A consumer dispute involving insurance claims for loan waiver cannot be effectively adjudicated without impleading the insurance company as a necessary party, as the scope and liability of coverage are determined by the insurer.

ORDER

PER MS.SHAILA WANDHARE, HON'BLE MEMBER

This is an appeal preferred by the original opposite party, Union Bank of India through its Manager, being aggrieved by the orderpassed on 12/10/2018of the learnedDistrict Consumer Disputes Redressal Forum, Nagpur (for short as “learned District Forum”) in Consumer Complaint No.CC/737/2016, vide Section 15 of the Consumer Protection Act 1986.

The parties of the appeal are hereinafter referred to by their original nomenclature as complainant and opposite parties respectively for better appreciation.

The facts emerge from the present appeal is that late Baljit Singh Chaudhary was a consumer of the O.P. bank and holder of Savings/Loan Account No.442402010907612. He had applied for a housing loan under the Union Home Scheme on 10/05/2009 which was sanctioned on 05/07/2009 vide Sanction Letter No.680/296 subject to specific terms and conditions duly signed by him including a condition relating to insurance coverage for securing the loan amount. The loan instalments and interest were regularly paid from 2009 till his sudden death on 29/07/2016. The complainant being widow of late Baljit Singh Chaudhary unable to continue repayment. So, the complainant approached the O.P. bank for settlement of the outstanding loan by invoking the insurance cover allegedly mandated and facilitated by the O.P. as part of the loan transaction. However, the O.P. denied the claim on the ground that no insurance policy was taken for the loan and replied in a rude and evasive manner. So, the complainant issued legal notices dated 16/08/2016 and 16/10/2016, but the O.P. failed to give any satisfactory response. So, the complainant alleged that the O.P. involved for deficiency in service and unfair conduct in relation to denial of insurance benefits and non-settlement of the housing loan under the Union Home Scheme. Therefore, the complainant filed consumer complaint against O.P. for directions of closure of the loan account and issuance of No Objection Certificate along with compensation for mental and physical suffering with costs of litigation.

The O.P. have resisted the claim before the learned District Forum and denied the contention on the ground that the husband of the complainant had independently obtained an insurance policy dated 25/08/2009 from United India Insurance Company Ltd. which was not impleaded as a party to the complaint and therefore the complaint suffered from non-joinder of a necessary party. They contended that the deceased had taken a “UNI Home Care Policy” bearing insurance period from 26/08/2009 to 25/08/2029. The said policy did not provide any cover for death or permanent disability of the insured, but was limited only to protection against specified perils such as fire, storm, cyclone, flood, earthquake and other structural risks to the insured property. They also contended that, in view of the express exclusions under the said policy, no benefit towards liquidation or waiver of the housing loan instalments could be claimed after the death of Baljit Singh Chaudhary. The O.P. further submitted that the complainant had failed to produce any document to show existence of a loan-linked life insurance or risk cover policy for the loan amount of Rs.5,00,000/- and mere payment of premium of Rs.4,035/- could not create liability beyond the policy terms. The O.P. asserted that Clause 7 of the Loan Sanction/Acceptance Letter dated 05/09/2009 which mandates comprehensive insurance of the financed asset with a bank clause and the policy taken was strictly in compliance with the said clause and related only to protection of the secured asset. They denied that any life or risk cover policy linked to the loan amount was provided or promised by the bank. They further contended that the loan instalments were payable as per contract and that the complainant is liable to discharge the outstanding dues. The O.P. specifically denied any deficiency in service or unfair trade practice as defined under Se