State Consumer Disputes Redressal Commission
Pnb Met Life India Insurance Company vs Deepa Arora & Another on 27 January, 2021
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.25 of 2020
Date of institution : 17.01.2020
Reserved On : 18.01.2021
Date of decision : 27.01.2021
PNB Metlife India Insurance Company, Ist Floor, Techniplex-1,
Techniplex Complex, Off Veer Sawarkar Flyover, Goregaon, West
Mumbai-Maharashtra-400062, through its Authorized Signatory Mr.
Rajeev Sharma S/o Late Sh. Lekh Ram Sharma, Senior Manager
(Legal) available at PNB Met Life Insurance Co. Ltd., 4th Floor,
Platinum Tower, Sohana Road, Sector 47, Gurugram-122001.
....Appellant/Opposite Party No.2
Versus
1. Deepa Arora, aged about 42 years, wife of Late Sh. Deepak
Arora, resident of Gobindram Baldev Raj Gol Bagh, Lakkar
Mandi, Jeevan Singh Road, now House No.11, Faram House,
Palm Lane, Fatehgarh Churian Road, Vridavan Garden, Nangli,
Amritsar-143001 (Punjab).
....Respondent/Complainant
2. Punjab National Bank, DAV College, Branch Hall Gate, Amritsar
(Punjab), through its Branch Manager.
.....Respondent/Opposite Party No.1
First Appeal against the order dated
26.11.2019 of the District Consumer
Disputes Redressal Forum (now
"Commission", Amritsar.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Rajinder Kumar Goyal, Member
Mrs. Kiran Sibal, Member.
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued By:-
For the appellant : Sh. Sanjeev Goyal, Advocate
For respondent No.1 : Sh. Jatinder Nagpal, Advocate
For respondent No.2 : Ex parte.
First Appeal No.25 of 2020 2
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT
The instant appeal has been filed by the appellant/opposite party No.2 against the order dated 26.11.2019 passed by District Consumer Disputes Redressal Forum (now "Commission"), Amritsar (in short, "the District Commission"), whereby the complaint filed by respondent No.1/complainant, under Section 12 of the Consumer Protection Act, 1986, was allowed against opposite party No.2 and the same was dismissed against opposite party No.1, in the following terms:
"15. In view of the above discussion, we allow the complaint and the opposite party No.2 is directed to clear all the outstanding loan amount after taking account statement from opposite party No.1. Opposite party No.2 is also directed to pay compensation to the tune of ₹7500/- and litigation expenses to the tune of ₹5000/- to the complainant. However, complaint against opposite party No.1 stands dismissed. Compliance of the order be made within one month from the date of receipt of copy of orders; failing which complainant shall be entitled to get the order executed through the indulgence of this Forum."
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission. Facts of the Complaint
3. Brief facts, as averred in the complaint, are that Late Sh. Deepak Arora, husband of the complainant, was the only bread earner for the family. He expired on 22.6.2018, leaving behind his wife i.e. complainant Deepa Arora (aged 45 years); mother (aged 75 years); two daughters namely Deepali Arora (aged 19 Years) and Alisha Arora (aged 15 years) and son Master Tushar Arora (aged 11 years). During his lifetime, husband of the complainant had taken Housing Term Loan First Appeal No.25 of 2020 3 of ₹8 lacs and OD HL Limit of ₹8 lacs from opposite party No.1-Bank in the month of January, 2015. The representative of opposite party No.1 had allured him to buy insurance policy namely "MET Loan & Life Suraksha Policy" from opposite party No.2-Insurance Company to cover death in case of any eventuality, by paying one time premium. Believing his representation, the husband of the complainant agreed to it and, accordingly, opposite party No.1 deducted ₹15,933.44 as premium and Insurance Policy No.00000299 of Loan Account No. HomeLoan-400600NC00041868, covering the entire loan of ₹8 lacs, was issued. However, the terms and conditions of the insurance policy were never supplied to him, nor any claim was ever raised under that policy. At the time of issuance of the said policy, opposite party No.1 had obtained only the signatures of the complainant's husband and the Proposal Form was filled-up by the agent of opposite party No.2. The husband of the complainant was never examined by any empanelled Medical Officer of opposite party No.2, neither he was asked to undergo any pathological tests to satisfy the opposite party No.2 for any type of ailments before issuance of the policy. It is further averred that during the validity period of that insurance policy, husband of the complainant suffered health problems for more than four days and became unconscious. He was immediately rushed to Fortis Escorts Hospital on 19.06.2018 with complaints of constipation and breathlessness and he was not in a position to tell anything regarding his health. He was advised immediate admission at that Hospital. While the husband of the complainant was planned for discharge after First Appeal No.25 of 2020 4 complete treatment and when he went to bathroom in the hospital, he had sudden