HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD * * * *

THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE GADI PRAVEEN KUMAR W.P.Nos.8760 of 2019 and 13176 of 2020 DATE :01-04-2026 W.P.No.8760 of 2019 Between :

Mrs.B.Madhavi … Petitioner And SBI Life Insurance Company Limited, represented by its Manager, Hyderabad and Two Others.

… Respondents.

COMMON ORDER:(per Hon’ble Justice Gadi Praveen Kumar Since these Writ Petitions arise out of common set of facts and the parties are also common, they are being disposed of by this common order.

2. Heard Sri E.Phani Kumar, learned counsel for the petitioner, Sri Srinivas Karra, learned counsel representing Sri K.Jaya Raj, learned counsel for the respondent No.2-Insurance Ombudsman in W.P.No.8760 of 2019 and Sri Mettu Srinivas Reddy, learned Standing Counsel appearing for the State Bank of India (SBI).

3. W.P.No.8760 of 2019 is filed assailing the award dated 17.12.2018 passed by the learned Insurance Ombudsman, for the States of Andhra Pradesh, Telangana and Yanam City, the 2^ndrespondent herein, whereby the complaint of the petitioner seeking waiver of the loan liability on account of the death of her husband was dismissed, while directing refund of the premium amount of Rs,87,802/- along with interest at 8% per annum, as illegal and arbitrary and consequently, sought a direction against the 1^st respondent to give effect to the waiver of the loan instalments payable by the petitioner in respect of the loan Account No.62055694550 with SBI RACPC, Abids, from the date of death of the petitioner’s husband on 04.08.2017.

4. W.P.No.13176 of 2020 is filed to declare the action of the respondents in classifying the loan account No.62055694550 of the petitioner as Non-Performing Asset (NPA), as illegal and arbitrary.

5. The facts leading to file the present Writ Petitions are that the petitioner and her husband availed a housing loan from the respondent-SBI on 15.03.2008 for a sum of Rs.23.00 lakhs for the purpose of construction of a residential house repayable in equated monthly instalments at the rate of Rs.24,976/-. It is further stated that on the insistence of the Bank, an insurance coverage was obtained by paying an amount of Rs.87,802/- on 10.05.2008 with a bona fide belief that the policy would cover the loan liability in the event of death of either borrower. It is admitted that subsequently, the petitioner’s husband availed a top up loan of Rs.10.00 lakhs on 01.03.2017 payable in 119 equated monthly installments at Rs.12,800/- commencing one month after disbursement. It is further averred that they were regular in remitting the installments, but unfortunately, the petitioner’s husband was diagnosed with cancer and after series of hospitalizations, passed away on 04.08.2017.

6. It is stated that pursuant to the demise of the petitioner’s husband, she approached the Bank for waiver of balance EMIs considering the insurance coverage, but when the installments were getting debited from her account, she addressed a letter dated 06.10.2017 and reminders on 26.02.2018 and 02.07.2018 to the SBI enclosing the death certificate of her husband and requested for closure of the loan account duly discharging the same. However, the Bank failed to respond to the representations submitted by the petitioner. Therefore, the petitioner knocked the doors of the 2^nd respondent, who by award dated 17.12.2018 dismissed the complaint of the petitioner. Aggrieved by the said award, the petitioner filed W.P.No.8760 of 2019.

7. While issuing notice before admission on 20.08.2020, this Court granted interim stay of recovery of the instalments and despite the said interim order, the 2^nd respondent transferred the petitioner’s home loan account to the 1^st respondent on 31.10.2019 by classifying it as NPA. Aggrieved thereby, she filed W.P.No.13176 of 2020.

8. The 1^strespondent filed a counter-affidavit contending that the crux of the compliant filed by the petitioner before the 2^nd respondent - Ombudsman i