Panipat District Commission Holds PNB Liable For Wrongful Repudiation Of Personal Accidental Insurance Claim Worth Rs. 18 Lakh

Brief Facts:

Mr. Ashok Kumar (“Deceased”), husband of Mrs. Phoolpati (“Complainant”) held an account with Oriental Bank of Commerce, Israna, which was later merged into Punjab National Bank (“Bank”). The husband of the Complainant met with a fatal road accident, leading to his demise, and an FIR (First Information Report) under Section 279/304A IPC was registered. The bank initially opened a savings account for the husband, which was later changed to a salary account by the bank officials. The deceased had availed a personal accidental insurance policy with the bank, obligating the bank to pay Rs. 18 lakhs to the legal heirs upon his death.

Despite the Complainant's repeated visits to the bank's branch and efforts to claim the insurance amount, the bank delayed the claim on various pretexts. Subsequently, a legal notice was sent by the Complainant, demanding the payment of Rs. 18,00,000/- along with interest as per the policy rules and an additional Rs. 50,000/- as compensation. The bank, however, did not fulfil the payment or respond to the legal notice. Consequently, the Complainant approached the District Consumer Disputes Redressal Commission, Panipat, Haryana (“District Commission”) and filed a consumer complaint against the bank. The bank didn't appear for the proceedings before the District Commission.

Observations by the District Commission:

The District Commission referred to the RBD (R) Circular 12/2020 dated 25.03.2020, which outlined the modification in the PNB's new salary scheme. According to the circular, account holders were entitled to an insured amount based on their salary account variant. Column No.4 of the circular, detailed the variants and corresponding Personal Accident Insurance (PAI) Cover amounts. The circular specified an insurance cover of Rs. 18 lakh for all variants, and considering the deceased's salary, the Complainant's case fell within the GOLD variant. Therefore, the District Commission held that the Complainant, as the legal heir of the deceased, was deemed entitled to the insured amount of Rs. 18,00,000/-. The District Commission held the bank liable for deficiency in services for false repudiation of the claim.

Consequently, the District Commission directed the bank to make a payment of Rs. 18,00,000/- to the Complainant within 45 days of the order. Additionally, the bank was directed to pay interest at the rate of 9% per annum from the date of filing the complaint until actual realization. It was also directed to pay a compensation of Rs. 5,000/- along with Rs. 5500/- as litigation expenses to the Complainant.