Life Insurance Corporation of India vs Narinder Kaur

THIS appeal is directed against the order dated 6.5.2003 passed by District Consumer Disputes Redressal Forum-I, U.T., Chandigarh [for short, hereinafter, to be referred as District Forum-I] in Complaint Case No. 989 of 1997.

THE contextual facts in brief are as under: THE respondent/complainant Smt. Narinder Kaur got her minor son Sarabjit Singh insured for Rs. 50,000/- vide Policy No. 160546927 on 9.2.1994 with risk commencing w.e.f. 15.2.1994. As per averments, on 17.6.1995 the insured minor Sarabjit Singh met with an accident with a stray wild cow and was under medical treatment in K.D. Hospital, Ambala (Haryana) from 17.6.1995 to 8.8.1995. THE insured was certified to have suffered 100 per cent disability as a result of aforesaid accident, the copy of medical certificate brought on record vide Annexure P-1. THE claim of the respondent/complainant was declined on the ground of insured being a minor on the date of accident and that extended disability benefit was not permissible to minors as per rules of LIC. Further, in this case the extra premium chargeable for extending AB/EDB was not charged or paid hence the disability benefits on that ground could not be claimed. THE respondent/complainant has termed the repudiation of claim as arbitrary and against the interest of minor and has averred that when the policy was issued to the minor, his age was known to the insurer hence rejecting the claim on that ground is a deficiency in service as nowhere in the conditions governing the policy it is being mentioned that it is not applicable to the minors. Further, if the mother of the minor can enter into the contract of insurance, she is also eligible to claim disability benefit since the contract was entered with the mother and not with the insured minor. Respondent/complainant has prayed for grant of claim of Rs. 50,000/- and allow her complaint with heavy damages and litigation expenses. In the written statement filed on behalf of the appellant/O.P. a preliminary objection of complaint being not maintainable as detailed evidence is required to prove the claim. On merits, factum of issuance of policy in the name of Sh. Sarabjit Singh for a sum of Rs. 50,000/- stands admitted. However, the appellant/O.P. have submitted that the accident benefits and disability benefits are not admissible on the life of minors and this benefit was not covered under the policy extended to the complainant as no extra premium was charged on that account. The appellant/O.P. has submitted that the accident as alleged by the complainant had not taken place and she should be put to strict proof regarding the same. In the instant case it is admitted that due to an oversight accident benefit cover was not deleted from the policy but the clerical omission does not entitle the complainant to claim the accident/extended disability benefits as no consideration for extending those benefits has been received hence no contractual obligations can arise out of it. The claim was repudiated in a bona fide manner according to the rules since the claimant was not covered under the benefit claimed.

In evidence the complainant has brought on record her affidavit along with Annexures P-1 to P-4 while the O.P. filed affidavit of Sh. Deva Ram, A.A.O. (Claims). The learned Counsel for appellant cited case law-(i) Ravneet Singh Bagga v. KLM Royal Dutch Airlines, 2000-1 PLR 182 (SC); (ii) United India Insurance Co. Ltd. v. Mohan Lal and Sons, I (1992) CPJ 132 (NC); (iii) LIC v. Ajit Singh, [1994] (1) CPC 642; and (iv) LIC v. Anil P. Tadakalakar, I (1996) CPJ 159 (NC). The learned Counsel for the respondent cited LIC v. Dharamvir Anand, [1999] (1) CPC 10. The District Forum allowed the complaint and directed the O.P. to pay assured sum of Rs. 50,000/- along with interest at the rate of 9 per cent per annum from the date of declining the claim i.e., 12.8.1996 till payment. The complainant was also held entitled to litigation costs of Rs. 1,000/-.

AGGRIEVED against the order of the District Forum the present appeal has been filed by Life Insurance Corporation of India pleading, inter alia, that policy on the life of Sh. Sarabjit Singh was issued on the basis of proposal and personal statement dated 9.2.1994 submitted by the respondent. This being a special proposal form on the life of minors does not contain any option of accident benefits. Further, since the cover of accidental benefit was not extended nor any premium was charged by the appellant for the accidental benefits, the claim was declined by the appellant after consideration of entire case. The appellants have assailed the order of the District Forum being based on conjectures on the ground that it failed to appreciate the preliminary points in the written statement. Further, the District Forum failed to appreciate the scope under the summary proceedings of C.P. Act. The order of the District Forum has also been termed as erroneous insofar as it failed to appreciate the fact that the respondent/complainant could not be given any advantage of clerical mistake specifically so when neither the accidental benefit was covered nor any premium was charged for that. Further, the District Forum failed to take note of the settled law that inordinate delay in intimating the accident to the Insurance Company was fatal to the claim. The appellant has also submitted that the District Forum has committed an error in awarding a sum of Rs. 50,000/- as even if the claim is allowed the amount was to be paid in equated monthly instalments spread over a period of 10 years and the District Forum was not justified in granting the entire sum in one time payment. Further, the District Forum failed to appreciate the relevant case law on the point and the settled law that the Redressal Agencies cannot go beyond the terms of contract. The award of interest at the rate of 9 percent per annum has also been termed as erroneous since under the contract of insurance no interest is payable. Further the award of both the compensation and interest is bad in law as interest is also by way of compensation. The learned Counsel for respondent Mr. S.S. Sodhi, Advocate vehemently defended the order of the District Forum and contended that the policy in question was for accidental benefits and same has to be construed from the terms and conditions from the policy itself as held by Hon''ble Supreme Court in the case of Dharamvir Anand (supra). Further, since the issuance of wrong policy has been admitted by the Insurance Company which is a deficiency in itself for which it should be held liable. In the instant case the appeal does not lie in view of the letter from the Head of the LIC. The District Forum was justified in awarding interest in view of the fact that no compensation was granted and the case has lingered on for six long years.

A perusal of the pleadings of the parties, record of the case and rival contentions of both the parties brings us to the conclusion that contention of the appellant has merit that the District Forum has not appreciated the facts of the case on the basis of material on record as the complainant has not even averred much less proved through any of the documents that any premium for covering accidental benefits/extended disability benefit was paid by her. Consequently, no deficiency in service and hence liability can be fastened if the services were not hired or paid for as per provisions of Section 2(1)(d)(ii). The parties cannot be allowed to take the benefit of any clerical error. The case of Mohan Lal and Sons (supra) whereby the Hon''ble National Commission held that the respondent/complainant cannot be allowed to take unfair advantage of a typing mistake in the policy document. The ratio of same case applies squarely to the facts of the instant case and mere non-deletion of words "With Accident Benefits" will not entitle her to claim the accidental disability benefits. Further, non-compliance with the terms and conditions of the policy is on the record as per the Condition No. 10, the claimant has to inform the insurer within a stipulated period of 90 days after the happening of disability in the manner prescribed under the terms. In the instant case as is evident from the letter dated 2.7.1997 (Annexure A-7), the intimation of accident which allegedly took place on 19.6.1995 was admittedly given after more than two years which demonstrate an admitted breach of policy conditions. If the complainant claims the benefit under the policy, it is incumbent upon her to prove compliance with the same, which in our considered opinion has not been done in the instant case. Further, the order of the district Forum directing the appellant to pay a sum of Rs. 50,000/- in lump sum while the conditions of the policy clearly stipulate that the amount was to be paid in 10 years in equated monthly instalments. In the final analysis, we hold that and due to the reasons stated above the order of the District Forum is set aside. The appeal is accepted. The pay order of Rs. 25,000/- placed on record by the appellant be handed over to him against proper receipt and after placing a photocopy of the same on record. Appeal allowed.