Consumer Protection – Insurance Policy – Special conditions of the policy – Notice of the special conditions under policy to the account holder – The bank-second respondent, obtained an insurance cover from first respondent-insurer – Under the insurance policy, all debit card holders were the beneficiary of the insurance cover – The appellant’s son was an account holder with the bank and had also availed debit card from the bank – Appellant’s son died in an accident – Appellant as mother of the deceased and nominee made a claim under the insurance cover – District Forum allowed consumer complaint and awarded Rs. 5 lakhs with interest – The SCDRC held that the deceased had failed to use the debit card with a non-ATM transaction during the period of three months immediately prior to the date of the accident and hence, the condition precedent for a claim under the insurance policy was not fulfilled – The order of the SCDRC was affirmed by the NCDRC – The contention of the appellant was that save and except for the covering letter which indicated that an insurance cover against personal accident was being provided to the account holder, neither the insurer nor the bank had ever furnished the insurance policy, its terms and conditions or any document related to the insurance cover to the account holder – Before the Supreme Court, the genesis of the dispute lies in whether the Special Conditions of the policy which was issued by the bank to the insurer were drawn to the notice of the account holder – Held: The terms of the insurance cover had to be specifically communicated to the account holder – The account holder had to be put on notice that the insurance cover would become available only after a transaction took place of the nature spelt out in the special conditions of the insurance policy – Insistence on communication to the account holder is necessary because the policy was issued to the bank by the insurer – The account holders are beneficiaries of the policy – In the present case, the bank did not choose to defend the proceedings – Insurer belongs to the same group as of the bank, it could have summoned for production of documents as to as to whether the debit card usage guide was made available to the account holder – In absence of such exercise, the case of the appellant as set out in the complaint remained uncontroverted – Respondents were not able to establish on a cogent basis that special conditions of the policy were drawn to the notice of the account holder – Accordingly, the judgment of the NCDRC set aside and the judgment of the District Forum restored. Allowing the appeals, the Court
HELD: 1. The insurance cover was governed by a policy between the first and the second respondents. The terms of the insurance cover had to be specifically communicated to the account holder. The account holder had to be put on notice that the insurance cover would become available only after a transaction took place of the nature spelt out in the special conditions of the insurance policy. Insistence on communication to the account holder is necessary because the policy was issued to the bank by the insurer. The account holders are beneficiaries of the policy. In the present case, the bank did not choose to defend the proceedings at all. The insurer who also belongs to the HDFC group could well have applied for a summons to be issued to the bank for production of its records in the course of the evidence which would establish as to whether the debit card usage guide had been made available to the account holder. In this backdrop, and in the absence of such a course of action being adopted, the case of the appellant as set out in the complaint remained uncontroverted. Consequently, unless the respondents were able to establish on a cogent basis that the special conditions of the policy which was issued by the first respondent to the second respondent were drawn to the notice of the account holder for whose benefit the insurance cover extended, the claim ought not to have been rejected. [Para 12][292-H; 293-A-D]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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