Yudhvir Singh vs CITI BANK

THE present complaint has been filed by the complainant Sh. Yudhvir Singh against Citi Bank, New Delhi, under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act"), for recovery of damages and for harassment due to non-issuance of insurance cover and non-performance of the terms and conditions of the agreement.

BRIEF facts of the case are that the complainant Sh. Yudhvir Singh purchased a Maruti car bearing registration No. DL-4CA-5174 in April, 1991 and got it financed through O.P. Citi Bank. The price of the car was Rs. 3,81,259/- and he was sanctioned Rs. 3,20,000/- by the O.P. Citi bank and paid this amount directly to M/s. Vikas Motors. The complainant paid Rs. 85,258/- out of which Rs. 61,259/- were adjusted towards the price of the car and rest of the amount was withheld by the O.P. as part of service charges and insurance charges. The case of the complainant is that the O.P. was to get the vehicle insured and to deliver the insurance cover to the complainant within 20 days of the purchase of the vehicle but the O.P. failed to give the insurance cover to the complainant till the date of filing of the complaint i.e., 31.1.1992. The complainant visited the office of the O.P. a number of times for taking the insurance cover and also made oral and written requests for sending the insurance cover to the complainant, but the O.P. failed to do so. According to the complainant the aforesaid vehicle met with an accident on 10.12.1991 and the O.P. was responsible for the damages. The complainant stopped the payment of instalments for the months of July, 1991, November 1991 and further instalments and sent an intimation to his Banker for stopping the payments. The case of the complainant is that since the O.P. has committed breach of trust, as such the complainant is not liable to pay further instalments. He has claimed Rs. 2 lacs as damages and further requested that the O.P. be directed to take possession of the vehicle till the damages are not paid. The complainant also requested for direction to the O.P. not to recover the amount of instalments.

The O.P. in its reply stated that the aforesaid vehicle was insured on 16.4.1991 and has filed a copy of the Cover Note (Annexure A). It is also stated by the O.P. that a loan of Rs. 3,35,680/- was sanctioned to the complainant by the O.P. for purchase of the said vehicle and loan agreement, hypothecation deed and other documents were signed by the complainant at the time of sanction of loan. The complainant agreed to pay the instalments in time. However, the complainant failed to adhere to the financial schedule. It is the case of the O.P. that the Bank is under no obligation to get the vehicle insured and it is the duty of the borrower to get the vehicle insured throughout the tenure of the loan as per Clause 6(E) of the agreement. O.P. denied that the complainant visited the office of the O.P. for taking the insurance cover. However, it was specifically asserted that the insurance of the vehicle was got done on 16.4.1991 and the said insurance policy was valid till 15.4.1992. It is also stated by the O.P. that the complainant was to repay the loan in 60 equated monthly instalments of Rs. 8,854/-. However, the complaint was not making regular payment since April, 1992. O.P. sent a demand notice to the complainant but the complainant failed to adhere to the financial schedule and hence the O.P. Bank was at liberty to repossess the vehicle, since the vehicle was hypothecated with the O.P. The O.P. has denied it has committed any breach of trust and is liable to pay any compensation to the complainant.

