Summary
A deceased debit-card holder’s nominee was denied accident cover because the card had not been used for a qualifying non-ATM transaction. The Court held that the respondents had not proved communication of that special condition to the beneficiary. A reference to a usage guide in the covering letter did not answer the specific allegation that no further policy documents were supplied. The basic Rs.5 lakh award was restored with interest and compensation, while the purchase-linked enhanced cover was refused.
Issues
- Whether the insurer could rely on a qualifying-transaction condition without proof it was communicated to the beneficiary.
- Whether the covering-letter reference and insurer’s affidavit established delivery of the usage guide.
- Whether the nominee qualified for basic or accelerated cover.
Held
- Because the insurer issued the group policy to the bank, its special eligibility conditions had to be specifically communicated to the account holder whose insurance benefit depended on them. The respondents had to establish that communication on a cogent basis. (¶ 10-12)
- The complaint specifically denied receipt of the policy, conditions or related documents beyond the covering letter. The bank did not defend the proceedings, and the insurer’s affidavit did not prove actual delivery of the usage guide. The inference that the deceased should have complained about a missing guide did not displace that case. (¶ 7-12)
- Wrongful repudiation constituted deficiency by the insurer. The Court left it free to pursue its remedy against the bank and did not determine whether the bank itself was deficient in service. (¶ 13)
- The nominee was entitled to the basic Rs.5 lakh cover, but not the accelerated benefit tied to purchases through the debit card. The District Forum’s award was restored: Rs.5 lakh with 9% annual interest from 1 February 2014 and Rs.20,000 compensation and costs. (¶ 14-15)
- Payment was directed by demand draft in the appellant’s name within one month of judgment. The appeals were allowed and pending applications disposed of. (¶ 15-17)
Result
Appeals allowed. Basic Rs.5 lakh award restored with 9% annual interest from 1 February 2014 and Rs.20,000 compensation and costs, payable within one month by demand draft. Accelerated cover refused; insurer’s remedy against the bank preserved.