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Tuesday, September 3, 2013

failure of Card swipe - Act of God ? - Dipika Pallikal sues Axis Bank

Straight drive; boast; volley; lob; nick shot; skid boast; mizuki…. Wonder what – some of the terms associated with Squash. Squash is a racquet sport played by two (singles) or four players (doubles) in a four-walled court with a small, hollow rubber ball. The players alternate in striking the ball with their racquet and hit the ball onto the playable surfaces of the four walls of the court.

Peril (n) - Serious and immediate danger; the dangers or difficulties that arise from a particular situation or activity.  Some of its synonyms are : jeopardy - danger - hazard - risk - menace – threat.

In Insurance parlance, peril is what is covered in a property policy of insurance.  It is a specific risk or cause of loss – covered by the insurance policy.  Some of the perils are : fire, lightning, impact damage, flood, inundation …. There are named peril policies and ‘all risks’ policies which do not cover all risks but covers perils other than those specifically excluded.  A peril is a particular risk that may cause a loss or damage. The type of policy you purchase will determine which perils you are covered for.

There is another terminology – ‘Act of God’ [AOG] perils… these are not literally the act of God but often used to describe when a natural event occurs in which damage is caused. When you hear about an “Act of God” you generally tend to think of events that cannot be prevented such as forest fires, earthquakes, tornadoes, landslides, and so forth. Most property policies carry a different Excess [deductible] for AOG perils as against normal perils.  More on AOG perils in a separate post, as this is intended to be a post on the Squash champion who has sued a bank - 10 lakhs as damages.

Reports state that Arjuna awardee and squash champion Dipika Pallikal, livid by the way the Axis Bank treated her during a foreign tour, claims that it affected her performance and has sued the bank for Rs 10 lakh. The Bank reportedly responded by  lobbing the ball  back saying she isn’t tough enough.

Dipika is the first Indian woman to crack the top 10 in WSA rankings. Ranked number 13 in the world in 2011,Pallikal was participating in the Cathay Pacific Sun Hung Kai Squash Open in Rotterdam, Holland. Before her first round match, she had to pay a bill of 490 euros (Rs 30,000)  when she checked out of Brainpark hotel there.  It is reported that despite having a balance of more than Rs 2 lakh in her account, the transaction failed, with the card-reading device showing link error.

The player of International acclaim is suing Axis Bank Ltd for the humiliation she felt and the loss of reputation after  that transaction was declined even though she had enough money in her account. In her consumer complaint, Dipika said some players from other countries even made snide remarks on her credit-worthiness as well as about the country. She had contacted her mother in India who in turn sent an urgent text message to the bank’s executive, but the official was unhelpful. She managed to settle the bill with another card that she was carrying.  

While she claims that she was traumatised due to the incident and was unable to perform in subsequent tournaments; the bank intriguingly denied  the charge of negligence by citing technical reasons, questioned her suitability to be a world champion and accused her of being unprofessional.

Dipika further claims that in another instance, she received Rs.1 lakh as award from the Union Sports Minister. When she deposited the cheque drawn in her favour, the bank returned it, saying “not drawn on us”. After yet another exasperating round of communication, the bank finally admitted that the cheque was returned due to a technical error. Coupling these two, she filed the consumer complaint before the District Consumer Redressal Forum, South (Chennai) in 2012 seeking Rs. 10 lakh compensation.

In its written version, the bank denied causing mental agony to Dipika. “The very fact that the complainant is not able to take the slightest disturbance would prove that she lacks the requisite mental toughness of a world champion… she is only making excuses for her non-performance and it is unfortunate and unethical to allege criminal acts on the bank for technical failure that took place in a foreign soil on which the bank has no control.”

According to the press the matter is being heard by the District Consumer Redressal Forum. 

As for her debit card at Rotterdam, the bank state the failure of the transaction was ‘act of God’ – over which the bank had no control. How and what was the nature of that failure and why it is attributed to an act of God may perhaps be known once the decision is pronounced and more details of the conduct of the case are made available.

As Insurers we are keen to read and understand  that ‘Act of God’ angle…..

With regards – S. Sampathkumar
3rd Sept. 2013.

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