DURING the pendency of the complaint M/s. Oriental Insurance Company was also impleaded as O.P. No. 2 vide order dated 12.9.1996. In its reply, O.P. No. 2 the Insurance Company admitted that the vehicle was insured vide Policy No. 21220/000/00000/31/92/233 for the period 16.4.1991 to 15.4.1992, in the name of the complainant but as per terms of the insurance policy, the policy would have been effective from the time when the complainant informs the identification mark/registration number of the vehicle which has not been done by the complainant. It is further stated by O.P. No. 2 that the complainant has not filed any claim with the Insurance Company in respect of the alleged accident dated 10.12.1991. Hence in the absence of any claim with O.P. No. 2 the Insurance Company, O.P. No. 2 could not take any steps regarding the assessment and survey of the vehicle. So there was no question of any payment to the complainant and hence there is no deficiency in service on the part of O.P. No. 2 the Insurance Company. It is further stated by O.P. No. 2 that the complainant failed to inform the registration number and other particulars of the vehicle in spite of letter of O.P. No. 2 dated 15.1.1992 and in the absence of furnishing the particulars of the vehicle the said vehicle was not covered under the policy of insurance issued by O.P. No. 2. We have heard the complainant and also the learned Counsels for both the O.Ps. and have also considered the documents/material on record. It appears that the complainant purchased a Maruti car and got it financed through O.P. No. 1 Citi Bank. As per terms of the Loan Agreement, the vehicle was to be insured during the period of repayment of loan. O.P. No. 1, Citi Bank got the vehicle insured for the period 16.4.1991 to 15.4.1992 but the insurance policy or the cover note was not delivered to the complainant as per his version. In the meanwhile, the vehicle met with an accident on 10.12.1991 and was damaged. However, the complainant instead of approaching O.P. No. 1 or O.P. No. 2, stopped the payment of further instalments and apprehending that the Bank may take possession of the vehicle filed the present complaint with distorted facts. It was the duty of the complainant to get the vehicle insured as per terms of the loan agreement but the complainant shifted this responsibility to O.P. No. 1. There is sufficient evidence on record in the form of insurance policy and also by the admission of O.P. No. 2 that the vehicle was insured for the period 16.4.1991 to 15.4.1992. The main dispute is whether the Cover Note was given to the complainant or not. There could have been no motive to O.P. No. 1 not to deliver the cover note to the complainant when the insurance policy has been taken for the vehicle. It appears that the complainant himself was a defaulter as he neither made any effort to obtain the Cover Note from O.P. No. 1 nor cared to inform O.P. No. 2, the Insurance Company about the detailed particulars of the vehicle like engine number, chassis number and registration number in response to letter of O.P. No. 2 dated 12.1.1992. On the other hand the complainant stopped the payment of instalments of loan after the vehicle met with an accident on 10.12.1991. This action on the part of the complainant was unilateral. There was no justification for stopping the payment of instalments simply because the Cover Note was not delivered by O.P. No. 1 to the complainant. The complainant has not any claim before O.P. No. 2 regarding the damages caused to the vehicle on account of accident dated 10.12.1991. As far as O.P. No. 2 is concerned, no deficiency in service is proved as no claim was presented before O.P. No. 2 relating to the accident dated 10.12.1991. Hence O.P. No. 2 the Insurance Company cannot be held responsible for any deficiency in service and the complaint against O.P. No. 2 is liable to be dismissed.

AS regards the O.P. No. 1 is concerned it was the duty of the complainant as per Clause 6(e) of the loan agreement to keep the vehicle insured throughout the tenure of the loan. Clause 6(e) reads as follows: 6(e) The Borrower appreciating his obligations represents and agrees as hereunder: "The Borrower(s) shall keep the vehicle(s) comprehensively insured against all eventualities as stipulated from time-to-time with any insurer approved by the Bank. In case of failure of the Borrower(s) to insure the vehicle(s), the Bank may get the insurance done on behalf of the Borrower(s) by debiting his account. The first claim on any insurance proceeds shall be that of the Bank. The Borrower(s) will comply with all directions of the Bank. The Borrower(s) irrevocably authorises the Bank to act on its behalf and take all necessary steps, actions, proceedings, and to compromise any claim deemed fit in the opinion of the Bank. However, any non-action on the part of the Bank will not affect the liability of the Borrower(s) to pay the necessary amounts."

However, in this case O.P. No. 1 obtained the insurance policy for the vehicle valid from 16.4.1991 to 15.4.1992. Even O.P. No. 2, the Insurance Company has admitted this fact, hence there was no default or deficiency in service on the part of O.P. No. 1 on this count. Here also it was the complainant who was a defaulter himself because after the accident, he stopped payment of the instalments of the loan without any reason and instead filed the present complaint to avoid payment and to stop O.P. No. 1 taking possession of the vehicle. Thus the complainant has failed to prove any deficiency in service on the part of O.P. No. 1 also. The contention of the complainant that he was not provided copy of the Cover Note is not substantiated by any reliable evidence. Moreover, O.P. No. 1 could have no motive to withhold the insurance cover once the vehicle has been insured and the premium has been paid to O.P. No. 2, the Insurance Company. In view of what we have discussed above, we are of the view that the complainant has failed to prove any deficiency in service either on the part of the O.P. No. 1 Citi Bank or on the part of O.P. No. 2, M/s. Oriental Insurance Company. Hence he is not entitled to any relief. The complaint is, therefore, liable to be dismissed and the same is dismissed accordingly. In the circumstances of the case the parties are left to bear their own cost.

THE present complaint stands disposed of in above terms. Complaint dismissed.