Case Note & Summary
The appeal arose from a judgment of the National Consumer Disputes Redressal Commission (NCDRC) dated 25 October 2018, which reduced the compensation awarded to the appellant, Hemiben Ladhabhai Bhanderi, from Rs 5 lakhs to Rs 2 lakhs. The appellant's spouse, Ladhabhai Thakarsibhai Bhanderi, was an account holder with Saurashtra Gramin Bank. Oriental Insurance Company Limited had launched a group individual accident policy for account holders. The deceased obtained an insurance form from the Bank on 21 July 2008 and submitted it to the Bank Manager. He met with an accident on 1 August 2008 and succumbed to his injuries on 11 August 2008. The appellant claimed Rs 5 lakhs under the insurance policy. The insurer repudiated the claim on the ground that the premium had not been forwarded by the Bank. The Bank contended that the form was initially submitted on 28 July 2008 but was taken back by the deceased and resubmitted only after office hours on 9 August 2008. The District Consumer Disputes Redressal Forum allowed the complaint on 28 January 2013, holding the Bank negligent and directing it to pay Rs 5 lakhs with interest. The State Commission confirmed this order. In revision, the NCDRC upheld the finding of deficiency of service but reduced the compensation to Rs 2 lakhs. The Supreme Court noted concurrent findings of fact by all three fora that the Bank failed to deduct the premium and forward the form, leading to the insurer's repudiation. The Court found the Bank's explanations to be an eye-wash and held that there was no justification for reducing the compensation. The Court restored the award of Rs 5 lakhs, to be paid within 60 days, and allowed the appeal.
Headnote
A) Consumer Law - Deficiency of Service - Bank's Failure to Forward Insurance Premium - The Bank was held guilty of deficiency of service for failing to deduct premium and forward the insurance form to the insurer, resulting in repudiation of the claim. The Supreme Court restored the full compensation of Rs 5 lakhs as awarded by the District Forum, holding that the NCDRC's reduction was without justification. (Paras 1-5) B) Consumer Law - Compensation - Quantum - Reduction Without Justification - The Supreme Court held that where concurrent findings of deficiency of service exist, the compensation should reflect the actual loss suffered. Reducing the amount from Rs 5 lakhs to Rs 2 lakhs was unjustified as the deceased would have been entitled to the full insurance cover of Rs 5 lakhs but for the Bank's negligence. (Paras 4-5)
Issue of Consideration
Whether the National Consumer Disputes Redressal Commission was justified in reducing the compensation awarded by the District Forum from Rs 5 lakhs to Rs 2 lakhs despite concurrent findings of deficiency of service against the Bank.
Final Decision
The Supreme Court allowed the appeal, set aside the NCDRC's reduction of compensation, and restored the award of Rs 5 lakhs to be paid by the Bank to the appellant within 60 days from the date of receipt of a certified copy of the order. No order as to costs.
Law Points
- deficiency of service
- compensation for loss of insurance cover
- concurrent findings of fact
- reduction of compensation without justification