cardiac arrest at 7.30 A.M. and pulsless-CPR was started immediately and all life saving drugs were given. He was intubated and CPR continued, but he could not be revived and was declared dead at 8.45 A.M. The complainant claimed the amount covered under the insurance policy, in question, from opposite party No.2, in order to discharge the liability of outstanding housing loan amount taken by her husband and submitted Death Certificate etc. to it. However, instead of settling the claim, the opposite parties pressurized her to clear the entire outstanding loan amount. Later on, they assured to settle the claim within 10 days and started making demands of new documents time and again. Ultimately, vide letter dated 28.09.2018, the genuine claim of the complainant was denied on flimsy grounds. The complainant obtained some material records regarding eligibility criteria from the source of www.pnbmetlife.com of opposite party No.2 and Life Suraksha Plan, wherein nothing was mentioned about such type of terms and conditions. Alleging deficiency in service and unfair trade practice on the part of the opposite parties, the complainant approached the District Commission, seeking issuance of following directions to them:
i) to settle the outstanding loan amount of ₹8,00,000/- as per Policy Cover Note, along with interest at the rate of 18% per annum from 22.09.2018 till realization;First Appeal No.25 of 2020 5
ii) to pay the compensation of ₹50,000/- for the mental agony, harassment suffered by the complainant at the hands of the opposite parties; and
iii) to pay ₹15,000/- as litigation costs.
Defence of the Opposite Parties
4. Upon notice, opposite parties No.1 & 2 appeared before the District Commission and filed their separate replies to the complaint.
5. Opposite party No.1, in its reply, raised preliminary objections that the complaint is not legally maintainable against opposite party No.1, as the dispute is mainly between the complainant and opposite party No.2. On merits, contents of Paras-1 to 5 of the complaint are denied being wrong and incorrect. Facts qua taking of loan and insurance policy, in question, by husband of the complainant are admitted. It is further denied that opposite party No.1 ever obtained signatures of her husband on forms etc. No cause of action had arisen to the complainant to file the complaint against opposite party No.1. The complainant is not entitled for the settlement of claim with opposite party No.1. All other allegations contained in the complaint are denied and dismissal of the complaint is prayed.
6. Opposite party No.2, in its reply, raised preliminary objections that the complainant has suppressed material facts. The insurance policy, in question, i.e. "Met Loan and Life Suraksha Decreasing Cover Option" bearing certificate No. 21828431 (Group Policy No. 00000299) was issued on the basis of information provided First Appeal No.25 of 2020 6 by the deceased life assured (in short, "DLA") in the Proposal Form dated 15.07.2015; which was proved to be incorrect and, as such, opposite party No.2 was well within its right to repudiate the claim of the complainant. It is further pleaded that as per the Death Summary issued by Fortis Escorts Hospital, Amritsar, the DLA was suffering from Chronic Kidney Disease-V for the last 6 years and Type-II DM, Hypertension, whereas the insurance policy, in question, was proposed on 15.07.2015. Thus, the DLA was suffering from the aforesaid kidney disease prior to taking of the policy. However, he deliberately answered the relevant questions in the Application Form dated 15.7.2015 in negative. The Insurance contract is based on utmost good faith and the DLA, being a party to the contract, was bound to disclose all material facts known to him at the time of proposal. The non-disclosure of material facts amounts to fraud and nobody can take the benefit of its own wrong doing. The DLA gave wrong answer as "No", to the following Question No.4.6 in the Proposal Form:
4.6 Do you have any of the following disorder or undergone any medical investigations like (including chest, x-ray, Gynological investigation, PAP smear or blood tests) consultation, hospitalization or surgery? For the below ailments:
Chest Pain, High Blood Pressure, Stroke, heart attack, heart murmur, or other disorder, Asthma, Chronic cough, Pneumonia, shortness of breath, T.B. or any other respiratory or lung disorder, Sugar in urine, diabetes mellitus, Protein (Albumin) Blood or pus in the urine, sexually transmitted or venereal disease, ulcerative colitis, chronic diarrhea, Hepatitis or Jaundice or other Chronic liver disorder, cancer, Tumor, thyroid disorder, enlarged glands or enlarge lymph nodes, Anemia, bleeding or blood disorders, dizziness/fainting spells, epilepsy, paralysis, nervous or mental/emotional disorder, disorder of First Appeal No.25 of 2020 7 urine, kidney, bladder, reproductive organ or prostrate, rheumatic disorders, acquired immune deficiency syndrome (AIDS) or Aids related complex or a test indicating the presence of HIV (AIDS virus).
