The liability to repay a loan exists independently of any insurance claim outcomes.

J U D G M E N T

The petitioner availed a loan from the first respondent bank.

On default being committed, the bank initiated proceedings for recovery of the amount due from the petitioner. The petitioner is before this Court stating that, at the time of availing the loan and on the instructions of the respondent bank, the petitioner had taken a ‘Unihome Care Insurance Policy’ from the third respondent and that though the house of the petitioner has been damaged due to natural calamities, the third respondent insurance company repudiated the claim made by the petitioner.

2. The learned counsel appearing for the respondent bank would submit that the outstanding liability of the petitioner as on 09.01.2026 is Rs.4,61,976/-(Rupees Four lakh Sixty One Thousand Nine Hundred and Seventy Six only). It is also submitted that there is another loan sanctioned to the wife of the petitioner and that the outstanding amount under the said loan is Rs.58,120/-. It is submitted that the repayment of the loan is independent of the insurance policy taken out by the petitioner, and therefore, the petitioner cannot be heard to contend that he is liable to pay the amounts due to the bank only if his claim under the insurance policy is sanctioned by the third respondent insurance company.

3. The learned counsel appearing for the third respondent insurance company would submit that the claim was repudiated on account of the fact that the damage (if any) suffered by the petitioner was not covered by the terms of the policy. It is also submitted that the report of the Surveyor deputed by the insurance company, and the report of the Village Officer, indicates that the damage caused to the house of the petitioner was not on account of any natural calamity but was, in fact on account of poor construction and also on account of the fact that there was large scale removal of red earth from the nearby property. It is therefore submitted that the third respondent company is not liable to pay any amount to the petitioner in terms of the insurance policy taken out by him.

4. Having heard the learned counsel appearing for the petitioner, the learned counsel appearing for the respondent bank, and the learned counsel appearing for the third respondent insurance company, I am of the view that there is considerable merit in the contention taken by the learned counsel for the respondent bank that the case of the petitioner that his claim under the insurance policy was wrongfully repudiated does not give him the right to contend that he is not liable to pay the amount due to the respondent bank. If the petitioner is in any manner aggrieved by the repudiation of his claim by the insurance company, it is for the petitioner to seek legal recourse against such repudiation, and the same cannot absolve the petitioner from repaying the amounts due under the loan availed from the respondent bank.

5. Faced with the situation, the learned counsel appearing for the petitioner submits that the petitioner may be permitted to clear the liability in some installments.

6. The learned counsel appearing for the respondent bank submits that the outstanding liability in respect of the loan availed by the petitioner as on 09.01.2026 is Rs.4,61,976/-(Rupees Four lakh Sixty One Thousand Nine Hundred and Seventy Six only). It is submitted that some installments can be granted to the petitioner to clear the liability.

7. Having regard to the circumstances of the case and the submissions made as recorded above, I am of the view that the petitioner can be granted an opportunity to repay the outstanding amount in twenty (20) installments.

8. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire outstanding