SCDRC asks SBI to waive widow’s 14.30 Lakh loan

Published on Jan 22, 2023 12:10 AM IST

Mumbai: The Maharashtra State Consumer Disputes Redressal Commission (SCDRC) has come to the rescue of a widow and directed the State Bank of India to waive a loan amount of ₹14

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Mumbai: The Maharashtra State Consumer Disputes Redressal Commission (SCDRC) has come to the rescue of a widow and directed the State Bank of India to waive a loan amount of 14.30 lakh.

The complainant, Sheetal Navnath Vaidya, a Pune resident, had sought to waive the balance amount of home loan taken by her late husband, as it was insured under accidental death cover, which was offered by the bank for free on the home loan.

The commission has asked the bank to waive the remaining loan amount of 14.30 lakh against the insurance cover offered to the complainant’s deceased husband. It also ordered the

Bank and the insurance company to pay the woman 75,000 towards compensation for mental agony and litigation costs. Besides, the bank is also asked to refund the three installments deducted from the deceased man’s bank account after his death.

The complainant, Sheetal Navnath Vaidya, a Pune resident, had claimed that her husband bought a house in 2007 on home loan from State Bank of India, which had provided Personal Accident Insurance Cover free with the home loan.

It was claimed that November 15, 2015, Navnath Vaidya met with an accident and succumbed to the injuries after which the complainant requested the bank to extend the benefit of the accident insurance policy and waive the remaining amount of home loan.

The bank however, did not respond to her request immediately, and continued to deduct the loan installments. On August 26, 2016, the bank informed her that benefits of insurance policy cannot be given, as the insurance company had discontinued the policy from July 2013.

Sheetal, however, contended that the discontinuation of free accidental policy was never informed to her or her deceased husband before his death. Even after several communications, the bank did not extend the benefit of the insurance policy, prompting her to approach the district consumer forum.

The district forum, however, rejected Sheetal’s complaint observing that the benefit of the policy extended to the husband of the complainant was free of cost and therefore, the complainant cannot be termed a consumer, as contemplated under the Consumer Protection Act. The complainant then moved in appeal before the state commission.

The bank claimed before SCDRC that it had put up a notice on their website and on the notice board of the branch concerned that it had discontinued the free accident cover benefit to home loan borrowers.

The defense, however, failed to impress upon SCDRC. The state commission held that the information or intimation of the discontinuation of the accident cover was not given to the husband of the complainant personally. Therefore, neither Sheetal nor her husband was aware of the discontinuation of the insurance cover, which was granted on account of availing home loan from the public sector bank.

Therefore, the commission said, held the bank guilty of deficiency in service by not intimating discontinuation of policy to the husband of the complainant and liable to compensate Sheetal.

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