HEMIBEN LADHABHAI BHANDERI versus SAURASHTA GRAMIN BANK & ANR on 3 February 2020

SUPREME COURT REPORTS

[2020] 3 S.C.R.

AHEMIBEN LADHABHAI BHANDERI

v.

SAURASHTA GRAMIN BANK & ANR

(Civil Appeal No. 979 of 2020)

BFEBRUARY 03, 2020

[DR. DHANANJAYA Y CHANDRACHUDAND HEMANT GUPTA, JJ.]

Consumer Protection Act, 1986: Deficiency of service –Spouse of the appellant was account holder with the first respondentCbank – A scheme was launched by an insurance company for theaccount holders of the respondent-bank – Under the terms of theagreement between the insurer and the bank, the account holderwas required to submit a Form to the concerned officer of the bankin order to avail insurance cover – Bank was to deduct Rs. 100 asDpremium from the account holder and forward it to the insurer –Insurance cover of Rs. 5 lakhs was offered – Appellant’s case wasthat on 21 July 2008, her husband obtained an insurance formfrom the Bank and submitted it to its Manager – He met with anaccident on 1 August 2008 while travelling on his motorcycle andsuccumbed to injuries on 11 August 2008 – Based on a case ofEaccidental death, the appellant claimed compensation of Rs.5 lakhsunder the insurance claim – The insurer repudiated the claim onthe ground that the premium was not forwarded by the Bank togetherwith the Form – The Bank took objection that the Form had notbeen submitted in time by the deceased and that after submitting itFinitially on 28 July 2008, he had taken it back to discuss the matterwith his relatives – District Forum held that the Bank had beennegligent in not forwarding the form submitted by the deceased tothe insurer within time after completion of all the formalities andthere being no insurance cover, the insured was not liable and Bankwas directed to pay appellant Rs. 5 lakhs – State Commission upheldGthe order of District Forum – In a revision filed by the Bank, theNCDRC reiterated the finding that the insurer could not be heldliable in the absence of an insurance cover – However, the Bankwas held guilty of a deficiency of service and was directed to payan amount of Rs. 2 lakhs (instead of Rs. 5 lakhs as awarded) – OnH

appeal, held: Evidently, there was a deficiency of service on thepart of the Bank in failing to forward the application form to theinsurer and in deducting the insurance premium on time – Insofaras the deficiency of service on the part of the Bank is concerned,there were concurrent findings – There was specific finding of factthat it was failure of the Bank to deduct the premium and to pay itover the insurer which resulted in the insurer repudiating the claimon the ground that no insurance cover existed – No insurance covercame into existence – There were concurrent findings of fact by thethree fora – There was no reason to take a different view,particularly, when the Bank did not challenge the judgment of theNCDRC – There was an evident deficiency of service on its part –There was no justification for the NCDRC to reduce the award ofcompensation against the Bank from Rs. 5 lakhs to Rs. 2 lakhs –Amount of compensation is enhanced from Rs. 2 lakhs to Rs. 5 lakhs.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: Insofar as the deficiency of service on the part ofthe Bank is concerned, there are concurrent findings. TheNCDRC confirmed that there was a deficiency of service on thepart of the Bank. Before it, the Bank admitted that no receiptwas given by it to anyone depositing the application form. As amatter of fact, it has also emerged from the record that threepersons including appellant’s husband had submitted forms onthe same day which had Serial Nos 351, 352 and 353. The defenceof the Bank that the deceased had withdrawn the form and that itwas eventually submitted on 9 August 2008, when a fresh SerialNo 358 was allotted has been rejected by the District Forum andby the SCDRC. The NCDRC has observed that the Bank hasnot explained the details of the application form mentioned atSerial No 352. There is a specific finding of fact that it was thefailure of the Bank to deduct the premium and to pay it over theinsurer which resulted in the insurer repudiating the claim onthe ground that no insurance cover existed. No insurance covercame into existence. There are concurrent findings of fact by thethree fora. There are no reason to take a different view,particularly, when the Bank has not challenged the judgment ofthe NCDRC. The Bank’s explanations are an eye-wash and athinly disguised attempt to defeat a legitimate grievance. There AB

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Awas an evident deficiency of service on its part. Evidently, therewas a deficiency of service on the part of the Bank in failing toforward the application form to the insurer and in deducting theinsurance premium on time. Had the Bank not been deficient inthe performance of its services, the deceased would have beenentitled to an insurance cover in the same terms as was providedBby the insurer to all other account holders desirous of obtaininginsurance. There was no justification for the NCDRC to reducethe award of compensation against the Bank from Rs 5 lakhs toRs 2 lakhs. The ends of justice would be met if the amount ofcompensation is enhanced from Rs 2 lakhs to Rs 5 lakhs. [ParasC8, 9][822 C-H; 823 A-B]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 979 of2020.

From the Judgment and Order dated 25.10.2018 of the NationalConsumer Disputes Redressal Commission, New Delhi in RevisionDPetition No. 3346 of 2013.

Rajinder Singh Rana, Praveen Swarup, Ameet Singh, Ms. ArchanaSharma, Madan Mohan, Lokendra Kumar, Suvesh Kumar, Advs. forthe Appellant.

EMs. Khushboo Kapur, Rajiv Kapur, Sanjay Kapur, Ms. MeghaKarnwal, Ajay Singh, Debasish Mukherjee, Jasdeep Singh, Vivek NarayanSharma, Advs. for the Respondents.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

F1. Leave granted.