The DLA had also signed the declaration, admitting that he had understood the terms and conditions of the plan and he had made declaration of true and correct facts. Opposite party No.2 had also taken into consideration the provisions of Section 2 (d) of the Protection of Policy Holders' Interests Regulation, 2002 at the time of issuing the policy to the DLA. Reference to some judgments has been made in the reply. It is further pleaded that complicated questions of law and facts are involved in the complaint, which cannot be decided in summary proceedings. On merits, facts qua taking of housing loan and insurance policy by the husband of the complainant are admitted. It is further pleaded that the DLA, at his own, obtained the insurance policy, in question, in order to cover the loan risk. The complainant was appointed as nominee under that policy. As per terms and conditions of the policy, in question, in case of unfortunate death of the insured, the decreasing sum assured shown in the schedule was payable. It is further pleaded that the terms and conditions of the insurance policy were duly supplied to the insured. The claim of the complainant was rightly repudiated, as the DLA had deliberately suppressed the material facts qua his health at the time of submitting the Proposal Form. Similar other pleas, as raised in preliminary objections, were reiterated and denying all other allegations levelled in the complaint, dismissal thereof was prayed.
First Appeal No.25 of 2020 8
7. Rejoinders were filed, in which the averments of the complaint were reiterated and that of the replies filed by the opposite parties were controverted.
Evidence of the Parties and Finding of the District Commission
8. The complainant, in support of her claim, filed her self attested affidavit Ex.C-1A, along with copies of documents i.e. Policy Certificate Ex.C-1, Death Certificate of DLA Ex.C-2, Credit Account Statement Ex.C-3, repudiation letter dated 28.09.2018 Ex.C-4 and print-out of plan Ex.C-5. Opposite party No.1, in support of its defence, filed unattested affidavit of Sh. Ashok Arora, Officer, Ex.OP-1/1 and Statements of Account Ex.OP-1/2 and Ex.OP-1/3. Opposite party No.2, in support of defence, filed complete policy document Ex.OP-1, repudiation letter dated 28.09.2018 Ex.OP-2, Claim Intimation Form Ex.OP-3 and Medical Record of DLA Ex.OP-4 (colly.). The District Commission, after going through the record and hearing learned counsel for the parties, allowed the complaint against opposite party No.2 and dismissed the complaint against opposite party No.1, vide impugned order, in the aforesaid manner. Hence, this appeal. Contentions of the Parties
9. We have heard learned counsel for the appellant and respondent No.1 and have carefully gone through the written arguments submitted on their behalf and records of the case. Respondent No.2 did not appear despite its service and was proceeded against ex parte, vide order dated 06.07.2020. First Appeal No.25 of 2020 9
10. The written arguments submitted on behalf of the appellant/opposite party No.2 are on the lines of the pleadings made in the reply filed by it before the District Commission and the grounds of appeal. The sum and substance of oral and written arguments is that the claim of the complainant was rightly repudiated, on the grounds that prior to taking the insurance policy, in question, the DLA was suffering from Chronic Kidney Disease-V for the last 6 years as well as Type-II DM and Hypertension as per Death Summary issued by Fortis Escorts Hospital, Amritsar. However, he suppressed these facts while filling up the Proposal Form dated 15.07.2015. Hence, the DLA was guilty of concealment of material facts at the time of taking the insurance policy. The District Commission has ignored the above said medical record of Fortis Escorts Hospital. It also erred in holding that no affidavit of the doctor, who issued the death summary, has been produced. In fact, the complainant has never disputed the fact of issuance of the said Death Summary. Rather, she herself admitted that her husband died in Fortis Escorts Hospital and produced the Death Certificate as Ex.C-2. The contract of insurance is of utmost good faith, i.e. uberrima fides, and intentional and willful concealment of any material fact vitiates it. Therefore, the impugned order is liable to be set aside, while allowing the present appeal. In support of his contentions, learned counsel for the appellant has relied upon following cases, the extract of some of which has been given in the written arguments:
First Appeal No.25 of 2020 10
i) Life Insurance Corporation of India v. Manish Gupta 2019 (3) CPJ 31 (SC);
ii) Reliance Life Insurance Co. Ltd. & Ors. v. Rekhaben Nareshbhai Rathod 2019 (2) CPJ 53 (SC);
iii) Pushpa Chauhan v. Life Insurance Corporation of India 2011 (2) CPJ 44 (NC);
iv) Ramratti v. Life Insurance Corporation of India & Anr. 2015 (1) CPJ 121 (NC);
v) Life Insurance Corporation of India & Anr. v. Bimla Devi 2016 (1) CPJ 57 (NC);
vi) United India Insurance Co. Ltd. v. M/s M.K.J. Corporation 1996 (3) CPJ 8 (SC);
vii) Bharti & Ors. v. Bajaj Allianz Life Insurance Company Ltd.
