Pawan Kumar Singh vs State Bank Of India & 3 Ors

The present Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), has been filed by the Petitioner/Complainant against the order dated 29.08.2016 in Appeal No.225 of 2014 of the State Consumer Disputes Redressal Commission, Patna, Bihar (for short "the State Commission"). The said Appeal was filed by the Respondent against the order dated 11.06.2014 in CC No. 64 of 2010 of the District Consumer Disputes Redressal Forum, Saran, Chhapra (for short "the District Forum"), by the Petitioner.

The brief facts of the case are that late Amit Kumar, son of the Petitioner had applied for an education loan of ₹4,00,000/- from State Bank of India branch Marhaura (Respondent No.2) for MBA (PG) study. For taking the said loan, the Petitioner and his wife mortgaged their property to the Bank and also executed the guarantee bond. The guarantee bond was also executed by Chandra Mohan Singh who was friend of the Petitioner and his wife. Respondent No. 2 while granting the loan in order to ensure the loan amount got an insurance policy from SBI life Insurance Co. Ltd. (hereinafter called as "the Insurance Company"). The number of the Policy was 15002073304 and the first instalment of ₹1,004/- towards the said policy was deducted by Respondent No.2 from the loan account of Amit Kumar and forwarded the said premium amount by way of a Demand Draft to the Insurance Company.

The case of the Petitioner is that the Insurance Company sent the policy bond of his son Amit Kumar to Respondent No.2 on 26.10.2006. He has also contended that he had deposited ₹8,000/- on 10.4.2007 and ₹6,000/- on 17.04.2008 in the loan account of his son Amit Kumar and also submitted the letter of even date to Respondent No.2 requesting them to deduct the premium amount of the insurance policy and forward it to the Insurance Company. Mr. Amit Kumar s/o the complainant died on 29.03.2009. Thereafter, a request was made to claim insured amount to the Respondent No.2 but they did nothing. The Petitioner thereafter sought information under RTI Act from the General Manager (Network)-cum-public Information Officer, Patna and he was informed on 23.10.2009 that the insurance was one time instalment and there was no need of renew. Information was sought by the Petitioner on 24.02.2010 from the Insurance Company and he was informed that policy of his son had lapsed on 30.09.2007 on account of the non-payment of the premium. The contention of the Petitioner is that the policy had lapsed due to deficiency in service on the part of the Respondent No.2 with whom the premium amount was deposited and direction issued to forward it to the Insurance Company. It is the Respondent No.2 who had failed in discharging its duties of forwarding the premium to the Insurance Company and did not do so since year 2007.

On this contention, the Complaint was filed.

In its reply of Respondent No.2, the first and foremost contention was that the Insurance Company was a necessary party and that the claim was bad for non-joinder of necessary party. It was also contended that the insurance policy was purchased as per the wishes of the Complainant/Petitioner who promised to make the payment of the renewal premium and it was with his consent that a payment of first instalment of the premium was made from the loan account by debiting the sum by Respondent No.2. It is denied that any amount was deposited by the Complainant on 10.04.2007 and 17.04.2008 for renewal of the policy or that he made any such request when depositing the interest of the loan. It was contended that letters dated 10.04.2007 and 17.04.2008 were forged and fabricated. The Respondent No.2 has also alleged that the Death Certificate of Mr. Amit Kumar s/o the Petitioner was also forged. It was contended that the Respondent No.2 has not committed any deficiency in discharging of their duty towards the Complainant and the Complaint was liable to be dismissed.

