Telangana Consumer Commission pulls up TATA AIG and Punjab National Bank

The Telangana State Consumer Disputes Redressal Commission (TGSCDRC) upheld an order of a district commission, and directed TATA AIG Insurance to clear a housing loan following the death of a borrower. The panel with in-charge president Meena Ramanathan and member (Judicial) V.V. Seshubabu found both the insurer and PNB Housing Finance Ltd. liable for deficiency in service.

The complainant, Suddala Sujatha, stated her husband, Doddana Gowd Suddula, died on May 5, 2021, on account of viral pneumonia. Mr. Suddula had availed a housing loan of ₹1.39 crore from PNB Housing Finance Ltd. The loan was insured through a policy which TATA AIG General Insurance had issued.

After her husband’s death, the complainant submitted a claim. But TATA AIG rejected it, stating that the death occurred due to illness, and was not an accident. The complainant approached the District Consumer Commission-I, Hyderabad. In its order, the commission directed the insurer to pay the outstanding loan amount. The commission also held both the insurer and the housing finance company jointly liable to pay ₹1 lakh in compensation and ₹25,000 towards costs.

TATA AIG challenged this by filing an appeal. Ms. Sujatha also filed an appeal seeking a refund of EMIs paid after her husband’s death and increased compensation.

The TGSCDRC dismissed the insurer’s appeal and partly allowing the complainant’s, they observed that the insurer failed had to furnish the proposal form and issued multiple policies without adequate disclosure. It noted certain inconsistencies as well and found fault with PNB Housing Finance for not forwarding the policy documents to the borrowers.

While TATA AIG was directed to clear the outstanding loan within 30 days, PNB Housing Finance was directed to release the mortgaged property documents to the complainant upon settlement of the dues. The complainant has also been permitted to withdraw the compensation and cost amounts deposited by the insurer.

Published - June 12, 2025 02:25 pm IST