VIRENDRA MOHAN MEHTA vs CHAIRMAN, LIFE INSURANCE CORPN. OF INDIA

-THIS appeal arises out of order passed by the District Forum, Satna in Case No. 29/93 dated 20.9.93. The District Forum was pleased to dismiss the complaint on a preliminary objection.

THE District Forum was of the view that the Insurance Company after investigation of the claim had rejected it and hence after such rejection, the District Forum or the Commission as the case may be has no jurisdiction to probe into dispute. The second ground raised is based on the question of jurisdiction. The Forum was of the opinion that the Satna Forum has no jurisdiction.

We have perused the record of the Forum. During the enquiry of the complaint that was on 13.9.93 that Manager, Indian Insurance Corporation, Satna (M.P.) was added as party. The record shows that the addition of party No. 4 as non-applicant has been shown as applicant No. 4. He should have been non-applicant No. 4. In column No. 3 of the complaint it is explained why non-applicant No. 4 has been treated as party.

ONE of the reasons for rejecting the complaint on preliminary ground is based on the plea raised by the non-applicant in the additional plea of defence raised. In para No. 4 of the additional pleas of the written statement the defence raised was that important facts were concealed deliberately and the death of deceased Smt. Neelam Mehta on 16.10.87 within a period of eight and half months after the life being insured was clouded with doubts. She was a teacher and she was on maternity leave from 6.11.86 to 2.2.87. This fact was not mentioned in the proposal for being insured. The learned Forum, Satna without giving an opportunity of recording evidence oral or documentary dismissed the complaint placing his opinion on the case law referred by the Forum in the impugned order, ignoring the judgment of National Consumers Disputes Redressal Commission, New Delhi reported in (1990) Vol.2 C.P.R. 587. A photocopy of the judgment was placed on record of the lower Court. In that judgment the Hon''ble National Commission after discussing the scope of Sec. 2(1)(a) and 2(14) of the Consumer Protection Act, 1986 has laid down as under:- "Held: Any unilateral repudiation of the context by the Insurance Company on the allegation that there had been a suppression of relevant material by the insurer at the time of taking the policy of insurance will not disentitle the policy holder from approaching the Redressal Forums constituted under the Act seeking an adjudication of the question whether the said repudiation was justified in law. In such a case the Consumer Disputes Redressal Forum has not only the jurisdiction but also a duty to investigate into the question whether the charge made by the Insurance Company on the basis of which the repudiation was made is well founded in fact. In case it is found as a result of such investigation that the Insurance Company was justified in repudiating the contract, the complaint petition before the Forum will have to fail; if on the other hand, the Forum comes to the conclusion that the charge levelled by the Insurance Company is not substantiated and hence there was no justification for its purported action repudiating the contract of insurance, the contract of insurance will be treated as subsisting and an enquiry will be conducted into the merits as to whether there was any ''deficiency'' in service on the part of the Insurance Company so as to entitle the complainant to grant of relief under the Act. Thus, it is clear that the jurisdiction of the statutory Redressal Forums to conduct an adjudication into the complaint is in no way affected by the unilateral repudiation of the contract of insurance by the insurer."

So the finding of the Forum that there was no necessity of probing into the matter suffers from illegality. Secondly the order of the Forum is dated 20.9.93 on that date the Consumer Protection Act, 1993 (Amendment) had come into force. Sec.ll stands amended. Sec.ll reads asunder: "14. Jurisdiction of the District Forum - (1)Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed (does not exceed Rs. 5 lakhs). (2)A complaint shall be instituted in a District Forum without the local limits of whose jurisdiction, (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or (carries on business or his branch office, or) personally works for gain, or; (b) any of the opposite parries, where there are more than one, at the time of the institution of the complaint, actually or voluntarily resides, or (carries on business or has a branch office) or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or (carry on business or have a branch office), or personally work for gain, as the case may be, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. In the light of this provision contained in Sec.ll Sub-clauses (a) and (b) when the Insurance Company has branch office at Satna, the Satna Forum has jurisdiction to entertain the complaint.

IN the result the appeal is allowed. The order passed by the District Forum is set-aside. It is directed that the District Forum after serving notice on both the parties shall dispose off the complaint. The cost of the complaint shall depend on the result of the complaint. Both the parties shall bear the costs of the appeal. The case is accordingly referred to the Forum for fresh decision according to law in the light of the order passed by this Commission. Appeal allowed.