LAW FOR ALL

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION-It is admitted that late Vinod Kumar Jain had availed a housing loan of Rs.10 lakhs. It is admitted that an amount of Rs.27,660/- was deducted from the account of the borrower towards the single premium amount payable towards insurance. It is admitted that at the time of sanction of the housing loan to the Complainant’s husband, OP-1 had an insurance master policy from OP-2 to cover such loans. It is admitted that a borrower could seek coverage under this group insurance scheme by paying the premium amount in advance. It is also admitted that for this purpose OP-1 acts as corporate agent of OP-2, in collecting the applications and forwarding the same to OP-2/SBI Life Insurance Company Ltd. = It is also argued that if the insurance company is not held liable to pay the sum assured for which the proposal was made, the bank also could not be asked to pay the amount to the Complainant. This argument also fails in the light of the finding of the State Commission that OP-2/SBI Life Insurance Company cannot be made liable to pay for the lapses on the part of the employees of the petitioner bank. We find ourselves in full agreement with the State Commission on this point, as everything that was required of the borrower, be it the proposal for insurance or authorization to debit the amount of one time premium to his account, was done at the time of sanction of the loan itself. By no stretch of imagination, the borrower can be held responsible for the lapses, which later resulted in the contract of insurance remaining incomplete till his death.