Need Legal Advice Regarding Life Insurance Claim On Loan Against Property

My father took a Loan Against Property against our house in 2016 for a term of 10 years from HDB financial services (NBFC from HDFC group) There was a life insurance policy that was issued at the time of loan sanction from HDFC life insurance company at a one time premium of Rs 70000 (current outstanding loan amount is around Rs 35 lakhs). My father expired in July 2019 and we filed for death claim through HDB. However, we were told by HDB that HDFC life has rejected the claim because the policy has expired on Aug 2018 post which we asked for the copy of original policy bonds as proof of tenure but they refused to provide the papers. On repeated follow-up and complaint of HDFC life on IRDA\'s grievance redressal portal, HDFC life responded that the policy was never in effect as it was subjected to a health checkup which my father didn\'t appear for and as a result the policy was cancelled and refund adjusted in loan amount in Jan 2017. I verified the same by asking for the statement of loan account from the bank. So, now I want to sue the bank(and or HDFC life) for not informing us that the policy was cancelled and not in effect because we continued to believe that my father is insured. Now, we think that this is negligence on part of bank to not inform us about the policy cancellation so that we could take another policy to secure the loan. Please advise if it is a valid argument to file a case against the bank . or do you think that this will not stand in the court of law. If yes, then where should we file the case, in court (for civil matters) or on consumer forum. Also, even if the court consider it as negligence on bank\'s part and ask them to bear the loan partially, it would be a good relief.