M/S. HDFC BANK LTD vs SMT. POOJA KAPOOR & ANR

Aggrieved by the order dated 29.03.2011 of the State Consumer Disputes Redressal Commission, Haryana Panchkula, (for short, "State Commission"), HDFC Bank Ltd. the petitioner has filed this Revision Petition before this Commission.

In short the case is that Mr. Pankaj Kapoor the husband of the Respondent No.1 had an account with the petitioner bank which issued him a gold debit card. This gold card also gave the benefit of insurance for Rs.5 Lacs in case of accidental death of the account holder. This insurance was under the policy no.130300/46/05/39/00000092 of the petitioner bank with the New India Assurance Co. Ltd, respondent No. 2 in the present revision. The husband of the petitioner Sh. Pankaj Kapoor died on 07.12.2006 in an accident but no claim was preferred within 30 days as required under the terms and conditions of the policy. The version of respondent no.1 is that she was unaware of any such policy even when she proceeded to close the account with the petitioner in July 2008. Later, she came to know about this policy from a third party and then she submitted the claim form on 08.12.2008 for insurance amount to the bank and the bank forwarded the same to the respondent no 2 which was rejected as it was not submitted within 30 days of the death of the account holder. Respondent no.1 then filed consumer complaint before the District Consumer Disputes Redressal Forum, Sonepat (for short, "District Forum") which vide its order dated 15.12.2009 ordered as follows: "We, therefore, direct the respondent to make the payment of Rs. 5,00,000/- on account of death claim of deceased Pankaj Kapoor being Gold Card Holder with compensation of Rs. 5,000/- on account of mental agony, harassment and litigation expenses suffered by her at the hands of the respondent bank. The order be complied within one month. Accordingly, the present complaint stands disposed of."

Against this order of the District Forum, the opposite party / petitioner filed an appeal before State Commission which was dismissed on 29.03.11. Against this order of the State Commission the present Revision Petitioner has been filed.

We heard the ld. Counsel for the petitioner and respondent no.1 in person as well as the learned counsel for respondent no.2. We also perused the documents carefully. The Ld. Counsel for the petitioner stated that the claim was highly time barred as this was to be filed within 30 days of the accidental death whereas the same was filed after one and a half years. The petitioner bank also did not have any information about the accident of the account holder and about his death as no family member informed the same to the bank. Bank is bound by the terms and conditions of the policy issued by the Respondent No.2 wherein the period for preferring the claim has been prescribed as 30 days from the date of death. However, the Bank after receiving the claim forwarded it to the Respondent No. 2 who finally rejected the same on account of being highly time barred. It is also to be noted that the bank has no role in agreeing or denying the insurance claim. Hence no deficiency in service could be attributed to the bank and the petitioner bank cannot be asked to pay the insurance amount. Thus, the order of the State Commission is prima-facie illegal and suffers from material irregularity.

Respondent No. 1 stated that she did not have any information about gold card issued to her husband and the insurance attached with this card. She only came to know about this scheme after closure of the account of the deceased when a third person informed her about this policy. The terms and conditions of the policy were also not known to her. As Mr. Pankaj Kapoor has died in an accident, his case is fully covered under the scheme. So far as the petitioner and the respondent no. 2 are concerned, it should not really make any difference for them whether the claim is submitted within 30 days or afterwards because the claim will be processed only once for one person. The District Forum has allowed the claim and State Commission has dismissed the appeal filed by the petitioner. Thus both the fora below have upheld the claim of the Respondent No. 1.

The learned counsel for the respondent No.2 stated that the insurance company was not a party in the proceedings at fora below. Moreover, the claim of the deceased cannot be allowed as it was submitted after one and a half years of the death of the deceased whereas, it was to be submitted within 30 days of the death of the deceased as per the policy. The policy is a contract between the insurer and the insured based on trust and has to be followed strictly according to the terms and conditions of the policy.

