Baramulla Consumer Commission Holds J&K Bank Liable For Deducting Insurance Premium Without Consent
The District Consumer Disputes Redressal Commission, Baramulla/Bandipora, comprising Peerzada Qousar Hussain (President) and Nyla Yaseen (Member), held J&K Bank liable for deficiency in service and unfair trade practice for deducting ₹2 lakh from a customer's account towards a MetLife insurance policy without his consent or authorization.
Brief Facts
The complainant, Tabreiz Ahmad Lone, had availed a Cash Credit loan of ₹20 lakh from J&K Bank in 2015-2016 for agricultural purposes. After completing the required formalities, the loan amount was sanctioned and disbursed in his favour. He alleged that the bank deducted ₹2 lakh from his account towards a MetLife insurance policy without his knowledge or consent.
According to the complainant, he had neither applied for any such insurance policy nor signed any consent form authorizing the deduction.
When the complainant approached the bank seeking details and the debit voucher relating to the deduction, the bank failed to provide any satisfactory explanation.
Aggrieved by the unauthorized deduction, he filed a complaint before the District Consumer Disputes Redressal Commission, Baramulla/Bandipora, alleging deficiency in service and unfair trade practice by the bank.
Despite service of notice, J&K Bank failed to appear before the Commission or file any response within the stipulated period. Consequently, the matter proceeded ex parte against the bank.
Observations And Decision
The Commission observed that it was an admitted fact that the complainant had availed a Cash Credit loan of ₹20 lakh from the bank and that an amount of ₹2 lakh had been deducted towards MetLife insurance. However, the Commission noted that there was no material on record to establish that the deduction had been made with the complainant's consent.
The Commission held that deduction of such a substantial amount without explicit authorization amounted to clear deficiency in service and unfair trade practice. It further observed that the plea regarding lapse of the insurance policy did not absolve the bank of liability, particularly when the very inception of the policy was under challenge for lack of consent.
Accordingly, the Commission allowed the complaint and directed the bank to cancel the unauthorized insurance policy issued in the complainant's name. The Commission further directed refund of ₹2 lakh with interest at the rate of 8% from the date of deduction till realization. Additionally, the bank was directed to pay ₹50,000 as compensation for mental agony, harassment, and inconvenience, along with ₹10,000 towards litigation expenses.
The Commission also directed the bank to comply with the order within 30 days, failing which the entire awarded amount would carry interest at the rate of 10% per annum till realization.
Case Title: Tabreiz Ahmad Lone v. J&K Bank
Case No.: CC/33/2025