HYDERABAD:A district consumer forum here has directed the Axis bank and Max Life Insurance Limited to pay a sum of Rs 50, 000 to a young widow as punitive damages for pressurising her to pay the balance amount of a loan that her husband took, which was supposed to be paid by the insurance company. In addition, the bank was also asked to refund an amount of Rs 1,03,500, which was wrongly debited from her husband’s account.
Surender Rao, husband of Padmaja, the complainant, had taken a loan of Rs 30,58,110 on July 22, 2011 from Axis Bank, Secunderabad branch. As per the loan sanction letter, the EMI without life insurance was Rs 33,162 and with life insurance was 33,805.
Surender opted for the one with life insurance paid insurance premium assigned in favour of the Axis bank. The bank had tied up with Max Life Insurance Limited for insuring his loan. Padmaja claimed that her husband has never defaulted the EMI of Rs 33, 805 per month, which includes an insurance amount of Rs 643 per month. He also paid a lump sum amount of Rs 5.00 lakh in February 2012 and Rs 7 lakh in March 2012 towards the principal loan amount.
Meanwhile, Surender died on July 18, 2012. Subsequent to his death, Axis bank continued debiting EMI from his account till October 2012. As per the terms and conditions of the loan, Padmaja is not liable to pay any amount to the bank towards repayment of the loan amount. In spite of perusing the same with the bank, they started exerting pressure on Padmaja and her family members for payment of the balance loan amount.
Later, she was shocked to receive a communication from the Max Life, saying that the insurance claim cannot be processed as they have not covered the loan amount under the policy. Therefore, she approached the forum.
The bank, contended that the application of Surender was rejected on the ground of not filling the health declaration form properly.
Max Life supported the contentions of the bank that the policy was rejected.
“The insurance company’s claim that the deceased had not filled the health declaration form properly, cannot be accepted, when no paper was filed by both parties to substantiate their pleas, “ the bench, said.
The Hyderabad-III District Consumer Forum, comprising president Y Chandra Sekhara Reddy and members D Mahesh Kumar and C Nirmala, passed an order directing the bank and the insurance company to pay punitive damages of Rs 50,000. The bank was told to refund an amount of Rs 1,03,500 debited from the account of the deceased Surendar Rao, after his death. They also said that the complainant is not liable to pay any amount towards the loan account of her husband. The forum said the opposite party No.2 shall first honour the insurance coverage of Surender Rao, besides Rs 2,000 was awarded as cost of the complaint.