State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India ... vs Karnail Singh on 17 October, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH
First Appeal No. 115 of 2009
Date of institution : 30.1.2009
Date of Decision : 17.10.2012
Life Insurance Corporation of India through its Authorized Officer, Manager
(L&HPF), Divisional Office Sector 17, Chandigarh.
....Appellant.
Versus
1. Karnail Singh S/o Kashimira Singh R/o Village Lullon P.O. Badwala,
Tehsil Bassi Pathana, Distt. Fatehgarh Sahib.
2. Gurnam Singh, Agent LIC No. 9420P (Code No.) Resident of Village
Amrali Sub Tehsil Morinda, Distt. Ropar.
...Respondents.
First Appeal against the order dated 11.12.2008 of
the District Consumer Disputes Redressal Forum,
Fatehgarh Sahib.
Before:-
Shri Piare Lal Garg, Presiding Member.
Shri Jasbir Singh Gill, Member.
Present:-
For the appellant : Sh. B.J. Singh, Advocate
For respondent No.1: Sh. Gulshan Verma, Advocate for
Sh. Arvind Kashyap, Advocate
For respondent No.2: Ex.-parte.
PIARE LAL GARG, PRESIDING MEMBER:
This is an appeal filed by the appellant-Life Insurance Corp. of India(hereinafter called 'the appellant') against the order dated 11.12.2008 of the District Consumer Disputes Redressal Forum, Fatehgarh Sahib(hereinafter called the 'District Forum') by which the complaint of respondent No.1/complainant (hereinafter called 'respondent No.1') was accepted by the District Forum.
2. Brief facts of the case are that respondent No. 1 was Motor Mechanic and doing the work in the Workshop of Kuldeep Singh on a First Appeal No. 115 of 2009 2 salary of Rs. 4,000/-. On 27.4.2001, when respondent No. 1 repaired the Thrasher at village Lullon during the course of transaction, an accident had taken place in which his right hand was got crushed. Immediately he was taken to Civil Hospital, Ropar, where all the digits including the thumb was amputated. He is still receiving the treatment from Civil Hospital, Ropar. Respondent No. 1 had incurred more than Rs. 20,000/- on his treatment and now he is jobless.
3. Respondent No. 1 had purchased Bima Kiran LIC Policy No. 161968592 on 28.3.2001 and insured himself for an amount of Rs. 50,000/-. He had paid 1st installment of Rs. 204/-. Respondent No. 1 had spent Rs. 20,000/- on his treatment and filed the claim with the appellant but the appellant refused to pay the same. Complaint was filed on the ground that the appellant may be directed to pay Rs. 20,000/- i.e. expenses incurred on treatment with interest @ 18% p.a.
4. Upon notice, the appellant replied by taking preliminary objections that the complaint was not maintainable, respondent No. 1 has no cause of action to file the complaint, respondent No. 1 misused the legal process. On merits, issuance of insurance policy was admitted by the appellant. It was pleaded that mode of payment of the premium was quarterly. No information regarding the accident or amputation has been given by respondent No. 1 to the appellant. The disability benefit was covered as per Policy Condition No. 8. Stand was taken by the appellant that the disability benefit was not payable as per the policy conditions No. 8(a) because only the digits of the right hand and thumb were amputated, which results in irrecoverable loss or in the amputation of one hand at or above the wrist and one foot or above the ankle shall be deemed to constitute such disability. It was denied that respondent No. 1 or his representative had ever informed the appellant about the accident and the First Appeal No. 115 of 2009 3 appellant came to know about the accident only after receiving the copy of notice of the complaint. It was pleaded that respondent No. 1 did not file any claim before the appellant, as such, they are unable to consider the claim. All other allegations were denied and dismissal of the complaint was prayed.
5. Learned District Forum after hearing the learned counsel for the parties and going through the record, allowed the complaint and directed the appellant to make the payment of Rs. 50,000/- with interest from the date of accident i.e. 27.4.01 till its realization and also direct to pay Rs. 10,000/- as compensation and Rs. 500/- as cost of the complaint.
6. Hence, the appeal.
7. We have gone through the pleadings of the parties, grounds of appeal, perused the record of the learned District Forum and heard the arguments of the learned counsel for the parties.
8. The appeal is filed by the appellant on the grounds that the District Forum has failed to appreciate Condition No. 8 of the Policy, erred in not appreciating the fact that a claim for disability benefit under the policy in question is not admissible as only in case of 100% disability the claim is payable and not on 30% disability, as such, the order of the District Forum is liable to be set-aside.
9. It is admitted case of the appellants that respondent No. 1 was insured with the appellant for Rs. 50,000/- vide policy dated 31.3.2001 and also paid the first premium of Rs. 204/- on 28.3.2001. The accident dated 27.4.2001 is also not denied vide which all the digits including the thumb of respondent No. 1 was amputated. Disability to the extent of 30% as stated by respondent No. 1 is also not disputed. It is also not disputed that respondent No. 1 was drawing Rs. 4,000/- as salary from Sh. Kuldip Singh, owner of the workshop where respondent No. 1 was working. First Appeal No. 115 of 2009 4
10. Only the dispute between the parties is whether respondent No. 1 is entitled for any claim due to disability of 30% which he had suffered in accident or not?
