Deposits can be refunded after nominal deductions: consumer panel

Consumer Commission seeks to know how signatures of an applicant were taken when he was abroad

A district consumer commission has directed an insurance company to refund ₹11.85 lakh and observed that it did not provide clarity about how the signatures of an applicant, who was living abroad, were taken. The commission also found that deposits cannot be forfeited, and only nominal deductions can be made.

The District Consumer Disputes Redressal Commission - III, Hyderabad was dealing with a complaint filed by G. Umesh Chandra, a former Army officer. The opposite parties were offices of Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited. 

The complainant stated that he made two deposits — one of ₹5.15 lakh and the other of ₹ 6.70 lakh — in October 2018 in his and his son’s name. He was shocked to receive life insurance policy documents instead of fixed deposits, he stated. Despite several emails to the opposite parties seeking a refund, the latter stated that the email was not registered, and on another occasion claimed that his phone was switched off.

For their part, the opposite parties denied all allegations. They maintained that the complainant had understood all terms and conditions. Validation calls, including to his son, were made. They also claimed that the complaint could have opted out during the “free look” period. They also denied that they ever made the claim that the complainant’s phone was switched off.

Taking the evidence and arguments placed on record, the Commission noted that the passport copy of the complainant’s son showed that he was not in the country at the time of making the deposit. They did not clarify how signatures were obtained when he was in the U.S., the Commission stated. “The opposite parties have not filed any evidence to prove their bona fide. Moreover, any deposit made in any bank or organization, can be refunded after nominal deductions, but the whole amount can never be forfeited,” the Commission stated.

Apart from directing a refund of the deposits at an interest rate of 9% per annum, the Commission directed the opposite parties to pay ₹ 25,000 as compensation. Costs of ₹10,000 were imposed.