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Judgment
The petitioner-Insurance Company has preferred the present writ petition questioning the legality and propriety of judgment and award dated
12.6.2019, passed by the learned Permanent Lok Adalat, Jodhpur, whereby a sum of Rs.5 lacs has been awarded in favour of the respondent no.1
with respect to a Group Insurance Policy, which had been taken by the respondent no.2- The Jodhpur Central Cooperative Bank Ltd for covering the
risk of the insured- its members/Kissan Credit Card Holders.
The facts relating to the accident are harrowing; but the facts giving rise to this case are even more agonising- they showcase the apathetical
attitude of the Insurance Companies.
On 31.1.2017 when Dungar Ram was traveling in a Bolero vehicle alongwith his family members, a truck collided with it, resulting in serious
accident, in which almost all the passengers, being his close relatives got seriously injured. Sattu Devi W/o Prakash and Sagni D/o Dungar Ram (the
deceased) died instantaneously; whereas Dungar Ram was seriously injured and was referred to MDM Hospital, Jodhpur. He remained hospitalized,
fought till 9.2.2017 and ultimately lost the battle.
The claimant being hapless widow mother of the deceased Dungar Ram took sometime to come out of the shock and mourning, and when she was
informed that her son was holding a Kissan Credit Card, covered by a Group Insurance Policy taken by the Jodhpur Central Cooperative Bank Ltd.
for its members, she contacted the respondent Bank. The respondent Bank, having taken a Group Insurance Policy on 11.7.2016 filed a claim under
the Policy for accidental death of Dungar Ram on 11.4.2017.
The petitioner - Insurance Company however repudiated the same vide its letter dated 7.12.2017, solely on account of the fact that the accident
took place on 31.1.2017, whereas the intimation to the Insurance Company was given on 11.4.2017 (after 70 days). It will not be out of place to
reproduce the contents of the repudiation letter dated 7.12.2017, which reads thus:
13.10.2017 - 1.
31.01.2017 11.04.2017 70
0 1 .. . 0 23 1.
2.
Respondent No. 1, the mother of the deceased - being nominee, thus approached Permanent Lok Adalat under Section 22-C of the Legal Services
Authority Act, 1987 by way of filing a claim petition.
The petitioner - Insurance Company opposed the claim tooth and nail, with the plea that the claimant is not entitled for the benefits of the Group
Insurance Policy, as the intimation of the accident was given after the prescribed of 30 days.
The learned Permanent Lok Adalat, after considering the facts and material available on record, allowed the claim petition filed by the respondent
no.1 and awarded a sum of Rs.5 lacs being amount payable under the Group Insurance Policy; interest @ 9% upon such sum from 1.1.2018 and cost
of Rs.10,000/-.
Mr. Jagdish Vyas, learned counsel for the petitioner - Insurance Company submitted that learned Lok Adalat has erred in passing the impugned
award dated 12.6.2019 and directing the petitioner- Insurance Company to pay the amount in pursuance of the Group Insurance Policy. Inviting
Court's attention towards condition no.1 of the terms and condition of the Policy, he submitted that as per the condition no.1, the claimant was required
to give intimation of the accident immediately, and in any case, within a maximum period of 30 days. According to him since neither any intimation of
the accident was given to the petitioner - Insurance Company nor was the claim lodged within the stipulated period, the benefits of Insurance Policy
cannot be extended, as the claimant failed to comply with the condition of the policy. The bone of contention- condition no.1 of the Policy is being
reproduced hereinfra:
Upon the happening of any event, which may give rise to claim under this Policy, written notice with full particulars must be given to the company
immediately. In case of death, written notice also of the death must, unless reasonable cause is shown, be so given before internment, cremation and
in any case, within one calendar month after the death, and in the event of loss of sight or amputation of limbs, written notice thereof must also be
given within one calender month after such loss of a sight or amputation.
Mr. Vyas contended that the Insurance Policy is a contract and parties thereto are bound by the terms and conditions enumerated in the Policy.
