IMPORTANT POINTS
Revisional jurisdiction of NCDRC is very limited. It has to be exercised in case the State Commission lacked jurisdiction, or acted with illegality or material irregularity.
If the finance company delays forwarding the premium received from the insured, it is deficiency in service of the finance company.

JUDGMENT :

INDU MALHOTRA, J.

Leave granted.

1. The present Civil Appeal has been filed to challenge the Order dated 30.11.2018 passed in Revision Petition No. 472 of 2018 by the National Consumer Disputes Redressal Commission (hereinafter referred to as “the National Commission”).

2. The factual matrix in which the present case has been filed is as under:

2.1. The Complainant/Appellant’s husband Late Anand Duparte had obtained a personal loan of Rs. 2,00,000/- on 27.02.2015 from the Respondent-Finance Company.

The personal loan was advanced on 27.02.2015 after executing the loan agreement, and completing all legal formalities.

The Respondent-Finance Company secured the loan by issuance of an insurance policy by its sister concern i.e. M/s Shriram General Insurance Company Ltd. on behalf of the Borrower.

In the Cover Note of the said policy, the Insured was shown as: M/s Shriram City Union Finance Ltd. i.e. the Respondent-Finance Company.

The insurance policy was a Group Insurance Policy issued to various borrowers, including the Appellant’s husband, whose name was at Serial No. 263 of the list.

2.2. The loan was to be serviced by the Appellant’s husband in 48 monthly instalments of Rs. 7,933/- each. The 1st loan instalment of Rs. 7,933/was paid on 07.03.2015 vide Cheque No. 433931.

2.3. The Appellant’s husband admittedly paid the premium of the insurance policy. The Respondent-Finance Company received a Demand Draft of Rs. 400/- from the Appellant’s husband towards the insurance premium. The Group Insurance Policy was issued from 30.03.2015 to 29.03.2016.

2.4. On 17.03.2015 i.e. within 18 days after obtaining the loan, the Appellant’s husband suddenly passed away.

2.5. The Respondent-Finance Company issued a notice to the Appellant for payment of the loan instalments.

2.6. The Appellant requested the Respondent-Finance Company to recover the loan through the insurance policy.

2.7. A Legal Notice dated 16.12.2015 was addressed by the Appellant to the Respondent-Finance Company, requesting that the loan amount be recovered from the Insurance Company.

2.8. The Respondent-Finance Company replied to the Legal Notice on 29.01.2016, and denied having received the Demand Draft of Rs. 400/- from the deceased husband of the Appellant. It was further contended that the amount of Rs. 2,120/- was deducted from the loan amount towards processing fee and stamp charges.

2.9. The Appellant filed a Consumer Complaint before the District Consumer Disputes Redressal Forum, Nanded.

The Appellant submitted that after the loan was sanctioned on 27.02.2015, the amount was credited to the loan account after deducting the insurance premium. The Respondent-Finance Company obtained the insurance policy from its sister concern on 30.03.2015. Had the insurance policy been issued when the loan was advanced, the amount would have been recovered through the insurance policy. There was therefore a deficiency of service by the Respondent-Finance Company in delay in obtaining the insurance policy from its sister concern. The Respondent-Finance Company was not entitled to recover the loan from the Appellant.

The Appellant prayed that the Respondent-Finance Company be restrained from recovering the loan amount from her, since the recovery was wrong and unreasonable, and prayed for payment of compensation.

2.10. The District Forum allowed the Consumer Complaint filed by the Appellant vide Order dated 27.02.2017. It was held that since the Appellant’s husband had paid 1st the loan instalment on 07.03.2015, it could be presumed that all the loan formalities had been completed by that date. This proved that the Appellant’s husband had paid the insurance premium soon after the loan was sanctioned. The Respondent-Finance Company had been negligent in obtaining the policy late, since it had forwarded the premium amount to the Insurance Company after a delay of about 1 month.

As per Section 64 VB (2) of the Insurance Act, 1938 [Section 64VB (2) – For the purposes of this section, in the case