State Consumer Disputes Redressal Commission
The New India Assurance Co. Ltd. vs Shri Chandrakant Motichand Kandle on 2 May, 2008
CONSUMER DISPUTES REDRESSAL COMMISSION CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE, MUMBAI FIRST APPEAL NO. 2396 OF 2005 Date of filing : 25/11/2005 @ MISC. APPL. NOS. 2822 & 2823 OF 2005 Date of order : 02/05/2008 IN CONSUMER COMPLAINT NO. 407 OF 2004 DISTRICT CONSUMER FORUM : SOLAPUR The New India Assurance Co. Ltd. Thru Divisional Manager, Hutatma Smriti Mandir Complex, Park Chowk, Solapur. Now thru Manager, Regional Office, Sharda Centre, Off Karve Road, Pune. Appellant/org. O.P. V/s. Shri Chandrakant Motichand Kandle At Post Andhor, Tal. Tuljapur, Dist. Osmanabad. Respondent/org. complainant Corum : Shri P.N. Kashalkar, Honble Presiding Judicial Member
Smt. S.P. Lale, Honble Member Present: Mr.R.P. Bafna, Advocate for the appellant/Insurance Company.
Mr.L.N. Maradkar, Advocate for the respondent/org. complainant.
- : ORDER :-
Per Shri P.N. Kashalkar, Honble Presiding Judicial Member This appeal is directed by org. O.P./Insurance Company against the order passed by District Consumer Forum Solapur in consumer complaint No.407/2004, whereby while allowing the complaint, O.P. has been directed to pay insurance claim to the complainant in terms of policy and to pay interest @ 9% p.a. from 29/05/2003 besides cost of Rs.500/-. By filing this appeal, Insurance Company has taken strong exception to the order passed by the District Consumer Forum.
The facts to the extent material may be stated as under :-
The respondent herein had taken Janata Personal Accident Insurance Policy bearing No.151300/47/98/17220 for period 02/09/1998 to 01/09/2008. The respondent met with an accident while he was driving Motorcycle on Umerga-Solapur Road on 17/07/2000. A Jeep had dashed his Motorcycle and he sustained severe injuries. Ultimately, it was found that he had suffered permanent disability of 75%. He lodged F.I.R. against the Jeep Driver in Tuljapur Police Station vide C.R.No.107/2000. He had lodged insurance claim after recovery from the illness. The Insurance Company however repudiated his claim stating breach of terms and conditions of the policy as a reason. Hence, the respondent was required to file consumer complaint No.407/2004 in District Consumer Forum Solapur. He claimed insurance amount as per Janata Personal Accident Insurance Policy with interest @ 18% p.a. and Rs.5,000/- towards mental agony and also requested for grant of cost.
The Insurance Company filed written statement and denied all the allegations made by the complainant. But, it admitted that the complainant was issued Janata Personal Accident Insurance Policy and at the time of accident, policy was in force. It admitted that on 17/07/2000 the complainant met with an accident and by letter dated 08/11/2002 accident was reported to the Insurance Company. The Insurance Company pleaded that it had repudiated the claim by sending letter dated 29/05/2003 on the ground that the complainant had committed breach of terms and conditions of the policy. The complainant ultimately filed consumer complaint on 02/12/2004.
According to the Insurance Company, filing of complaint by the complainant on 02/12/2004 itself is belated one. The complaint should have been filed within one year from the date of disclaimer intimated to the complainant by the Insurance Company. The Insurance Company further pleaded that it had appointed Advocate Mr.S.M. Narkar as an Investigator. He investigated the matter, examined the accident papers and circumstances surrounding the accident. However, claim was repudiated on the ground of breach of terms and conditions of the policy and therefore the Insurance Company pleaded that the complaint should be dismissed with cost.
On the basis of affidavits and documents filed by the rival parties, the Learned District Consumer Forum held that the complaint as filed by the complainant was not time-barred and it was filed well within limitation. It also held that O.P./Insurance Company is guilty of deficiency in service since they had wrongly repudiated the claim of the complainant and therefore, it was pleased to allow the complaint and gave directions to the Insurance Company to pay the amount as per Janata Personal Accident Insurance Policy purchased by the complainant with interest @ 9% p.a. and also cost of Rs.500/-. Hence, this appeal filed by the Insurance Company.