According to him, condition no.1 of the Insurance Policy is sacrosanct; as the intimation was given after 70 days of the accident, benefits of the policy
cannot be claimed.
In support of his contention aforesaid, Mr. Vyas relied upon the judgment of Hon'ble the Supreme Court in the case of Sonell Clocks and Gifts
Ltd. Vs. New India Assurance Company Ltd., reported in (2018) 9 SCC 78.4 Placing heavy reliance upon said judgment and para no.15 in particular,
he argued that interpreting almost identical condition of the Insurance Policy, Hon'ble the Supreme Court held that such condition is sine qua non to
maintain a valid claim under the policy.
Mr. Mehta, on the other hand, appearing for the claimant submitted that in an unfortunate accident, which took place on 31.1.2017, grand-daughter
of claimant-respondent no.1 died instantaneously, while her son Dungar Ram suffered serious injuries and other family members (6 in number) got
severely injured. His son was referred to Hospital at Jodhpur, where he suffered various complication and ultimately passed away on 9.2.2017.
He submitted that a Group Insurance Policy was taken by the respondent- Jodhpur Central Cooperative Bank for its members, who were about
12,000 in number. It was the duty of the respondent- Bank to claim the amount in terms of the Policy, while intimating Insurance Company (petitioner)
about the accident/death of the member/Kissan Credit Card holder. He submitted that in the social set up of rural areas, it cannot be expected from an
old aged widowed mother to know about the advantages and benefits his son is entitled to and to know that there was a Policy of Group Insurance
taken by her son from respondent-Bank. It was only after she was informed by her acquaintance about such Policy, that she contacted the respondent
-Bank and pursued them to file the claim, which was sent on 11.4.2017.
He argued that delay of 70 days in the present facts cannot be considered fatal and the same is nothing but an excuse to avoid its contractual
liability.
Heard learned counsel for the parties and perused the material available on record.
Concededly, the Policy in question is a tailor made Policy- ""Group Insurance Policy"", which an employer takes for its employees or a company or a
society takes for the advantages of its members. The contract of Insurance is between the Insurance Company and the Employer or the Society, as
the case may be. There is no privity of contract between the Insurance Company and the members/employees, though they are the insured or ultimate
beneficiaries.
In the present contract there are two contracting parties; Petitioner- the insurance company (the insurer) and Respondent- Bank (the Policy
Holder). The Kissan Credit Card Holder/ Member is the insured or the beneficiary. The premium of the Group Policy has been paid by the Bank for
covering the risk of its members/ Kissan Credit Card Holders.
Such being the position, the case cited by Mr. Vyas does not serve his cause, particularly when the case before the Hon'ble Supreme Court was
involving a Policy of commercial nature, in which the insured cannot plead lack of knowledge of the terms of policy; whereas in the present case, the
policy is altogether of a different nature. Expecting the family members of the employee or the member of the society (in the present case from the
respondent no.1) to know about existence of such policy and its requirement that she is required to intimate the Insurance Company within a period of
30 days, is a bit too much to ask for.
This Court finds a clear distinction not only between the nature of policy, but also in the very contract of Insurance- particularly in respect of the
beneficiaries. In commercial policies, or general policies such as Life Insurance, Mediclaim etc. the beneficiary is the Insured himself or his family
members or his property, whereas in Group Insurance, the insured or beneficiary is not a signatory to the contract of Insurance. Hence, the Apex
Court's ruling in Sonell Clock (supra) is clearly distinguishable.
During the course of arguments, learned counsel for the respondent - claimant invited Court's attention towards a circular dated 20.9.2011 issued
by the Insurance Regulatory and Development Authority, inter alia, providing that the Insurance Company should not reject the claims solely on the
ground of delay. The said circular was produced before the learned Lok Adalat and relevant part thereof was exhibited. This Court deems it
imperative to reproduce the same:
The Current contractual obligation imposing the condition that the claim shall be initiated to the insurer with prescribed documents within a specified
number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement
etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of
documents due to unavoidable circumstances.
