NEW INDIA ASSURANCE COMPANY LTD. vs VARSHABEN P. SHAH

This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), by New India Assurance Co. Ltd. (for short "the Insurance Company"), the sole Opposite Party in the Complaint under the Act, is directed against the order dated 24.12.2014, passed by the Gujarat State Consumer Disputes Redressal Commission at Ahmedabad (for short "the State Commission") in First Appeal No. 1319 of 2010. By the impugned order, while affirming the order dated 24.02.2010, passed by the District Consumer Disputes Redressal Forum, Ahmedabad Rural (for short "the District Forum"), in Complaint Case No. 137 of 2007, preferred by the Respondent/ Complainant, the State Commission has dismissed the Appeal, preferred by the Insurance Company. By the said order, while holding that there was deficiency in service on the part of the Insurance Company in rejecting the claim preferred by the Complainant, the District Forum had allowed the Complaint and directed the Insurance Company to pay to the Complainant the assured sum of Rs.5,50,000/- with interest @ 9% p.a. from the date of the Complaint till realization, as also Rs.5,000/- as compensation towards mental harassment and cost of litigation.

The husband of the Complainant, namely, Pankajbhai, had taken an Insurance policy, namely, Janta Personal Accident Policy, from the Insurance Company, in the assured sum of Rs.5,50,000/-. The policy, wherein the Complainant was registered as a nominee, was valid for a period of 15 years from 30.03.1999 to 29.03.2014. While the policy was in force, on 16.04.2005 the Insured met with an accident. The Complainant preferred the claim under the policy, along with necessary documents, with the Insurance Company. Despite several requests, the claim was not honoured. The Complainant made a representation to the Insurance Ombudsman, which was decided on 23.06.2006, opining that since the policy had already been cancelled before the claim under it was made, the Complainant was not entitled to the relief sought for. Ultimately, the Insurance Company repudiated the claim on the said ground.

In the said background, alleging deficiency in service on the part of the Insurance Company in rejecting the claim, without intimating the Insured about the cancellation of the policy, the afore-noted Complaint came to be filed before the District Forum, wherein the Complainant had prayed for a direction to the Insurance Company to pay to her the assured sum of Rs.5,50,000/-, along with interest @ 12%, from the date of intimation, i.e. 18.04.2005, till realization, as well as Rs.20,000/- towards mental harassment and Rs.10,000/- as litigation costs.

Upon contest and, inter alia, taking into consideration the Certificate of Insurance (page 81 of the paper-book), dated 30.03.1999, which had been issued in the name of Pankajbhai A. Shah, the Insured, the District Forum came to the conclusion that the insurance policy was issued in the personal name of the Insured and since the Insurance Company did not intimate the cancellation of the policy either to the Insured or the Complainant, the said cancellation was of no consequence in so far as the Complainant was concerned and, therefore, the Insurance Company was liable to pay the assured sum to the Complainant. Consequently, while allowing the Complaint, the District Forum issued the aforesaid directions to the Insurance Company.

Being unsuccessful in its Appeal before the State Commission, the Insurance Company is before us in the present Revision Petition.

While admitting the factum of issue of afore-noted Insurance Certificate; and the sum assured & the period of the policy in question, learned Counsel appearing for the Insurance Company submits that since the Group Insurance Policy had been taken by the Company, namely, Ma Group of Company, in respect of 3000 applicants and it was issued in the name of the said Company though the Insured was also one of the beneficiaries under the policy, the communication of its decision dated 01.02.2003, by RPAD, about exercise of its discretion under Condition No.5 of the said policy and cancelling the policy, to the Company and refund of the premium received in respect of the said policy, was sufficient compliance with the policy conditions and, therefore, since the said policy was not in operation, the Insurance Company was not liable to make any payment of assured sum to the Complainant.

Per contra, learned Counsel appearing for the Complainant submits that since the Insurance Company had not intimated the Insured about the cancellation of the policy, there was deficiency in service on its part and hence, the orders passed by the Fora below, being based on correct interpretation of the terms and conditions of the policy in question, the present Revision Petition deserves to be dismissed.

Having heard learned Counsel for the Insurance Company and the Complainant and perused the documents on record, including the certificate of insurance, issued by the Insurance Company; the afore-noted Condition of the policy; as also the Schedule, containing the stipulation in the policy to the effect that if the Insured sustains any bodily injury resulting solely and directly from accident caused by outward, violent and visible means, then the Insurance Company shall pay to the Insured the assured sum, we are of the of the opinion that the orders passed by the Fora below, do not warrant interference. For the sake of ready reference, the afore-noted Condition and the Schedule are extracted below: "Conditions

The company may at any time by giving notice in writing cancel this policy. Provided that the company shall in that case return to the insured the then last paid premium less 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 the address last registered in the Company''s books and at all be deemed to have been received by the insured at the time when the same would be delivered in the ordinary course of post."

"Whereas the insured named in the Schedule below has made or caused to be made to the New India Assurance Co. Ltd. (hereinafter called the company) a written proposal dated as per the Schedule hereto of the contract and is deemed to be incorporated herein and has paid to the Company the premium herein stated for the insurance of the risks hereinafter specified occurring during the period stated in the Schedule.

Now this policy witnesseth that subject to the terms, exclusions, definitions and conditions contained herein or endorsed or otherwise expressed hereon the Company will indemnify the insured as hereinafter mentioned.

If the insured shall sustain any bodily injury resulting solely and directly from Accident caused outward, violent and visible means then the Company shall pay to the insured the sum hereinafter set forth ..."

Manifestly, a harmonious and holistic interpretation of the afore-extracted condition, leaves no doubt in our mind that the "Insured" referred to in the Schedule to the policy is the person whose life has been insured and the Company, Ma Group of Companies in the instant case, which had taken the policy for the benefit of its members, was only a facilitator. Hence, in the event of the Insurance Company deciding to cancel the policy, issued in terms of the arrangement between it and the Company, the Insurance Company was obliged not only to return to the "Insured" the last paid premium less pro-rata part thereof, it was equally required to send notice in this behalf to the "Insured" at his last registered address in the books of the Company.

Having carefully perused the details mentioned on the Certificate of Insurance issued by the Insurance Company, we have no hesitation in coming to the conclusion that for all intents and purposes, the "Insured", within the meaning of the said Condition in the Insurance contact, was late Pankajbhai A. Shah, and by any stretch of imagination Ma Group of Companies could not be treated as the "Insured", as is sought to be pleaded by learned Counsel appearing for the Insurance Company. Hence, in our opinion, the cancellation of the policy, without notice and refund of premium (pro-rata) to late Shri Pankajbhai A. Shah, who was undoubtedly the "Insured", and in repudiating the claim preferred by the Complainant under the afore-noted policy, on the afore-noted ground, amounted to deficiency in service on the part of the Insurance Company. We do not find any jurisdictional error in the impugned order, warranting interference in our Revisionary Jurisdiction.

Resultantly, the Revision Petition fails and is dismissed accordingly. The Insurance Company is directed to comply with the orders passed by the Fora below and pay the awarded amount to the Complainant, by way of a demand draft drawn in her favour, within four weeks from the date of receipt of a copy of this order. In case any amount has already been paid/released to the Complainant in terms of the orders passed by the Fora below or this Commission, the Insurance Company shall be at liberty to account for the same while remitting the amount due in terms of this order to the Complainant.

The Revision Petition stands disposed of in the above terms, leaving the parties to bear their own costs.