BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.395 of 2015

Date of Instt. 08.09.2015

Date of Decision : 30.03.2016

1. Kuldeep Kaur aged about 47 years W/o Bhupinder Singh;

2. Bhupinder Singh aged about 44 years S/o Tarlochan Singh;

3. Atinderpal Singh aged about 20 years son of Bhupinder Singh;

all residents of 91, Sangam Vihar, Ladhewali, Jalandhar District Jalandhar.

..........Complainants Versus

1. Punjab National Bank, Branch Office:-University Road, Ladhewali, Jalandhar through its Branch Manager.

2. Punjab National Bank, Circle Office:-Civil Lines, Jalandhar through its Senior Manager (IT).

3. Insurance Company of OPs No.1 & 2.

.........Opposite parties

Complaint Under the Consumer Protection Act, 1986.

Before: Sh.Ashwani Kumar Mehta (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.DDS Nayyar Adv., counsel for the complainant.

Sh.MS Sood Adv., counsel for the OP No.1 & 2.

Order

Ashwani Kumar Mehta (President)

1. Complainant Kuldeep Kaur etc have filed the present complaint against Punjab National Bank Ladhewali, Jalandhar etc opposite parties (OPs) under the Consumer Protection Act, 1986 (hereinafter to be called as 'Act') on the allegations of deficiency in service, unfair trade practice etc with further prayer to direct the OPs to pay Rs.50,000/- as accidental death insurance and Rs.20,000/- as compensation for harassment etc and Rs.10,000/- as litigation expenses alongwith interest.

2. The case of the complainant in brief is that Gurinder Pal Singh was son of complainant No.1 and 2 and was brother of complainant No.3 and said Gurinder Pal Singh was having an account No.6607001500000588 with OP No.1; that at the time of opening of the account, a ATM cum Debit Card was issued by OP No.1; that as per scheme of the OP, Gurinder Pal Singh was insured with OP No.3 for insurance amount of Rs.50,000/- in the event of accidental death of Gurinder Pal Singh and the said amount was to be disbursed to the legal heirs of Gurinder Pal Singh in case of accidental death; that no specific terms and conditions with regard to the scheme were issued to complainant; that Gurinder Pal Singh died in accidental death on 25.11.2013 while he was driving a motorcycle No. PB21-D-3843 and a FIR No.184 dated 25.11.2013 under section 279, 304 IPC was registered at PS Kharar and postmortem was conducted at Civil Hospital, Kharar; that when complainant No.2 came to know about the compensation scheme, a claim application was lodged for claiming Rs.50,000/- and all the requisite documents were sent to OP No.1 who approved the application and recommended the same to OP No.2 on 14.10.2014 and even thereafter reminders were sent but with no effect; that complainant then served legal notice dated 21.3.2015 to OPs but that also failed to have any effect on the OPs; that the act and conduct of the OPs amounts to deficiency in service, malpractice and unfair trade practice and it caused harassment, mental tension and agony to the complainant. Hence, complaint was filed.

3. After formal admission of the complaint, notice was issued to the OPs and OPs No.1 & 2 appeared through counsel and filed written statement contesting the complaint on the preliminary objections that claim is barred by time; that the OPs issued TBD circular dated 22.1.2014 regarding the PNB Monetary Compensation Scheme and the same was also posted on the website of the OPs for general circulation and information of the customers of the OPs; that clause no.5 & 6 provides that the claim should be lodged within 90 days from the date of death of the account holder and ATM/Debit Card should be in active stage and had been used for financial transaction within 90 days preceding the date of accident leading to untimely death and the application is to be filed to the base branch within 90 days of the death; that the claim of the complainant was rejected as the claim was filed after 90 days of death of Gurinder Pal Singh and claim was rejected vide letter dated 4.11.2014. The complaint was also contested on merits on the same lines as were taken in the preliminary objections. All other allegations mentioned in the complaint were denied with a prayer to dismiss the complaint.

