Telangana HC Clarifies on Premium Under Insurance-Linked Housing Loan

Hyderabad: A two-judge panel of the Telangana High Court upheld the rights of a woman to the property of her late husband without having to pay the balance of the loan premium under an insurance-linked housing loan. The panel comprising Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar set aside an award passed by the Insurance Ombudsman. The panel was dealing with a writ petition filed by B. Madhavi, questioning a ruling of the Insurance Ombudsman, Hyderabad, holding that an insurer cannot deny coverage after retaining premium for nearly a decade. The court directed discharge of entire loan liability of the borrower while invalidating its classification as a non-performing asset (NPA). It was contended that the award of the Ombudsman in rejecting the claim of petitioner for waiver of housing loan liability upon the death of her husband, while directing refund of the premium with interest, was arbitrary and illegal. The petitioner contended that a housing loan of Rs 23 lakh was availed from the State Bank of India, and an insurance premium of Rs 87,802 was paid in May 2008 at the insistence of the bank to cover the loan in the event of death. It was pointed out that her husband died in August 2017 and despite repeated representations seeking closure of the loan under the insurance cover, the claim was not accepted, and the complaint was dismissed by the Ombudsman. The insurer argued that no valid contract of insurance came into existence due to non-submission of income proof, and that the proposal stood cancelled, with the premium later refunded. The court noted that the insurer retained the premium for nearly 10 years without establishing that rejection of the proposal was communicated or that refund was effected within a reasonable time. It held that such conduct amounted to gross negligence and raised a presumption of a concluded contract of insurance. The panel found that although the Ombudsman recorded findings of negligence, it failed to grant appropriate relief, thereby committing a manifest error. It held that once insurance coverage applied, the loan liability stood discharged from the date of death and, consequently, classification of the loan account as an NPA cannot be sustained in law. Accordingly, the writ petition was allowed.

Plea says land marked as lake, fenced

Justice N. V. Shravan Kumar of the Telangana High Court probed the state authorities for unilaterally classifying over two acres of land at 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, with a board erected claiming that it fell within the full tank level (FTL) boundary, without issuance of notice or adherence to due process. It was contended that no lake existed in the vicinity of the subject land and that the action was contrary to procedure laid down in earlier judicial precedents. During the hearing, the court examined the stand of the respondent authorities that the land formed part of a proposed list of water bodies, based on Survey of India mapping. The court raised specific queries regarding Hyderabad Metropolitan Development Authority records, noting that the subject land was marked with pink dots. It sought clarification on the significance of such marking, whether it reflected a final classification, and the stage at which such mapping was undertaken. Further, the court questioned how entry upon the land and fencing it could be carried out on the basis of a preliminary notification issued only for inviting objections. On the request of the respondents, time was granted to place written instructions. The court directed the authorities to produce all material supporting the existence of a water body and the classification of the land, ordered impleadment of the irrigation department, and posted the matter for further hearing on Monday.

HC to examine plea on contractual dispute

The Telangana High Court will examine the maintainability of a writ plea arising out of contractual disputes. Justice Renuka Yara was examining a writ plea filed by Finczars Infra Projects and Developers alleging illegal dispossession from property allotted to it for the purpose of an IT tower project at Malakpet, Hyderabad, and assailing proceedings issued by the chief engineer, Telangana Industrial Infrastructure Corporation (TGIIC) The petitioner sought a declaration that the action of the authorities in dispossessing it from the allotted property was illegal, arbitrary and contrary to principles of natural justice. The petitioner sought an interim direction restraining further action till disposal of a pending commercial suit before the Special Court for trial of commercial disputes at Hyderabad. The TGIIC argued that the impugned action was two years ago and it was challenged after the petitioners raised a similar dispute before the commercial court. The judge questioned the petitioner as to why there was a delay in filing the writ petition. Observing that the petitioner had already instituted a commercial suit in respect of the same subject matter, the judge wondered how issues relating to contractual enforcement and obligations could be agitated in a writ petition.