ANJU KALSIversusHDFC ERGO GENERAL INSURANCE COMPANY LIMITED AND OTHERS

                         [2022] 2 S.C.R. 287                             287


                           ANJU KALSI                                    A
                                  v.
  HDFC ERGO GENERAL INSURANCE COMPANY LIMITED
                  AND OTHERS
               (Civil Appeal Nos. 1544-1545 of 2022)                     B
                       FEBRUARY 21, 2022
        [DR. DHANANJAYA Y CHANDRACHUD AND
                  SURYA KANT, JJ.]
       Consumer Protection – Insurance Policy – Special conditions
                                                                         C
of the policy – Notice of the special conditions under policy to the
account holder – The bank-second respondent, obtained an
insurance cover from first respondent-insurer – Under the insurance
policy, all debit card holders were the beneficiary of the insurance
cover – The appellant’s son was an account holder with the bank
and had also availed debit card from the bank – Appellant’s son          D
died in an accident – Appellant as mother of the deceased and
nominee made a claim under the insurance cover – District Forum
allowed consumer complaint and awarded Rs. 5 lakhs with interest
– The SCDRC held that the deceased had failed to use the debit
card with a non-ATM transaction during the period of three months
                                                                         E
immediately prior to the date of the accident and hence, the condition
precedent for a claim under the insurance policy was not fulfilled –
The order of the SCDRC was affirmed by the NCDRC – The
contention of the appellant was that save and except for the covering
letter which indicated that an insurance cover against personal
accident was being provided to the account holder, neither the           F
insurer nor the bank had ever furnished the insurance policy, its
terms and conditions or any document related to the insurance cover
to the account holder – Before the Supreme Court, the genesis of
the dispute lies in whether the Special Conditions of the policy which
was issued by the bank to the insurer were drawn to the notice of
                                                                         G
the account holder – Held: The terms of the insurance cover had to
be specifically communicated to the account holder – The account
holder had to be put on notice that the insurance cover would become
available only after a transaction took place of the nature spelt out
in the special conditions of the insurance policy – Insistence on
                                                                         H
                                 287
288            SUPREME COURT REPORTS                      [2022] 2 S.C.R.


A     communication to the account holder is necessary because the policy
      was issued to the bank by the insurer – The account holders are
      beneficiaries of the policy – In the present case, the bank did not
      choose to defend the proceedings – Insurer belongs to the same
      group as of the bank, it could have summoned for production of
      documents as to as to whether the debit card usage guide was made
B
      available to the account holder – In absence of such exercise, the
      case of the appellant as set out in the complaint remained
      uncontroverted – Respondents were not able to establish on a cogent
      basis that special conditions of the policy were drawn to the notice
      of the account holder – Accordingly, the judgment of the NCDRC
C     set aside and the judgment of the District Forum restored.
            Allowing the appeals, the Court
             HELD: 1. The insurance cover was governed by a policy
      between the first and the second respondents. The terms of the
      insurance cover had to be specifically communicated to the
D     account holder. The account holder had to be put on notice that
      the insurance cover would become available only after a
      transaction took place of the nature spelt out in the special
      conditions of the insurance policy. Insistence on communication
      to the account holder is necessary because the policy was issued
E     to the bank by the insurer. The account holders are beneficiaries
      of the policy. In the present case, the bank did not choose to
      defend the proceedings at all. The insurer who also belongs to
      the HDFC group could well have applied for a summons to be
      issued to the bank for production of its records in the course of
      the evidence which would establish as to whether the debit card
F     usage guide had been made available to the account holder. In
      this backdrop, and in the absence of such a course of action being
      adopted, the case of the appellant as set out in the complaint
      remained uncontroverted. Consequently, unless the respondents
      were able to establish on a cogent basis that the special conditions
G     of the policy which was issued by the first respondent to the second
      respondent were drawn to the notice of the account holder for
      whose benefit the insurance cover extended, the claim ought not
      to have been rejected. [Para 12][292-H; 293-A-D]


