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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
V.B. Gupta, P.M.
UNION BANK OF INDIA - Appellant
Versus
AVINASH GOVIND JOSHI - Respondent
Revision Petition No. 2232 of 2014 (Against the Order dated 24.02.2014 in Appeal No. 31 of 2013 of the State Commission Maharastra).
Decided on : 07-10-2015
O.P. Gaggar, Advocate, for the Appellant; None for the Respondents, for the Respondent
The main legal point established is that the delay in availing insurance coverage by the bank amounted to a deficiency in service, leading to the deprivation of the respondent's claim benefits.
Headnote:
Insurance - Housing Loan - Consumer Protection Act, 1986 - Section 21(b)
Fact of the Case:
The petitioner bank failed to avail the insurance policy in time, resulting in the rejection of the insurance claim after the death of the respondent's wife. The District Forum partly allowed the complaint, directing the bank to pay the claim amount and interest. The State Commission dismissed the bank's appeal.
Finding of the Court:
The State Commission found the bank's delay in availing the insurance policy to be a deficiency in service, leading to the deprivation of the respondent's claim benefits. The court dismissed the bank's appeal, upholding the District Forum's decision.
Issues: The main issue was the bank's failure to provide timely insurance coverage, leading to the rejection of the insurance claim after the death of the respondent's wife.
Ratio Decidendi: The court held that the bank's delay in subscribing to the insurance policy amounted to a deficiency in service, depriving the respondent of the opportunity to claim the benefits. The court also emphasized the limited scope of revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986.
Final Decision: The court dismissed the bank's revision petition, affirming the findings of the lower fora and emphasizing the absence of jurisdictional error or illegality in the impugned order.
ORDER
V.B. Gupta, (P.M) - Petitioner/Opposite Party has preferred this revision against impugned order dated 24.2.2014, passed by State Consumer Disputes Redressal Commission, Maharashtra, Mumbai (for short, 'State Commission') in First Appeal No.31 of 2013.
2. Brief facts are, that Respondent/Complainant got sanctioned housing loan of Rs.10 lacs in August, 2002 on certain terms and conditions and EMI of Rs.11,370/- was deducted from his Saving Bank Account from the next month i.e. from September, 2002. Undisputedly, amount of E.M.I. includes the premium for availing insurance policy to provide insurance cover to the mortgaged property and personal accident cover to the borrowers viz. respondent and his wife. However, respondent's wife was murdered on 01.10.2002. Though, loan was released in August, 2002 and E.M.I. was effectively deducted from the month of September, 2002 (which includes payment of premium for the policy), the petitioner bank failed to avail the policy in month of September,2002. The one time premium as provided for in the agreement amounting to Rs. 6,315/- was paid on 05.10.2002 to United India Insurance Co. by respondent to avail the policy. Though policy was issued and claim was preferred after the death of respondent's wife, it was rejected by the insurance company on the ground, that there was no coverage of insurance as on 1st October, 2002, as policy was effective from 05.10.2002. The Insurance Company accordingly, intimated the petitioner bank. Thus, alleging deficiency on the part of petitioner, the respondent filed a consumer complaint praying for following reliefs;
"(a) That the opponent's bank be ordered, directed and decreed to pay to the complainant an amount of Rs.14,00,000/- as per the particulars of claim annexed and marked as Exhibit-"F" to the complaint."
3. In its reply, petitioner has admitted that respondent has lodged the insurance claim due to death of his wife. Thereafter, insurance company vide their letter dated 9.09.2003 had informed the petitioner, that proposal for insurance policy was received by them on 10.10.2002. Since, death of insured had taken place on 1.10.2002, that is, much before the assumption of risk and MOU clearly states, that assumption of risk starts from the date of issue of pay order, hence insurance company was unable to accept the liability under the policy.
4. It is further stated, that petitioner again vide its letter dated 29.11.2005, once again called upon the insurance company to verify and ascertain whether the death of policy holder, falls within purview of the insurance policy The insurance company, vide its letter dated 28.12.2005 informed the petitioner, that death of the insured is not covered, as the death has occurred before the commencement of the policy. Hence, same is not covered under the contract.
5. District Consumer Disputes Redressal Forum, South Mumbai (for short, 'District Forum') vide order dated 25.04.2012, partly allowed the complaint and passed following directions;
"2. On account of carelessness and deficiencies in the services given by the Opponent Union Bank of India, the complainant has not received the claim of Rs. 5,00,000/- on the accidental death of this wife from United India Insurance Company, hence the Opponent Bank to pay claim amount of Rs.5,00,000/- (Rupees Five Lacs only) to the complainant.
3. It is responsibility of the Opponent Bank to pay above amount for Rs. 5,00,000/-(Rs. Five Lakh only) to the Complainant within One month time from the date of receipt of copy of the order otherwise to pay interest at 9% p.a. from the date of this order on the entire amount to be received by the complainant.
4. Opponent Bank to pay Rs.5,000/-(Rs.Five Thousand) to the complainant as the cost of his application."
6. Being aggrieved petitioner filed appeal before the State Commission, which dismissed the same vide the impugned order.
7. I have heard learned counsel for petitioner and gone through the record.
8. It is submitted by le
