• Ms. Neelangini Tiwari

Hemiben Ladhabhai Bhanderi Vs. Saurashta Gramin Ban (AIR 2020 SC 1243)

Updated: Dec 8, 2020


Hemiben Ladhabhai Bhanderi Vs. Saurashta Gramin Bank & Anr.


AIR 2020 SC 1243


Supreme Court of India

Division bench: Justice. Dr. Dhananjaya Y Chandrachud, Justice Mr. Hemant Gupta




Can a higher authority reduce the punishment/compensations ordered by a lower authority without proper justification?


  1. Oriental Insurance Company Limited had launched a group individual accident policy for the account holders of the Bank. Under the terms of the agreement between the insurer (who can be any account holding customer of the bank) and the Bank, the account holder was required to submit a form to the concerned officer of the Bank to avail of an insurance cover. An insurance cover of Rs 5 lakhs was offered. The Bank would deduct an amount of Rs 100 as a premium from the account holder and forward it to the insurer.

  2. The spouse of the appellant, Ladhabhai Thakarsibhai Bhanderi, was an account holder with the first respondent at its Dhutarpur Branch in the District of Jamnagar in Gujarat.

  3. On 21 July 2008, the spouse of the appellant obtained an insurance form from the Bank and submitted it to its Manager. On 1 August 2008, while traveling on his motorcycle, the spouse of the appellant met with an accident and succumbed to his injuries on 11 August 2008.

  4. The District Consumer Disputes Redressal Forum allowed the complaint on 28 January 2013 and concluded that the Bank had been negligent in not forwarding the form submitted by the deceased to the insurer within time after completion of all the formalities. The Bank was directed to pay the appellant an amount of Rs 5 lakhs with interest at the rate of 6 percent per annum from 20 August 2009 together with an additional amount of Rs 2,000 towards mental agony ad Rs1,500 towards costs.

  5. The order was confirmed in appeal by the SCDRC on 28 June 2013. In a revision filed by the Bank, the NCDRC reiterated the finding that the insurer could not be held liable in the absence of an insurance cover. The amount of compensation was reduced from Rs 5 lakhs to Rs 2 lakhs without any justification. The Bank has complied with the order of the NCDRC by handing over a cheque in an amount of Rs 2 lakhs to the appellant.

  6. The appellant declined to encash the cheque of Rs 2 lakhs as she believes the bank is accountable for the amount of Rs 5 lakhs, as it was proven already that the respondent was negligent in filling the insurance with the Oriental Insurance Company Limited at both SCDRC and NCDRC.


Is the respondent by any chance not negligent in causing the loss of insurance applied by the husband of the appellant?

There is a specific finding of fact that it was the failure of the Bank to deduct the premium and to pay it over the insurer which resulted in the insurer repudiating the claim on the ground that no insurance cover existed. No insurance cover came into existence. There are concurrent findings of fact by the three fora. We have no reason to take a different view, particularly, when the Bank has not challenged the judgment of the NCDRC. The Bank's explanations are an eye-wash and a thinly disguised attempt to defeat a legitimate grievance.

Was it all right for the NCDRC to lower the compensation amount to be paid by the bank without any justifications while being aware that it was due to the negligence of the bank, that insurer was not liable to pay the claim made by the appellant initially?

There was no justification for the NCDRC to reduce the award of compensation against the Bank from Rs 5 lakhs to Rs 2 lakhs thus, the SC concluded that the amount of 5 lakhs must be paid to the appellant in the next 60 days after the receipt of this order is published to serve justice



The author is a Bsc (Statistics) student at Kirori Mal College, University of Delhi.

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