ASHATAI W/O ANAND DUPARTE versus SHRIRAM CITY UNION FINANCE LTD.

Citation: [2019] 6 S.C.R. 58 · Decided: 16-04-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 6 S.C.R.
ASHATAI W/O ANAND DUPARTE
v.
SHRIRAM CITY UNION FINANCE LTD.
(Civil Appeal No. 3962 OF 2019)
APRIL 16, 2019
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Consumer Protection Act, 1986:
Deficiency in service – Complainant-appellant’s husband took
personal loan from the Finance Company and Finance Company
secured the loan by issuance of an insurance policy by its sister
concern – Payment of insurance policy premium by the
complainant’s husband and Finance Company received a Demand
Draft for the same – Thereafter, death of complainant’s husband –
Issuance of notice by Finance Company to complainant for payment
of the loan instalments – Legal notice by complainant to the Finance
Company to recover the loan through the insurance policy –
However, Finance Company denied having received the premium
amount and that the amount was deducted from the loan amount
towards processing fee and stamp charges – Consumer complaint
by appellant alleging deficiency in service – Allowed by the District
Forum as also State Commission, however, set aside by the National
Commission – On appeal, held: Husband of the appellant had paid
the insurance premium by a Demand Draft in favour of the Insurance
Company – Finance Company in the revision petition filed before
the National Commission, itself admitted that it had received the
Demand Draft from the complainant’s husband towards payment of
the insurance premium; and that it had deducted an amount towards
processing of the loan, and payment of stamp charges – Finance
Company however delayed in forwarding the amount to the
Insurance Company for obtaining the insurance policy – Thus, there
was a clear deficiency of service by the Finance Company –
Furthermore, the risk would be covered from the date of payment of
the insurance premium – Loan was secured from the date on which
the insurance premium was paid – Premium having been paid by
the appellant’s husband during his life-time, the loan was to be
   [2019] 6 S.C.R. 58
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adjusted from the insurance policy – In view thereof, order passed
by the National Commission set aside – Finance Company to pay
compensation and costs to appellant – Insurance Act, 1938 – s.
64VB (2).
s. 21 (b) – Revisional jurisdiction – Exercise of, by the
National Commission – Held: Revisional jurisdiction of the National
Commission is a limited jurisdiction, to be exercised in case the
State Commission lacked jurisdiction, or acted with illegality or
material irregularity.
Allowing the appeal, the Court
HELD: 1.1 The National Commission, in exercise of its
revisional jurisdiction, set aside the concurrent findings of the
District Forum and State Commission. The revisional jurisdiction
of the National Commission is a limited jurisdiction, to be
exercised in case the State Commission lacked jurisdiction, or
acted with illegality or material irregularity. [Para 3.1][64-F-G]
Galada Power and Telecommunication Limited v. United
India Insurance Company Limited & Anr. (2016) 14 SCC
161 ; Rubi (Chandra) Dutta v. United India Insurance
Co. Ltd. (2011) 11 SCC 269 : [2011] 3 SCR 977
– referred to.
1.2 The National Commission has allowed the Revision
Petition of the respondent-Finance Company on two grounds;
first, that the appellant had failed to produce any evidence to
prove that the insurance premium was paid to the respondent-
Finance Company; and second, that there was no evidence to
prove that the respondent-Finance Company deducted the
insurance premium from the loan account. The respondent-
Finance Company in the Revision Petition filed before the
National Commission, has itself admitted that it had received the
Demand Draft from the appellant’s husband towards payment of
the insurance premium. Hence, the first ground on which the
National Commission has set aside the order of the State
Commission is factually incorrect. With respect to the second
ground, the respondent-Finance Company has admitted that it
had deducted an amount of Rs. 2,120/- towards processing of the
ASHATAI W/O ANAND DUPARTE v. SHRIRAM CITY UNION
FINANCE LTD.
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
loan, and payment of stamp charges. However, it was contended
by the Respondent-Finance Company that this deduction was not
made towards payment of the insurance premium. A perusal of
the documents shows that the Respondent-Finance Company was
providing a loan facility to the borrowers, which was secured by
an insurance pol

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