NEW INDIA ASSURANCE COMPANY LIMITED vs SHIV SHANKAR

-THIS appeal is directed against the order dated 9. 9. 2004 passed by the District Consumer Disputes Redressal Forum, Sirsa whereby while accepted the complaint of the respondent-complainant, following conclusion has been drawn: "hence, the complainant is entitled to compensation but the relief of interest and penalty on premium amount is sufficient to meet the ends of justice. We further direct the respondent/company to accept the remaining balance amount of premium from the date of cancellation upto date from the complainant without any interest and penalty. We further direct the respondent/company to implement the present order within a period of one month from the date of present order, failing which the complainant is entitled to recover the amount of compensation to the tune of Rs. 2,500 on account of physical and mental harassment etc. with cost of proceeding to the tune of Rs. 1,500 from the respondents. The amount of compensation as well as cost of proceeding shall be recovered from the pocket of the erring officer. We further direct the Insurance Company to implement the present order within a stipulated period. We order accordingly. "

PUT shortly, the facts of the case as set out in the complaint are that the complainant had purchased a Janta Personal Accident Insurance Policy bearing No. 473227040034 for the period from 9. 12. 1997 to 8. 12. 2012, from the opposite parties. The payment of premium of Rs. 2,000 was made by the complainant. Thereafter, the opposite party No. 2 issued letter No. 353803/jpa/2002 dated 22. 5. 2002 through registered post on 15. 7. 2002, whereby it was conveyed to the complainant that the aforesaid policy had stood cancelled w. e. f. 1. 6. 2002. Terming the action of the opposite party No. 2 as illegal, arbitrary and unlawful, it was pleaded that before termination of policy, prior notice was required to be issued to him. But in this case by the same letter dated 15. 7. 2002 the policy had been cancelled from 1. 6. 2002. Accordingly, it was prayed that the directions be given to the opposite parties treating the policy as subsisting and valid till the expiry period ending on 8. 12. 2012. In addition, Rs. 10,000 was claimed as compensation on account of mental agony and harassment caused to him and Rs. 2,000 as litigation expenses. The complaint was contested by the opposite parties. In the written statement filed it was pleaded that the complainant was refunded the amount as per terms of the policy on pro rata basis. Accordingly, it was prayed that the complaint merited dismissal. On scrutiny of the pleadings of the parties and evidence adduced on record the District Forum found no substance in the stand of the opposite parties and while accepting the complaint issued the directions in its order dated 9. 9. 2004 noticed above. It is against the said order the present appeal has been filed. Learned Counsel representing the parties have been heard at length.

Learned Counsel representing the appellant-opposite parties while assailing the order of the District Forum has vehemently urged that the District Forum had failed to take into account that the policy in question had been cancelled by the opposite parties as per letter dated 15. 7. 2002, which was admittedly received by the complainant and thereafter vide letter dated 21. 11. 2002, the pro rata premium was returned to the complainant vide cheque No. 574230 dated 8. 11. 2002 during the pendency of the complaint and thereafter the complainant had represented the cheque for encashment and had received the amount on 21. 4. 2003. In this manner, after having withdrawal the pro rata premium during the pendency of the appeal, the complainant was estopped from challenging the cancellation of the policy. It was further stated that the District Forum had not given due consideration to the fact that in terms of the condition No. 5 of the policy, no prior notice was envisaged or required to be served for cancellation of the policy and on that account, as well, the order of the District Forum, as such, cannot be sustained. Further reference was made to the provisions of Section 64vb (3) of the Insurance Act, 1938, wherein it has been provided that, " (3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent". It was thus submitted that cancellation of the policy was justified. In support of the stand taken reliance was placed by him on the case The Central Bank of India, Ltd. , Amritsar v. The Hartford Fire Insurance Co. Ltd. , AIR 1965 SC 1288, wherein it was laid down as under: "now it is common place that it is the Court''s duty to give effect to the bargain of the parites according to their intention and when that bargain is in writing the intention is to be looked for in the words used unless they are such that one may suspect that they do not convey the intention correctly. If those words are clear, there is very little that the Court has to do. The Court must give effect to the plain meaning of the words however it may dislike the result. Thus where a clause in an insurance policy says:"this insurance may be terminated at any time at the request of the insured" and "insurance may also at any time be terminated at the instance of the company" the words "at any time" can only mean "at any time the party concerned likes". Shortly put the clause says that either party may at its will terminate the policy. No other meaning of the words used is conceivable. The plain and categorical language cannot be radically changed by relying upon the surrounding circumstances. Thus right to terminate at will cannot, by reason of the circumstances, be read as a right to terminate for a reasonable cause. Held also that the term in this form is a common term in policies and must, therefore, be accepted as reasonable. "

LEARNED Counsel representing the respondent-complainant during the course of arguments though did not specifically replied to the above stated submissions made, but at the same time justified the order of the District Forum for the reasons stated therein. The controversy in this regard centralised to condition No. 5 of the Insurance which reads as under: "the company may at any time by notice in writing cancel this policy. Provided that the company shall in that case return to the insured the then last paid premium less a pro rata part thereof for the portion of the current insurance period, which shall have expired. Such notice shall be deemed sufficiently given if posted, addressed to the insured at address last registered in the company''s books and shall be deemed to have been received by the insured at the time, when the same would be delivered in the ordinary course of post. "

IN terms of the said condition the opposite parties had issued letter bearing No. 353803/jpa/2002 dated 22. 5. 2002 which reads as under: "with reference to the above, we would like to bring in your kind notice that we have decided not to continue the above referred policy issued in your favour as per policy condition No. 5. Conseuqence whereof your policy referred above stand cancelled w. e. f. 1. 6. 2002. The proportionate premium for the unexpired period which is being worked out would be refunded soon. Please inform if there is any change in your address. "

It is manifest from condition No. 5 that it is nowhere required that a prior notice before cancellation of the policy is required to be given to the complainant as contended by him in the complaint and accepted by the District Forum. Rather, in this case the notice had been issued on 22. 5. 2002 wherein the cancellation date of the policy specified is 1. 6. 2002. It is also mentioned therein that the proportionate premium for the unexpired period which is being worked out would be refunded soon. Therefore, this action of the opposite parties was strictly in accordance with the above stated condition of the policy. Even otherwise, it has not been disputed from the side of the complainant that pro rata premium amount had been received by him vide cheque No. 574230 dated 8. 11. 2002 during the pendency of the complaint and that amount had been encashed by him on 21. 4. 2003. Therefore, the complainant is estopped from raising any objection in this regard. Thus, this additional circumstance will also justify the rejection of the complaint. For the aforesaid reasons, while accepting the appeal, the impugned order is set aside and the complaint is accordingly dismissed.

THE amount of Rs. 2,000 deposited at the time of filing the appeal be refunded to the appellant against proper receipt and identification in accordance with rules. Appeal allowed.