Ratan Kavadia vs ORIENTAL INSURANCE Company

THE husband of the Complainant/Petitioner had obtained Janta Accidental Policy on 28.1.1999 for a sum of Rs. 5 lakh. The premium of Rs. 1,550 was paid. The policy was valid from 28.1.1999 to 7.1.2011. The policy holder died on 13.3.2006 in a road accident. The Complainant/Petitioner being nominee under the policy filed claim with the Insurance Company, but the same was repudiated vide letter dated 8.5.2006 in which it was stated that the Complainant had been informed that the policy in question was cancelled w.e.f. 15.2.2002 through registered notice and premium as per policy condition was returned vide cheque dated 4.3.2002. The Complainant claimed that no notice was given for cancellation of policy and the amount of premium was not received.

THE Insurance Company had contested the claim on the ground that as per policy condition No. 5, the policy was cancelled by sending registered notice dated 4.2.2002 to the policyholder and a sum of Rs. 1,119 also refunded to the policyholder through cheque bearing No. 825291 dated 4.3.2002 which was sent by registered post.

BEFORE the District Forum, the Insurance Company did not deposit the cost imposed on 24.10.2008 and also did not file receipt of intimation of cancellation or the proof of credit of the cheque in the insured account. In view of this, the District Forum ordered payment of Rs. 5 lakh with 9% interest as also a sum of Rs. 8,500 for mental harassment, besides this Rs. 1,500 for legal expenses. This order was challenged by the Opposite Party/Respondent before the State Commission. The State Commission held that it had been duly established that the notice of cancellation was sent to the policyholder by registered post. The State Commission accordingly allowed the appeal and dismissed the complaint. The Complainant has filed revision against the order of the State Commission.

LEARNED Counsel for the Petitioner argued before us that the defence of the Respondent had been struck of and the Respondent could not have produced/filed any new documents before the State Commission without permission. He also stated that both the conditions were required to be fulfilled, namely, cancellation of the policy as also return the premium but the Respondent had failed to prove the same and the State Commission erred in passing the impugned order.

LEARNED Counsel for the Respondent submitted before us that the letter dated 4.3.2002 vide which the cheque for Rs. 1,119 was sent by registered post could not be located but the cheque had been received back and the same is lying with the Insurance Company.

WE do not find any merit in the submissions made by the learned Counsel for the Petitioner that the Respondents could not be permitted to produce or rely upon letter dated 4.2.2002 vide which the policy in question was cancelled and the policyholder was informed of the same, as also postal receipt No. 3418 in respect of the same. The Respondents were entitled to produce the said documents in appeal in view of the pleadings and case set up before the District Forum even though the same might not have produced before the District Forum. The copy of the registered letter dated 4.2.2002 which was produced before the State Commission shows that the policyholder was informed that policy issued in his favour stood cancelled w.e.f. 15.2.2002. The said notice was sent under postal receipt No. 3418. The State Commission was right in holding that even though no acknowledgement receipt had been filed, yet presumption can be drawn that the policyholder must have received the communication in ordinary course of business. This presumption could not be rebutted by the wife of policyholder by stating that no such notice was received. In the said registered letter dated 4.2.2002, the policyholder was informed that the premium payable under the policy would be sent through cross cheque. The case of the Insurance Company is that the cheque No. 825291 dated 4.3.2002 for Rs. 1,119 was sent by registered post and the cheque was returned back. In this view of the matter, the only entitlement of the Petitioner/Complainant would be to receive the said amount of Rs. 1,119 with interest thereon. Accordingly, the District Forum was not justified in ordering payment of maturity value of Rs. 5 lakh of the policy with interest, etc. Therefore, the revision is partly allowed only to the extent of refund of Rs. 1,119 with 12% p.a. interest thereon from 15.2.2002 when the policy stood cancelled till effective payment thereof. In the facts and circumstances of the case, cost shall be borne by the Insurance Company which are fixed at Rs. 25,000 to be paid to the Complainant. The revision stands disposed of in aforesaid terms. Revision Petition disposed of.