Consumer Protection Act, 1986: Deficiency of service – Spouse of the appellant was account holder with the first respondent bank – A scheme was launched by an insurance company for the account holders of the respondent-bank – Under the terms of the agreement between the insurer and the bank, the account holder was required to submit a Form to the concerned officer of the bank in order to avail insurance cover – Bank was to deduct Rs. 100 as premium from the account holder and forward it to the insurer – Insurance cover of Rs. 5 lakhs was offered – Appellant’s case was that on 21 July 2008, her husband obtained an insurance form from the Bank and submitted it to its Manager – He met with an accident on 1 August 2008 while travelling on his motorcycle and succumbed to injuries on 11 August 2008 – Based on a case of accidental death, the appellant claimed compensation of Rs.5 lakhs under the insurance claim – The insurer repudiated the claim on the ground that the premium was not forwarded by the Bank together with the Form – The Bank took objection that the Form had not been submitted in time by the deceased and that after submitting it initially on 28 July 2008, he had taken it back to discuss the matter with his relatives – District Forum held that the Bank had been negligent in not forwarding the form submitted by the deceased to the insurer within time after completion of all the formalities and there being no insurance cover, the insured was not liable and Bank was directed to pay appellant Rs. 5 lakhs – State Commission upheld the order of District Forum – In a revision filed by the Bank, the NCDRC reiterated the finding that the insurer could not be held liable in the absence of an insurance cover – However, the Bank was held guilty of a deficiency of service and was directed to pay an amount of Rs. 2 lakhs (instead of Rs. 5 lakhs as awarded) – On appeal, held: Evidently, there was a deficiency of service on the part of the Bank in failing to forward the application form to the insurer and in deducting the insurance premium on time – Insofar as the deficiency of service on the part of the Bank is concerned, there were concurrent findings – There was specific finding of fact that it was failure of the Bank to deduct the premium and to pay it over the insurer which resulted in the insurer repudiating the claim on the ground that no insurance cover existed – No insurance cover came into existence – There were concurrent findings of fact by the three fora – There was no reason to take a different view, particularly, when the Bank did not challenge the judgment of the NCDRC – There was an evident deficiency of service on its part – There was no justification for the NCDRC to reduce the award of compensation against the Bank from Rs. 5 lakhs to Rs. 2 lakhs – Amount of compensation is enhanced from Rs. 2 lakhs to Rs. 5 lakhs.
Allowing the appeal, the Court
HELD: Insofar as the deficiency of service on the part of the Bank is concerned, there are concurrent findings. The NCDRC confirmed that there was a deficiency of service on the part of the Bank. Before it, the Bank admitted that no receipt was given by it to anyone depositing the application form. As a matter of fact, it has also emerged from the record that three persons including appellant’s husband had submitted forms on the same day which had Serial Nos 351, 352 and 353. The defence of the Bank that the deceased had withdrawn the form and that it was eventually submitted on 9 August 2008, when a fresh Serial No 358 was allotted has been rejected by the District Forum and by the SCDRC. The NCDRC has observed that the Bank has not explained the details of the application form mentioned at Serial No 352. There is a specific finding of fact that it was the failure of the Bank to deduct the premium and to pay it over the insurer which resulted in the insurer repudiating the claim on the ground that no insurance cover existed. No insurance cover came into existence. There are concurrent findings of fact by the three fora. There are no reason to take a different view, particularly, when the Bank has not challenged the judgment of the NCDRC. The Bank’s explanations are an eye-wash and a thinly disguised attempt to defeat a legitimate grievance. There was an evident deficiency of service on its part. Evidently, there was a deficiency of service on the part of the Bank in failing to forward the application form to the insurer and in deducting the insurance premium on time. Had the Bank not been deficient in the performance of its services, the deceased would have been entitled to an insurance cover in the same terms as was provided by the insurer to all other account holders desirous of obtaining insurance. There was no justification for the NCDRC to reduce the award of compensation against the Bank from Rs 5 lakhs to Rs 2 lakhs. The ends of justice would be met if the amount of compensation is enhanced from Rs 2 lakhs to Rs 5 lakhs. [Paras 8, 9][822 C-H; 823 A-B]
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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