Case: Anju Kalsi Vs. HDFC Ergo General Insurance Company Limited and Another

3. On 3 September 2013, the appellants son obtained the benefit of an insurance cover under a policy called the Cardsure Package Policy. The appellants son was an account holder with HDFC Bank Limited and had availed of a debit card from the bank. The bank, which is the second respondent, obtained an insurance cover on 3 September 2013 from the first respondent. The insurance cover was to commence from 25 August 2013 and was to end on 24 August 2014. Against the payment of premium by the bank to the insurer, the insurer provided an insurance cover for card holders of the bank. For Platinum card holders, the base cover was in the amount of Rs 5 lakhs. In addition, the cover would stand increased by five times of every rupee spent on purchases through the debit card, extending up to an accelerated cover of Rs 5 lakhs, thus making up a total sum insured of Rs 10 lakhs. The appellants son died in a road accident on 30 October 2013. The appellant as the mother of the deceased and nominee made a claim under the insurance cover. The claim was repudiated by the insurer on 17 December 2013 on the ground that the deceased had not undertaken a nonATM transaction in the period of three months immediately preceding the date of the accident.4. The appellant instituted a consumer complaint before the District Consumer Disputes Redressal Forum (District Forum), Bhatinda upon the repudiation of the claim under the policy. The complaint was allowed by the District Forum on 16 July 2014 in the amount of Rs 5 lakhs together with interest at 9% per annum from 1 February 2014 and compensation and costs quantified at Rs 20,000/-. The order on the consumer complaint was challenged both by the appellant and by the first respondent. The SCDRC dismissed the appeal for enhancement of compensation and allowed the appeal by the insurer. The SCDRC held that the deceased had failed to use the debit card with a non-ATM transaction during the period of three months immediately prior to the date of the accident and hence, the condition precedent for a claim under the insurance policy had not been fulfilled. The order of the SCDRC was affirmed by the NCDRC by its judgment dated 24 March 2017.

Court's reasoning:
11. The evidence which was tendered by way of an affidavit on behalf of the insurer by its Manager (Legal), does not displace the burden which was cast on the bank, whose customer the deceased was, of establishing that the debit card usage guide containing the requisite terms and conditions had actually been furnished to the deceased account holder. The NCDRC upheld the decision of the SCDRC by holding that there was no specific averment in the complaint that the debit card usage guide was not enclosed to the forwarding letter. This finding proceeds on a misreading of the averments in the complaint. The NCDRC also held that the forwarding letter referred to the usage guide and if the guide had not been furnished, the deceased account holder would in the ordinary course of human conduct have written to the bank complaining that usage guide had not been made available. The specific averment of the appellant in the consumer complaint was that save and except for the covering letter, neither the insurance policy nor its terms and conditions were furnished to the account holder or the appellant. It was also averred that no document relating to the insurance cover was issued to the account holder or the appellant by the insurer or the banker.12. The insurance cover was governed by a policy between the first and the second respondents. The terms of the insurance cover had to be specifically communicated to the account holder. The account holder had to be put on notice that the insurance cover would become available only after a transaction took place of the nature spelt out in the special conditions of the insurance policy. Insistence on communication to the account holder is necessary because the policy was issued to the bank by the insurer. The account holders are beneficiaries of the policy. In the present case, the bank did not choose to defend the proceedings at all. The insurer who also belongs to the HDFC group could well have applied for a summons to be issued to the bank for production of its records in the course of the evidence which would establish as to whether the debit card usage guide had been made available to the account holder. In this backdrop, and in the absence of such a course of action being adopted, the case of the appellant as set out in the complaint remained uncontroverted. Consequently, unless the respondents were able to establish on a cogent basis that the special conditions of the policy which was issued by the first respondent to the second respondent were drawn to the notice of the account holder for whose benefit the insurance cover extended, the claim ought not to have been rejected.We are unable to subscribe to this contention since, as a matter of fact, the case of the appellant was that save and except for the covering letter no further documentation had been furnished to the account holder. Learned counsel for the insurer has submitted in the alternate that the deficiency of service, if any, would be on the part of the bank and that there was no deficiency on the part of the insurer. We are not inclined to go into this aspect of whether or not there was deficiency of service on the part of the bank. The deficiency of service on the part of the insurer lies in the wrongful repudiation of the claim under the policy. The insurer would however be at liberty to work out its remedy against the second respondent – bank.14. For the reasons which we have indicated, we find that the case which was set up by the appellant has not been displaced. Hence, the appellant was validly entitled to the award of the basic claim in the amount of Rs 5 lakhs together with interest as directed by the District Forum. The appellant would not be entitled to the claim under the enhanced cover since it was linked to purchases made against the debit card.