The Hindu Business Line : Bank directed to compensate card holder

The State Consumer Disputes Redressal Commission, Chennai, has upheld the order of the District Forum that there was deficiency of service on the part of Citibank, NA, and hence it was liable to compensate the complainant who had alleged to have suffered physical, financial and mental strain.

The Forum had granted relief to him for a total sum of Rs 1,44,314.58.

The Bank had launched a scheme, in association with the New India Assurance Co. Ltd, Chennai, for providing group insurance to the credit card holders. Under the scheme, the insurance company would extend insurance coverage, and the premium payable towards it would be directly paid by the Bank by debiting the card holder's account. The credit card holder, Mr Yezi Homi Tata of New Delhi, had complained that there was deficiency in service on the part of the opposite parties (Bank and insurance company) as they had failed to renew the complainant's policy with effect from February 1, 2000 in spite of the complainant forwarding the renewal form as early as January 12, 2000.

The complainant alleged that the Bank had debited his account much after the renewal date, and on such occasions, the insurer had renewed the policy with retrospective effect.

Bank's contention

But the Bank had contended that the complainant had on his own failed to renew policy properly and the Bank should not be held responsible for the omission of the complainant. Since the complainant failed to renew his policy within the time intimated by the Bank, the claim of benefits was not acceded to by the Bank. Mere debiting of the transaction would not make the Bank assume joint responsibility with the insurance company. The Bank would also not be liable for any rejection of request for protection of insurance benefits by the insurer.

No warranty

The Bank contended that credit cards did not hold out any warranty nor did they make representation about quality, delivery of the cover or claims processing whatsoever.

The insurance company submitted that it had not received any instruction or premium from Bank for inclusion in the policy commencing from February 1, 2000. It was clear that the insurer was required to cover the complainant along with various other cardholders under the policy from June 1, 2000.

It had processed the instructions when it was found that the column relating to pre-existing illness was blank in the referral form. Since the earlier policy had expired, the insurance commencing from June 1, 2000 was a fresh policy. The complainant was not entitled to make any claim for hospitalisation from May 30, 2000.

The Commission, comprising Mr Justice K. Sampath, President, and Ms R. Vanaroja and Mr Pon Gunasekaran, Members, said they were satisfied there had been deficiency in service on the part of the appellant (Bank). The complainant was right in his submission that the inaction by the Bank for a period of more than five months would itself amount to deficiency. The appeal shall stand dismissed with cost of Rs 5,000.

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