SALIL KR.BANERJEE vs DIVISIONAL MANAGER, THE ORIENTAL INSURANCE CO. LTD.

THIS appeal is directed against order dated 16.7.1997 passed by the Calcutta District Forum, Unit-II dismissing the case of the complainant.

THE complainant approached the Forum with two grievances. His first grievance was that his Medi-claim Policy was cancelled by the Insurance Company by a letter dated 18.8.1994 although the investigation with regard to the claim was not them complete. His second grievance is that the Insurance Company refused to renew his Medi-claim Policy for a further period from 16.5.1995 to 15.5.1996. THE complainant alleges that the action on the part of the opposite party amounts to deficiency in service. Accordingly, he has claimed compensation of Rs. 10,000/-. THE Forum dismissed the case on the ground that the policy condition empowers the Insurance Company to cancel a policy by sending 30 days notice in advance. THE Forum noticed that the aforesaid condition of the policy was complied with by the Insurance Company and the policy was cancelled by a letter dated 18.8.1994. THE Forum noticed that the relevant clause of the policy is Clause No. 3.11. It is accepted that a voucher for the sum of Rs. 1,519/- was sent to the complainant upon cancellation of the Medi-claim Policy. Since the Clause 3.11 of the policy conditions empowers the Insurance Company to cancel the policy by sending 30 days notice the action of the Company, in our view, cannot be said to be illegal. THE opposite party has sent a voucher for Rs. 1,519/- to the complainant. This being the position we are in agreement with the view taken by the Forum with regard to the cancellation of the policy. Now coming to the question of renewal of the policy for the period from 16.5.1995 to 15.5.1996 we find that the said period has long expired. It is to be considered whether the act of the Insurance Company was arbitrary, irrational and is tantamount to unfair trade practice. Learned Counsel appearing for the appellant argues that the action of the Insurance Company in not renewing the policy for a further period was unfair trade practice requiring interference by the Forum. He submits that the Insurance Company cannot adopt pick and choose policy in the matter of renewal of the Medi-claim Policy. In this connection, he has referred to a case reported in (1994) 3 Supreme Court Cases 504. He has also referred to another case reported in (1995) 5 Supreme Court Cases 482. On perusal of these two judgments we find that the ratio of decision rendered in these two cases cannot be applied to the facts of the present case. It may be mentioned that the renewal of policy depends on mutual consent of the parties and the Insurance Company is not obliged to renew the policy in view of the terms and conditions contained in the policy. Here, in this case the Insurance Company has not adopted any unfair trade practice and there is no discrimination between one class of policy-holders and others. In our opinion, the Insurance Company cannot be compelled to renew the policy especially with regard to financial matters. For the reasons aforesaid, we think that the judgment appealed against does not call for any interference. The Forum has rightly decided the case. The appeal is without any merit and it is accordingly dismissed on contest. Mr. D. Karforma, Member-While agreeing with the above decision in view of the terms and conditions contained in the policy, I would like to make the following observation. Cancellation and non-renewal of the Medi- claim Policy has been sought to be defended by the respondent only on the basis of a clause in the policy empowering the Insurance Company to cancel a policy without assigning any reason. However, the question remains that whether such a clause stipulated by the Insurance Company is reasonable and fair, and not arbitrary and irrational. A few facts may be noted in this regard. The Insurance Company is in the public sector and uptil now there is no private sector Company in the insurance business. Also in regard to the product "Medi-claim" there is hardly any choice before the consumer, but to approach the said Insurance Company and take the policy only upon agreeing to their terms and conditions, regardless of their arbitrariness, if any. Moreover, the consumer is also faced with the limitation of unequal bargaining power vis- a-vis the Insurance Company. In this regard, the observations made in the judgment in the case (1995) 5 Supreme Court Cases 482, are quite illuminating. However it will be too much to expect a Consumer Court to go into the question of arbitrariness or irrationality of a clause stipulated by the Insurance Company, and possibly only an appropriate Court may do this, if the matter is agitated before it. With the above observations, I agree with the main order that the appeal be dismissed on contest. Appeal dismissed.