Paytm Payments Bank Liable For Failed Insurance Payment; Delhi Consumer Commission Orders Refund With Interest

The District Consumer Disputes Redressal Commission, South-II, Delhi, comprising President Monika Aggarwal Srivastava and Members Dr. Rajender Dhar and Ritu Garodia, has held Paytm Payments Bank Limited deficient in service in a dispute concerning a failed insurance premium transaction of ₹40,466. The Commission found that although the amount was debited from the complainant's Paytm Wallet and the transaction was shown as successful, the insurer did not receive the payment. The complainant subsequently paid the premium again through another payment gateway, following which the insurance policy was issued.

Facts:

The complainant, Tarun Mangla, maintained an account with Paytm Payments Bank Limited and regularly used its application for financial transactions and bill payments.

On July 6, 2022, the complainant paid an insurance premium of ₹40,466 to ICICI General Insurance through the Paytm application. Although the transaction was shown as successful on the Paytm application and the amount was debited from his Paytm Wallet, the insurance company did not receive the payment.

When the complainant approached the insurer for the policy documents, he was informed that the premium had not been credited to its account. The order records an email dated July 14, 2022, reflecting the earlier transaction as failed.

The complainant stated that he approached Paytm's customer support and was initially advised to wait 72 hours for the transaction to be reconciled. According to him, Paytm subsequently disowned responsibility when he contacted customer support again after the stipulated period.

Consequently, the complainant issued a demand-cum-legal notice dated August 1, 2022, seeking a refund of ₹40,466. He subsequently filed a consumer complaint seeking a refund with 18% annual interest, ₹50,000 as compensation and ₹40,000 towards litigation expenses. The complaint was instituted on August 26, 2022.

Paytm Payments Bank's contentions:

Paytm contended that it acted as an automated conduit service provider for digital payments and that the transaction initiated on July 6, 2022, had been successfully processed from its end in accordance with the applicable wallet terms and regulatory guidelines. It also stated that it had emailed the insurer on July 14, 2022, seeking clarification and that the insurer had confirmed that services had already been provided against the remitted amount. Paytm sought dismissal of the complaint.

Insurer's contentions:

The insurer stated that its records did not reflect receipt of ₹40,466 on July 6, 2022. It further stated that a payment of the same amount was received on July 14, 2022, following which the insurance policy was issued.

Observation and decision:

The Commission observed that Paytm Payments Bank Limited's records showed that ₹40,466 was debited from the complainant's Paytm Wallet on July 6, 2022, and the transaction was reflected as successful. However, ICICI General Insurance did not receive the amount, and its email dated July 14, 2022, reflected the earlier transaction as failed. The complainant's account statement further established that he paid the same amount again through Razorpay on July 14, 2022, following which the insurance policy was issued.

The Commission held that Paytm was deficient in service for failing to transfer the amount despite showing the transaction as successful and for not refunding the money to the complainant.

Accordingly, the Commission directed Paytm Payments Bank Limited to refund ₹40,466 to the complainant along with 7% annual interest from July 6, 2022, until payment. It also awarded ₹25,000 as compensation and ₹5,000 towards litigation expenses. The Commission directed Paytm to comply with the order within 60 days, failing which the amount awarded under the order would carry interest at 8% from September 18, 2026, until realization.