Forcing to pay for insurance policy sans consent unfair

Ramkrishan Upadhyay

Tribune News Service

Chandigarh, April 20

The District Consumer Disputes Redressal Forum, Chandigarh, has penalised a bank for forcing consumers to pay for an insurance policy which they never willingly opted for.

Terming the act as an unfair trade practice, the commission directed the bank to not only refund insurance amount of Rs3,39,975 with 12 per cent interest, but also to pay Rs25,000 as compensation to the consumers for mental agony and harassment.

Deepak Agnihotri and her wife Urvashi Agnihotri approached the commission through counsel Uday Agnihotri after a bank allegedly forced them to pay Rs3,39,975 for the policy which they never opted for. In the complaint before the commission, the complainant said they availed of a home loan of Rs24.40 lakh on March 8, 2013. They deposited all necessary documents and title deeds with the State Bank of Patiala, which was later merged with the State Bank of India with all its assets and liabilities.

The complainants repaid the entire loan within five years and intimated the bank on September 17, 2018, to return the title deed along with the NOC. However, a bank official told that in addition to mandatory house insurance, the bank also issued another insurance policy known as ‘SBI Suraksha Policy’ for which an amount of Rs3,39,975 was outstanding. The complainants opposed the demand and told that they never opted/applied for such an insurance policy nor was it ever issued by the bank. However, the bank refused to return the original title deeds, etc., unless the entire amount of premium amounting to Rs3,39,975 and interest thereon of the Suraksha Policy were first paid. Left with no alternative and under compelling circumstances, the complainants deposited the amount of Rs3,39,975 under protest and got the Suraksha Insurance Policy closed, reserving the right to claim refund of the amount and interest.

The complainants said they never applied for any Suraksha Insurance Policy from the bank nor it was ever issued to them. The bank issued the policy without informing them.

In its reply before the commission, the bank stated that the complainants were given two policies and it was also mentioned in the agreement. Denying allegations and pleading no deficiency in service, the bank prayed for the dismissal of the complaint.

After hearings the arguments and examining the documents, the commission noted forcing a consumer to take insurance from the specific insurer to enhance their “other income” portfolio was a clear case of breaking the sanctity of the agreement and against the “fair practice codes” implemented by the RBI under the Banking Codes and Standards Board of India.

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