Jodhpur Consumer Commission Rules Against Future General Insurance Solutions in Policy Lapse Dispute

Jodhpur Consumer Commission Rules Against Future General Insurance Solutions in Policy Lapse Dispute

The District Consumer Disputes Redressal Commission-II, Jodhpur (Rajasthan) bench, presided over by Dr. Shyam Sundar and Afsana Khan as a Member, ruled in favour of the complainant against Future General Total Insurance Company. The Commission found the insurance company liable for deficiency in service due to wrongful charges levied against the insured based on "no payment received," despite the error being on the company's end. The District Commission concluded that the insurance company's failure to present the cheque for encashment constituted an error or negligence, leading to the lapse of the insured's policy.

Krishna Arora procured an insurance policy from Future General Total Insurance Solutions (the Insurance Company). The complainant issued a cheque of ₹10,100 to the insurance company, which was submitted at the Axis Bank branch associated with the insurer. However, approximately four to five months later, during the first week of July 2018, the complainant received notification from the insurance company that the policy had lapsed due to non-payment of the premium amount. Despite reaching out via toll-free numbers and WhatsApp, the complainant only received a message indicating that the cheque had been dishonoured. Frustrated by the lack of satisfactory responses from both the insurance company and Axis Bank, the complainant approached the Consumer Disputes Redressal Commission (CDRC) in Jodhpur, Rajasthan, and filed a consumer complaint against Axis Bank and the insurance company.

In reply, Axis Bank maintained that the central dispute revolved around the complainant and the insurance company, with the bank playing no direct role in the matter. On the other hand, the insurance company asserted that the complainant had issued a cheque on March 9, 2018, which unfortunately remained uncleared, resulting in the policy’s lapse. The insurance policy was subsequently renewed on August 14, 2018, and it remained in effect. The insurance company contended that the complainant was well aware of the dishonouring of the cheque from the outset.

The District Commission observed that the complainant submitted a payment of ₹10,000 toward the insurance premium to the insurance company. Additionally, a cheque of ₹100 was issued, which was initially acknowledged, and a receipt was issued by the insurance company. However, after a lapse of approximately four to five months, it came to light that the cheque had been dishonoured.

Despite the complainant’s request for return memos related to the dishonoured cheque, the District Commission found that the insurance company failed to furnish the necessary documentation. The Commission took note of the complainant’s Bank of Baroda account statement, which revealed consistent deposits exceeding ₹2 lakh during the specified period. Additionally, the Commission observed that the insurance company did not provide the original dishonoured check or the return memo as evidence. Consequently, the complainant was compelled to renew the policy after submitting a ‘Penalty and Health Declaration’ form.

The District Commission determined that the insurance company’s failure to deposit the cheque in the bank constituted an error or negligence, leading to the lapse of the complainant’s insurance policy. Consequently, the commission held the insurance company accountable for deficient service.

As a result, the District Commission ordered the insurance company to refund ₹494 (the excess amount collected during renewal) to the complainant, in addition to providing ₹10,000 as compensation and covering ₹5,000 in litigation costs.