Back
2019 Supreme(Pat) 1792
IN THE HIGH COURT OF JUDICATURE AT PATNA
RAJEEV RANJAN PRASAD, J.
Birendra Pathak, son of Late Bachchu Pathak - Petitioner
Versus
The State Bank of India - Respondents
Civil Writ Jurisdiction Case No.22910 of 2013
Decided On : 11-09-2019
For the Petitioners:Mr.Binay Kumar Pandey, Advocate Mr. Akhileshwar Singh, Advocate
For the S.B.I. :Mr. Kaushalendra Kr. Sinha, Advocate Mr. Sunil Kumar Singh, Advocate
For the S.B.I. Life :Mr. Bindhyachal Rai, Advocate
Headnote:
Education Law—Loan taken by the father for his son—Unfortunately the son died during his studies—However, in spite of due information, the Bank did not close the loan account and kept on deducting the installment—The respondent no.2 has refused to adjust the rest amount of education loan from the coverage of loan scheme under the SBI Life —Ri Nn Rakesh Policy—The policy document is in tune with the concept of group insurance policy which is normally obtained by an employer for the benefits of their employees—In the Context of the present case the employer will be the State Bank of India who has obtained the Master Policy for the benefit of it's borrower—Co-borrowers—It is the State Bank of India who has undertaken to pay the premium for ensuring an insurance cover to it's members—All that the borrower had to do was to agree with the SBI to debit the premium amount in the loan account of the borrower which may be recovered from the borrower as a part of liability under the loan account—The respondent—Bank is prima-facie unable to demonstrate from any piece of evidence that at any point of time they had given any proposal from to the petitioner which ws required to be filled up to give effect to a policy or coverage under the Master Policy—This initial burden lies upon the SBI because it is the SBI who is negating the claim of the petitioner by taking a plea that the petitioner had not submitted the proposal form—Under the scheme of SBI Life Insurance Company Ltd., the Master Policy covers the risk not only of existing members but also of the new members who have been defined as borrowers and Co-borrowers of the Bank—The State Bank of India, if did not pay the premium to the SBI Life Insurance Co. Ltd. and for that reason it is not likely to get the death claim arising on the death of the son of the petitioner from SBI Ins. Co. Ltd. so as to cover the outstanding loan amount the SBI has to blame itself in the situation and bear the burnt—There was no need for the petitioner to maintain any balance in the account for purpose of deduction of the amount because the amount debited to his account could have been recovered with other outstanding loan amount—Writ petition allowed—Impugned Communication in Annexure: 1' is held arbitrary and set aside—Denial of request of the petitioner to close the loan account has been rejected on totally misconceived ground—Respondents directed to refund the amount recovered after the death of the son—No further deduction to be made. (Paras 17 to 23)
AIR 1984 SC 1014; AIR 2000 SC 43; (2005) 5 SCC 188 – Referred.
JUDGMENT :
Let the reply on behalf of the petitioner to the counter affidavit filed on behalf of respondent no. 1 be taken on the record.
2. Heard learned counsel for the parties.
3. This writ application has been preferred seeking a writ in the nature of writ of certiorari to quash and cancel the communication as contained in letter dated 17.05.2013 issued by the Branch Manager, State Bank of India, Patna High Court Campus Branch (respondent No. 2) enclosed as Annexure ‘1’ to the writ application, by which the respondent no. 2 has refused to adjust the rest amount of education loan sanctioned to the son of the petitioner who died on 15.01.2013 from the coverage of the loan scheme under the SBI Life – RiNn Raksha Policy. The impugned communication as contained in Annexure ‘1’ to the writ application is extracted hereunder for ready reference:
“To Date: 17/05/2013
Sri Rajdan Pathak & Sri Birendra Pathak
Qtr No.17
Patna High Court
Patna – 800 028
BN/06/62/2013-14
Dear Sir/Madam,
EDUCATION LOAN NO. 30898227595 SRI RAJDAN PATHAK & SRI BIRENDRA PATHAK STUDENT RAJDAN PATHAK DIED ON 15/01/2013 CLAIMING CLOSURE OF LOAN ACCOUNT BY DEATH CLAIM FROM SBI LIFE INSURANCE COMPANY LTD.
With reference to your letters dated 01/03/2013, we have to advise that the our competent authority advised us the borrower has not opted for SBI Life Insurance and withdrawn the entire sanctioned amount of Rs. 3,95,000/- in four installments.
2. In the circumstances above, there is no question of the loan account from insurance claim through SBI Life Insurance Company Ltd.
Yours faithfully
Sd/-
BRANCH MANAGER”
3. Before this court, learned senior counsel representing the petitioner has contended that the petitioner had applied for an education loan of Rs. 3,90,000/- for his minor son for pursuing his study in J.P. Institute of Engineering and Technology, J.P. Campus Mawana Road, Meerut from State Bank of India, Patna High Court Campus Branch. The loan documents were processed and an agreement was signed between the petitioner and the Assistant General Manager of the Bank. A copy of the agreement dated 15/18th September 2009 has been placed on record as Annexure ‘2’ to the writ application and clause 6.2.a of the said agreement has been relied upon to submit that there was complete understanding between the State Bank of India and the petitioner that loan will be covered under the SBI RiNn Raksha scheme and yearly premium payable by the State Bank of India in the group insurance policy obtained from SBI Life will be debited to the loan account. Clause 6.2.a of the said agreement reads as under:
“6.2.a – SBI Life Yearly Premium: SBI Life Yearly Premium to be debited to Loan Account : Rs. Yes”
4. It is submitted that unfortunately the minor son of the petitioner fell ill on 14.01.2013 in his college Hostel from where he was taken to Hospital where he died on 15.01.2013. This fact was brought to the notice of the Branch Manager of the Bank and a copy of the death certificate was submitted with a request to close the education loan account by recovering the rest amount of the loan from SBI Life. The petitioner requested the Bank to stop any further deduction of monthly installment from his salary account.
5. It is the grievance of the petitioner that the Bank did not close the loan account, kept on deducting the installment of loan amounting to Rs. 4089/- from the salary account of the petitioner and no communication to this effect was made to the petitioner by the respondent Bank. Later on, the petitioner was informed by the impugned communication that there is no question of adjustment of loan account from insurance claim through SBI Life Insurance Company Limited, which is the impugned order in the writ application.
6. The State Bank of India has opposed the writ application on the solitary ground that for coverage under the insurance scheme the petitioner was required to submit an application to the respondent Bank for sending it to the SBI Life Insurance Company Li