The State Commission has observed deficiency in service on the part of the petitioner-bank and has observed the following in its order dated 29.03.2011:- "It is admitted fact that Pankaj Kapoor (now deceased)-husband of the complainant Gold Card holder in respect of his account No.0911000105282 with the opposite party-Bank. It is also admitted that after the death of her husband on 7.12.2006, the complainant had closed the above said account upon which the opposite party had issued a cheque of Rs.14,009.02 dated 16.7.2008 i.e. the balance amount in the aforesaid account was paid to the complainant. In other words it had come to the notice of the Bank that Pankaj Kapoor Gold Card Holder had died and as per the agreement between the Bank and the Insurance Company, the bank was supposed to inform the Insurance Company in this regard and to collect the insured amount of Rs.5 lacs as well as credit the same towards the aforesaid account prior to closing the account, but no such steps were taken by the Bank in this regard. We, therefore, feel that when it had come to the notice of the Bank that the account holder had died but still the Bank failed to put complainant''s claim with the Insurance Company which amounts to deficiency in service. In view of the agreement between the Bank and the Insurance Company, it is the Bank who is under an obligation to honour its commitment to the Gold Card Holder as per the scheme of the Bank and the complainant being nominee/legal heir of the deceased Pankaj Kapoor-Gold Card Holder, who is complainant''s husband, cannot be deprived of this claim simply on the ground that the complainant had not preferred the claim in time. The complainant has nowhere apprised about the preferring of the claim after the death of her husband. The Bank and the Insurance Company have erred in denying the claim to the complainant for the simple reason that no claim was preferred. The bank cannot hold the complainant responsible for any shortcoming when the Bank was aware about the death of Pankaj Kapoor. The plea of the Bank that the Insurance Company has not been impleaded as a party in the case, does not make any difference. Even when the Bank has put in appearance before the District Forum for the first time, it had disclosed the name of the Insurance Company but it is not the case of the Bank that it had moved any application to implead the Insurance Company as a party. Therefore, for non-impleading of the Insurance Company as a party to the complaint, the fault does not lie on the part of the complainant but with the Bank."

The State Commission has found the petitioner responsible for deficiency in service and has accordingly ordered to pay the insurance amount to the respondent No.1. In fact, as per the Gold Card Scheme, the insurance amount was to be paid by the insurance company i.e. respondent No.2 in the present revision petition. But the State Commission has solely held the petitioner responsible for meeting out the deficiency in service by ordering the payment of full insurance amount to the respondent No.1 by the petitioner. From the above quoted observations of the State Commission, the deficiency in service on the part of the bank is clear and hence the arguments of the petitioner-bank cannot be accepted that there was no deficiency in service on their part and it was the insurance company that rejected the insurance claim. We are of the view that the compensation awarded should be commensurate with the deficiency in service. In the present case, even if the insurance claim would have been sent at the time of closure of the account by the petitioner-bank, the insurance company might have rejected the claim as being time barred. The petitioner has been found deficient in not informing the respondent No.1 to submit the claim at the time of the closure of the bank account. Obviously, under the scheme, the bank was not responsible for paying the insurance amount to the nominee of the insured. Hence, we do not support the view of the State Commission that the full insurance amount should be paid by the petitioner-bank to mitigate the deficiency in service. We feel that interest of justice would be served, if petitioner-bank pays a compensation of Rs.2 lakhs (Rupees Two Lakhs only) to the respondent No.1 for their deficiency in service.

Accordingly, revision petition is partly allowed and the petitioner-HDFC Bank Ltd. is directed to pay to the respondent No.1 Rs.2 lakhs (Rupees Two Lakhs only) instead of Rs.5 lakhs along with interest @ 8% p.a. from the date of the order of the District Forum i.e. 15.12.2009 till realization. The order dated 29.03.2011 of the State Commission and order dated 15.12.2009 of the District Forum stand modified to this extent. This order be complied with within 45 days from the date of this order, failing which, the interest @ 12% p.a. shall be payable by the petitioner instead of 8% p.a.

No order as to costs.