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Anju Kalsi vs HDFC Ergo General Insurance Co. Ltd.

Civil Appeal · 2022 INSC 211Decided 21 Feb 2022
Civil Appeal Nos. 1544-1545 of 2022
Dr. Dhananjaya Y. Chandrachud · Surya Kant · Chandrachud

Background

The appellant's son held an HDFC Bank debit card that came bundled with an accident insurance cover ("Cardsure Package Policy") of up to Rs. 10 lakhs, subject to special conditions requiring certain card transactions within specified periods. After her son died in a road accident in 2013, the appellant (his mother and nominee) claimed the insurance, but the insurer denied the claim, saying he had not made a qualifying "non-ATM transaction" in the preceding three months. Her consumer complaint succeeded before the District Forum but was reversed on appeal by the State Commission and the National Consumer Disputes Redressal Commission (NCDRC), both of which upheld the insurer's denial.

Decision Breakdown

The Supreme Court held that the special conditions restricting the insurance cover had to be clearly communicated to the account holder for them to be enforceable against him, and that the burden of proving such communication (through the debit-card usage guide) lay on the bank and insurer, not the deceased customer's family. Since the bank never appeared or produced evidence that the usage guide was actually sent, and the insurer could not independently prove this either, the appellant's uncontroverted claim that only a covering letter (without the detailed terms) was ever supplied had to be accepted. The Court restored the District Forum's award of Rs. 5 lakhs (the base cover, not the enhanced accelerated cover tied to actual card spending) with interest and costs, and left the insurer free to separately pursue the bank if it believed the bank was really at fault.

Lesson Learnt

An insurer or bank cannot enforce restrictive fine-print conditions of a bundled insurance policy against a customer unless it can actually prove those conditions were communicated to the customer: silence or an unproven assumption of disclosure will not defeat a genuine claim.

Official source (sci.gov.in)View Judgment (PDF)

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