Oriental Insurance Co. Ltd. vs MADAN SINGH VERMA

THIS appeal under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 19.11.2003 in Complaint No. 77/2003 by the District Consumer Dispute Redressal Forum, Durg (hereinafter called ''Distt. Forum'' for short) directing the appellant to pay a sum of Rs. 2,50,000/- with interest @ 6% per annum under the policy as also compensation and cost of the complaint.

UNDISPUTEDLY, the complainant/respondent obtained a Group Janta Personal Accident Insurance Policy (hereinafter called as the ''Janta Policy'' for short) 152501/47/99/00176 for the period from 9.1.1999 to 8.1.2011 as a member of Steel Workers'' Union, Bhilai for assured sum of Rs. 5 lacs. Policy document was issued in favour of the insured Madan Singh Verma. The premium of the said policy was duly paid by deduction from the salary of the appellant. It was stipulated that 50% of the assured sum was payable on account of loss of eye, leg or hand in an accident. It is also not in dispute that the complainant while working in the Steel Plant, met with an accident and his right hand was crushed in the roller in the wire rod mill. As a result of the said accident, the right hand of the insured had to be amputated. The complainant, in his complaint claimed that he was entitled to 50% of the assured amount of Rs. 5.00 lacs i.e., the sum of Rs. 2.50 lacs on account of loss of his right hand in the accident.

The appellant/insurer resisted the claim as above mainly on the ground that the policy was cancelled as per Clause 5 of the terms and conditions of the said policy. It was averred that a letter dated 26.11.2001 was sent to Steel Workers'' Union, Bhilai intimating the cancellation of policy as above. It was, therefore, averred that the complainant was not entitled to any benefit under the said policy.

THE learned Distt. Forum overruled the objection as above of the appellant/insurer and awarded a sum of Rs. 2.50 lacs with interest. The learned Counsel for the appellant submitted that since the appellant/insurer was entitled to revoke the policy at any time under Clause No. 5 of the said policy and intimation of the cancellation dated 26.11.2001 was sent by it to the Bhilai Steel Workers'' Union, the policy stood cancelled. Therefore, the respondent was not entitled to the relief under the said policy. Learned Counsel for the appellant placed reliance on the decision of the M.P. State Commission, Bhopal in New India Assurance Co. Ltd. v. Murarilal Sharma; 2004 (1) CPR 306. In the said case the question that arose for consideration was: as to whether the appellant was entitled to unilaterally cancel the policy. It was held therein that unilateral cancellation of policy by insurer was not illegal. However, in the instant case the question for consideration is not as to whether the policy could be unilaterally cancelled. In fact, as noticed earlier, the question that arises in this appeal is as to whether the policy was duly cancelled by the appellant/insurer by sending an intimation to Steel Workers'' Union, Bhilai, and whether the policy would stand cancelled notwithstanding the fact that notice in writing about the cancellation of policy was not given to the insured?

IT may be noticed that the said Clause 5 of the terms and conditions of policy stipulated between the parties was that it could be cancelled by written notice subject to refund of proportionate premium for the remaining period of policy. IT is, therefore, clear that though the appellant/insurer had a right to cancel the policy, but it could be done by notice in writing to the insured and further the proportionate premium had to be refunded for the remaining period of the policy. IT may be noticed that the copy of the said letter dated 26.11.2001 has not even been placed on record. IT is also not averred that the proportionate amount of premium was refunded to the complainant/respondent Moreover, even according to the averments of the appellant/insurer, the letter dated 26.11.2001 cancelling policy allegedly sent for cancellation of policy was addressed to the Secretary, Steel Workers'' Union, Bhilai. The appellant, therefore, does not even aver that the notice of cancellation of policy was sent to the complainant/respondent. Thus, it is not the stand of the appellant/insurer that notice of cancellation was given to the complainant respondent. Hence the policy was not duly cancelled, as per Clause 5 of the said policy. In view of above the complainant/respondent was entitled to benefit under the said policy, as has been rightly held by the learned Distt. Forum. There is no substance in the appeal. It is accordingly dismissed. Appeal dismissed.