2014 (1) CPJ 502 (NC);
viii) Life Insurance Corporation of India & Ors. v. Shamim 2009 (4) CPJ 217 (NC);
ix) Rakesh Patel v. LIC of India & Anr. 2015 (1) CPJ 716 (NC);
x) PNB Metlife Insurance Company Ltd. & Anr. v. Mopidevi Lalitha 2017 (3) CLT 303 (NC);
xi) Charanjit Singh v. Life Insurance Corporation of India & Anr.
2018 (2) CPJ 204 (NC);
xii) Ramesh Kumar v. Tata AIA Life Insurance Co. Ltd. & Anr.
2019 (3) CPJ208 (NC);
xiii) ICICI Prudential Life Insurance Co. Ltd. v. Yashika Alias Meera & 2 Ors. 2015 (4) CLT 518 (NC); and
xiv) Sunita Goyal v. Bajaj Allianz Life Insurance Co. Ltd. & 2 Ors.
2017 (4) CPJ 54 (NC).
11. The written arguments submitted on behalf of respondent No.1/complainant are also on the lines of the averments made in the complaint. The sum and substance of the oral and written arguments is that the DLA never concealed any disease/fact at the time of First Appeal No.25 of 2020 11 purchasing the insurance policy. He was admitted in Fortis Escorts Hospital, Amritsar under IPD No.126826 dated 19.06.2018 only with the complaint of constipation and when he was about to be discharged, he went to toilet and suddenly suffered cardiac arrest and died. The DLA was doing a small business of fire wood Commission Agent. He had taken housing loan of ₹8 lac from opposite party No.1- Bank and to secure the said loan, on the allurements made by the opposite parties, he had obtained the insurance policy, in question. However, only the policy cover note was issued and no terms and conditions of the insurance policy were ever supplied. Even the Proposal Form was filled-up by the official of the opposite parties and only signatures of the DLA were obtained on blank papers. It is further contended that the claim of the complainant has been repudiated merely on the basis of answers given as "No" to the questions put in the Proposal Form on first page. However, at the end of that page of the Proposal Form, "N/A" is also written. The tick mark on word "No" and words "N/A" could have been written by anyone, either by Bank official or the Insurance Company official. Even otherwise, the Insurance Company could have asked for medical examination of the DLA before issuing the policy, but that was not done at the relevant stage. Therefore, the claim of the complainant has been wrongly and illegally rejected. The District Commission has passed the impugned order after correctly appreciating the entire evidence on the record. The appeal is liable to be dismissed. In support of his contentions, First Appeal No.25 of 2020 12 learned counsel for respondent No.1/complainant has relied upon following cases:
i) D. Srinivas v. SBI Life Insurance Company Ltd. Civil Appeal No.2216 of 2018 decided by the Hon'ble Supreme Court, vide order dated 16.02.2018;
ii) Balwinder Kaur v. SBI Life Insurance Company Ltd. & Ors.
CC No.143 of 2013, decided by this Commission, vide order dated 17.02.2017; and
iii) ICICI Lombard General Insurance Co. Ltd. v. Jasbir Singh FA No.162/2013 decided by H.P. State Commission, vide order dated 31.01.2013.
