NEW INDIA ASSURANCE COMPANY LTD. vs Sukumar Saha

BRIEF facts:The Complainant Sukumar Saha was an employee of Union Bank of India O.P. 1 (in short, ''bank'') and became a member of Group Insurance Policy covering all employees of the bank. The value of the policy was Rs. 5,00,000 for each member employee. The bank was paying regularly the premium to the insurer, the New India Assurance Co. Ltd. (O.P. -3) after deducting premium amount from salary of the employees. On 30.8.2003, the Complainant suffered fracture injuries in a motor accident and treated for long period; became partially disabled to the extent of 45%. He made the claim to the bank which was forwarded to the insurer for payment of proportionate amount. The claim was, however, repudiated on two grounds, one as it was time barred that such claim was to be made within 12 months from the date of accident and another that the policy which covered the employees including the Complainant was not in force when the time -barred claim was forwarded by the bank. Aggrieved by the repudiation the Complainant filed a complaint No. CC 70 of 2006 before the District Consumer Disputes Redressal Forum, Agartala West Tripura (in short, ''District Forum'') for appropriate remedies. The District Forum dismissed the complaint by observing that once the complainant received compensation from Motor Accident Claims Tribunal (in short MACT); therefore the complaint before the District Forum does not sustain, accordingly the complaint was dismissed. Against the order of District Forum the Complainant preferred an Appeal FA -44/2011 in the State Consumer Disputes Redressal Commission, Tripura (in short, ''State Commission'').

THE State Commission concluded that the repudiation of claim and deduction of insurance benefit from the compensation in Motor Accident by the Insurance Company (O.P. -3) was wrong. It was held that benefits of Group Insurance Policy are independent of the statutory benefit under the M.V. Act. The State Commission allowed the appeal and directed the Insurance Company to pay proportionate amount of the policy holding it as Rs. 5,00,000 due to the injuries. It further directed to pay Rs. 2,00,000 as compensation with interest @ 9% from the date of institution of the claim. In case the amount was not paid within one month then the interest chargeable was @ 12% from the date of expiry of one month. Aggrieved by the order of State Commission the O.P. -2 filed this revision petition.

WE have heard Counsel of both the parties. The Counsel for the petitioner vehemently argued that the O.P. -3 never received any details of the accident. As per the policy conditions all the injuries or all the accident does not cover therefore O.P. -3 is not liable to make any payment of compensation. It was also made out that as per the terms of the policy the claim is to be lodged within 12 months from the date of accident; but the complainant did not submit for claim within 12 months from the date of accident.

IT is an admitted fact that complainant filed a claim petition before the Motor Accident Claims Tribunal where he got compensation and had submitted all the documents of the treatment in original before the MACT. It was also noted that the complainant has preferred an Appeal seeking enhancement of the compensation. The claim under the Motor Vehicles Act arises out of a statutory provision relating to Third Party insurance under which the victim derives benefit of the policy between owner and insurer. While, The Group Insurance Policy for the employees on the other hand creates contractual liability between the insured employee and the insurer. The employees pay premium regularly for the group policy purchased through the employer bank. The benefit in case of accident thus arises from the contract between the employees and the insurer for which the employees paid valuable consideration. Thus, a policy purchased for value cannot be linked to any statutory benefit under the M.V. Act arising out of Third Party insurance which a person is entitled to get as per law. We rely upon the Hon''ble Supreme Court decision in Helen C. Rebello v. Maharashtra State Road Transport Corporation, reported in VII (1998) SLT 585 : IV (1998) CLT 129 (SC) : II (1998) ACC 512 (SC) :(1999) 1 SCC 90, held that insurance benefit is not deductible from compensation in motor accident.

ON careful perusal of evidence on record we found that the policy was very much in force when the accident occurred, the complainant intimated the bank but the bank gave intimation to the insurer only on 23.6.2005, i.e. after lapse of one year five months. Hence, in our opinion anyway the complainant was not at fault and should not suffer from the fault of bank (O.P. -1). Accordingly, the victim was entitled to get the benefit of the policy.

THE Divisional Manager of the insurer (O.P. -3) informed the bank (O.P. -1) by his letter dated 4.7.2005, the relevant part of which reads as follows: please note that the above policy period is 1.4.2003 to 31.3.2004 and the above claim is falling under this policy period. But our system is not allowing intimation of the above claim because the above policy already expired and you have intimated this claim very late. We do not have any provision for the above claim and our claim ratio has already been calculated for that financial year and necessary loading has already been done on the premium.

In the present case it is clear that that O.P. No. 3 Insurance Company was an insurer and insured the Bank i.e. O.P. No. 1; therefore the entire staff including the Complainant became the beneficiaries. Hence, the complainant is a consumer and the complaint is maintainable. Also none of the O.Ps. produced the original insurance policy. Therefore, we are of considered opinion that the claim of complainant was legitimate; even though the Complainant has received compensation as per order of the Motor Accident Claims Tribunal. The repudiation made by Insurance Company was due to deficiency and negligence of the bank. The Insurance Company cannot wriggle out of the liability merely on the ground that the claim made before is time barred. The period of 12 months is too short, keeping in view the fact that the banks are loaded with enough work. No blame can be put to the Complainant. He has done his duty. This is a case of negligence on the part of the bank and too harsh rules prepared by the Insurance Company. Both of them must share the liability to the extent of 50%. The order of the State Commission accordingly stands modified.