H
    ANJU KALSI v. HDFC ERGO GENERAL INSURANCE COMPANY                        289
                     LIMITED AND OTHERS

      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1544-                  A
1545 of 2022.
       From the Judgment and Order dated 24.03.2017 of the National
Commission Disputes Redressal Commission, New Delhi in Revision
Petition No. 2974-2975 of 2016.
       Ms. N. Annapoorani, Adv. for the Appellant.                           B

       Rajeev Maheshwaranand Roy, Adv. for the Respondents.
       The Judgment of the Court was delivered by
       DR. DHANANJAYA Y CHANDRACHUD, J.
                                                                             C
       1. Leave granted.
       2. These appeals arise from a judgment of the National Consumer
Disputes Redressal Commission1 dated 24 March 2017 in the exercise
of its revisional jurisdiction against an order of the State Consumer
Disputes Redressal Commission2, Chandigarh.
                                                                             D
       3. On 3 September 2013, the appellant’s son obtained the benefit
of an insurance cover under a policy called the “Cardsure Package
Policy”. The appellant’s son was an account holder with HDFC Bank
Limited and had availed of a debit card from the bank. The bank, which
is the second respondent, obtained an insurance cover on 3 September
2013 from the first respondent. The insurance cover was to commence          E
from 25 August 2013 and was to end on 24 August 2014. Against the
payment of premium by the bank to the insurer, the insurer provided an
insurance cover for card holders of the bank. For ‘Platinum’ card holders,
the base cover was in the amount of Rs 5 lakhs. In addition, the cover
would stand increased by five times of every rupee spent on purchases        F
through the debit card, extending up to an accelerated cover of Rs 5
lakhs, thus making up a total sum insured of Rs 10 lakhs. The appellant’s
son died in a road accident on 30 October 2013. The appellant as the
mother of the deceased and nominee made a claim under the insurance
cover. The claim was repudiated by the insurer on 17 December 2013
on the ground that the deceased had not undertaken a “non-ATM                G
transaction” in the period of three months immediately preceding the
date of the accident.

1
    “NCDRC”
2
    “SCDRC”                                                                  H
290                  SUPREME COURT REPORTS                        [2022] 2 S.C.R.


A             4. The appellant instituted a consumer complaint before the District
      Consumer Disputes Redressal Forum3, Bhatinda upon the repudiation of
      the claim under the policy. The complaint was allowed by the District
      Forum on 16 July 2014 in the amount of Rs 5 lakhs together with interest
      at 9% per annum from 1 February 2014 and compensation and costs
      quantified at Rs 20,000/-. The order on the consumer complaint was
B
      challenged both by the appellant and by the first respondent. The SCDRC
      dismissed the appeal for enhancement of compensation and allowed the
      appeal by the insurer. The SCDRC held that the deceased had failed to
      use the debit card with a non-ATM transaction during the period of
      three months immediately prior to the date of the accident and hence,
C     the condition precedent for a claim under the insurance policy had not
      been fulfilled. The order of the SCDRC was affirmed by the NCDRC
      by its judgment dated 24 March 2017.
             5. We have heard Ms N Annapoorani, counsel appearing on behalf
      of the appellant through the Supreme Court Legal Services Committee
D     and Mr Rajiv M Roy, counsel for the insurer.
              6. The issue which arises for determination in the present case
      falls within a narrow compass. The SCDRC reversed the award of the
      claim by the District Forum on the ground that a mandatory condition of
      the insurance policy, namely, that there has to be a non-ATM swipe
E     transaction within a stipulated period prior to the date of the event had
      not been fulfilled. The two conditions which have a bearing on this issue
      are respectively, conditions 5 and 9 of the ‘Special Conditions’ forming a
      part of the insurance cover. The insurance cover was provided by the
      first respondent to the second respondent, but the debit card holders of
      the bank were beneficiaries of the cover of insurance. Special Conditions
F     5 and 9 of the insurance policy which was issued by the first respondent
      to the second respondent read as follows:
               “5.     Non ATM swipe (transaction) is mandatory i.e. on or before
                       6 months from the date of loss for claims eligibility.

