News Citation : 2026 LN (CGSCDRC) 11

February 13, 2026 : In a significant ruling on consumer rights and insurance liability, the Chhattisgarh State Consumer Disputes Redressal Commission has partly allowed an appeal filed by The New India Assurance Company Ltd. while holding both the insurer and Axis Bank jointly responsible for delay in settling an accidental death insurance claim linked to an ATM card.

The order was pronounced on February 12, 2026, in Appeal No. SC/22/FA/484/2025, arising out of a complaint originally decided by the District Consumer Commission, Balod.

Background of the Case

The dispute arose after the death of Dileshwar Sahu, who held a savings account with Axis Bank. An ATM card issued to him carried an accidental insurance cover of ₹2 lakh. His wife, Hulsi Bai, was the nominee under the policy.

Sahu died in an accident on April 20, 2022. Following his death, Hulsi Bai submitted a claim seeking payment of the insured amount. According to the record, she informed the bank about her husband’s death and sought release of the insurance compensation. However, despite correspondence and a legal notice, the claim was not settled.

Left with no option, she approached the District Commission alleging deficiency in service by both the bank and the insurance company.

Stand of the Insurance Company and the Bank

The insurer argued that it had not received the necessary claim documents within the stipulated period of 90 days from the date of death, as required under the policy conditions. It contended that no proper intimation or claim form was forwarded through the bank in time, and therefore there was no deficiency in service on its part.

Axis Bank, on the other hand, maintained that the complainant had not formally submitted the prescribed claim application at the branch, and therefore the bank had no occasion to forward the claim to the insurer. Both parties attempted to shift responsibility onto each other.

Findings of the State Commission

After examining the documents on record, the State Commission found that Hulsi Bai had indeed sent a written communication to the bank on August 17, 2022, informing it of the death and requesting the insurance amount. She had also issued a legal notice later.

The Commission observed that once the bank was informed about the account holder’s accidental death, it had a duty to guide the nominee and forward the claim with necessary documents to the insurance company. There was no credible evidence to show that the bank promptly transmitted the claim to the insurer.

At the same time, the Commission held that once the matter reached the District Commission and all relevant documents were available, the insurer could not continue to deny the claim on purely technical grounds such as non-receipt of intimation within 90 days. There was no dispute that the policy was valid at the time of death and that the death was accidental.

The Commission concluded that both the bank and the insurance company failed in their respective obligations and were responsible for the delay in settlement of the genuine claim.

Final Order

While partly allowing the insurer’s appeal, the State Commission modified the earlier order and directed that: Both Axis Bank and The New India Assurance Company Ltd. shall jointly and severally pay ₹2,00,000 to Hulsi Bai, along with 7 percent annual interest from October 26, 2023, the date of filing of the complaint, until realization and additionally, they must pay ₹10,000 as compensation for mental and financial harassment and ₹5,000 towards litigation costs.

The payment is to be made within one month from the date of the order.

Why This Ruling Matters

This decision reinforces a key principle in consumer protection law: technical lapses and internal communication failures between a bank and its insurance partner cannot defeat a legitimate claim of a nominee when the policy is valid and the insured event has occurred. It also underscores that banks offering bundled insurance benefits with debit or ATM cards bear responsibility to assist customers in claim processing.

Case Reference : Appeal No. SC/22/FA/484/2025; The New India Assurance Company Ltd. vs. Hulsi Bai & Ors.