In Mumbai, a consumer commission has ordered Axis Bank and the New India Assurance company to pay an insurance claim of ₹30 lakh, along with interest, to a policeman who sustained permanent disabilities after an accident in 2017.
The District Consumer Disputes Redressal Commission in South Mumbai issued the order on March 11. It noted that the bank and insurance company had an agreement to provide insurance coverage to police personnel, as stated in a Memorandum of Understanding between the bank and the Mumbai Police.
The commission observed that the rejection of the policeman’s insurance claim was arbitrary and based on a wrong interpretation. The order of repudiation was deemed to be unsustainable under the law.
The claimant, Rajesh Pawar, was stationed at the Kasturba Marg police station in suburban Borivali when he filed the complaint in December 2020. According to Pawar, the bank and police department had an MoU in 2015, whereby personnel opening accounts with the bank would receive a Power Salute Debit cum ATM Card, providing personal accident insurance of ₹10 lakh and air accident cover of ₹25 lakh. Consequently, Pawar opened an account at the bank’s branch in Dadar.
Pawar was involved in an accident in October 2017 and was hospitalized for an extended period. He sustained severe injuries resulting in permanent disabilities, preventing him from working for nearly a year.
After recovering, Pawar submitted the necessary documents to the bank in April 2019 to claim insurance. However, the insurance company rejected the claim, citing delayed submission of documents and the policy’s exclusion of partial disability.
In response, the bank argued that Pawar had made a false claim. It contended that he received uninterrupted monthly salary payments and experienced no loss of employment or mental or physical harassment. Additionally, the bank stated that the scheme did not cover partial disability. It asserted its role was merely that of a corporate agent, with the actual insurance to be issued by the insurance company.
The insurance company also opposed the claim, stating that the insured person must immediately provide notice with full details to claim insurance. In this case, the insurer claimed that Pawar had notified them after a gap of one year and seven months.
The insurance company further claimed that it was unaware of any agreement between the bank and the Mumbai Police. It argued that since it had not entered into any agreement with the police, the bank’s agreement with the police was not binding on them.
After considering all the submissions, the commission found that both parties had agreed to provide insurance coverage to police personnel as per the MoU between the bank and the Mumbai Police. It concluded that the rejection of the claim was arbitrary and based on a wrong interpretation.
The commission ordered the bank and the insurance company to jointly and severally issue the claim of ₹30 lakh to Pawar, along with an interest rate of 6 percent from the date of repudiation until its actual realization. Additionally, they were directed to pay ₹2.50 lakh to Pawar as compensation for mental agony and ₹25,000 towards litigation costs.
Mumbai Police made a big blunder. Tripartite agreement/MoU should have been signed between Axis Bank, New India Assurance Company and Mumbai Police. Mumbai Police should have known that there is a Legal Advisor of a very high seniority in every State Govt & they should have obtained legal advice before signing the agreement/ MoU. The Hon’ble Court should have also passed strictures Against Mumbai Police for this negligence.
It’s become a rule now, rather than exception, to deny claims for petty reasons, passing the buck on each other, & make the claimant / nominees run from pillar to post.
At the time of opening of account, banks highlight the insurance scheme but in reality denial, while entertaining claims.