G              9.      For accidental death coverage the following conditions should
                       be fulfilled – Under Platinum card only:
                       Step I: Base cover – Rs 50,000 per card by doing one
                               POS transaction in the last three months.

      3
H         “District Forum”
 ANJU KALSI v. HDFC ERGO GENERAL INSURANCE COMPANY                            291
LIMITED AND OTHERS [DR. DHANANJAYA Y CHANDRACHUD, J.]

             Step II: Accelerated cover up to Rs 5,00,000/- (Total of up      A
                      to Rs 10,00,000/-) for over Rs 1 spent on purchase
                      through the Platinum Debit Card, sum assured
                      increases by five times the spent amount (subject
                      to minimum spends of Rs 20,000) in the last 12
                      months as per the latest bank statement of the
                                                                              B
                      customer.”
       7. The genesis of the dispute lies in whether the Special Conditions
of the policy which was issued by the bank to the insurer were drawn to
the notice of the account holder. Before the District Forum, the appellant,
in her consumer complaint made the following averments:
                                                                              C
      “That the opposite party no.1 and 2 never issued any insurance
      policy or its terms and condition or any document related to the
      insurance ever issued to the account holder or complainant till
      date except the said covering letter in which it is mentioned that
      Personal Accident insurance Cover upto Rs.10.00 lacs and also
      mentioned that when the account holder on every Rs.1/- spent on         D
      purchased through this card, the same increased the sum insured
      by 5 times. The opposite parties ‘also did not disclose any Policy
      Number to the complainant or account holder till date.”
      8. The second respondent who were the bankers of the deceased
did not appear in the proceedings.                                            E

      9. A reply to the consumer complaint was filed by the first
respondent, who is the insurer, in which it was stated that:
      “That in reply to para No.4 of the complaint it is submitted that
      the opposite party No.2 had purchased a insurance policy from           F
      the replying opposite party named as Cardsure Package Policy
      bearing No.2999200570315100000 and the replying opposite party
      sent the entire terms and conditions along with the policy to the
      opposite party no.2 and it is pertinent to mention here that the said
      group insurance policy purchased by opposite party no.2 to protect
      its account holders who were interested to avail the benefits of        G
      platinum debit card, gold debit card, women advantage card, world
      card, business card etc. It is further pertinent lo mention here that
      the opposite party no.2 at the time of issuing the said card as
      described above the opposite party no. 2 also provide a debit card
      usage guide with the said card and this fact is clearly mentioned
                                                                              H
292             SUPREME COURT REPORTS                            [2022] 2 S.C.R.


A            in the covering letter on which the complainant herself relied upon,
             there is specifically mentioned i.e. “For Details and Terms and
             Conditions, Please Refer to the Usage Guide Enclosed”
             and there is further specifically mentioned that “Conditions
             Apply”. Rest of para is incorrect, hence denied.”
B            10. The contention of the appellant was that save and except for
      the covering letter which indicated that an insurance cover against
      personal accident was being provided to the account holder, neither the
      insurer nor the bank had ever furnished the insurance policy, its terms
      and conditions or any document related to the insurance cover to the
      account holder. The deceased was a customer of the bank and it was
C     for the bank to establish that when it dispatched the debit card to its
      customer, both the covering letter as well as the debit card usage guide
      had been furnished to the deceased. The bank remained away from the
      proceedings. The insurer could not possibly have adduced any evidence
      in regard to whether the debit card usage guide had been actually
D     furnished to the deceased account holder.
             11. The evidence which was tendered by way of an affidavit on
      behalf of the insurer by its Manager (Legal), does not displace the burden
      which was cast on the bank, whose customer the deceased was, of
      establishing that the debit card usage guide containing the requisite terms
E     and conditions had actually been furnished to the deceased account holder.
      The NCDRC upheld the decision of the SCDRC by holding that there
      was no specific averment in the complaint that the debit card usage
      guide was not enclosed to the forwarding letter. This finding proceeds
      on a misreading of the averments in the complaint. The NCDRC also
      held that the forwarding letter referred to the usage guide and if the
F     guide had not been furnished, the deceased account holder would in the
      ordinary course of human conduct have written to the bank complaining
      that usage guide had not been made available. The specific averment of
      the appellant in the consumer complaint was that save and except for
      the covering letter, neither the insurance policy nor its terms and conditions
G     were furnished to the account holder or the appellant. It was also averred
      that no document relating to the insurance cover was issued to the
      account holder or the appellant by the insurer or the banker.
             12. The insurance cover was governed by a policy between the
      first and the second respondents. The terms of the insurance cover had
H     to be specifically communicated to the account holder. The account holder
 ANJU KALSI v. HDFC ERGO GENERAL INSURANCE COMPANY                            293
LIMITED AND OTHERS [DR. DHANANJAYA Y CHANDRACHUD, J.]

