LIFE INSURANCE CORPORATION OF INDIA And ANOTHER vs LACHMAN RAM

THIS is an appeal by the Life Insurance Corporation of India (in short, the "Corporation'') against the judgment and order of the District Consumer Disputes Redressal Forum, Muktsar (hereinafter called the "District Forum") dated 30.6.2005 by which complaint of the complainant (respondent in this appeal) was allowed in the following terms : "In view of the above discussion, we accept the complaint of complainant. However, the complaint is directed to submit claim papers with the opposite party within 10 days from receipt of copy of this order. The opposite party is also directed to pay the amount of policy i.e. Rs. 1,25,000 within 30 days after filing the claim papers by the complainant to them. The opposite party is further directed to pay Rs. 10,000 as consolidated compensation for mental harassment and litigation expenses to the complainant within 30 days from receipt of copy of this order. Copy of order be sent to the parties free of costs. File be consigned to records."

BRIEF facts of the case may be noticed : On 22.5.2004, the complainant had taken a life insurance policy known as "Endowment Assurance Policy with profits plus accident benefit" in the sum of Rs. 1,25,000 from the appellant-Corporation. Before we state further facts, let us first understand as to what this policy is. Under this policy, the assured person gets the amount of sum assured plus bonus, if any, on the maturity of the policy. However, if the assured dies before the maturity of the policy, the nominee/heirs would get the assured sum plus the bonus, if any, upto that date, i.e. the date of death. Further, if during the subsistence of the policy the life assured is permanently disabled as a result of an accident as defined in the policy, then in that eventuality the life assured would get an additional amount to the extent of the sum assured but the payment is spread over 10 years in monthly instalments. In the policy the disability which may entitle to accident benefit is in the following terms ; "10(2) Accident Benefit-If at any time when this policy is in force for the full sum assured the Life Assured before the expiry of the period for which the premium is payable or before the Policy Anniversary of which the age nearer birthday of the Life Assured is 70, whichever is earlier, is involved in accident resulting in either permanent disability as hereafter defined or death and the same is proved to the satisfaction of the Corporation, the Corporation agrees in the case of:

(a) Disability to the Life Assured: (i) to pay in monthly instalments spread over ten years an additional sum equal to the Sum Assured under this policy. If the policy becomes a claim before the expiry of the said period of 10 years, the disability benefit instalments which have not fallen due will be paid along with the claim; (ii) to waive the payment of future premiums. (b) xxx xxx xxx xxx (c) xxx xxx xxx xxx 10(3) xxx xxx xxx xxx xxx

10(4) The disability above referred to must be disability, which is the result of an accident and must be total and permanent and such that there is neither then nor at any time thereafter, any work, occupation or profession that the life assured can ever sufficiently do or follow to earn or obtain any wages, compensation or profit. Accidental injuries which independently of all other causes and within 120 days from the happening of such accident result in the irrecoverable loss of the entire sight of both eyes or in the amputation of both hands at or above the wrists or in the amputation of feet at or above ankles or in the amputation of one hand at or above the wrist and one foot at or above the ankle shall also be deemed to constitute such disability.

10(5) Immediately after the happening of the disability, full particulars thereof must be given in writing to the office of the Corporation where this policy is serviced together with the then address and whereabouts of the life assured who has become subject to the disability and within 120 days after the happening of the disability there must be given to the servicing Branch Office......., under.............. Division in the manner required by it, proof of disability satisfactory to the Corporation and without any expenses to the Corporation and thereafter similar proof must be given, as and when required by the Corporation, of the continuance of such disability. Any medical examiner nominated by the Corporation shall be allowed to examine the person of the Life Assured in respect of any disability claimed in such manner and at such tines before and/or after the disability is accepted by the Corporation as the Corporation may require."

Just to clarify, the accident benefit under the policy is not only available in case of permanent disability but in case of death also resulting from accident. Coming back to the facts, the assured Lachman Ram met with an accident while cutting fodder on the fodder clipper (Toka) on 23.8.2004 resulting in the amputation of his left arm. After the amputation of his arm, the complainant allegedly approached the appellant-Corporation for claiming the accident benefits under the insurance policy, but the claim was declined. This led the complainant to file a complaint before the District Forum, which has been allowed as aforesaid.

Learned Counsel for the appellant argued that it has been repeatedly held by various Courts and Fora, including the National Commission and the Apex Court, that the terms of contract of insurance have to be strictly contrued and while construing the clauses of the present policy, it could not be said that the complainant had suffered permanent disability when his left arm was amputated as a result of the accident. He cited the judgment of the National Commission in LIC of India v. Ramesh Chandra, II (1997) CPJ 45 (NC)=1997 (2) CPR 8 (NC), where similar clauses of the policy had been interpreted and it was held that to bring the case under the clause the permanent disability will only be deemed to have aken place if one hand at or above the wrist and one foot at or above the ankle are amputated or cut simultaneously. Since in this case, only one hand was amputated it would not come under the definition of ''permanent disability'' as mentioned in the policy. It will be apposite to reproduce the observations of the National Commission in Ramesh Chandra''s case (supra): "The question is whether the amputation of right hand suffered by the complainant is a specified event and constitute disability entitled to an accident benefit under Clause 10(a) of the policy bond. The accident benefit is available to the assured only if he is involved in an accident resulting in total and permanent disability as defined in Clause 10. The disability referred in the said clause must be disability which is the result of accident and must be total and permanent. The accidental injuries which independently of all other clauses and within 120 days from happening of such accident result in the irrecoverable loss of the entire sight of both the eyes or in the amputation of both hands at or above the wrists or in the amputation of feet at or above ankles, or in the amputation of one hand at or above the wrist and one foot at or above the ankle only constitute such disability. The case of the complainant is not of the amputation of both hands at or above the wrists or in the amputation of one hand at or above the wrist but that is not independently deemed to be a disability as is covered since the coverage in the clause is only in cases of amputation of one hand at or above the wrist and one foot at or above ankle. It bears repetition that the deeming clause constituting the disability will get attracted only if there was the amputation of one hand at or above the wrist and one foot at or above the ankle. If it is the amputation of one hand at or above the wrist or the amputation of one foot at or above the ankle, then it does not by the fiction of the Clause 10(a) constitute disability."

THE parties are governed by the terms of the contract of the policy and accident benefit would only be available in case the disability comes strictly under the definition as provided by the terms of the policy. According to us, the case is fully covered in favour of the appellant by the judgment of the National Commission in Ramesh Chandra''s case (supra), in which similar clause has been interpreted. No judgment to the contrary of the National Commission or of the Punjab and Haryana High Court or of the Apex Court has been brought to our notice.

IN view of the above, we allow this appeal, set aside the judgment and order of the District Forum dated June 30, 2005. There will be no order as to costs. The amount deposited by the appellant while filing the appeal may be refunded by the Registry by way of bank draft/crossed cheque after 45 days. The bank draft/cheque may be handed over to the Counsel for the appellant-Corporation for onward transmission to the concerned quarters. Appeal allowed.