The Delhi State Consumer Disputes Redressal Commission, led by Justice Sangita Dhingra Sehgal (President) and Ms. Pinki (Judicial Member), has exonerated Canara Bank of allegations of service deficiency in a case involving the sale of insurance policies. The decision comes after an appeal by the bank against a previous ruling by the District Consumer Commission.
Case Background
The case originated when a complainant alleged that Canara Bank, acting as a corporate agent for Bajaj Allianz Life Insurance, misrepresented and sold her four Bajaj Allianz Unit Gain Plus Gold policies. The complainant paid a total premium of ₹1,20,000. However, upon surrendering the policies after 36 months, she received only ₹1,23,750 out of the ₹1,80,000 paid, resulting in a financial loss of ₹56,250.
Feeling defrauded, the complainant filed a complaint before the District Commission, seeking a refund of the lost amount, ₹30,000 as compensation, and ₹11,000 as litigation costs.
District Commission’s Ruling
The District Commission ruled in favor of the complainant, directing Bajaj Allianz Life Insurance to refund ₹56,250 with 9% interest. Additionally, both Canara Bank and Bajaj Allianz were ordered to pay ₹50,000 as compensation and ₹5,000 as litigation costs.
Canara Bank’s Appeal
Aggrieved by the District Commission’s decision, Canara Bank filed an appeal before the State Commission. The bank argued that it was authorized by the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (IRDA) to act as a corporate agent. It emphasized that its role was limited to soliciting and procuring insurance business, without assuming any risk or direct involvement in underwriting or claims settlement.
State Commission’s Observations
The State Commission carefully examined the arguments and evidence. It noted the following:
- Canara Bank’s role was confined to facilitating the sale of insurance policies as a corporate agent.
- There was no principal-agent relationship between the bank and the complainant.
- The bank had no responsibility for the performance or services provided by Bajaj Allianz Life Insurance.
The Commission concluded that Canara Bank could not be held liable for any alleged service deficiency by the insurance company. It modified the District Commission’s order, absolving Canara Bank of all liabilities in the matter.
Insurance Company’s Appeal Dismissed
In a separate judgment, the State Commission dismissed the appeal filed by Bajaj Allianz Life Insurance. It upheld the District Commission’s order against the insurance company, reaffirming its responsibility to refund the complainant’s losses.
