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HDB Financial Services Ltd., Having Head Registered Office v/s Pankaj Kumar & Others

    First Appeal No. 253 of 2017

    Decided On, 13 September 2017

    At, Punjab State Consumer Disputes Redressal Commission Chandigarh

    By, MEMBER

    For the Appellant: Shailendra Sharma, Advocate. For the Respondents: R1, Rajan Bansal, R2 & R3, Munish Gupta, Advocates.

Judgment Text

J.S Klar, Presiding Judicial Member

1. The appellant has directed this appeal against order dated 23.01.2017 of District Consumer Forum Faridkot, directing the appellant of this appeal and respondents no.2 and 3 of this appeal to pay the amount of Rs.4,85,707/- to respondent no.1 of this appeal on account of death claim for his deceased brother Manjit Singh with interest @ 9% p.a from date of filing the complaint till its realization and further to pay Rs.3000/- as costs of litigation. Respondent no.1 of this appeal is complainant and respondents no.2 and 3 of this appeal are opposite parties no.2 and 3 in the complaint and they be referred as such, hereinafter for the sake of convenience.

2. The complainant has filed complaint U/s 12 of Consumer Protection Act, 1986 (in short, "the Act") against OPs on the averments that Manjit Singh son of Udhey Singh resident of Kotkapura purchased one vehicle Bolero bearing registration no. PB-04V-2068 on loan through HDB Finance Company Bathinda, and there was a condition of the said company that if any person takes vehicle on loan, then he would have to purchase one personal life insurance policy from HDFC Standard Life Insurance Company Ltd. Above Manjit Singh purchased personal life insurance policy no. PP000025 with commencement of membership date as 31.12.2014 for assured sum of Rs.4,85,707/- from OPs. The complainant was made nominee by Manjit Singh his real brother in his said life insurance policy. Manjit Singh policyholder died on 05.07.2015. He is entitled to get death insurance claim of late Manjit Singh being his nominee. The complainant requested OPs for releasing the claim in this regard, but to no effect. The complainant visited OPs number of times for the said claim, but of no use. The complainant alleged deficiency in service and unfair trade practice on the part of OPs. The complainant has, thus, filed complaint directing the OPs to pay insured amount of Rs. 4,85,707/- to him with compensation of Rs.2 lac and Rs.25,000/- as costs of litigation.

3. Upon notice, OPs no.1 and 2 filed written reply and contested the complaint of the complainant vehemently. Certain legal objections were taken that intricate questions of facts and law are involved in the complaint, which required voluminous evidence for resolution and hence matter cannot be determined by the consumer Forum invested with summary jurisdiction. He concealed the material facts and documents from the Forum and is disentitled to any such relief. This fact was concealed that Manjit Singh life assured was having pre-existing disease of polio and was 100% physically handicapped at the time of taking the insurance policy. This fact was materially concealed from the insurer at the time of taking the contract of insurance by the insured. No claim is payable as per terms and conditions of the insurance policy in this case due to suppression of material fact. It was denied that complainant is consumer of the OPs. The complaint is alleged to be bad for non joinder of the parties, as all legal heirs of Manjit Singh have not been impleaded in this case. On merits, OPs no.1 and 2 averred that the contract of insurance is subject to the terms and conditions of the policy, which is issued on the basis of disclosures and declarations contained in the proposal form by the assured. It was denied that complainant is entitled to get death insurance claim of Manjit Singh. Manjit Singh obtained policy on the basis of application for purchase of HDFC Life Group Credit Protect Plus Plan and his application was accepted at standard rates on the basis of information provided in the member information form. OPs no.1 and 2 prayed for dismissal of the complaint.

4. OP no.3/ HDB Financial Services Ltd filed its separate written reply by contesting the complaint of the complainant vehemently. It was averred in legal objections that complaint is not maintainable. The complainant has no locus standi to file the complaint. Late Manjit Singh signed the loan agreement No. 849468 with OP no.3 containing Clause 5.1 that "the borrower hereby hypothecates to and charges in favour of HDBFS by way of first and exclusive charge the asset financed" and in Clause no. 5.7 "the charge hereunder shall be remain in full force so long as all the repayments and payments mentioned in clause 3 are not made." OP no.3 financed the vehicle to late Manjit Singh. Late Manjit Singh signed loan agreement no. 849468 with OP no.3 and in this agreement, it is specifically mentioned in Clause no. 5.1 that "the borrower hereby hypothecates to and charges in favour of HDBFS by way of first and exclusive charge the asset financed". OP no.3 is financer which has a first charge and first claim on the said vehicle being hypothecated with it. On merits, OP no.3 averred that there was no such condition imposed by it on the borrower to purchase the personal life insurance policy from HDFC Standard Life Insurance Co. It was denied that OP no.3 forced the borrower to purchase the personal life insurance policy. The complainant's brother took the financial assistance of loan from OP no.3 and purchased a Mahindra Bolero Pickup commercial vehicle bearing registration no. PB-04V-2068 and the loan amount was sanctioned on dated 30.12.2014 of Rs.4,85,707/- and the total amount with interest payable in 35 monthly installments and EMI amount of Rs.16,680/- and the first installment due was on 30.12.2014 and the last installment was due on 04.11.2017 according to the loan account statement as on 18.08.2016 showing a sum of Rs.2,55,081/- net recoverable from the complainant apart from this future installment, which was also pending against the complainant. Rest of the averments have been denied by OP no.3 and it prayed for dismissal of the complaint.