The insurer's decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in
isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on
purely technical grounds in a mechanical fashion will result in policyholders losing confidence n the insurance industry giving rise to excessive
litigation.
A perusal of the finding recorded by the learned Lok Adalat shows that it was established beyond pale of doubt that Dungar Ram, son of the
claimant, died of a vehicular accident on 9.2.2017. The claimant had placed a certificate given by the Medicare Relief Society, MDM Hospital,
Jodhpur (Ex.5); the intimation of the accident and death was duly given to the concerned Police Station, Shergarh. The petitioner's argument that no
post-mortem was got done has been aptly dealt with and repelled by the learned Lok Adalat by observing that Dungar Ram passed away in
Government Hospital and further that post- mortem is not mandatory as per the letter (dated 12.10.2004) of the Police Headquarter.
Apart from the letter of the Police Headquarter, there are series of judgments of this Court as well as other High Courts to the effect that if the
factum of accident is proved and by cogent evidence the death has been held to be arising out of an accident, a claim cannot be rejected solely
because no FIR was lodged. This Court does not find any merit in the contention of the petitioner that the respondent was not entitled for the benefits
as no post mortem was got done.
Adverting to the facts of the present case, indisputably, the accident took place on 31.1.2017 and the claim was lodged by the respondent- Bank,
the policy holder on 11.4.2017, in relation to the accidental death of Dungar Ram - its member/Kissan Credit Card Holder. One cannot lose sight of
the fact that said Dungar Ram died on 9.2.2017, hence, the relvant date as per condition no.1 has to be reckoned as 9.2.2017, to be the date of
accident and not the date on which the vehicular accident took place i.e., 31.1.2017.
Looking to the peculiar facts of the case, when the accident took place and as many as 8 persons of the family got injured/died, it cannot even be
expected from the members of the family to forget the grief, search for the investments/entitlement of the deceased and take up the proceedings to
claim benefit accruing out of the Insurance Policy.
So far as factum of accident and death of Dungar Ram - claimant's son in the accident are concerned, it has never been seriously denied/disputed
by the petitioner - Insurance Company. Purpose of condition no.1 in the Insurance Policy, providing for a 30 days time to file a claim, is to ward off
any frivolous claim and to ensure that the Insurance Company can at its level investigate the matter as to whether the accident has actually taken
place or not and/ or determine the amount payable.
Insurance Regularity & Development Authority (IRDA) has issued the circular dated 20.9.2011 and cautioned all the Insurance Companies to
desist from rejecting genuine claims, when the delay in intimation or submission of document is due to unavoidable circumstances. The circular issued
by the IRDA are binding on all insurance companies, including the petitioner Company. It cannot ignore such binding circular, which has been issued
to give benefits of the policy to the insured.
So far as existence of unavoidable circumstances is concerned, there can be no more deserving case than the one at hands.
As a matter of fact, in the present case, it was the duty of the respondent Bank- the policy holder to lodge the claim. The beneficiary or the family
member of the insured cannot directly file a claim. It is difficult nay impossible for the Bank to know that a particular member/ Kissan Credit Card
holder has passed away and that too out of an accident. The relationship of the respondent- Bank and the deceased was not that of employer-
employee, hence it was all the more improbable to know that such beneficiary has passed away and then to gather requisite details and documents to
lodge the claim or to intimate the Insurance Company within a period of 30 days.
In considered opinion of this Court, having regard to the nature of policy and considering the fact that the beneficiary or the insured are members/
Kissan Credit Card holders, stationed at remote corners, the condition No. 1 itself is unconscionable. The same cannot be applied mechanically,
without going into the reasons which has led to late intimation.
In the instant case, since nothing has been brought on record, which can even create a doubt about the occurrence of the accident, this Court is of
the considered opinion that the Insurance Company has committed an illegality in repudiating the claim in relation to the death of Dungar Ram under
the cloak of condition no.1 of the Insurance Policy.
The writ petition is thus, dismissed with cost, which is quantified at Rs.10,000/-.
The stay application also stands disposed of accordingly.