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Order :

PER HON’BLE SMT. MEENA RAMANATHAN, MEMBER (NON-JUDICIAL)

1. The appeal is filed u/s 41 of Consumer Protection Act, 2019 by the complainant, aggrieved by the order of District Consumer Commission, Mahabubnagar, dated 08.03.2021 in CC 23/2019 and prays this Commission to allow the appeal by modifying the orders and to allow the complaint as prayed for and may be pleased to pass such other order or orders which may deem fit and proper in the interest of justice.

2. The brief averments of the complaint are that the husband of the complainant by name Sri Uma Maheshwar Goud was working as a Police Constable and approached the opposite parties for loan towards construction of his house. The opposite parties considered his application and sanctioned a loan of Rs.21,44,680/- vide A/c No. 37683297636 in S.B.I. Suraksha and the opposite parties deducted insurance amount of Rs.2,19,612/- in case any incident occurs in respect of the house or insured. The complainant is the nominee. The opposite parties stated that the insurance amount will be paid and the monthly payments were fixed at Rs.25,000/-. The loan amount was disbursed on three dates i.e. on 08.05.2018; 27.07.2018 and 06.09.2018. The opposite parties deducted the insurance amount on 09.07.2018. The complainant’s husband paid the 1st installment on 05.12.2018 and died of heart- attack on 20.12.2018. The complainant submitted the death certificate and claim form along with necessary documents but the opposite parties did not settle the claim amount, instead they demanded the complainant to pay the loan amount of Rs.19,33,004/- failing which they will take necessary action. Although, the opposite parties deducted the insurance premium from the loanee’s account, they have not paid the amount to the Insurance Company. After receiving the death claim, the opposite parties credited the amount paid towards insurance coverage. This is nothing but unfair trade practice and the opposite parties have been most deficient in keeping the amount paid towards insurance coverage in their custody and refunded the amount only after receiving the death claim. Having no other remedy, the complainant has approached the Commission for justice and equity.

3. The opposite parties No.1 & 2 filed their written version, and admitted that they sanctioned a loan for construction of house as per the sanction terms and conditions. They admit that a premium of Rs.2,29,746/- was debited on 09.05.2018 from the home loan Suraksha Account and the proposal was sent to SBI Life Insurance Company i.e. the opposite party No.3. The receipt of premium was acknowledged by opposite party No.3 on 10.05.2018. The customer/loanee paid three installments of Rs.25,000/- each on 05.12.2018; 31.01.2019 and 28.02.2019. An amount of Rs.1,86,062/- was received in the account towards Prime Minister Awas Yojana (PMAY). On 24.01.2019, they received a letter from the complainant that her husband/the loanee expired on 20.12.2018 and requested them to waive the entire loan amount.

4. The proposal submitted by the customer for insurance was forwarded to opposite party No.3 and was returned by them for the reason that the loanee was suffering from Diabetis Mellitus-II and did not qualify on medical grounds. S.B.I Life Insurance had returned the premium as the loanee did not qualify in the medical tests conducted by them on 24.05.2018 and that he required to pay an additional premium of Rs.1,92,986/- within a period of 21 days on receipt of the letter addressed to the customer on 01.08.2018. The customer has not responded and did not pay the single extra health premium and S.B.I. cancelled the proposal on 02.07.2018. The premium amount of Rs.2,29,746/- was credited in the home loan account vide 37683261950 on 09.07.2018 instead of Suraksha Home Loan Account 37683297636.

5. It is their contention that the Suraksha Account had to be closed since the proposal was refunded by opposite party No.3 and the home loan account will not a