Mumbai: Full returns for policy taken as loan collateral

Mumbai: The District Consumer Disputes Redressal Commission, Central Mumbai, has directed Bajaj Allianz Insurance Co Ltd to pay a peon the full maturity amount of a policy taken as a collateral against a loan from a co-operative. The co-operative had made it mandatory to take the policy from Bajaj to get the loan.

The Commission has directed the balance maturity amount of Rs26,059 be paid with 6% interest per annum from Sept 2016 till date of realisation. Additionally, the peon will also receive Rs15,000 towards mental agony and litigation cost. 

The order dated Nov 25 (uploaded Dec 7) was passed by Commission’s President SS Mhatre and Member MP Kasar on a complaint of Sunil Vadatkar against the insurance firm and Vidya Vikas Employees Co-Operative Credit Society Limited.

For the mandatory five-year policy, he had to pay a premium of Rs10,000 and was told that he would get Rs50,000 with interest when the policy matures. He paid the amount but at the time of maturity he wasn’t given the money with interest, which Mr Vadatkar felt came to about Rs60,278. Bajaj on the other hand, gave him Rs34,129.
Mr Vadatkar said before the Commission that the opponents had trapped him. During the hearing, the Commission noted that Vidya Vikas is the master policy holder of the group policy and though it had kept a condition, there was no issue of loan repayment and that the money was being settled.
During the hearing, Bajaj said that as per the conditions, Mr Vadatkar was given the amount due as per condition but did not elaborate. It also didn’t give any counter argument put by Mr Vadatkar that other members were paid over Rs60,000.
The Commission noted that the number of members of group insurance was not stated either. Finding deficiency in service and unfair trade practices, the Commission directed Bajaj to pay compensation within 30 days from receiving the order.