Date of Filing 14.09.2023

                                                                                                       Date of Disposal: 15.04.2024

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                         …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL,                                                                               ……MEMBER-I

               THIRU.P.MURUGAN, M.Com., ICWA(Inter), BL.,                                                          …….MEMBER-II

CC.No.99/2023

THIS MONDAY, THE 15^th DAY OF APRIL 2024

Tmt.S.Madhana,

W/o. Late S.Sankar,

No.4/229, New Colony,

Venmanambadhur Village,

Kadambathur Post,

Thiruvallur Taluk & District 631 203.                                                    ......Complainant.

                                                                        //Vs//

1.Edelweiss Asset Reconstruction (ARC),

   Rep. by its Authorized Officer,

   Edelweiss House, Off CST Road,

   Kalina, Mumbai 400 098.

2.Edelweiss Housing Finance Limited,

   Rep by its Manager,

   No.167, 1^st Floor, Meenakshi Building,

   JN Road, Thiruvallur 602 001.                                                        …..Opposite parties.

Counsel for the complainant                                             : M/s.C.Elamaran, Advocate.

Counsel for the opposite parties 1 & 2                            : Exparte.

This complaint coming before us on various dates and finally on 28.03.2024 in the presence of M/s.C.Elamaran, counsel for the complainant and opposite parties were set exparte for non appearance and upon perusing the documents and evidences of complainant’s side this Commission delivered the following:

ORDER

PRONOUNCED BY Tmt. Dr.S.M. LATHA MAHESWARI, PRESIDENT.

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite parties with regard to the loan availed with the opposite parties along with a prayer to direct the opposite parties to release the original documents, to issue No Objection Certificate for the Loan Account No.LTVLSTL0000044586 and to pay a sum of Rs.5,00,000/- towards compensation for the mental agony and hardship caused to the complainant along with cost of the proceedings.

Summary of facts culminating into complaint:-

2. Being aggrieved by the act of opposite parties in the matter of loan availed from them the present complaint was filed.

3. The complainant’s husband one Mr.N.Sanker who was employed as a Technician at Southern Railway obtained Housing Loan from the 2^nd opposite party by mortgaging certain property and that the complainant was a co-applicant for the said loan.  The complainant’s husband had also availed Group Insurance Policy with Edelweiss Housing Finance Limited vide policy No.700038205E for the period from 10.05.2018 to 10.05.2019.  The EMI was regularly paid until the death of complainant’s husband on 17.03.2021. However, on 10.03.2021 a notice was issued by the 2^nd opposite party for dishonour the cheque dated 27.02.2021 though there was no default or overdue in the repayment of the loan account until 05.03.2021.  After which the Loan Account transferred to the 1^st opposite party for asset reconstruction on 31.03.2021 by fraudulently showing a net overdue of Rs.1,29,057.26/-.  On 08.06.2022 an amount of Rs.14,49,941/- was credited to the Loan Account from the Insurance Company.  After which when the complainant approached the 2^nd opposite party seeking the documents on 10.02.2023 the 2^nd opposite party unlawfully claimed an amount of Rs.6,42,233/- as overdue and retained the original documents.  A legal notice was issued by the complainant on 13.04.2023.  However the 1^st opposite party issued legal notice under section 13(2) SARFAESI ACT on 02.06.2023 for which the complainant sent a reply on 24.06.2023.  Thus aggrieved by the act of opposite parties in unlawfully retaining the original documents without closing the Loan Account the present complaint was filed for the reliefs as mentioned above.

4. On the side of complainant proof affidavit was filed along with documents marked as Ex.A1 to Ex A12. Though notice was served to the opposite parties they did not appear before this Commission to file any written version within the mandatory period as per the statute and hence the opposite parties were set exparte on 18.12.2023. 

Points for consideration:-

1) Whether the act of opposite parties in not closing the Loan Account even after receiving the Insurance amount towards the outstanding amount in Loan Account and claiming an amount of Rs.6,42,233/- towards outstanding amounts to deficiency in service and whether the same has been successfully proved by the complainant?

2) If so, to what reliefs the complainant is entitled?

Point No.1:-

5. Heard the oral arguments advanced by the learned counsel appearing for the complainant.

6. The crux of the oral arguments adduced by the counsel appearing for the complainant is that the 2^nd opposite party illegally demand an overdue of Rs.6,42,233/- when the net overdue as on 31.03.2021 was only Rs.1,29,057.26/-(Ex.A7).  Further it is his argument that the 2^nd opposite party did not give credit to the insurance amount credited to the Loan Account which could satisfy the entire loan.  Thus he sought for the complaint to be allowed as prayed for.

