Supreme Court of India
Hemiben Ladhabhai Bhanderi vs Saurashtra Gramin Bank on 3 February, 2020Author: Hon’Ble Dr. Chandrachud

Bench: Hon’Ble Dr. Chandrachud, Hemant Gupta



Civil Appeal No. 979 of 2020
(Arising out of SLP (C) No 5637 of 2019)

Hemiben Ladhabhai Bhanderi …. Appellant(s)


Saurashta Gramin Bank & Anr ….Respondent(s)


Dr Dhananjaya Y Chandrachud, J

Leave granted.

This appeal arises from a judgment of the National Consumer

Disputes Redressal Commission1 dated 25 October 2018 in a revision from

an order of the State Consumer Disputes Redressal Commission, Gujarat 2.

The spouse of the appellant, Ladhabhai Thakarsibhai Bhanderi, was

an account holder with the first respondent at its Dhutarpur Branch in the

District of Jamnagar in Gujarat. Oriental Insurance Company Limited had

launched a ‘group individual accident policy’ for the account holders of the

Bank. Under the terms of the agreement between the insurer and the

Bank, the account holder was required to submit a form to the concerned

officer of the Bank in order to avail of an insurance cover. The Bank would

Signature Not Verified
deduct an amount of Rs 100 as premium from the account holder and
Digitally signed by
Date: 2020.02.15
12:58:08 IST
Reason: forward it to the insurer. An insurance cover of Rs 5 lakhs was offered.


The case of the appellant is that on 21 July 2008, her spouse obtained an

insurance form from the Bank and submitted it to its Manager. He met with

an accident on 1 August 2008 while travelling on his motorcycle and

succumbed to his injuries on 11 August 2008. Based on a case of

accidental death, the appellant claimed an entitlement to receive a

compensation of Rs 5 lakhs under the insurance claim. The insurer

repudiated the claim on the ground that the premium had not been

forwarded by the Bank together with the form. The Bank took the objection

that the form had not been submitted in time by the deceased and that

after submitting it initially on 28 July 2008, he had taken it back to discuss

the matter with his relatives.

The District Consumer Disputes Redressal Forum3 allowed the

complaint on 28 January 2013 and came to the conclusion that the Bank

had been negligent in not forwarding the form submitted by the deceased

to the insurer within time after completion of all the formalities. There

being no insurance cover, the insured was held not to be liable. The Bank

was directed to pay the appellant an amount of Rs 5 lakhs with interest at

the rate of 6 per cent per annum from 20 August 2009 together with an

additional amount of Rs 2,000 towards mental agony ad Rs1,500 towards


The order was confirmed in appeal by the SCDRC on 28 June 2013.

In a revision filed by the Bank, the NCDRC reiterated the finding that the

insurer could not be held liable in the absence of an insurance cover.

However, the Bank was held guilty of a deficiency of service and was

directed to pay an amount of Rs 2 lakhs (instead of Rs 5 lakhs as awarded

3 District Forum

by the consumer fora) within a period of 45 days.

The appellant, as the legal heir of the deceased, is hence in appeal.

The submission which has been urged on behalf of the appellant is

that the NCDRC has accepted the position that the Bank was guilty of a

deficiency of service. However, it was urged that the amount of

compensation has been reduced from Rs 5 lakhs to Rs 2 lakhs without any

justification. On the other hand, it has been urged on behalf of the first

respondent that the Bank had all along taken the defence that the form,

though initially filled up on 28 July 2008, had been taken back by the

deceased and that it was resubmitted only after office hours on 9 August

2008. In the meantime, as a result of the accident which took place on 1

August 2008, the account holder died on 10 August 2008 of which the

Bank was intimated on the next day. In these circumstances, it was urged

that there was no deficiency of service on the part of the Bank. The Bank

has complied with the order of the NCDRC by handing over a cheque in an

amount of Rs 2 lakhs to the appellant. The appellant has declined to

encash the cheque of Rs 2 lakhs paid towards compensation on the

ground that she is entitled to the full compensation of Rs 5 lakhs as

awarded by the District Forum.

Insofar as the deficiency of service on the part of the Bank is

concerned, there are concurrent findings. The NCDRC confirmed that

there was a deficiency of service on the part of the Bank. Before it, the

Bank admitted that no receipt was given by it to anyone depositing the

application form. As a matter of fact, it has also emerged from the record

that three persons Rasik Gordhanbhai Dobariya, Harjibhai Bhanderi and

the spouse of the appellant had submitted forms on the same day which

had Serial Nos 351, 352 and 353. The defence of the Bank that the

deceased had withdrawn the form and that it was eventually submitted on

9 August 2008, when a fresh Serial No 358 was allotted has been rejected

by the District Forum and by the SCDRC. The NCDRC has observed that

the Bank has not explained the details of the application form mentioned at

Serial No 352. There is a specific finding of fact that it was the failure of

the Bank to deduct the premium and to pay it over the insurer which

resulted in the insurer repudiating the claim on the ground that no

insurance cover existed. No insurance cover came into existence. There

are concurrent findings of fact by the three fora. We have no reason to

take a different view, particularly, when the Bank has not challenged the

judgment of the NCDRC. The Bank’s explanations are an eye-wash and a

thinly disguised attempt to defeat a legitimate grievance. There was an

evident deficiency of service on its part. Evidently, there was a deficiency

of service on the part of the Bank in failing to forward the application form

to the insurer and in deducting the insurance premium on time. Had the

Bank not been deficient in the performance of its services, the deceased

would have been entitled to an insurance cover in the same terms as was

provided by the insurer to all other account holders desirous of obtaining


We are accordingly of the view that there was no justification for the

NCDRC to reduce the award of compensation against the Bank from Rs 5

lakhs to Rs 2 lakhs. The ends of justice would be met if the amount of

compensation is enhanced from Rs 2 lakhs to Rs 5 lakhs which shall be

paid over to the appellant within a period of 60 days from the date of

receipt of a certified copy of this order.

The appeal is allowed to the above extent.

No order as to costs.

[Dr Dhananjaya Y Chandrachud]

[Hemant Gupta]
New Delhi;
February 03, 2020



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