National Consumer Disputes Redressal
Life Insurance Corporation vs Batthini Rama Rao on 24 April, 2009
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3254 OF 2004 (From the Order dated 09.07.2004 in Appeal No. 932/2001 of Andhra Pradesh State Consumer Disputes Redressal Commission, Andhra Pradesh) LIFE INSURANCE CORPORATION OF INDIA PETITIONER VERSUS BATTHINI RAMA RAO RESPONDENT BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MR. B.K. TAIMNI, MEMBER FOR THE PETITIONER : MR. AJAY GOSWAMI, ADVOCATE. FOR THE RESPONDENT : MR. NEMO. PRONOUNCED ON : 24.04.2009 O R D E R
ASHOK BHAN J., PRESIDENT Petitioner herein, who was the Opposite Party before the District Consumer Disputes Redressal Forum, Nalgonda (hereinafter referred to as the District Forum for short), has filed the present Revision Petition.
Shortly stated, the facts of the case are: -
Complainant-respondent herein had taken a policy called Asha Deep Policy in the sum of Rs.1,00,000/- on a yearly premium of Rs.4,939/-. Respondent submitted a proposal on 29.10.1993. While submitting the proposal, respondent made a request to date back the policy and indicated himself that the policy be backdated from 28.09.1993. The proposal was submitted on 29.10.1993. An amount of Rs.4,940/- was paid on 19.11.1993 towards the first premium. Accordingly, policy no. 643340247 for a sum of Rs.1,00,000/- on yearly premium of Rs.4,939/- was issued on 30.11.1993. The date of the maturity is 28.09.2018. Respondent underwent a heart operation of Aortic Valve replacement with 23 inches size on 10.10.1994 at Medwin Hospital, Hyderabad. Respondent applied for reimbursement of the amount incurred for the said operation. The claim was repudiated on the ground that in terms of the policy, no reimbursement could be given as the respondent had undergone the operation within one year of the date of the issuance of the policy.
Being aggrieved, respondent filed the complaint before the District Forum claiming benefit under (A) and (B) as per terms and conditions of the policy along with interest @ 24% per annum from the date of operation with costs. A sum of Rs.1,00,000/- was claimed towards the harassment and mental agony. District Forum allowed the complaint aggrieved against which the respondent had filed an Appeal before the Andhra Pradesh State Consumer Disputes Redressal Commission, Andhra Pradesh (hereinafter referred to as the State Commission for short). The State Commission dismissed the Appeal by the impugned Order holding that the policy had come into effect from 28.09.1993 and the respondent underwent the heart surgery on 10.10.1994 which was clearly beyond the period of one year. It was observed as under: -
The complainant has obtained Ashadeep policy marked as Ex.A-1. Admittedly the assured underwent open Heart By-pass surgery. Hence it is to be held that the policyholder has underwent the operation within the period of insurance and is entitled for reimbursement. The policy was accepted on 28.09.1993 as per Ex.A-1 and he underwent an open heart surgery on 10.10.1994. Hence it is obvious that the assured has not underwent the operation within one year from the commencement of policy. Sec. 64 VB of the Insurance Act 1939 has no application. Taking into consideration Exs. A-1 and A-13 the District Forum came to the conclusion that there is deficiency of service on the part of the opposite parties. We do not see any reason to interfere with the well considered order passed by the District Forum.
In spite of Notice, the respondent did not appear and he was ordered to be proceeded ex-parte on 04.03.2009. The case was adjourned for today and the Office was directed to send a copy of the Order dated 04.03.2009 to the respondent. Respondent is not present today as well in spite of Notice.