Before the District Forum, the Complainant had examined two witnesses and exhibited 14 documents. Respondent No.2 examined one witness Shri Rajiv Mohan, Regional Officer State Bank and exhibited three documents. After hearing the arguments of the party, the District Forum rejected both the contentions of Respondent No.2 and 3 with the following directions:

"Therefore, this forum, on the basis of aforesaid facts and analysis, directs the respondent no.1 as well as other respondents to pay to the applicant, by way of compensation 9lapsed insurance amount) a sum of ₹4 Lakhs with 9% annual interest from the date of filing the case till the date of payment within three months of passing this order and simultaneously, for the physical and mental agony of the applicant, pay ₹20,000/- (twenty thousand) and ₹4,000/- (four thousand) as cost of litigation. Simultaneously, this Forum also direct the respondents that it may deposit/adjust the aforesaid all amounts in the education loan account of deceased Amit Kumar, the son of the applicant. After adjustment, it may pay the balance amount to the applicant. Even after aforesaid adjustment if the loan amount remains outstanding/balance then the applicant may deposit the same after adjustment in the loan account within one month, whereafter the respondents shall close the loan account of the deceased and will return back all documents of the properties of applicant and his friend Chandra Mohan and his wife which were deposited by them as guarantor."

Respondent No.2 challenged the said order before the State Commission. The State Commission set aside the order of the District Forum and held as under:

"5. We have considered the rival submissions, case of the parties material on the record as also the impugned order. The short issue is also who is responsible to pay the Insurance premium. It could not be disputes that policy holder. Howver, in case of loan the bank in order to protect its safe recovery by loan dues gets Insurance policy with respect to the goods pledged or mandate from the account older to debit the loan account and sends premium. In the instant case no evidence is produced on behalf of the complainant giving instructions to the Bank to debit the loan account and remit the insurance premium amount ₹1004/-. It does not stand to reason that when payment of Insurance premium of ₹1004/- was due on 29.09.2007 the sum of ₹8,000/- as per letter dated 10.04.2007 and sum of ₹6,000/- as per letter dated 17.04.2008 was claimed to be deposited for payment of second premium.

We find substance in the submission of the appellant that aforesaid sums were deposited towards the interest in loan account in question. In absence of clear instruction the Bank could not have debited account for payment of the Insurance premium payable on 29.09.2007 in face of accepted position that the primary responsibility keep insurance policy alive lies with the policy holder."

This order is impugned before me by the complainant alleging that the findings in the impugned order are totally contrary to the documents which stand proved on record and that the State Commission had ignored the evidences on record and the findings are based on surmises and conjectures ignoring the proved facts on record. It is submitted that the order is liable to be set aside.

It is argued on behalf of the Respondent No.2 that the findings of the State Commission in the impugned order are based on the evidences on record and has no illegality or infirmity. It is argued that the bank could not have acted in the absence of any specific directions for debiting the money from the loan account and forwarding it to the Insurance Company. It is further argued that the complaint was also bad for non-joinder of necessary parties and since it was liable to pay the amount to the insurance company and the same cannot be claimed from them. It is further stated that the letters on which the petitioner is relying dated 10.04.2007 and 07.04.2008 are fabricated documents and therefore cannot be relied upon.

I have heard the arguments and peruse the relevant records.

The admitted facts are that at the time when the loan was sanctioned in favour of the son of the complainant by Respondent No.2 they had involved the insurance company and it was on the directions of Respondent No.2 that the insurance policy was taken and accordingly from the loan account the premium was paid to Respondent No.2. The issue whether the premium was payable by the insured personally or it was to be paid from the loan account by the Respondent No. 2 is the main issue for consideration. Although it is argued that the documents dated 10.04.2007 and 07.04.2008 are forged documents but the witness examined by Respondent No.2 has made no statement on oath that these documents are fabricated documents and has not even denied these documents. Respondent No. 2 has therefore, failed to produce any evidence on record in support of the contention that the documents are fabricated one. It is not disputed that on 10.04.2007 and 07.04.2008 the complainant had paid the interest on the loan account.

Learned counsel for the complainant has produced in court the documents in its possession, photocopy of which was filed and the document bears the stamp of the Bank and therefore the documents cannot be said to be fabricated one. The letter dated 10.04.2007 is reproduced as under:

"To

The Senior Manager

State Bank of India

Marhaura, Saran

Sub: For sending insurance premium of SBI Life from Education Loan Account No.01593017041

Sir,

You are aware that in the education loan head of my son Amit Kumar a loan of ₹4,00,000/- (four lakh) is sanctioned. You have got his insurance done from the SBI Life Insurance. By debiting from the account the first instalment of ₹918/- on 21.4.06 and ₹86/- on 15.9.06 i.e. total ₹1004/- has been sent. Till date the said nsurance policy bond is not received to me.

