Appeal arising from SARFAESI action where borrower died. Tribunal held bank failed to recover loan from insurance company due to non-issuance of policy, dismissing appeal to quash DRT order.
Appeal dismissed. No order as to costs.
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Appeal No. 317 of 2018-DRAT-Kolkata
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
Appeal No. 317 of 2018
(Arising out of S.A. No. 71 of 2015 in DRT-I, Kolkata)
THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON
UCO Bank, a Banking Company constituted under the Banking Companies (Acquisition ad Transfer of Undertakings) Act, 1979 as amended by Banking Laws (Amendment Act, 1985), carrying on business from its branch office at Liluah Branch, “Puspanjali Apartment”, 268, G.T. Road, Bellurmath, Howrah – 711 204.
-Versus-
Counsel for the Appellant … Mr. Raghu Nath Ghose, Mr. Debrup Bhattacharrya and Ms. Shusna Santra Counsel for Respondents … Mr. Debasish Karrrmakar, Mr. Parikshit Lakhottia and Mr. Sayan Ojha
JUDGMENT : 20th January, 2023
THE APPELLATE TRIBUNAL :
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Appeal No. 317 of 2018-DRAT-Kolkata
Instant Appeal arises against an order dated 3rd January, 2017 passed by Learned DRT-I, Kolkata allowing the SARFAESI Application. 2. Heard Learned Counsel for the parties and perused the record. 3. It appears that one Sarwan Kumar Shah availed a House Loan of Rs.5.00 lac and an amount of Rs.5.25 lac was sanctioned by the Appellant. It is submitted that out of this amount of Rs.5.00 lac, Rs.25,693.00 was made as One Time Premium to the Life Insurance Corporation under ‘UCO Griha Lakshmi Yojna’. Accordingly loan was covered for repayment in the virtual death of the borrower.
4. Borrower, Sarwan Kumar died on 29th March, 2013. Intimation was sent to the Bank but further steps were not taken by the Bank. Thereafter, there was some default in payment. Amount was classified as N.P.A. on 30th June, 2014. SARFAESI action was initiated. Notice under Section 13 (2) was issued on 17th November, 2014 while notice under Section 13 (4) was issued on 20th February, 2015. Symbolic possession was taken on 25th February, 2015.
5. Bank filed reply with an assertion that Life Insurance Corporation was a necessary party and in absence of Insurance Company the matter cannot be decided. It is further pleaded that the borrower did not appear for the medical check-up which was a mandatory formality to be completed by the borrower; hence the borrower is at fault and the Insurance Company is not at fault. Bank is not responsible for recovery.
6. It is not in dispute that the loan was sanctioned by the Bank. It is also admitted that the borrower has died. It is submitted that the loan account was insured by the Life Insurance Corporation by making payment of One time premium. As far as liability of the borrower is concerned, if he has not appeared for the medical examination, what action, if any, was taken by the Bank or by Insurance Company? Further, as per the letter dated 20th March, 2015, it is communicated by the Life Insurance Corporation to the Bank that there was a requirement of full medical check-up of the borrower. There is nothing
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Appeal No. 317 of 2018-DRAT-Kolkata on record to show that any communication was ever sent to the borrower to the effect that he should make himself available for full medical report. For want of such communication to the borrower, it cannot be accepted that he was required to produce himself for full medical examination. Communication was sent by the Insurance Company and it was the duty of the Bank to communicate the Borrower to comply with the directions. Scheme of the Policy is also not on record. Further, the proposal sent by the borrower is also not on record. Admittedly, insurance policy was not issued, if it is so what action Bank had taken in this regard? If the premium was paid and policy was issued appropriate action should have been taken against the insurance company as well as the borrower. It is also borne from the record that agreement executed between the Bank and the Insurance Company is not on record and the terms and conditions of the agreement also does not find place on record.
7. Learned DRT has specifically held that on the death of the borrower, it was the responsibility of the Bank to recover the amount from the insurance company. Even if it is accepted the Insurance Policy was not issued, even then it was the responsibility of the Bank to immediately inform the borrower. The first letter was sent to the borrower after his death in 2015 that too after about eight years of sanction of the loan in 2007. It is apparent from the record that Bank has not performed its duty as per law. Accordingly, I do not find any merit in the appeal.
8. Appeal is liable to be dismissed. Learned Counsel for Respondent submits that the borrower has paid a total sum of Rs.4,58,990.00 approximately which however is not accepted by the Bank.
O R D E R
Accordingly, the appeal is dismissed. No order as to costs.
File be consigned to Record room.
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Appeal No. 317 of 2018-DRAT-Kolkata
Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.
Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.
Order dictated, signed and pronounced by me in the open Court on this the 20th day of January, 2023.
(Anil Kumar Srivastava,J) Chairperson
Dated: 20th January, 2023 19/ac
UCO Bank
Smt. Usha Devi
Shri Awadh Shaw
Shri Sanjoy Shaw
Shri Shyam Shaw
Shri Arun Shaw
Anil Kumar Srivastava
As recorded by the court registry
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