Counsel for the petitioner, relying upon the Judgment of Supreme Court of India in Life Insurance Corporation of India v. Dharam Vir Anand reported in [(1998) 7 SCC 348], contends that the risk under the policy would be covered from the date on which the policy is issued and not from the date which is mentioned in the policy. In the present case, the date of issuance of the policy was 30.11.1993 and the risk would be covered only from that date. In Dharam Vir Anands case (supra), Supreme Court of India held as under: -
6. Having examined the rival submissions and having examined the policy of insurance which is nothing but a contract between the parties and having considered the expressions used in Clause 4-B of the terms of policy we are persuaded to accept the submissions made by Mr. Salve, the learned Senior Counsel appearing for the appellants. In construing a particular Clause of the Contract it is only reasonable to construe that the words and the terms used therein must be given effect to. In other words one part of the Contract cannot be made otiose by giving a meaning to the policy of the contract. Then again when the same Clause of a contract uses two different expressions, ordinarily those different expressions convey different meanings and both the expressions cannot be held to be conveying one and the same meaning. Bearing in mind the aforesaid principle of construction, if Clause 4-B of the terms of policy is scrutinized, it becomes crystal clear that the date on which the risk under the policy has commenced is different from the date of the policy. In the case in hand undoubtedly the date on which the risk under the policy has commenced is 10.5.1989 but the date of the policy is
31.3.1990 on which date the policy had been issued. Even though the Insurer had given the option to the Insured to indicate as to whether the policy is to be dated back and the Insured indicated that the policy should be dated back to 10.5.1989 and did pay the premium for that period, thereby the risk under the policy can be said to have commenced vim effect from 10.5.1989 but the date of the policy still remains the date on which the policy was issued i.e. 31.3.1990. The death of the life assured having occurred as a result of suicide committed by the assured before the expiry of three years from the date of the policy, the terms contained in Clause 4-B of the policy would be attracted and, therefore, the liability of the Corporation would be limited to the sum equal to the total amount of premium paid under the policy without interest and not the entire sum for which the life had been insured. The Forums under the Consumer Protection Act committed gross error in construing Clause 4-B of the policy and giving the same meaning to the two expressions in the aforesaid Clause 4-B namely "the date on which the risk under the policy has commenced" and "the date of the policy". The construction given by us to the provisions contained in Clause 4-B get support, if the proviso to Clause 4-B is looked into. Under the proviso if the life assured commits suicide before expiry of one year reckoned from the date of the policy then the provisions of the Clause under the heading "suicide" printed on the back of the policy would apply. In a case therefore where a policy is dated back for one year prior to the date of the issue of the policy the proviso contained in Clause 4-B cannot be operated at all. When parties had agreed to the terms of the contract it is impermissible to hold that a particular term was never intended to be acted upon. The proviso to Clause 4-B will have its full play if the expression "the date of the policy" is interpreted to mean the date on which the policy was issued and not the date on which the risk under the policy has commenced. In the aforesaid premises we are of the considered opinion that under Clause 4-B of the policy the date of the policy is the date on which the policy had been issued and not the date on which the risk under the policy had commenced by way of allowing it to be dated back. In view of our aforesaid construction to Clause 4-B, in the case in hand the respondent in law would be entitled to only the sum equal to the total amount of premium paid under the policy without any interest inasmuch as the death of the life assured has occurred before the expiry of three years from the date of the policy i.e. 31.3.1990. Even though we have construed the provisions of Clause 4-B as aforesaid but so far the amount of compensation payable to the respondent is concerned we find from the letter of the Corporation dated 02.02.1995 that the Claims Review Committee has examined the facts of the case and had decided to pay a sum of Rupees two lacs on ex-gratia basis and we see no reason why the respondent should not be entitled to receive the said amount together with the interest thereon. The said offer of the Corporation having been made on 02.02.1995 and more than three and half year having been elapsed since then, we think that the appellant-Corporation should pay a total sum of three lacs to the respondent-claimant in full satisfaction of the claim of the respondent and this amount should be paid within eight weeks from today. This appeal is disposed of accordingly.
(Emphasis supplied) Clause 4-B discussed in the Dharam Vir Anands case (supra) is similar to the clause in the present case. The point in issue is clearly covered by the Judgment of the Supreme Court of India in Dharam Vir Anands case (supra). Respectfully following the same, we accept this Revision Petition and set aside the Orders passed by the District Forum as well as the State Commission. Consequently, the complaint is ordered to be dismissed with no orders as to costs.
. . . . . . . . . . . . . . . .
(ASHOK BHAN J.) PRESIDENT .
. . . . . . . . . . . . . . .
(B.K. TAIMNI) MEMBER REVISION PETITION NO.
3254 OF 2004 (From the Order dated 09.07.2004 in Appeal No. 932/2001 of Andhra Pradesh State Consumer Disputes Redressal Commission, Andhra Pradesh) LIFE INSURANCE CORPORATION OF INDIA PETITIONER VERSUS BATTHINI RAMA RAO RESPONDENT Draft Order in the above matter is sent herewith for your kind perusal. If approved, the same may be listed for pronouncement.
(ASHOK BHAN J.) President 23.04.2009 Honble Mr. B.K. Taimni, Member