Consumer panel directs bank, insurer to pay Rs 30 lakh claim to Mumbai cop injured in accident

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A consumer commission in Mumbai has directed the Axis Bank and the New India Assurance company to pay an insurance claim of Rs 30 lakh along with interest to a policeman who suffered injuries with permanent disabilities after an accident in 2017, reported news agency PTI.

The District Consumer Disputes Redressal Commission, South Mumbai, in an order passed on March 11, noted that as per the facts, the bank and the insurance company were in agreement for providing insurance cover to police personnel as per the Memorandum of Understanding (MoU) between the bank and the Mumbai Police, reported PTI.

The policeman's insurance claim has been "arbitrarily rejected/repudiated", it observed.

It is based on "wrong interpretation" and hence the order of repudiation is found to be unsustainable under the law," the commission said in its order, a copy of which was made available on Sunday, reported PTI.

The claimant, Rajesh Pawar, was posted at the Kasturba Marg police station in suburban Borivali (designation not mentioned in the order) at the time of filing the complaint in December 2020, reported PTI.

He claimed that as per an MoU signed between the bank and the police department in 2015, when the personnel open account in the bank, they would be given a Power Salute Debit cum ATM Card, with a personal accident insurance of Rs 10 lakh and air accident cover of Rs 25 lakh, reported PTI.

Hence, he had opened an account with the bank's branch in Dadar (east).

The complainant met with an accident in October 2017 and said he was hospitalised for a long period of time, reported PTI.

He suffered "huge bodily injuries with permanent disabilities" which kept him away from work for almost one year, the complainant said.

As per the certificate issued by the government medical authority, the policeman is "71 per cent handicap", reported PTI.

After recovering from the injuries, the complainant claimed insurance from the bank by submitting necessary documents in April 2019, reported PTI.

The insurance company rejected the claim on the grounds of delayed submission of documents and that partial disability was not covered in the policy terms.

The bank, in a written response, contended the complainant had raised a "false claim", reported PTI.

The policeman receives his salary every month without interruption. Thus, there is no loss of employment nor any mental or physical harassment, the bank claimed, reported PTI.

It also said that partial disability is not covered in the scheme, reported PTI.

The claim was required to be submitted within 90 days from the date of incidence, it said, adding the bank's role is only of a corporate agent and the actual insurance to be issued by the insurance company, reported PTI.

The insurance firm also opposed the claim, saying that to claim the insurance, the insured person shall immediately give a notice with full particulars as far as possible, reported PTI.

In the present case, the complainant intimated after a gap of 1 year and 7 months, the insurer said.

Further, the insurance company submitted it was not aware what transpired between the bank and Mumbai Police, reported PTI.

The insurance company also said that as it has not entered into any agreement with the Mumbai Police, the agreement between the bank and the Mumbai Police is not binding upon it.

The commission, after considering all the submissions, said the facts reveal that both the opposite parties were in agreement for providing insurance cover to police personnel as per the MoU between the bank and the Mumbai Police, reported PTI.

"Thus, from the very conduct of the Respondent, it is found that to avoid the liability of insurance, the claim has been arbitrarily rejected/repudiated," the commission said, reported PTI.

Thus, the very order of repudiation of claim being arbitrary is based on wrong interpretation and hence found to be unsustainable under the law, it added, reported PTI.

The complainant is justified to claim of Rs 30 lakh with an interest rate of 6 per cent from the date of repudiation (June 5, 2019) till its actual realisation, the commission said, reported PTI.

It directed the bank and the insurance firm to issue the claim jointly and severally.

The commission also directed them to pay Rs 2.50 lakh to the policeman towards compensation for mental agony and Rs 25,000 towards the litigation costs, reported PTI.

(With inputs from PTI)