Summary
A finance company rendered deficient service by delaying insurance of a personal loan after receiving the borrower’s premium demand draft. The National Commission wrongly disturbed concurrent consumer findings on the factually incorrect premise that premium payment was unproved, despite the company’s own admission. The Court treated the loan and group insurance as a composite transaction, held that the loan was secured from premium payment, and directed adjustment through insurance rather than recovery from the widow.
Issues
- Whether the National Commission properly exercised its limited revisional jurisdiction.
- Whether admitted premium payment and delayed insurance constituted deficient service.
- What relief was due to the deceased borrower’s widow.
Provisions considered
- Section 21(b), Consumer Protection Act, 1986Limited revision could not sustain reversal of concurrent findings on grounds contradicted by the finance company’s own pleadings. (¶¶ 3.1–3.3, 3.8)
- Section 64VB(2), Insurance Act, 1938On the admitted lifetime premium payment in this composite transaction, the Court held the loan secured from payment and required adjustment through insurance. (¶ 3.7)
Held
- The finance company expressly admitted receiving the premium demand draft in its revision petition. The National Commission’s contrary premise was therefore factually incorrect. (¶ 3.2–3.3)
- The loan, processing charges and group insurance obtained from the company’s sister concern were interlinked. The borrower had performed his obligations by paying the premium and processing charges; delay in forwarding the premium and obtaining cover was deficient service. (¶ 3.4–3.6)
- On these admitted facts, premium payment during the borrower’s lifetime secured the loan, which was to be adjusted under the insurance policy. The widow had been unnecessarily drawn into proceedings because of the company’s deficient service. (¶¶ 3.7–3.8, 5)
Result
Appeal allowed and National Commission order set aside. Finance company directed to pay Rs 50,000 compensation and Rs 25,000 costs to the widow; loan to be adjusted through insurance. Pending applications disposed of.