Bank fined Rs 4.5 lakh for failing to credit insurance premium

The Delhi State Consumer Disputes Redressal Commission has ordered the Punjab National Bank to pay Rs 4.5 lakh as damages, for wrongly deducting money from a company's account.

The commission also ordered PNB to pay Rs 4,295, the original amount that was deducted from the account of M/S Bhoop Singh and Sons. The bank had reportedly deducted the amount for payment of premium for the firm's insurance policy, but it did not credit it to the insurance company.

Somvir Singh had demanded a compensation of Rs 17 lakh because a fire damaged goods at his shop and the insurance firm rejected his claim. The insurance firm said Singh had not renewed the policy.

Singh had alleged that it was the bank's responsibility to renew the insurance policy. The commission, however, noted that Singh had entered into a contract with the bank, which said renewal of insurance was Singh's responsibility.

"Agreement between the parties should not be avoided on unsustainable grounds," the commission said. The judge allowed Singh's plea for damages caused due to the bank's failure to credit the premium to the insurance company.

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