Today on 10.4.07 I have deposited ₹8,000/- eight thousand) in the said account. Kindly send the 2nd premium by debiting from the account to the SBI Life.

Thanking you.

Yours faithfully

Pawan Kumar Singh

Village - Nautan

10.04.2007

Letter dated 07.04.2008 is reproduced as under:-

To

The Manager

State Bank of India

Marhaura, Saran

Sir,

It is submitted that education loan sanctioned you're your bank to my son Amit Kumar. His insurance has also been got done. The bond of insurance policy has not been received to me till date, nor I have knowledge about the policy numder. I have contacted your office many times as well as I have given in writing but only assurance has been given to me. If your bank has received the policy bond then a Xerox copy of the same may be made available to me. The former (previous) Manager had told that the bond would be in the file.

Today on 17.4.087 I have deposited ₹6,000/- (six thousand). Kindly send the amount of ₹1004/- towards 3rd premium to the SBI Life by debiting the same from the account.

For information and necessary action.

Yours faithfully

Pawan Kumar Singh

Village - Nautan

Marhaura

Account No.11467713362

Both these letters contain a clear instruction given by the Complainant to the Bank to pay the premium of the insurance policy from the loan account. It is a fact that the first premium at the time when policy was purchased was made by the Bank, i.e., Respondent No.2 from the loan account itself. The arguments of leaned counsel for Respondent No.2 that no written authority was given to the bank to pay the premium is meritless.

My attention is also drawn by the Petitioner to the reply of the Regional Manger cum Central Public Information Officer of State Bank of India dated 16.11.2010. This letter is reproduced as under:-

"Pawan Kumar Singh

Vill + P.O. Nautan

(Via-Amnaur), District - Saran

PIN - 841401

Sir,

Your application under Right to Information Act

We refer to your application dated 01.11.10 on the subject mentioned above. In this regard, the desired information is as under:-

As per the agreement/contract done under the bank loan scheme, the amount of insurance premium is deducted from the account of loanee and sent/transmitted to the insurance company.

In this regard, if you want to prefer appeal against the aforesaid information, then you can file/send your application within prescribed time to the appellate authority, whose designation and address is as under:-

General Manager - Network-I

State Bank of India,

Local Head Office, 5th Floor,

West Gandhi Maidan, Patna"

This letter of Respondent No.1, which is State Bank of India itself of which Respondent No.2 is a Branch clearly states that under the bank loan scheme the insurance premium is to be deducted from the account of loanee and transmitted to Insurance Company. This letter clearly put the responsibility on the loanee Bank to deduct the insurance premium from the loan account and transmit it to the Insurance Company. Admittedly, the Respondent No.2 is the loanee Bank and therefore it was its duty to deduct it from the loan account and transmit it to the Insurance Company. This however has not been done by the Respondent No.2 which resulted in lapse of the insurance policy. There is thus deficiency in service by Respondent No.2.

The District Forum has dealt with the issue of non-joinder of necessary parties and has held as under:-

This is the argument of the respondent that the applicant has not made the insurance company namely SB Life Insurance Company Ltd. The necessary party due to which his claim is not maintainable and he cannot receive the insurance claim is not acceptable, because the applicant in his aforesaid claim has not demanded the insurance claim from the respondents, due to which no question arises to make the insurance company a party. He has demanded compensation equal to insurance amount from the respondent on account of lapse of policy due to negligence of respondents and has requested for adjusting the same in the loan account, due to which Forum finds that the respondents could get no benefit of this and this claim of the applicant is maintainable on this point."

I concur with the findings of the District Forum. The State Commission has not dealt with this contention. From the above discussions, it is apparent that the findings of the State Commission are contrary to the evidence on record. It has failed to take note of the material documents and the pieces of evidences while disposing of the Appeal vide impugned order. The findings are based on surmises and conjectures.

For these reasons, the impugned order is hereby set aside the order of the District Forum is confirmed.

With these directions the Revision Petition stands disposed off with no order as to costs.