Court orders Punjab National Bank to pay compensation for not providing insurance amount to customer

The District Consumer Disputes Redressal Commission, Panipat (Haryana), recently held Punjab National Bank (PNB) liable for deficiency in services. This was due to PNB’s failure to settle the claim of Rs. 18 lakh after the demise of a valid policyholder. The commission directed PNB to pay the claim amount of Rs. 18 lakh to the nominee and also pay Rs. 5,000 as compensation along with Rs. 5,500 for the litigation costs incurred by the nominee.

Case Details

• Mrs. Phoolpati’s husband, Ashok Kumar, initially held an account with the Oriental Bank of Commerce. However, due to a merger, the bank became Punjab National Bank (PNB), resulting in a different account number.
• Ashok Kumar tragically lost his life in a road accident, and an FIR was registered under Section 279/304A IPC at P.S. Madlauda, District Panipat.
• Ashok Kumar had opened a savings account in PNB, which was later converted into a salary account by the officials of the PNB branch.
• Ashok Kumar had also availed a personal accidental insurance policy with PNB, which obligated PNB to disburse Rs. 18 lakh to the legal heirs in the event of various contingencies.
• Despite repeated visits to the PNB branch, the settlement of the claim was unduly prolonged with various pretexts.
• Mrs. Phoolpati sent a legal notice to PNB, but the bank neither made the stipulated payment nor responded to the notice.

Consumer Complaint

Feeling aggrieved, Mrs. Phoolpati filed a consumer complaint against PNB with the District Consumer Disputes Redressal Commission, Panipat. PNB did not appear before the commission for the proceedings.

Commission’s Decision

The District Commission referred to the “RBD (R) Circular 12/2020,” which outlined modifications in PNB’s new salary scheme. According to the circular, all variants were eligible for an insurance cover of Rs. 18 lakh. Since the deceased’s salary fell within the ‘GOLD’ variant, the commission held that Mrs. Phoolpati, as the legal heir, was entitled to the insured amount of Rs. 18 lakh. Therefore, the commission held PNB liable for deficiency in services.

Commission’s Directives

As a result, the District Commission directed PNB to:

• Make a payment of Rs. 18 lakh to Mrs. Phoolpati, the complainant, within 45 days.
• Pay interest at the rate of 9% per annum from the filing date until realization.
• Provide Rs. 5,000 as compensation to Mrs. Phoolpati.
• Reimburse Rs. 5,500 as litigation costs incurred by Mrs. Phoolpati.
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