2. This appeal arises from a judgment of the National ConsumerDisputes Redressal Commission[1] dated 25 October 2018 in a revisionfrom an order of the State Consumer Disputes Redressal Commission,Gujarat[2].G

3. The spouse of the appellant, Ladhabhai Thakarsibhai Bhanderi,was an account holder with the first respondent at its Dhutarpur Branchin the District of Jamnagar in Gujarat. Oriental Insurance Company 1 NCDRCH2 SCDRC

HEMIBEN LADHABHAI BHANDERI v. SAURASHTA GRAMIN BANK[DR. DHANANJAYA Y CHANDRACHUD, J.]

Limited had launched a ‘group individual accident policy’ for the accountholders of the Bank. Under the terms of the agreement between theinsurer and the Bank, the account holder was required to submit a formto the concerned officer of the Bank in order to avail of an insurancecover. The Bank would deduct an amount of Rs 100 as premium fromthe account holder and forward it to the insurer. An insurance cover ofRs 5 lakhs was offered. The case of the appellant is that on 21 July2008, her spouse obtained an insurance form from the Bank and submittedit to its Manager. He met with an accident on 1 August 2008 whiletravelling on his motorcycle and succumbed to his injuries on 11 August2008. Based on a case of accidental death, the appellant claimed anentitlement to receive a compensation of Rs 5 lakhs under the insuranceclaim. The insurer repudiated the claim on the ground that the premiumhad not been forwarded by the Bank together with the form. The Banktook the objection that the form had not been submitted in time by thedeceased and that after submitting it initially on 28 July 2008, he hadtaken it back to discuss the matter with his relatives.

4. The District Consumer Disputes Redressal Forum[3] allowedthe complaint on 28 January 2013 and came to the conclusion that theBank had been negligent in not forwarding the form submitted by thedeceased 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 lakhswith interest at the rate of 6 per cent per annum from 20 August 2009together with an additional amount of Rs 2,000 towards mental agony adRs 1,500 towards costs.

5. The order was confirmed in appeal by the SCDRC on 28 June2013. In a revision filed by the Bank, the NCDRC reiterated the findingthat the insurer could not be held liable in the absence of an insurancecover. However, the Bank was held guilty of a deficiency of service andwas directed to pay an amount of Rs 2 lakhs (instead of Rs 5 lakhs asawarded by the consumer fora) within a period of 45 days.

6. The appellant, as the legal heir of the deceased, is hence inappeal.

7. The submission which has been urged on behalf of the appellantis that the NCDRC has accepted the position that the Bank was guiltyof a deficiency of service. However, it was urged that the amount of3 District Forum A

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Acompensation has been reduced from Rs 5 lakhs to Rs 2 lakhs withoutany justification. On the other hand, it has been urged on behalf of thefirst respondent that the Bank had all along taken the defence that theform, though initially filled up on 28 July 2008, had been taken back bythe deceased and that it was resubmitted only after office hours on 9August 2008. In the meantime, as a result of the accident which tookBplace on 1 August 2008, the account holder died on 10 August 2008 ofwhich 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 theBank. The Bank has complied with the order of the NCDRC by handingover a cheque in an amount of Rs 2 lakhs to the appellant. The appellantChas declined to encash the cheque of Rs 2 lakhs paid towardscompensation on the ground that she is entitled to the full compensationof Rs 5 lakhs as awarded by the District Forum.

8. Insofar as the deficiency of service on the part of the Bank isconcerned, there are concurrent findings. The NCDRC confirmed thatDthere was a deficiency of service on the part of the Bank. Before it, theBank admitted that no receipt was given by it to anyone depositing theapplication form. As a matter of fact, it has also emerged from the recordthat three persons Rasik Gordhanbhai Dobariya, Harjibhai Bhanderi andthe spouse of the appellant had submitted forms on the same day whichhad Serial Nos 351, 352 and 353. The defence of the Bank that theEdeceased had withdrawn the form and that it was eventually submittedon 9 August 2008, when a fresh Serial No 358 was allotted has beenrejected by the District Forum and by the SCDRC. The NCDRC hasobserved that the Bank has not explained the details of the applicationform mentioned at Serial No 352. There is a specific finding of fact thatFit was the failure of the Bank to deduct the premium and to pay it overthe insurer which resulted in the insurer repudiating the claim on theground that no insurance cover existed. No insurance cover came intoexistence. There are concurrent findings of fact by the three fora. Wehave no reason to take a different view, particularly, when the Bank has not challenged the judgment of the NCDRC. The Bank’s explanationsGare an eye-wash and a thinly disguised attempt to defeat a legitimategrievance. There was an evident deficiency of service on its part.Evidently, there was a deficiency of service on the part of the Bank infailing to forward the application form to the insurer and in deducting theinsurance premium on time. Had the Bank not been deficient in theHperformance of its services, the deceased would have been entitled to HEMIBEN LADHABHAI BHANDERI v. SAURASHTA GRAMIN BANK[DR. DHANANJAYA Y CHANDRACHUD, J.]

an insurance cover in the same terms as was provided by the insurer toall other account holders desirous of obtaining insurance.

9. We are accordingly of the view that there was no justificationfor the NCDRC to reduce the award of compensation against the Bankfrom Rs 5 lakhs to Rs 2 lakhs. The ends of justice would be met if theamount of compensation is enhanced from Rs 2 lakhs to Rs 5 lakhswhich shall be paid over to the appellant within a period of 60 days fromthe date of receipt of a certified copy of this order.

10. The appeal is allowed to the above extent.

11. No order as to costs.

Devika Gujral

Appeal allowed.

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