STATE BANK OF HYDERABAD KOPPAL BRANCH Vs. NIRMALA

JUDGEMENT

(1.) State Bank of Hyderabad Koppal Branch, Karnataka has filed this revision petition challenging the order of Karnataka State Consumer Disputes Redressal Commission in FA No. 1540/ 2010. The revision pctitioncr/OP-1 has filed this petition against the original complainant as the first respondent and SBI Life Insurance Company Ltd., the original OP-2 as the second respondent.

(2.) As seen from the record, Mr. Vinod Kumar Jain, the husband of the Complainant Mrs. Nirmala had sought a housing loan of Rs.10 lakh from the revision petitioner/ OP-1 to construct a house on his plot in Koppal town. The case of the complainant is that the loan was agreed but simultaneously Mr. Jain was made to apply for insurance from OP-2/SBI Life Insurance Company to provide insurance cover to the housing loan. An amount of Its. 27,660/- was debited to the borrower's account towards premium. All this happened on 9.3.2007.

(3.) Three months later, the borrower died on 19.6.2007. His widow/the complainant asked the OP-1 to have the insurance claim settled and apply the proceeds towards clearance of the outstanding housing loan. OP-2 rejected the insurance claim on the ground that the insured had died before the acceptance of the proposal and therefore, there was no privity of contract between the Complainant and the Insurance Company/ OP-2. Soon thereafter, a notice was issued by OP-1 asking the Complainant to pay back the entire loan. Subsequently, a notice was also published in local newspapers to the effect that OP-1/State Hank of Hyderabad was going to take possession of the concerned property.