Consideration of Contentions
12. We have given our thoughtful consideration to the contentions raised by the learned counsel for the parties.
13. Admittedly, the husband of the complainant, DLA, during his lifetime, had taken Housing Term Loan of ₹8 lac and OD HL Limit of ₹8 lac from opposite party No.1-Bank. To secure that loan in case of any unfortunate event, he obtained the insurance policy, in question, i.e. "Met Loan & Life Suraksha Policy, from opposite party No.2; which was valid from 19.07.2015 to 19.07.2030. Certificate of Insurance has been placed on record by the complainant as Ex.C-1. The DLA died on 22.06.2018 in Fortis Escorts Hospital, as is evident from Death Certificate Ex.C-2. The claim lodged by the complainant was repudiated by opposite party No.2, vide letter dated 28.09.2018, Ex.C- 4, on the grounds that the DLA was suffering from Chronic Kidney First Appeal No.25 of 2020 13 Disease-V, prior to taking the Insurance Policy, but he had suppressed material facts about his health while filling up the Proposal Form dated 15.07.2015. The only question to be decided in this appeal is whether the repudiation of the claim of the complainant on the above referred ground is legal and valid or not?
14. In support of the repudiation of the claim, opposite party No.1 has relied upon the medical record, including Death Summary dated 22.06.2018, issued by Fortis Escorts Hospital, Ex.OP-4 (colly.) and aforesaid judgments. There is no dispute to the law laid down by the Hon'ble Supreme Court in Manish Gupta's case (supra) and other judgments relied upon by the learned counsel for the appellant, but it needs to be mentioned that present is the case of housing loan taken by the DLA, which was covered under the group insurance policy Certificate, Ex.C-1. This is not a personal/individual Insurance Policy. It was taken by opposite party No.1-Bank from opposite party No.2- Insurance Company for the purpose of securing the loan advanced by it to the DLA. In the policy documents, Ex.OP-1 (colly.) produced by opposite party No.2 on record, opposite party No.1-Bank is mentioned as the nominee and proportion of benefit is mentioned as 100%. It is also an admitted fact that the Proposal Form was filled up by the Bank officials and not by any of the officials of the Insurance Company. However, no evidence of the Bank official, who filled the Proposal Form at the instance of the DLA or Insurance Company, has been brought on record. The Proposal Form has been produced by the appellant/opposite party No.2 at Pages-145/147 of District First Appeal No.25 of 2020 14 Commission's record. The questionnaire and its answers are given on first page and tick marking has been done in the box meant for "No". However, there are no signatures of the DLA on the first page of the Proposal Form. It also needs to be noticed that under the said questionnaire and answers, "N/A" is specifically written by hand. We all know that "N/A" (means 'not applied') is written in the specific column(s)/part(s) of the forms etc., which is/are not related or applicable to the signatory. Thus, by virtue of "N/A" mentioned under the questionnaire/answers and in the absence of signature of the DLA thereunder, it cannot be said that the said questions/answers were applicable to the DLA or were answered by him. Furthermore, being a group insurance policy, there may be possibility of filling-up wrong columns of the Proposal Forms, including that of DLA, by the agent, who filled the Proposal Form(s). Merely getting signatures of DLA only on the last page of the standard Proposal Form is not sufficient.
15. Furthermore, it is the specific plea of the complainant that the terms and conditions of the Insurance Policy were never conveyed/supplied to the DLA and only the Certificate of Insurance, Ex.C-1, is alleged to have been sent. Although, the Insurance Company has alleged that all the terms and conditions of the Insurance Policy was supplied to the DLA, but no cogent and convincing evidence, such as dispatch number, postal receipts etc., has been produced on record to prove this fact. Hon'ble Supreme Court in case Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 reversed the order of the Hon'ble National, First Appeal No.25 of 2020 15 observing that it failed to consider the fact that the terms and conditions of the Insurance Company were not supplied to the insured and upheld the order of the State Commission, allowing the claim. Thus, when the DLA was not aware about the terms and conditions of the Insurance Policy, then the question of concealment of material facts can also not be raised. It is the duty of the Insurance Company to bring all the terms and conditions of the Insurance Policy to the specific notice of the insured, so that within the "Free Look Period", the insured person can ask for cancellation of the Insurance Policy and seek the refund of the premium, if he/she is not satisfied with the features of the same. In the absence of the supply of terms and conditions of the Insurance Policy, the DLA was not in a position to go through the same and make his mind to accept or reject the insurance policy at the relevant time. After the lapse of sufficient long period, it cannot be presumed that the complainant is not entitled to the claim.
