F.A.No.928/2007  against C.C.No.209/2005, Dist.Forum-II,Krishna, Vijayawada.    

Between:

1.ICICI Home  Finance Ltd.,

   Rep. by its Branch Manager,

   2^nd floor, Opp. to A.I.R., M.G.Road,

    Vijayawada-4.

2. ICICI Bank Ltd.,

     Rep. by its Managing Director,

    Reg. Office:’Land Mark’ Race Course Circle,

    Vadodara – 390 007.                                        ….Appellants/

                                                                            Opp.parties 

         And

Smt. M.V.Trinadha Devi,

W/o.late Rama Mohan Rao,

Flat no.T-7, Vaibhav Apartments,

Maruthinagar, Vijayawada-4.                              … Respondent/

                                                                        Complainant

Counsel for the Appellants          :  M/s.N.Harinath Reddy (Hari &

                                                Associates )

Counsel for the Respondents     :    M/s.Sarvabhouma Rao

CORAM: SMT. M.SHREESHA, HON’BLE MEMBER,

AND

SRI K.SATYANAND , HON’BLE MEMBER.

THURSDAY, THE SEVENTEENTH DAY OF DECEMBER,

TWO THOUSAND NINE.

Oral Order (Per  Smt M.Shreesha, Hon’ble Member)

                                                ***

            Aggrieved by the order in C.C.No.209/2005  on the file of District Forum-II, Krishna at Vijayawada, the opposite parties preferred this appeal.

        The brief facts as set out in the complaint are that the  husband of the complainant submitted an application for sanction of the housing loan for purchase of a  flat with  the first  opposite party who sanctioned Rs.5 lakhs  towards housing loan vide letter dt.24.3.2003  and as per the terms and conditions of the said loan  it should be repayable by the borrower in 240  equal monthly instalments @  Rs.4,743/-  and the future principal  outstanding  of the loan  is extended to cover 12 monthly instalments in case of borrower suffers any disease.   The complainant’s husband paid the instalments regularly to  the opposite party  for some period and suffered heart problem  from December 2003 and subsequently died.  This incidence was informed to the first opposite party but her claim was not settled on the ground that the heart attack was not covered under the personal accident  insurance policy   Hence the complaint seeking direction to the opposite parties  to settle the insurance claim of the complainant and adjust the  same towards the outstanding loan amount of  the deceased  and to release the house documents of the deceased and to award costs and compensation.   

        Opposite parties filed counter  stating that the death of the borrower is due to  heart attack which  is not covered under the scheme of Personal Accident  and the complainant’s husband committed default in payment of the instalments  and that the discharge summary of the complainant’s husband  clearly  show that he suffered ailment   and was under continuous   treatment for a  long time and hence  the death of   the deceased  due to heart attack does not cover under the policy.  They submit that there is no deficiency in service on their behalf and seek dismissal of the complaint with costs.

        District Forum based on the evidence adduced i.e. Exs.A1  to A6 and Exs.B1 to B4  allowed the complaint  in part directing the opposite parties  to adjust the insurance amount towards the outstanding loan  and return  the house documents to the complainant  and the opposite parties are also directed to pay Rs.25,000/- towards compensation and Rs.1000/- towards costs.

        Aggrieved by the said order, the opposite parties preferred this appeal. 

        The facts not in dispute are that the complainant availed loan from the opposite parties  for Rs.5 lakhs which was sanctioned vide letter dt.24.3.2003   and by virtue of this loan he was given a  protection plan  and this loan amount is repayable  in 240  monthly equal instalments @ Rs.4,743/-   and the  borrower was also covered with insurance coverage under which, in case of default due to death  or permanent  disability  of the borrower,  the total future principal  outstanding of the loan is insured  and the cover  is extended to cover 12 monthly instalments  in case the borrower suffers from any  diseases of the nine specified.  It is not in dispute that the  insured died of heart attack on 8.9.2004.   It is the case of the  complainant that the opposite parties did not settle the claim  on the ground that the heart attack was not covered under the personal accident insurance.  It is the appellants/opp.parties’ case that  home ‘loan shield’ cover  of insurance which has been issued to the respondent/complainant and her husband will cover  the principal outstanding  of the loan and not the entire loan  and moreover the personal accident  is covered under  the insurance cover ‘home loan shield’ and not the  ailment of heart  disease.  They further contend that the complaint is bad for non joinder of ICICI Lombard which issued the home loan and contend that the District Forum  has erred in awarding compensation  of Rs.25,000/- .

         Ex.A2 which specifies the key features of the ‘loan shield’  is    as follows:

1.    “In case of default due to death or permanent total disability of the borrower, the total future principal outstanding of the loan is insured.

2.    The cover is also extended to cover 12 monthly instalments in case the borrower suffers from any one of the 9 listed critical illnesses.

3.    In case of any involuntary unemployment (only for salaried employees) upto 3 monthly instalments will be covered under the plan.

4.    Besides this, there is a 5 year property insurance, given to the borrower free of cost”. 

 Careful perusal of  Ex.A2   says  that the ‘Loan Shield’ insurance plan  covers future  principal outstanding  of  the loan  in case of default of the borrower  due to death or permanent  total disability.  There is no condition   that the  borrower must die in an accident. Therefore the contention of the appellants/opp.parties that the insured must die  in an accident is  unsustainable in the absence of  any such  exclusion clause.  The contention of the appellants/opp.parties  that ICICI Lombard   should have been made a party   and the complaint is bad for non joinder of this company is also untenable on the ground that the policy issued under the home loan   cover is not  in dispute and there is no further evidence which can be given by this party and therefore non joinder of this ICICI   Lombard  cannot be termed as bad.  The learned counsel for the appellants argued that the District Forum has erred in directing them to  adjust the insurance amount towards the outstanding  loan.   On perusal of the material on record we observe that the complainant is entitled to the ‘loan shield’  and the opposite parties are under the obligation to adjust the insurance amounts towards the future principal outstanding of the loan and to return the house documents.  We do not see any infirmity in the order of the District Forum in awarding compensation of Rs.25,000/-  and costs of Rs.1000/-.   However   we modify the order of the District Forum only to  the extent  of adjusting the insurance amount towards the future principal outstanding of the  loan.

In the result  this appeal is allowed only in part  and  we modify the order of the District Forum only to  the extent  of adjusting the insurance amount towards the future principal outstanding of the  loan  and handover  the house documents on discharge of the loan amount while  we confirm the rest of the order of the District Forum. In the circumstances no costs.  Time for compliance four weeks. 

                                                         Sd./MEMBER

                                                         Sd./MEMBER

                                                        Dt.17.12.2009

Pm*