Telangana HC Clarifies on Premium Under Insurance-Linked Housing Loan

Hyderabad: A two-judge bench of the Telangana High Court upheld a woman’s rights over her late husband’s property without having to pay the balance of the loan premium under the insurance-linked home loan. The panel comprising Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar set aside the award given by the Insurance Ombudsman. The panel was dealing with a writ petition filed by B. Madhavi questioning the decision of the Hyderabad Insurance Ombudsman that an insurance company cannot deny cover after retaining the premium for nearly a decade. While the court decided to discharge the debtor’s entire loan debt, it invalidated the classification of the loan as a non-performing asset (NPA). It was claimed that the Ombudsman’s decision to reject the applicant’s request for waiver of the mortgage loan obligation upon the death of his wife and to order the return of the premium with interest was arbitrary and unlawful. The petitioner alleged that a home loan of Rs 23 lakh was taken from the State Bank of India and an insurance premium of Rs 87,802 was paid in May 2008 on the bank’s insistence to cover the loan in case of death. It was stated that his wife passed away in August 2017, and despite repeated applications to close the loan within the scope of insurance, the request was not accepted and the complaint was rejected by the Ombudsman. The insurer argued that a valid insurance contract was not formed because the income certificate was not submitted, the offer was canceled and the premium was later refunded. The court noted that the insurer kept the premium for approximately 10 years without finding that the rejection of the offer was notified or that the refund was made within a reasonable period of time. The court ruled that such behavior amounted to gross negligence and gave rise to the presumption that an insurance contract had been concluded. The Board found that although the Ombudsman recorded findings of negligence, it failed to provide appropriate relief and therefore made clear error. It held that once the insurance cover is applied, the loan liability ceases to exist from the date of death and hence, the classification of the loan account as NPA cannot be sustained in law. Accordingly, the writ petition was allowed.

Plea says the land is marked as a lake and is fenced

Justice NV Shravan Kumar of the Telangana High Court initiated an inquiry against the state authorities for unilaterally classifying more than two acres of land in Manchirevula as a lake. The judge was dealing with a writ petition filed by A. Bhanu Prasad, who alleged that the land was treated as part of a lake and fenced, a board was erected claiming that it was within the full tank level (FTL) limit, without any notice or compliance with due process. It was argued that there was no lake near the land in question and that the case was contrary to the procedure established in previous case law. During the hearing, the court examined the respondent authorities’ position that the land formed part of the proposed list of water bodies based on Survey of India mapping. The court stated that the land in question was marked with pink dots and asked specific questions regarding the records of the Hyderabad Metropolitan Development Authority. It was requested to clarify the significance of such marking, whether it reflects a final classification and the stage at which such mapping is carried out. Moreover, the court questioned how the entry and enclosure of land could be done based on a preliminary notification given solely for the purpose of inviting objections. At the request of the participants, time was given to provide written instructions. The court directed the authorities to submit all materials supporting the existence of a water body and classification of the land, ordered the assignment of the irrigation department and sent the matter for additional hearing on Monday.

HC will review the defense regarding the contractual dispute

The Telangana High Court will examine the maintainability of a writ plea arising out of contractual disputes. Justice Renuka Yara was hearing a writ plea filed by Finczars Infrastructure Projects and Developers alleging illegal dispossession of property allotted to it for the purpose of an IT tower project in Malakpet, Hyderabad, and encroachment cases filed by chief engineer Telangana Industrial Infrastructure Corporation (TGIIC). The petitioner was seeking a declaration that the action of the authorities in separating the property from the allotted property was illegal, arbitrary and contrary to natural principles. justice. The petitioner sought an interim direction restraining further proceedings pending disposal of a commercial case pending before the Special Court for adjudication of commercial disputes in Hyderabad. TGIIC argued that the disputed case happened two years ago and the case was challenged after the petitioners raised a similar dispute before the commercial court. The judge asked the plaintiff why there was a delay in filing the writ petition. Observing that the petitioner had already filed a commercial suit on the same issue, the judge wondered how issues relating to contractual enforcement and obligations could be agitated in a writ petition.