Pune: In a significant ruling, the Additional District Consumer Disputes Redressal Commission has penalized an insurance company for illegally rejecting an accidental insurance claim based on a change in the type of bank account. The company has been ordered to pay ₹40 lakh to the deceased employee’s family, along with 9% annual interest from the date of rejection.
If the amount is not paid within 45 days of the order, the interest rate will increase to 12%. The commission, chaired by Arun Gaikwad with members Kanchan Gangadhare and Pranali Sawant, also directed the insurance company to compensate the complainants with ₹25,000 for mental distress and ₹10,000 for legal costs.
The Case: From Policy Agreement to Claim Rejection
The case revolves around Suryakant Kolte, an employee of Pune Municipal Corporation, who held a savings account with the Bank of Maharashtra. The bank had entered into an agreement with Oriental Insurance Company, offering accidental insurance benefits to its account holders. According to the policy, in case of accidental death, the insured’s family was entitled to ₹40 lakh compensation.
Kolte converted his savings account into a salary account under the same bank. Unfortunately, on November 12, 2020, he passed away in an accident. Following this, his family submitted all required documents and applied for the insurance payout.
However, the insurance company rejected the claim, stating that the policy did not cover salary accounts. Kolte’s family sent a legal notice, but the company failed to respond. Left with no choice, they approached the consumer commission with the help of Advocate Dnyanaraj Sant.
Advocate Sant argued that the agreement between the bank and the insurance company obligated the insurer to honor the ₹40 lakh payout, regardless of the account type conversion. The commission agreed, ruling that the insurance company could not escape its liability based on a technicality.
In its judgment, the commission directed the insurance company to:
Pay ₹40 lakh to Kolte’s family
Provide 9% annual interest from the date of claim rejection
Increase interest to 12% if not paid within 45 days
Compensate the complainants with ₹25,000 for mental distress
Cover ₹10,000 in legal costs