments @ Rs.27,657/- per EMI.
The OP1, while granting loan, took signatures of the Borrower and took the insurance amount in the sum of Rs.14,662/- which was deducted from the complainant''s account. Unfortunately, Niranjanbhai Dhulabhai Soni passed away, on 02.11.2007. The information was given to OP1 on 28.11.2007 and it was explained that on the basis of insurance, the loan file should be closed. In response, OP1 wrote a letter without date to the effect that the OP2, due to technical and underwriting ground, had not accepted the insurance proposal and the premium amount was sent back by OP1 to the complainant on 06.11.2007 through cheque drawn on Ahmedabad Peoples Co-operative Bank Ltd., in the sum of Rs.14,662/-. The said cheque was not got encashed. As Niranjanbhai Dhulabhai Soni, expired on 02.11.2007, the account of Dhulalal Nanal Choksi in Ahmedabad Peoples Co-operative Bank Ltd., was closed on 30.11.2007.
The repayment of the loan amount was started since 03.09.2007 and total three instalments (on 03.09.2007, 03.10.2007 and 03.11.2007) @ Rs.27,657/- each, were given and accepted. OP1, while knowing that the Borrower had since expired, yet, presented the cheque which was returned with the endorsement "account closed". Even then, the OP sent legal notice and filed a complaint under Section 138 of the Negotiable Instruments Act, before the Hon''ble Delhi Metropolitan Magistrate, which was dismissed, subject to deposit of Rs.5,000/- with the Delhi Legal Service Authority and Rs.5,000/- to the son of the Borrower, i.e., complainant No.1. Thereafter, the instant complaint was filed before the District Forum with the prayer that the complainant be granted a sum of Rs.9,12,681/- against both the OPs, jointly and severally, with interest @ 15% p.a., and compensation in the sum of Rs.10,00,000/- and complaint expenses in the sum of Rs.10,000/-.
The District Forum passed the following order :- " That the opponent No.1 had deducted the premium amount from the loan amount then also proposal form is not sent with premium and due to that reason the complainant due to remaining away from the benefits of policy had given mental harassment for which he will pay Rs.15,000/-.
That the opponent No.1 will pay Rs.2,000/- for the expense of complaint of complainant.
Complaint is cancelled against opponent No.2 but no any order is passed for costs".
Aggrieved by that order, an appeal was filed by the complainants/ LRs, before the State Commission. The State Commission passed the following order :- "1. That the application is partly granted.
Interruption is done in order of Ld. Forum and it is ordered to opponent No.1 that they have to pay all the loan amount to complainant of the loan account of deceased Niranjanbhai Dhulabhai Soni and or by depositing the loan amount in the above loan of deceased their heirs should be given no due certificate within one month from the date of this order. Moreover, the order which is passed for paying Rs.15,000/- for the mental harassment and Rs.2,000/- complaint expense that is kept, continues.
No order is passed for application expense".
We have heard the counsel for the parties. It is true that Late Sh. Niranjanbhai Dhulabhai Soni had taken personal loan from OP1 for the Institute, owned by him. OP1 had offered the loan on the condition that if the complainant would get personal loan from Indiabulls Finance, then insurance would be obtained from Max New York Life Insurance Company Ltd., OP2.
This is an admitted fact that after taking the premium, the OP1 did not send proposal form and premium amount to OP2. The State Commission correctly held that no negligence or liability can be attributed in respect of OP2.
However, the State Commission did not correctly hold that OP1 was liable to pay the outstanding loan. It was contended that since the OP1 did keep the proposal and premium with it, therefore, it should be liable to pay the entire amount. The relevant para runs as follows :- " In that circumstances, the loan amount of deceased Niranjanbhai Dhulabhai Soni is outstanding then along with all that loan amount liability is of opponent No.1. Therefore he should have to pay that amount till today with all interest to the complainant and or that amount should be considered as paid to the deceased Niranjanbhai Dhulabhai and their heirs should be given No Due Certificate if such order is passed then the purpose of justice can be maintained".
A close scrutiny of the record clearly goes to show that the proposal form states "Indiabulls - Max New York Insurance Co. Ltd. - Unit Linked Proposal form". It further mentions the name of proposer as Niranjanbhai Dhulabhai Soni. The next column mentions "life to be insured:-
Ritesh, S/o. Niranjanbhai Dhulabhai Soni. Photographs of both the proposer and insured appear on the proposal form. The proposal form was signed by both of them at its foot. It is thus clear that Niranjanbhai Dhulabhai Soni was not the insured. The insured was his son, Ritesh Niranjanbhai Soni, who is still alive. Consequently, the judgment passed by the State Commission does not stand scrutiny of law.
The loan amount is still recoverable. The Bank can recover the loan, as per law, subject to following conditions. The deficiency on the part of OP-1 stands to this extent only. OP1 did not send the proposal form to OP2, after deducting the premium from the account of Niranjanbhai Dhulabhai Soni since deceased. This smacks of malafide intention. The OP1 wanted to have benefit of both the worlds. Secondly, the proposal form is somewhat puzzling. Both the ''proposer'' and ''insured'' are different. However, it is for the borrower to understand the facts properly. They have signed the proposal form with open eyes. It is assumed that they understood the entire position properly.
The petitioner Bank at the same time is terribly remiss in discharge of its duties. We, therefore, hold that OP1 will pay the premium already recovered from the insured, for three monthly instalments, to OP2, within 15 days from the date of receipt of copy of this order and also send copy of the policy to Sh. Ritesh Niranjanbhai Soni, failing which, after expiry of said 15 days, OP1 will pay penalty of Rs.500/- per day to Ritesh Niranjanbhai Soni, till the needful is done. Secondly, for the aforesaid lapse, OP1 will pay compensation in the sum of Rs.50,000/-, which shall stand adjusted to the loan account, in question. There lies no rub in recovering the amount from the Borrower - complainants/LRs, as per law, along with up to date interest. Revision petition stands disposed of.