4. Both the parties were given sufficient opportunities to lead evidence in order to prove their respective cases.

5. In support of his complaint, learned counsel for the complainant has tendered into evidence, affidavit Ex.CA alongwith copies of documents Ex.C1 to Ex.C11 and closed evidence.

6. On the other hand, learned counsel for the OPs No.1 & 2 has tendered into evidence, affidavit Ex.RA alongwith copies of documents Ex.R1 to Ex.R3 and closed evidence.

7. We have carefully gone through the record and also heard the learned counsels for the parties.

8. The learned counsel for the complainant contended that Gurinder Pal Singh was having account in OP No.1 bank and he died on 25.11.2013 in a road side accident and complainant No.3 is nominee of Gurinder Pal Singh deceased in the bank account and as per scheme of the OP bank, claim was filed by the complainant for payment of compensation amount and same was also recommended by OP No.1 bank but same was illegally rejected by OP bank though terms and conditions of the scheme was never sent to the complainant or to Gurinder Pal Singh and as such complainants are not governed by those rules and as such complainants are entitled to payment of compensation amount as per scheme and as such the complaint is required to be allowed with cost.

9. The learned counsel for the OP bank contended that OP No.3 insurance company were wrongly impleaded in the complaint as no insurance company is involved in the scheme and as per scheme, the compensation amount was to be paid by the OP bank and not by any insurance company. He further contended that terms and conditions of the scheme were posted on the website of the bank and as such all members of the scheme were duly informed and have the knowledge of the terms and conditions of the scheme. He further contended that as per terms and conditions of the scheme, the ATM Card should be an active card and should have been used within 90 days from the death of the account holder and claim is also to be filed within 90 days from the date of death of the account/AMT Card holder. He further contended that Gurinder Pal Singh account holder died on 25.11.2013 as per allegations of the complaint but claim was filed on 14.10.2014 that is much after 90 days of the death of account holder and as such the claim was not maintainable and the same was rightly rejected vide letter dated 17.11.2014 Ex.R3. He further contended that complaint is false and is not maintainable in view of terms and conditions of the scheme and is liable to be dismissed.

10. It is admitted fact in this case that deceased Gurinder Pal Singh was having an account in the OP bank and was also a ATM/Debit Card holder. It is also admitted fact that the OP bank floated a scheme named 'PNB Monetary Compensation Scheme' vide which compensation is to be paid in case of accidental death of ATM/Debit Card holder and it is also admitted fact in this case that in case of accidental death of active ATM/Debit Card holder, amount of Rs.50,000/- was to be paid as compensation. It is also admitted fact in this case that Gurinder Pal Singh deceased died in an accident. It is also admitted fact in this case that after the death of Gurinder Pal Singh, a claim was lodged for payment of compensation under the scheme which was rejected by OP bank on the ground that claim has been filed after a period of 90 days from the death of Gurinder Pal Singh and as such claim was time barred.

11. It is the contention of the complainant who are legal heirs of deceased Gurinder Pal Singh that the scheme was never circulated to account holder nor the terms and conditions or other clauses were made known to the account holder/ATM/Debit Card holder and as such the account holder or their legal heirs entitled for compensation under the scheme are not bound by terms and conditions of the scheme.

