The State Bank of India has been fined Rs 8 lakh by the country's highest consumer court, National Consumer Disputes Redressal Commission, for not sharing insurance policy details with a customer. The bank has been ordered to pay the full amount as compensation to the customer.
The customer, Jaipur-based Jaishree Industries, could not avail the benefit of insurance as the bank didn't disclose the terms, the commission ruled, setting aside the state commission's order that had asked the bank to pay about Rs 36 lakhs.
"The deficiency of the bank lies in obtaining the policy without informing the complainant (Jaishree Industries) or even without getting his signatures as well as in not sharing the policy and its details with the complainant even after getting the policy document from the insurance company. The complainant had every right to know the details of the policies that were taken by the bank to secure the hypothecated stocks," presiding member Prem Narain said.
The commission said that if any repayment amount of loan is due against the complainant, it should be adjusted and the bank shall notify the same within 45 days, and if part amount is to be adjusted, the remaining amount shall also be paid within the same period.
The furniture dealer took a cash credit facility from the State bank of Bikaner and Jaipur (now State Bank of India) and stocks were insured by the National Insurance Company Ltd in 2005.
In 2006, a fire broke out in his godown.
The complainant's insurance claim was rejected by the insurance company on the grounds that the risk location (location insured) mentioned in the policy is not the same where the fire broke out.
The bank had contended that it was not aware that the stocks were not kept at the risk location but at some other place.
The commission said that due to lack of enough evidence, it cannot be said beyond doubt that the bank officials knew about the change of risk location but did not purposely or knowingly intimate the same to the insurance company.
It further said that Jaishree Industries was partly responsible as he did not try to get the policy document and at no point of time did he submit an application for change of address.