16. Further we would like to observe that the insurance may be defined as a contract between two parties, whereby one party called 'insurer' undertakes in exchange for a fixed sum called premium to pay to the other party called 'insured' a fixed amount of money, after happening of a certain event. Insurance policy is a legal contract & its formation is subject to the fulfillment of the requisites of a contract, as defined under Indian Contract Act 1872. What an individual person expects from the insurance company is not very complicated risk management but simple insurance coverage to his person and hard- earned property at an affordable price and timely indemnification First Appeal No.25 of 2020 16 without much cumbersome formalities. There is a popular saying 'What insurance companies give you in a big print, they take away in small print.' The policy contract is crowded with exceptions, exclusions, limitations, conditions and warranties. There are 'ifs' and 'whiles' clauses and sub-clauses, which overpower the so called 'big print' as a policy. The main object of the insurance is dislodged. No one objects to the necessity for limiting insurance within a known boundary, but the domination of these limitations should not blur the very basic objective of insurance. All the 'ifs' and 'whiles' clauses are highlighted and the claimant is asked to prove that the ashes are from his own property. The insurance companies have failed to win the confidence of the general public for its procedural drawbacks. The nobility of the principles of insurance had enough room to accommodate all, but the priests of insurance restrict access. We cannot let these people to imprison insurance. At the operating level, formalities are so rigid and inflexible that often these are impractical. The sticklers to formalities do no good to the idea of insurance, which man formulated to his own use.
17. The doctrine of promissory estoppel applies where there is a promise upon which the promisor could reasonably expect to induce action or forbearance of a definite and substantial character which does in fact induce such action or forbearance and injustice can only be avoided by enforcement of the promise. A promise is a voluntary commitment or undertaking by the party making it (the promisor) addressed to another party (the promisee) that the promisor will First Appeal No.25 of 2020 17 perform some action or refrain from some action in the future. An insurance agent's specific assurance that certain losses were covered under the insured's policy constituted a representation of fact. The legal effect of a contract or of a particular provision of a contract can often be a matter of uncertainty. In such cases, one may in all honesty, candor, and sincerity, state his opinion predicting the ultimate interpretation without thereby making a statement of fact. But what may subjectively be merely an opinion can, nevertheless, be stated as a present existing fact. If the statement thus made as a representation is not true but is justifiably relied on as being true, deceit has been practiced. If damage results, liability cannot be avoided on the ground that what was stated as a fact was subjectively intended as merely an opinion. Further if the Insurance Agents are subjectively stating mere opinions they are reckless in stating them as facts without first having ascertained their truth. The evidence presented is sufficient to sustain a finding that the Insurance Company through its agent made a false representation of policy coverage, which it either knew to be false or which it made recklessly without knowledge of its truth or falsity. Further constructive fraud is the breach of a legal or equitable duty which is fraudulent because of its tendency to deceive others, to violate a public or private trust, or to injure public interest. The elements of constructive fraud are: (1) a duty existing by virtue of the relationship between the parties; (2) representations or omissions made in violation of that duty; and (3) reliance on that representation or omission by the individuals to whom the duty is owed and to the First Appeal No.25 of 2020 18 detriment of that individual. Applying the general principles of law associated with the assumption of a duty, we hold that a duty to use reasonable skill, care and diligence may arise when pursuing an insurance claim on behalf of an insured. No doubt, generally an insured has a duty to learn the contents of the policy himself, even though it becomes necessary to have some third person read the contents to him. However, reasonable reliance upon an agent's representations can override an insured's duty to read his insurance policy. Further the elements of actual agency are: (1) manifestation of consent by the principal; (2) acquiescence by the agent; and (3) control exerted by the principal. If an agent does not act in good faith or with due care, he may be held liable to his principal for losses sustained. Therefore, we hold that the Insurance Company's duty to ascertain for themselves the procedure for preserving their claim was not enough to defeat as a matter of law the duty of good faith and reasonable care owed to its agents.
18. In view of our above discussion, the repudiation of the claim of the complainant was illegal and wrong and, as such, there is no justification for setting aside the impugned order.
19. Accordingly, the appeal, being without any merit, is hereby dismissed.
20. The appellant had deposited a sum of ₹25,000/- at the time of filing of the appeal. It deposited another sum of ₹5,84,375/-, vide receipt dated 03.03.2020, in compliance of order dated 05.02.2020 passed by this Commission. Both these amounts, along with interest First Appeal No.25 of 2020 19 which has accrued thereon, if any, shall be remitted by the registry to the District Commission forthwith. Respondent No.1/complainant may approach the District Commission for the release of the above amount and the District Commission may pass the appropriate order in this regard after the expiry of limitation period in accordance with law.
21. The appeal could not be decided within the statutory period due to heavy pendency of court cases and pandemic of COVID-19.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER (MRS. KIRAN SIBAL) MEMBER January 27, 2021.
(Gurmeet S)