Insurance on ATM-cum-Debit Card: NCDRC Asks New India Assurance To Pay Rs5 Lakh Claim


Upholding orders passed by the fora below, the national consumer dispute redressal commission (NCDRC) asked New India Assurance Co Ltd to pay an insurance claim of Rs5 lakh to the family of the deceased holder of a debit-cum-ATM card from Axis Bank.

In an order issued last week, the bench of Subhash Chandra (presiding member) says, “This Commission, in exercise of its revisional jurisdiction, is not required to re-assess and re-appreciate the evidence on record when the findings of the lower fora are concurrent on facts. It can interfere with the concurrent findings of the fora below only on the grounds that the findings are either perverse or that the fora below have acted without jurisdiction. Findings can be concluded to be perverse only when they are based on either evidence that have not been produced or based on conjecture or surmises i.e. evidence which are either not part of the record or when material evidence on record is not considered.”

New India Assurance had filed a revision petition against orders passed by the district consumer disputes redressal forum at Panchkula and the Haryana state consumer disputes redressal commission.

Manoj Kumar from Panchkula in Haryana had, on 7 October 2011, opened a savings bank account in Axis Bank. As per the scheme of Axis Bank, a debit-cum-ATM card was issued to Manoj Kumar. Axis Bank had a credit card package insurance policy with New India Assurance covering the risk of lost card liability and personal accident insurance, subject to eligibility criteria and exceptions of the policy.

On 18 November 2011, Manoj Kumar died in a road accident. As his nominee, his father, Jagdish Chand, approached Axis Bank to pay the accident insurance claim. The Bank informed Jagdish Chand about the procedure to file a claim with the insurer. On 5 July 2012, he issued a legal notice to Axis Bank.

However, New India Assurance alleged that Mr Chand and his wife, the nominees of Manoj Kumar, neither followed the procedure for the claim nor fulfilled the eligibility criteria but sent the documents to Axis Bank on 17 July 2012, which were merely forwarded to the insurer on 19 July 2012.

Mr Chand and his wife made several futile efforts to have the claim released; however, Axis Bank did not honour the claim which amounted to unfair trade practice and deficiency in service and caused mental agony and harassment to them. They then filed a complaint before the district forum.

Axis Bank contended that the formalities of filing all documents with the claim within 10 days of the date of death had not been done, and only documents were filed on 17 July 2012. It was stated that the insurance cover was an additional facility provided by the insurance company and there was no contract between or agreement between Mr Chand and his wife and Axis Bank, and the claim was to be settled by the insurance company.

New India Assurance also denied the allegations and submitted in its written statement that Manoj Kumar had an accident insurance cover of Rs2 lakh with it. It denied that any transaction had been made with the debit card and, as the death was within 42 days of the opening of the account, he was not entitled to any personal accident insurance coverage benefit. New India Assurance also contended that though the death occurred on 18 November 2011, Mr Chand and his wife submitted the requisite papers to the insurance company after 243 days on 19 July 2012. Given the delay, New India Assurance says there was no liability on the insurer to pay the claim.

The insurer also contended that the accident cover policy was applicable only if a successful payment transaction at any merchant outlet was made within 90 days before the incident, which had not been proven in the case of Manoj Kumar.

In its order on 24 September 2013, the district forum allowed the complaint. It directed New India Assurance to pay the insurance amount of Rs5 lakh under the policy along with interest at 9% per annum from the due date till the actual payment. Axis Bank was directed to pay a lump sum compensation of Rs10,000 to Mr Chand and his wife for mental harassment and litigation cost.

New India Assurance challenged the order before the state commission. While dismissing the appeal, the state commission pointed out that Mr Chand and his wife approached Axis Bank in December 2011 and submitted all relevant documents, such as the post-mortem report, death certificate, copy of the first information report (FIR) and other documents. They were advised to open a new account to transfer the balance in the account of Manoj Kumar, which was done on 20 December 2011.

Axis Bank did not deny these facts. New India Assurance also did not deny providing insurance coverage of Rs5 lakh for accidental death. “Merely because some prescribed forms were not filled up, cannot be a ground to repudiate the claim, particularly when at least the initial formalities were completed by the complainants,” the state commission says in its order on 25 February 2014.

New India Assurance then filed a revision petition before NCDRC.

After hearing both the parties and carefully considering the material on record, Mr Chandra from NCDRC observed that New India Assurance has not denied that there was a personal accident insurance policy linked to the debit card issued by Axis Bank to the deceased son of Mr Chand and his wife.

“However, it is their case that there was no privity of contract between the deceased card holder and New India Assurance. It is also argued that the claim of insurance was filed very late by the Bank and that the eligibility criteria of a valid transaction at a merchant outlet at least 90 days prior to the incident had not been met,” the bench noted.

The counsel for Mr Chand and his wife submitted that the lower fora have arrived at concurrent findings which have attained finality and NCDRC’s revisional jurisdiction is therefore limited. He also argued that Axis Bank has paid the costs of Rs10,000 imposed on it by the state commission for mental harassment and litigation cost.

He also submitted that both the conditions of usage of the card and intimation to the Bank within 60 days had been met. “The card had been used for the purchase of petrol worth Rs100 and Rs9,937 had been transferred from another account. This has not been challenged by either Axis Bank or New India Assurance.”

NCDRC observed that the concurrent findings on facts of these two foras are based on evidence led by the parties and documents on record. “The present revision petition is, therefore an attempt by New India Assurance to urge this Commission to re-assess, re-appreciate the evidence, which cannot be done in revisional jurisdiction.”

“The foras below have pronounced orders which are detailed and have dealt with all the contentions of the petitioner. In view of the settled proposition of law that where two interpretations of the evidence are possible, concurrent findings based on evidence have to be accepted and such findings cannot be substituted in revisional jurisdiction, this petition is liable to fail,” Mr Chandra from NCDRC says.

(Revision Petition No1928 of 2014  Date: 10 April 2023)



Please enter your comment!
Please enter your name here