11. The relevant Condition No. 8 and 8(a) relates to the "Disability to the Life Assured", which is reproduced:-
"8. Accident Benefit : If at any time when this policy is in full force, the Life Assured, before the expiry of the period for which the premium is payable is involved in an accident resulting in either permanent disability as herein after defined or death and the same is provided to the satisfaction of the Corporation, the Corporation agrees in the case :
(a) Disability to the Life Assured : (i) to pay in monthly instalments spread over 10 years an additional sum equal to the Death Benefit under this Policy. If the policy becomes a claim before the expiry of the said period of 10 years, the disability benefit instalments which have not fallen due will be paid along with the claim. (ii) to waive the payment of future premiums.
The waiver of premiums shall extinguish all options under this policy and also the benefits covered by para (b) of this Clause.
The disability above referred to must be disability which is the result of an accident and must be total and permanent and such that there in neither than nor at any time thereafter any work, occupation or profession that the Life assured can ever sufficiently do or follow to earn or obtain any wages, compensation or profit. Accidental injuries which independently of all other causes and within 180 days from the happening of such accident, result in the irrecoverable loss of the entire sight of both eyes or in amputation of both hands at or above the wrists or in the amputation of both feet at or above ankles, or in the amputation of one hand at or above the wrist and one foot at or above the ankle, shall be deemed to constitute such disability.
Immediately after the happening of the disability, full particulars thereof must be given in writing to the office of the Corporation where this policy is serviced together with the then address and whereabouts of the Life Assured and within the 180 days after the happening of the disability there must be given to the servicing office of the Corporation in the manner required by it, proof of disability satisfactory to the Corporation and without any expense to the Corporation, and thereafter similar proof must be given as and when required by the Corporation, of the continuance of such disability. Any Medical Examiner nominated by the First Appeal No. 115 of 2009 5 Corporation shall be allowed to examine in person the Life Assured in respect of any disability claimed, in such manner and at such times before and/or after the disability is accepted by the Corporation as the Corporation may require.
In the event of its being discovered at any time that a claim under this Clause has been wrongly admitted all premiums falling due after the Corporation's intimation to that effect shall be paid on due dates and further all premiums for which the waiver was wrongly claimed and all instalments of additional sun which have been paid shall be paid to the corporation in one lumpsum with interest at such rate as, may be prevailing at the time of payment as if no disability had occurred falling which (i) the benefits available under the policy shall stand reduced as if the policy has been discontinued as on the date from which premium have been waived to those available on the date from which the premiums have been waived or the payment of the first instalment of additional sum assured, whichever is earlier and (ii) the instalments of additional sum assured already paid shall be treated as a debt against the said policy and shall be deducted with interest at such rate as may be prevailing at time of payment from the proceeds of the policy."
12. The Hon'ble National Commission in Revision Petition No. 3446 of 2006 "L.I.C. of India versus Ram Singh Tanwar", 2007(1) CLT 500 dealt with the similar facts and thoroughly discussed the point under question and observed in paras No. 7 to 14 as follows:-
"7. No doubt the aforesaid condition as per the policy term, is not in divided form as stated above. But, for the purpose of understanding and interpretation the condition is divided into two parts without any addition. First part of the condition, inter alia, provides that in the accident there must be total and permanent disability so that assured can never sufficiently do or follow to earn or obtain any wages, compensation or profit. This part is different from the second part narrated above.
8. Second part deals with accidental injuries which independent of all other causes, result in loss of limbs as mentioned therein. Such loss of limb is also deemed to constitute permanent disability. It is a deeming provision where capacity to earn is not required to be considered. It makes it clear that independent of the injuries which may be total and permanent for any other cause, the loss of limbs, as stated therein, would by itself be deemed to be permanent disability. To illustrate, a businessman can do his work even if there is amputation of one hand and/or above the wrist and one foot and/or above the ankle.First Appeal No. 115 of 2009 6
9. In our view, this would be the reasonable interpretation and in conformity with the principle that if the terms of the policy are vague it should be interpreted for the benefit of the assured as it would serve the purpose and object of getting insurance coverage Re: Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan & Ors., I (1987) ACC 413 (SC)=(1987) 2 SCC 654; Shashi Gupta v. LIC of India, II (1995) CPJ 15 (SC)=(1995) Suppl. 1 SCC 754; B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., II (1996) CPJ 28 (SC)=I (1997) ACC 123 (SC)=(1996) 4 SCC 648; and LIC v. Raj Kumar Rajgarhia & Anr., II (1999) SLT 362=(1999) 3 SCC 465.
10. In any case where there is any ambiguity or term is capable of two interpretations, interest of justice would be served if interpretation one beneficial to the policy holder is accepted: Re: United India Insurance Co.
Ltd. v. Pushpalaya Printers, (supra).