7. We perused the pleadings and material evidence produced by the complainant.

8. As per the Memorandum of Deposit of Title Deeds it is seen that the husband of the complainant had mortgaged the property situated at Door No.4/229, Venmanambudur Village, Thiruvallur Taluk & District and had obtained a loan for a sum of Rs.16,00,000/-.  Vide Ex.A3 it is seen that the complainant stood as co-applicant for the said loan Account.  The insurance policy taken by the complainant’s husband was produced as Ex.A4 to cover the entire loan amount of Rs.16,00,000/- for a coverage period of 11 years commencing from 10.05.2018 to 10.05.2029 and it is seen that a single premium of Rs.76,034/- has been paid

9. In the said Insurance policy the death benefit was also provided that “if the insured member dies during the terms of the coverage and whilst the insured’s coverage is in force than they would pay the sum assured as mentioned in the schedule.”  The complainant’s husband died on 17.03.2021 as evidenced by Ex.A5.  While so, as per the Policy Schedule provided in Ex.A4 for the death “during the Policy Year 3 the loan outstanding would be Rs.14,49,941/- and the Sum Assured under death would also be Rs.14,49,941/-.”  Thus it is sufficiently established that the insurance coverage which was in force during the death of the complainant’s husband had completely satisfied the outstanding loan amount.  Vide the Statement of Accounts filed by the complainant under Ex.A7 it is clearly seen that on 08.06.2022 the Insurance amount of Rs.14,49,941/-was deposited into the Loan Account.  However, inspite of the same the balance Principal was given as Rs.5,79,305,01/- even though the net overdue was shown as Rs.4,839/-.  It is an established legal Principle that on the death of the borrower when an insurance policy is in force taken for the purpose of coverage of the Loan Account, the insurance amount would satisfy the outstanding loan amount.  The insurance policy towards Loan Account was taken by the borrowers only on the said Principle.  However, in the present case the 2^nd opposite party without attributing towards the said established Principle had calculated the EMI amount and outstanding continuously.  As per Ex.A7 dated 10.02.2023 it has been clearly mentioned that the EMI amount was Rs.20,244/-, EMI, outstanding was Rs.1,61,952/- and the balance Principle was Rs.4,62,597.01/-.  Thus the total outstanding amount was mentioned as Rs.6,42,233.65/- and the total payment was received was shown as Rs.14,49,941/-, Waiver Passed was shown as 0 and  Excess Amount was shown as 0.  However the opposite parties vide notice dated 02.06.2023 had issued a demand notice under section 13(2) of the SARFAESI ACT which is contrary to the Statement of Accounts found in Ex.A7.  In the said notice the total amount payable was mentioned as Rs.6,74,219.40/-.  For the legal notice issued by the complainant no reply was sent by the 2^nd opposite party justifying their demand towards the outstanding amount.  However it is stated by the complainant that thereafter the SARFAESI ACT proceedings were dropped by the 2^nd opposite party.  Thus in the above said circumstances when the EMI amount was duly paid out of the salary received from the deceased S.Sanker until his death and when no cheque bounce had occurred the issuance of the cheque bounce notice and even after receipt of the insurance amount towards satisfaction of the entire outstanding Loan amount, not closing the Loan Account and demanding further payment of Rs. 6,42,233.65/- clearly amounts to deficiency in service.  The opposite parties also failed to appear before this commission to repudiate/dispute the complaint allegations justifying their claim for outstanding amount in the Loan Account of the complainant.  Thus we answer the point accordingly in favour of the complainant and as against the 2^nd opposite party.

10. As there was no allegation against 1^st opposite party and also this Commission has to jurisdiction over the acts of 1^st opposite party, the complaint is dismissed against them.

Point No.2:-

            11. As we have held above that the 2^nd opposite party had committed deficiency in service in not closing the Loan Account we feel it is appropriate to direct the 2^nd opposite party to close the Loan Account of the complainant and to issue No Objection Certificate and to return the original documents mortgaged with them to the complainant.  Further we also award a sum of Rs.50,000/- to be paid towards compensation for the mental agony and hardship caused to the complainant.

In the result, the complaint is dismissed against the 1^st opposite party and partly allowed against the 2^nd opposite party directing them

a) To close the Loan Account No.LTVLSTL0000044586 of the complainant and to issue No Objection Certificate to the complainant within six weeks from the date of receipt of copy of this order;

b) To release the Original Documents deposited and mortgaged with the 2^nd opposite party i.e. Doc.No.4516/2018 to the complainant within six weeks from the date of receipt of copy of this order;

c) To pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards compensation for the mental agony and hardship caused to the complainant;

 d) To pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant;

            Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 15^th day of December April 2024.

     Sd/-                                                        Sd/-                                                                     Sd/-                                                                         MEMBER-II                                    MEMBER-I                                                  PRESIDENT

List of document filed by the complainant:-

    Sd/-                                                           Sd/-                                                            Sd/-

MEMBER-II                                           MEMBER-I                                           PRESIDENT