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Omission on part of bank resulting in lapse of insurance policy amounts to ‘deficiency in services’

National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission (NCDRC): The Bench comprising of R.K. Agarwal, J., M. Shreesha, Member, dismissed the revision petition filed against the order of Haryana State Consumer Disputes Redressal Commission.

The respondent had purchased an insurance policy from Oriental Insurance Company which was valid till 28-12-2015, however, the respondent had requested for renewal of the said policy and subsequently, the petitioner-bank had deducted a sum of Rs. 4,726/- from respondent’s account for preparing a draft in favour of the insurance company. The draft was not submitted to the insurance company and hence the policy expired. Thereafter, petitioner’s wife met with an accident and the petitioner had to spend Rs. 3,50,000/- for his wife’s treatment.

The Commission, in this case, observed that the fact about the existence of the demand draft was not contested by the petitioner-bank, neither it was denied that they had deducted Rs. 4,726/- from respondent’s account. Had the draft been deposited in time, the policy would have been renewed and the expenses incurred by petitioner would have been covered by the policy.

The Commission held that since the petitioner-bank had deducted the amount and also prepared the draft but did not give it to the insurance company, this amounted to deficiency in services on the part of the petitioner bank. The Commission upheld the order of the state commission, directing petitioner to pay Rs. 3,10,000/- to the respondent as compensation on account of deficiency of services. [Oriental Bank of Commerce v. Rajesh Kumar,2018 SCC OnLine NCDRC 307, order dated 30-07-2018]

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