11. In the present case, the complainant is an illiterate person whose only job was driving a vehicle and he lost his one leg and become unfit for driving the vehicle then it cannot be said that he can sufficiently do the said work for getting his livelihood or to obtain any wages, compensation or profit by doing the said job. May be that by begging he may get some amount but that cannot be said to be a business or occupation and that such an interpretation is to be avoided.
12. Learned Counsel for the petitioner, however, submitted that the terms of the insurance policy are to be strictly interpreted as held by the Apex Court. For this proposition, we have no doubt. But, at the same time when the condition is ambiguous the interpretation which serves the purpose of insurance is to be accepted.
13. He further referred to the decision rendered by this Commission wherein this Commission observed that loss of one eye was not a permanent disability and, therefore, the LIC rightly repudiated the claim. In or view, the said judgment would have no bearing on the facts of the present case, as the person is a driver and his livelihood was depending upon driving a vehicle, and that he cannot do so in future for all the time to come.
14. Finally, we observe that it is necessary for the officers of the LIC to change their negative approach in dealing with such claim and the insurance coverage should not be nullified by backward looking interpretation of the Act and in some cases litigation could be avoided. The Apex Court, in this context, held in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, (supra), that: "It is the statutory provision defining the conditions of exemption which is being interpreted. These must, therefore, be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfil its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not turned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the Legislature has given, the Court cannot deprive of by way of an exercise in interpretation when First Appeal No. 115 of 2009 7 the view which renders the provision potent is equally plausible as the one which renders the provision impotent".
13. The above proposition of law would fully cover the case of respondent No. 1 and he is entitled for the disability benefit under the policy.
14. Respondent No. 1 also tendered into evidence disability certificate Ex. C-4 issued by Civil Surgeon, Fatehgarh Sahib to the tune of 30%. The version of respondent No. 1 is that due to amputation of all the digits including the thumb of his right hand, he is unable to work and earn his livelihood and the appellant has not rebutted this version of respondent No. 1 rather the same was almost admitted by the appellant.
15. So as per the above discussion, we of the opinion that respondent No. 1 is entitled for the benefit of Bima Kiran Policy, which he had purchased from the appellant.
16. In case "L.I.C. of India versus Ram Singh Tanwar", I(2007) CPJ 48 (NC), the Hon'ble National Commission interpreted the terms of the policy and considered the case of the insured as 'permanent disability'. It was observed in paras No. 3, 5, 12 as follows:-
"3. The State Commission referred to the decision of the Apex Court in United India Assurance Company Ltd. V. Puspalaya Printers, I (2004) CPJ 22 (SC)=II (2004) SLT 263=2004 (3) SCC 649 and observed that if there is any ambiguity, or a term is capable of two possible interpretations, the one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. The State Commission thereafter referred to the fact that a Medical Board was set up by the Government of Rajashtan at SMS Hospital, Jaipur and that Board has certified that the right leg of the complainant below knee was amputated on 25.12.2000. The State Commission also noted that complainant was not educated and cannot be gainfully employed because he is not a normal person. On the said basis, the State Commission confirmed the order passed by the District Forum directing the LIC to pay the sum assured.
5. To avoid such litigation and its costs, officers of the L.I.C. should keep in mind the observations of the Apex Court in the case of Life Insurance First Appeal No. 115 of 2009 8 Corporation of India v. Asha Goel (Smt.) & Anr., I (2001) SLP 89=(2001) 2 SCC 160, that the approach of the Corporation in the matter of repudiation of the policy, admittedly issued by it, should be one of extreme care and caution. It should not be dealt with in a mechanical and routine manner.
12. Learned Counsel for the petitioner, however, submitted that the terms of the insurance policy are to be strictly interpreted as held by the Apex Court. For this proposition, we have no doubt. But, at the same time when the condition is ambiguous the interpretation which serves the purpose of insurance is to be accepted."
17. However, the appellant has not given the Permanent Disability Benefit (PDB) table in the policy when the policy covers the accidental benefits. The intention of the LIC was not good and to pay the claims to the persons, who are entitled under the policy. It was observed by the Hon'ble National Commission that officials of the LIC change should their negative approach in dealing with such claims and the insurance cover should not be nullified by backward looking interpretation of the Act and in some cases litigation could be avoided. But till date the LIC has not changed their negative approach, as such, the appeal of the appellant is liable to be dismissed with special costs.
18. In view of the above discussion, it is proved that respondent No. 1 is entitled for the amount of sum assured with all benefits accrued thereon as per the policy in question.
19. The order passed by the learned District Forum is legal and valid and there is no ground to interfere with the same. The appeal being without any merit is dismissed with special costs of Rs. 10,000/- and the impugned order of the District Forum is affirmed and upheld.
20. The arguments in this appeal were heard on 4.10.2012 and the order was reserved. Now the order be communicated to the parties.
21. The appellant had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to First Appeal No. 115 of 2009 9 respondent No. 1 by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant.
22. Remaining amount shall be paid by the appellant to respondent No. 1 within 30 days from the receipt of the copy of the order.
23. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Piare Lal Garg)
Presiding Member
October 17, 2012. (Jasbir Singh Gill)
as Member