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2025 Supreme(Online)(SCDRC) 2559
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Smt.Meena Ramanathan, CJ, Sri V.V.Seshubabu, J
Cholamandalam Investment and Finance Company Limited – Appellant
Versus
Smt.Nirmala – Respondent
FA.NO.500 OF 2022 | CC.NO.32 OF 2020
For the Appellants/Petitioners: M/s. P.Shashi Kiran
For the Respondents: Sri Deepak Deshpande
A vehicle loan insurance policy does not cover natural deaths, and consumers must adhere to loan repayment obligations despite insurance claims.
Headnote:(A) Consumer Protection Act, 2019 - Sections 41 - Appeal against District Commission order - Appellant sought to set aside the order directing it to bear the costs arising from a vehicle loan insurance claim - The Complainant argued that the loan was insured, expecting a waiver upon the borrower's death, which the Appellant contested asserting no such provision for natural death under their insurance policy. (Paras 1, 2, 8, 10)
(B) Evidence - Nature of Insurance - The court examined whether the vehicle loan was indeed covered by insurance for events leading to the borrower's death, concluding that the insurance covered only accidental deaths, reinforced by the documented insurance terms and existing knowledge of both parties on the loan agreement. (Paras 8, 10, 11)
(C)
Findings of Court:
The Complainant was bound by the terms of the loan, and her husband's death due to heart attack does not invoke the insurance coverage as stipulated; thus, the Complainant must continue to pay the loan installments. (Paras 10, 11)
(D)
Result: Appeal allowed; the prior order is set aside.
| Table of Content |
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| 1. appellant's insurance position and loan background. (Para 1 , 3) |
Order : (Per Smt.Meena Ramanathan, Hon’ble In-charge President)
1. This is an appeal filed by the Appellant/Opposite Party U/s.41 of Consumer Protection Act , 2019, praying this Commission to allow the appeal by setting aside the order dated 03.09.2021 passed in Consumer Complaint No.32 of 2020 on the file of the District Consumer Disputes Redressal Commission, Medak at Sanga Reddy in the interest of justice and enquiry and pass such other order or orders as are deemed fit and proper in the circumstances of the case.
2. For the sake of convenience, the parties are described as arrayed in the complaint. The Appellant is the Opposite Party and the Respondent is the Complainant in CC.No.32/2020.
3. Briefly stated, the facts are that – the Complainant and her husband approached the Opposite Party for availing a vehicle loan on 29.12.2018 towards purchase of Swift Desire Car and an amount of Rs.6,71,000/- was sanctioned the Complainant’s husband and the Complainant stood co-borrower. They were informed by the Opposite Party that the said loan amount will be insured with the insurance coverage to the borrower and if any unseen events occur, the loan amount will be waived off. On this assurance, the Complainant’s husband deducted an amount of Rs.15,375/- out of the actual loan amount of Rs.6,71,000/- towards the life insurance policy. The monthly instalments for the said loan amount was fixed at Rs.14,929/- in (50) equal instalments.
It is submitted that as per the Insurance Clause every Insured shall execute a declaration form within (15) days from the date of receipt of the original insurance bond. But in the instant case, the Complainant had not received the original insurance bond. Further, the Complainant’s husband died on 31.07.2019 due to heart attack. After the death of her husband, the Complainant stopped paying the loan instalments thinking that the loan amount will be waived off by the Opposite Party as there is insurance coverage to the vehicle and also on the person who obtained loan.
It is submitted that the Opposite Party officials demanded for payment of the outstanding amount. The Complainant issued a legal notice on 03.09.2019 to the Opposite Party with a demand to settle the insurance benefits of her husband and to close the loan amount and issue original bond. The Opposite Party gave a reply dated 23.09.2019 with all false and baseless averments denying the contents of the legal notice. The Opposite Party was trying to seize the vehicle from the custody of the Complainant. The Complainant submits that she struggled with the Opposite Party but did not get the relief from them. Hence, the complaint with a prayer as under:
To direct the Opposite Party to release the insurance policy amount of Rs.6,71,000/- and to waive off the loan amount, to provide all consequential benefits of the Insurance Policy to the Complainant and to award costs.
6. The Opposite Party filed their written version stating that the Opposite Party sanctioned a loan of Rs.6,71,000/- to the Complainant’s husband towards purchase of Swift Desire Car. It is submitted that the Opposite Party after explaining various insurance policy details and understanding the same by the Complainant and her husband, they signed on the Loan Application and insurance application. The policy is only for accidental death benefit. Monthly instalment is Rs.14,929/-. It is submitted that the Complainant’s husband obtained the policy for accidental death benefit and he died due to heart attack and not because of accident. The Complainant’s husband received insurance documents and the Complainant is also well aware about the same that he obtained accidental death insurance policy. The Complainant agreed to deduct the insurance premium amount and service charges from sanctioned loan amount for which the Opposite Party deducted Rs.5,885/- towards insurance premium, Rs.1,100/- towards documentation