5. The complainant tendered in evidence his affidavit Ex.C-1 along with copies of documents Ex.C-2 to Ex.C-3. As against it; OPs no. 1 and 2 tendered in evidence affidavit of Sh. Anmit Khanna DM HDFC Standard Life Insurance Co. Ltd Ex.OP1&2/1 along with copies of documents Ex.OP1&2/2 to Ex.OP1&2/6. OP no.3 tendered in evidence affidavit of Sh. Vikas Verma Legal Officer HDB Finance at Branch Officer Bathinda as Ex.OP3/1 along with copies of documents Ex.OP3/13.. On conclusion of evidence and arguments, the District Forum Faridkot accepted the complaint of the complainant by virtue of order dated 23.01.2017. Dissatisfied with the order of the District Forum Faridkot dated 23.01.2017, opposite party no.3 now appellant, carried this appeal against the same.

6. We have heard learned counsel for the parties at considerable length and have also examined the record of the case.

7. On the point that Manjit Singh was polio affected and 100% physically handicapped and as such he is not entitled to any insurance claim on account of suppression of this material pre- existing ailment, evidence has to be referred to by us on the record to determine this point. The terms and conditions of the insurance policy are Ex.OP1&2/3 on the record. We have carefully examined the same. There are no exclusion clauses being part of this insurance policy Ex.OP1&2/3 on the record. The counsel for the appellant relied upon document Ex.OP1&2/4 that Manjit Singh life assured answered in negative with regard to the fact of his previous ailments suffered by him. We find that there is no medical evidence on the record that he was 100% physically handicapped on account of onslaught of polio on him. This point has not been pointed out by counsel for the insurance company to us on the record that exclusion clauses were part of the insurance contract and same have been violated by life assured. Unless and until exclusions clauses form part of the contract of insurance, the insurer cannot be repudiate the contract of insurance in our view. The Division Bench of Hon'ble Punjab & Haryana High Court Chandigarh has held inIFFCO TOKYO General Insurance Company Ltd. vs. Permanent Lok Adalat Gurgaon and others, reported in 2012(1) RCR Civil 901, that contract among unequal-validity-mediclaim policy-exclusion Clause-pre Existing Disease-Exclusion Clause is standard form of contracts-when bargaining power of the party is unequal and consumer has no real freedom to contract-courts can strike down such unfair and unreasonable clause in a contract, where parties are not equal in bargaining power. We find that no exclusion clause is a part of the contract of insurance in this case nor it has been shown to us during the arguments. The Apex Court has also held inM/s Modern Insulators Ltd.. versus Oriental Insurance Company Ltd, reported in AIR (SC) 1014 2000(2)that National Commission based its decision on the exclusion clause in contract and "New Plea" in appeal - the exclusion clause was neither a part of the contract of insurance nor disclosed about the clause to appellant and claim cannot be repudiated on the basis of alleged exclusion clause. The above authority of Apex Court is directly applicable to the facts of the case. The Hon'ble Punjab and Haryana High Court Chandigarh has also held inNew India Assurance Company Limited versus Smt. Usha Yadav & others reported in 2008(3) RCR (Civil) 111that insurance companies are only interested in earning the premiums and find ways and means to decline insurance claims. All conditions, which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy. Thus, we find that the claim cannot be repudiated on account of hidden exclusion clause, which never formed part of the contract of insurance in this case between the parties and the same was never made understandable to the insurer. Even on the point of pre-existing disease of insured Manjit Singh, there is no reliable record on the file to prove it and hence the insurance company is not liable to repudiate the contract of insurance on this point.

8. From the above analysis and findings recoded by us, we find that the District Forum rightly held that complainant being nominee of Manjit Singh is entitled to receive the insurance claim in this case. The next point for adjudication is whether the financier is entitled to seek insurance claim for discharge of his loan liability of assured Manjit Singh or not. This policy was purchased through financer from the insurance company in this case. The cause of death of Manjit Singh insured is heart attack and not on account of polio ailment, vide Ex.OP1&2/6 on the record. Pankaj Kumar is brother of the insured and he lodged insurance claim with OPs after death of insured. The loan agreement executed between Manjit Singh borrower and financer is Ex.OP-3/3 on the record. Primarily this is the master policy taken through financer by the insured Manjit Singh borrower. The financer has charge over the assets of borrower for recovery of the loan amount.

9. As a result of above discussion, appeal is accepted and order passed by District is modified to the extent that the insurance company shall remit the outstanding amount of loan amount of deceased Manjit Singh to the extent of Rs.3,25,975/- to the financer for discharge of his liability and the balance amount, if any due thereafter, shall be paid by the insurance company to the complainant, as nominee of the insured Manjit Singh with intere

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st @ 9% per annum from the date of filing the complaint till actual payment. The cost of litigation as awarded by the District Forum is kept undisturbed in this appeal except the slight modification in the order of the District Forum that due amount of loan shall be remitted to OP no.3/Financer for discharge of loan liability of the insured and rest of the amount with interest @ 9% p.a shall be remitted to complainant as nominee of insured. There is no other merit in the appeal and the same stands dismissed with the above modification in the order. 10. The appellant had deposited the amount of Rs.25,000/-with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque / demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant for discharge of outstanding loan liability of insured Manjit Singh . 11. Arguments in this appeal were heard on 11.09.2017 and the order was reserved. Certified copies of the order be communicated to the parties as per rules. 12. The appeal could not be decided within the statutory period due to heavy pendency of court cases.