• Insurance claiming for mortgage in case of death

Sir, I'am Suriti Hariteja ,age 24, My mother (Suriti Sarala) took a mortgage loan of Rs.35,00,000/-(Thirty five lakhs loan) from Shri Ram City union Finance on dt.26.07.2014. (4 commercial shops)has been mortgaged to this finance.

The whole mortgaged agreement is in between the names of my mother (Suriti Sarala) and Shri Ram City union Finance.

At the time of agreement they took my  (Suriti Hariteja) individual 60 cheques (as the loan is of 60 EMI and Rs.1,06,458/- for each installment), as at that time my mothers cheques were not available so i gave my cheques for them.

So my mother (Suriti Sarala) paid 4 full installments as on dt.19.05.2016.

My mother(Suriti Sarala) was EXPIRED on 11.12.2014.She committed suicide,due to disputes between me and my sisters husband(Kishor) , he registered a false criminal case 302 IPC on me (Suriti Hariteja) stating that my mother comitted suicide because of me, His (Kishor) intention was to grab the entire property after sending me behind the bars.

However case was aqquital and dismissed in the court.

Now the problem is , this Shri Ram Cit Union Finance sent me the notice stating that I have to clear and pay the loan amount as  I am the co-borrower with in 1 week .
I(Suriti Hariteja) asked them (Shri Ram Cit Union Finance) to claim for insurance, but they are saying that insurance will not cover for suicidal death, and moreover You are the accused in that case so we will not cover the insurance.

But I (Suriti Hariteja) argued with he finance that case on me is not proved. So I have a right to claim the insurance.

Moreover this finance have done insurance in their own company. So they started bluffing me that there will be no chance of getting insurance. 

Now (Shri Ram Cit Union Finance) sent me the legal notice stating that I have to pay the total loan amount of Rs.64,68,873/-. failing which they will sent against me the ARBITRATION PROCEEDINGS to pay the total money.

SIR please help me in this issue. THANKING YOU.
Asked 2 years ago in Business Law from Hyderabad, Telangana
1) if you are co borrower of the loan you are liable to pay the debt 

2) it is true that if your mother committed suicide insurance company will not make payment 

3) contact a local lawyer and reply to legal notice .

4) arbitration is an expensive proposition 

5) seek time to make payment . better reach an out of court settlement 

Ajay Sethi
Advocate, Mumbai
44285 Answers
2572 Consultations

5.0 on 5.0

1. The court has acquitted you of the charge of murder but this cannot per se be interpreted to mean that the court has said that the deceased was not murdered. 

2. If arbitration proceedings are launched against you then you  can take the defence that the petitioner should claim the insurance amount instead of making you liable. Unless the arbitration proceedings are actually commenced there is nothing you are required to do.
Ashish Davessar
Advocate, Jaipur
22966 Answers
631 Consultations

5.0 on 5.0

Legally if you are Acquitted by the court, then you are not liable for your mother's death. 
Not sure on what insurance you are talking about. Are you talking about insurance for the mortgage loan?
Need to see the policy document of your insurance cover(normally in case of suicide in the first year of insurance cover, no payment will be made). 
if you have not signed as a co-borrower or a guarantor in the loan agreement but only given cheques then the cheques cannot be presented and you cannot be liable for the loan. 
Rajgopalan Sripathi
Advocate, Hyderabad
1265 Answers
154 Consultations

5.0 on 5.0

On whose name is the property lying now?
Whether you are a co-borrower?
Whether you stood as guarantor?
What is the insurance about in the event of a mortgage loan?
How do you claim insurance on your own life when you are alive?
Why did the finance company accept your post dated cheque?
If the company has issued a legal demand notice, what and how are they fixing the liability on yourname?
Whether you have given a reply notice to them absolving your liability to the loan amount?
If the company is mentioning that they may have to proceed with arbitration proceedings, the result will be that they may have to acquire the properties given as collateral security for the loan, hence ask them to proceed you can participate and defend the same properly.
You may revert with answers if you need more opinions and suggestions to come out of the crisis.
T Kalaiselvan
Advocate, Vellore
34455 Answers
372 Consultations

5.0 on 5.0

Insurance company is right in repudiating the death claim since the death is by suicide within one year from the date of commencement of policy. 
You are a co-borrower hence you are liable to pay the loan amount.  
The evidence for co-borrowing is the cheques you have given therefore you cannot claim innocence.
You cannot say that "as at that time my mothers cheques were not available so i gave my cheques for them."  No finance company will accept a third party's cheque for the loan liability of the borrower.

You say that" I suspect that the documents of my signed id proofs which i gave them for insurance claim -- with that they included me as a co-borrower." 
 It cannot be believed because you have given the cheques at the time of grant of loan so all your signatures and necessary formalities have already been obtained, hence your liability is established.
Better talk to the finance company and re-schedule loan and the repayment accordingly suiting to your revised repayment capacity or else you will be in more trouble.
T Kalaiselvan
Advocate, Vellore
34455 Answers
372 Consultations

5.0 on 5.0

1) you can obtain copy of insurance policy from insurance company 

2) if insurance is only for 15 lakhs not for the whole loan amount co borrowers would be liable to pay balance amount even if insurance company pays Rs 15 lakhs 

3) since you have inherited properties on mother death you   a re liable to repay the loan 

4) if you have not signed loan agreement you are not liable as co borrower

5) financier would seek to recover the money from you and guarantor of the loan 
Ajay Sethi
Advocate, Mumbai
44285 Answers
2572 Consultations

5.0 on 5.0

Shivendra Pratap Singh
Advocate, Lucknow
4973 Answers
78 Consultations

4.9 on 5.0

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