12. The contention of the OP bank is that OP No.3 insurance company has been impleaded wrongly as the ATM/Debit Card holder was not insured with any insurance company by the OP bank rather the scheme for payment of compensation was itself floated by the OP bank and compensation, if any was to be paid by OP bank itself and not by any insurance company. Gurinder Pal Singh admittedly died on 25.11.2013. Complainants have proved recommendation letter Ex.C4 vide which OP bank recommended the case of the complainant for compensation. It shows that the claim was recommended for payment of compensation on 14.10.2014 whereas Gurinder Pal Singh died on 25.11.2013. As such the claim was filed or recommended after 90 days from the death of Gurinder Pal Singh and as per clause 6 of scheme Ex.R1, the claim was to be filed within 90 days from the death of the ATM/Debit Card holder and consequently OP bank rejected the claim of the complainant vide letter Ex.R3 dated 17.11.2014 on the ground that claim has been submitted after 90 days from the death of Gurinder Pal Singh. In case titled as Paramjit Kaur Vs. Branch Manager, The Ferozepur Central Co-op Bank etc, the account holder died and claim for compensation was filed by his legal heirs but the same was rejected on the ground that information about the death of account holder was not given within 90 days from the death of account holder and as such bank was not liable to pay the compensation. Thereafter the complainant filed a complaint in the District Disputes Redressal Forum, Ferozepur which was allowed and appeal was filed against the order before Hon'ble State Commission, Chandigarh but the appeal was dismissed and it was observed that claim should not be rejected simply on technical grounds. In this case the Hon'ble State Commission observed that a circular dated 20.9.2011 was issued by Insurance Regulatory Development Authority (IRDA) to all the insurance companies which reads as under:-

“Circular

To: All Life insurers and non-life insurers

Re: Delay in claim intimation/documents submission with respect to

I. All life insurance contracts and

II. All Non-life individual and group insurance contract.

The authority has been receiving several complaints that claims are being rejected on the ground of delayed submission of intimation and documents.

The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specified number of days in necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances=:

:= The insurers' decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.

Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.=

== The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurers' stand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.”

J.Harinarayan

Chairman.”

13. Even in this circular, it was observed that limitation clause does not work in isolation and is not absolute and one needs to see the merits and goods spirit of the clause, without compromising on bad claims and rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation. It was advised in this circular to all the insurance companies that insurer must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time. On the basis of this circular, the Hon'ble National Commission in case tilted National Insurance Co.Ltd Vs. Kulwant Singh 2014(iv) CPJ 62 (NC) observed that the insurance company should not repudiate the claim merely on account of delay in giving the information particularly when there was absolute no delay in lodging the FIR with the police. The same principal of law was observed by Hon'ble National Commission in case titled as Reliance General Insurance Co.Ltd (Petitioner) Vs. Sri Avvn Ganesh (Respondent) 2012 (1) CPJ 176.

14. In the case in hand also, the claim of the complainant have been rejected by the OP bank only on the ground that information regarding the death or claim has been filed after 90 days from the death of Gurinder Pal Singh. In this case, the OP bank have not brought any evidence on the file to show that the scheme have been circulated amount all the account holder/ATM-Debit Card holder much less to their legal heirs. Normally legal heirs are not aware about the scheme itself and they are informed about the scheme only after the death of the account holder and in this eventuality, it is not expected that the legal heirs would file the claim as per terms and conditions of the scheme which has never been circulated among the account holder much less legal heir of the account holder. In this eventuality, the legal heir i.e. complainants are not bound by any such terms and conditions of the scheme. Otherwise, also in view of the case law discussed above, the delay in filing the claim or giving information regarding the death of account holder to the bank is not absolute conditions and bank should distinguish between the genuine cases and bad claim cases.

15. In the light of above discussion, it is evident that the OP bank have wrongly rejected the claim of the complainant merely on account of delay in filing the claim or giving information regarding the death of the account holder and it amounts to deficiency in service and unfair trade practice. Accordingly, the complainants are entitled to compensation amount and are also entitled to compensation which can be allowed to the complainant in the form of interest.

16. In the light of above discussion, the complaint succeed and the same is hereby allowed with cost in favour of the complainant and against the OP bank and OP bank is directed to disburse the compensation to the complainants as per scheme and complainants are also entitled to interest in lieu of compensation @ 9% per annum on the compensation amount from the date of filing of the claim till realization. The complainants are also allowed Rs.2000/- as litigation expenses. The OP bank is directed to comply with the order within one month from the date of receipt of copy of order. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Ashwani Kumar Mehta

30.03.2016 Member Member President