We heard submissions of Mr.R.P. Bafna, Advocate for the appellant/Insurance Company and Mr.L.N. Maradkar, Advocate for the respondent/org. complainant.
There was delay of 23 days in filing this appeal. For that condonation of delay application was filed by the Insurance Company. In support of condonation of delay application affidavit has been filed and acting upon the said affidavit, since just and sufficient cause has been made out, we are inclined to allow this application and condone the delay. Accordingly delay is condoned.
Coming to the merits, we are finding that Advocate Mr.Bafna has raised a very vital point of disclaimer and delay in filing complaint on the part of respondent/org. complainant. He also raised another point that policy condition stipulated that the accident should be intimated forthwith upon happening of any such event by way of giving notice to the Insurance Company in any case within one calendar month after the happening of event. He produced on record (page-22&23) terms and conditions of the Janata Personal Accident Insurance Policy.
We will take second point first for discussion.
This was Janata Personal Accident Insurance Policy and as per terms and conditions, the claimant has to intimate in any case within one calendar month immediately upon happening of any such event giving rise to the claim under this Insurance Policy. In fact wording of condition No.1 is that such accident or event must be intimated forthwith, but latitude of one month is given. So, in case of any accident or event happening giving rise to insurance claim under the Janata Personal Accident Insurance Policy, the claimant has to prefer claim within one month from happening of event. In the instant case, complainant sustained injuries on 17/07/2000 at Umerga-Solapur Road by meeting with an accident. He was driving his motorcycle. His motorcycle was dashed by Jeep coming from opposite side and he sustained severe injuries. He was required to be hospitalized and ultimately it is the case of the complainant that he has been disabled permanently to the extent of 75%. If this is so, within one month from 17/07/2000 he should have intimated about the accident to the Insurance Company as per terms and conditions of the Janata Personal Accident Insurance Policy issued to the complainant. He has not done so within one month. Admittedly, for the first time he sent intimation about his accident on 08/11/2002. So, there was delay of more than two years in giving first information to the Insurance Company about his accident. Delay of more than two years is the direct breach of condition No.1, which cast duty on the insured to inform about the accident within one month from happening of the accident. This delay according to us is very much fatal and it goes to the root of the policy condition and this delay cannot be condoned. Had there been delay of 10-15 days in giving intimation to the Insurance Company about his accident, we would have considered it in favour of the complainant. But, delay of more than two years is too much to be condoned and no just and sufficient cause has been shown by the complainant in his complaint why there has been such an inordinate delay in giving intimation of accident to the Insurance Company. The Counsel for the respondent Mr.Maradkar tried to impress upon us that there has been delay on the part of the complainant in intimating accident because he was for some time hospitalized and for another period he was taking outdoor treatment. If the respondent was hospitalized on account of accident, period of hospitalization could be said to be just and reasonable cause or sufficient cause within meaning of condition No.1 of Janata Personal Accident Insurance Policy. But, when the person is taking treatment at O.P.D., period of O.P.D. cannot be said to be reasonable because a person taking treatment at O.P.D. for follow-up action after he is discharged from the hospital, can very well go here and there and could have sent intimation immediately to the Insurance Company. But, he had not done so. It is not his case that for more than two years he was bed ridden and was indoor patient in any hospital. So, period of two years in even giving first information of the accident to the Insurance Company must be held to be unreasonable and he cannot be excused for the same and on this ground alone for committing vital breach of condition No.1, the Forum below ought to have dismissed the complaint. The Forum below erred in law in holding that the delay on the part of the complainant in giving intimation to the Insurance Company is just and reasonable. We do not agree with the findings recorded by the Forum below in this behalf. When the policy condition stipulated that the accident should be informed forthwith or in any case within one month since happening of event/accident, delay of more than two years is too inordinate to be condoned so lightly. So, on this ground alone complaint should have been dismissed by the Forum below upholding the objection raised by the Counsel for the Insurance Company.
