Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No. 979 of 2020   (Arising out of SLP (C) No 5637 of 2019)

Hemiben Ladhabhai Bhanderi                   .... Appellant(s)

      Versus

Saurashta Gramin Bank & Anr                  ....Respondent(s)

J U D G M E N T

Dr Dhananjaya Y Chandrachud, J

Leave granted.

 This  appeal  arises  from  a  judgment  of  the  National  Consumer

Disputes Redressal Commission1 dated 25 October 2018 in a revision from

an order of the State Consumer Disputes Redressal Commission, Gujarat2.

The spouse of the appellant, Ladhabhai Thakarsibhai Bhanderi, was

an account holder with the first respondent at its Dhutarpur Branch in the

District of Jamnagar in Gujarat.  Oriental Insurance Company Limited had

launched a ‘group individual accident policy’ for the account holders of the

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 of an insurance cover.  The Bank would

deduct  an amount  of  Rs 100 as premium from the account holder and

forward it to the insurer.  An insurance cover of Rs 5 lakhs was offered.

1 NCDRC 2 SCDRC

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The case of the appellant is that on 21 July 2008, her spouse 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  his  injuries  on  11  August  2008.   Based  on  a  case  of

accidental  death,  the  appellant  claimed  an  entitlement  to  receive  a

compensation  of  Rs  5  lakhs  under  the  insurance  claim.   The  insurer

repudiated  the  claim  on  the  ground  that  the  premium  had  not  been

forwarded by the Bank together with the form. The Bank took the 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.

The  District  Consumer  Disputes  Redressal  Forum3 allowed  the

complaint on 28 January 2013 and came to the conclusion 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.   There

being no insurance cover, the insured was held not to be liable.  The Bank

was directed to pay the appellant an amount of Rs 5 lakhs with interest at

the rate of 6 per cent per annum from 20 August 2009 together with an

additional amount of Rs 2,000 towards mental agony ad Rs1,500 towards

costs.

The order was confirmed in appeal by the SCDRC on 28 June 2013.

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

3 District Forum

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by the consumer fora) within a period of 45 days.    

The appellant, as the legal heir of the deceased, is hence in appeal.  

The submission which has been urged on behalf of the appellant is

that the NCDRC has accepted the position that the Bank was guilty of a

deficiency  of  service.  However,  it  was  urged  that  the  amount  of

compensation has been reduced from Rs 5 lakhs to Rs 2 lakhs without any

justification. On the other hand, it  has been urged on behalf of the first

respondent that the Bank had all along taken the defence that the form,

though initially  filled  up on 28 July  2008,  had been taken back by the

deceased and that it was resubmitted only after office hours on 9 August

2008.  In the meantime, as a result of the accident which took place on 1

August 2008, the account holder died on 10 August 2008 of which the

Bank was intimated on the next day.  In these circumstances, it was urged

that there was no deficiency of service on the part of the Bank.  The Bank

has complied with the order of the NCDRC by handing over a cheque in an

amount  of  Rs  2  lakhs  to  the  appellant.  The  appellant  has  declined  to

encash  the  cheque  of  Rs  2  lakhs  paid  towards  compensation  on  the

ground  that  she  is  entitled  to  the  full  compensation  of  Rs  5  lakhs  as

awarded by the District Forum.

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  Rasik Gordhanbhai Dobariya, Harjibhai Bhanderi and

the spouse of the appellant had submitted forms on the same day which

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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.  We have 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.  

We are accordingly of the view that 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 which shall be

paid  over  to  the appellant  within a period of  60 days from the date of

receipt of a certified copy of this order.

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The appeal is allowed to the above extent.

No order as to costs.    

  …………...…...….......………………........J.

                                                                   [Dr Dhananjaya Y Chandrachud]

…..…..…....…........……………….…........J.                              [Hemant Gupta]

New Delhi;  February 03, 2020  

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