In Brief
The appellant's spouse, an account holder with Saurashta Gramin Bank, submitted an insurance application form for a group accident policy offering Rs 5 lakhs cover. He died in an accident, but the insurer rejected the claim because the bank had not forwarded the form and premium. Consumer forums found the bank guilty of deficiency of service. The National Commission reduced compensation from Rs 5 lakhs to Rs 2 lakhs. The Supreme Court reversed this, holding the bank's failure to process the application deprived the deceased of insurance cover he would otherwise have had. Full compensation of Rs 5 lakhs was restored.
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