Secondly, it was contended rightly by the Counsel for the Insurance Company Mr.Bafna that there was another breach committed by the complainant that is in respect of disclaimer clause. As per terms and conditions of the Janata Personal Accident Insurance Policy, there was specific term that if the Company disclaimed the liability of the insured or any claim hereunder and such claim shall not within 12 calendar months from the date of such disclaimer have been made the subject of a suit in any Court of Law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.
This clause found in some of the Insurance Policies was also subject matter involved in National Insurance Company Ltd. V/s. Sujir Ganesh Nayak & Co. decided by the Honble Supreme Court, reported in 1986-99 Consumer 4946 (NS). While interpreting provisions of Section 28 of Contract Act, the Supreme Court made following observations :-
But there could be agreements which do not seek to curtail the time for enforcement of the right but which provides for the forfeiture or waiver of the right itself if no action is commenced within the period stipulated by the agreement. Such a clause in the agreement would not tall within the mischief of Section 28 of the Contract Act. To p7ut it differently, curtailment of the period of limitation is not permissible in view of Section 28 but extinction of the right itself unless exercised within a specified time is permissible and can be enforced. If the policy of insurance provides that if a claim is made and rejected and no action is commenced within the time stated in the policy, the benefits flowing from the policy shall stand extinguished and any subsequent action would be time-barred. Such a clause would fall outside the scope of Section 28 of the Contract Act.
Thus the Supreme Court held that if the policy of insurance provides that if the claim is made and rejected and no action is commenced within the time stated in the policy, the benefits flowing from the policy shall stand extinguished and any subsequent action would be time-barred. The Supreme Court held that such a clause would not fall within the scope of Section 28 of the Contract Act.
In the instant case, such a disclaimer clause was incorporated in the policy as basic term and condition of the policy. This clause stipulated that if the Company shall disclaim liability and if insured aggrieved by the disclaimer, does not file any proceeding in a Court of Law within 12 calendar months from the date of such disclaimer, the claim for all purposes shall be deemed to have been abandoned and shall not thereafter be recoverable hereunder. It would necessarily mean that from the date of disclaimer by the Insurance Company of any claim, the insured has to bring legal action within 12 calendar months since the date of disclaimer and not thereafter. This term is held to be valid term by the Supreme Court in the ruling mentioned supra. In our case, the Insurance Company sent no claim notice on 29/05/2003 by registered A.D. and since that date within 12 calendar months, the complaint should have been filed by the complainant. It means that complaint should have been filed on or before 28/05/2004. But, the consumer complaint has been filed on 02/12/2004 i.e. 17 months after the repudiation of claim by the Insurance Company. So, there was patently delay of more than five months since disclaimer letter sent by the Insurance Company, which is directly in contravention of disclaimer clause mentioned in the Insurance Policy issued to the respondent/org. complainant. This disclaimer clause extinguished the rights of the complainant and he had no existing right to file consumer complaint though a consumer complaint can be filed within two years from the date of repudiation of claim by the Insurance Company. In the normal course of thing, had there been no disclaimer clause, the consumer complaint as filed by the complainant would have been held as having been filed within limitation. But, since there is disclaimer clause and since only one year period was available to the complainant to file consumer complaint since the date of disclaimer letter received by him and since he has committed five months delay in filing consumer complaint in terms of disclaimer clause, the complaint was absolutely barred by limitation as per contractual terms and conditions governing Janata Personal Accident Insurance Policy. In the circumstances, on this ground also the Forum below appears to have been committed patent error in law in overlooking the vital aspect involved in this complaint and returned wrong finding in favour of the complainant. Thus, by allowing this appeal, the complaint will have to be dismissed on these two grounds. Hence, the following order :-
-: ORDER :-
1. Misc. Appl. No.2822/2005 for condonation of delay is allowed. Delay is condoned.
2. Appeal is allowed. The impugned order under challenge is quashed and set aside. Complaint stands dismissed.
3. Parties are left to bear their own costs.
4. Misc. Appl.
No.2823/2005, which is for stay stands disposed of.
5. Copies of the order be furnished to the parties.
(S. P. Lale) (P.N. Kashalkar) Member Presiding Judicial Member dd.