had to be put on notice that the insurance cover would become available       A
only after a transaction took place of the nature spelt out in the special
conditions of the insurance policy. Insistence on communication to the
account holder is necessary because the policy was issued to the bank
by the insurer. The account holders are beneficiaries of the policy. In the
present case, the bank did not choose to defend the proceedings at all.
                                                                              B
The insurer who also belongs to the HDFC group could well have applied
for a summons to be issued to the bank for production of its records in
the course of the evidence which would establish as to whether the
debit card usage guide had been made available to the account holder.
In this backdrop, and in the absence of such a course of action being
adopted, the case of the appellant as set out in the complaint remained       C
uncontroverted. Consequently, unless the respondents were able to
establish on a cogent basis that the special conditions of the policy which
was issued by the first respondent to the second respondent were drawn
to the notice of the account holder for whose benefit the insurance cover
extended, the claim ought not to have been rejected.
                                                                              D
        13. Mr Rajiv M Roy, learned counsel appearing on behalf of the
insurer made an attempt to support the findings by urging that the debit
card usage guide was suppressed by the appellant. We are unable to
subscribe to this contention since, as a matter of fact, the case of the
appellant was that save and except for the covering letter no further
documentation had been furnished to the account holder. Learned               E
counsel for the insurer has submitted in the alternate that the deficiency
of service, if any, would be on the part of the bank and that there was
no deficiency on the part of the insurer. We are not inclined to go into
this aspect of whether or not there was deficiency of service on the
part of the bank. The deficiency of service on the part of the insurer        F
lies in the wrongful repudiation of the claim under the policy. The insurer
would however be at liberty to work out its remedy against the second
respondent – bank.
      14. For the reasons which we have indicated, we find that the
case which was set up by the appellant has not been displaced. Hence,         G
the appellant was validly entitled to the award of the basic claim in the
amount of Rs 5 lakhs together with interest as directed by the District
Forum. The appellant would not be entitled to the claim under the
enhanced cover since it was linked to purchases made against the debit
card.
                                                                              H
294                SUPREME COURT REPORTS                     [2022] 2 S.C.R.


A           15. For the above reasons, we allow the appeals and set aside the
      impugned judgment of the NCDRC dated 24 March 2017. The judgment
      of the District Consumer Disputes Redressal Forum, Bhatinda shall
      accordingly stand restored and the appellant would be entitled to
      compensation in the amount of Rs 5 lakhs together with interest from 1
      February 2014 at 9% per annum. The appellant would also be entitled to
B
      compensation and costs quantified at Rs 20,000/- as awarded.
            16. Payment in terms of the present order shall be made over to
      the appellant by a demand draft drawn in her name within a period of
      one month from the date of the present judgment.
C           17. Pending applications, if any, stand disposed of.


      Ankit Gyan                                                   Appeals allowed.



D




E




F




G




H