National Consumer Disputes Redressal
National Insurance Company Ltd. vs Hukam Bai Meena on 1 August, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3216 OF 2016 (Against the Order dated 07/09/2016 in Appeal No. 753/2015 of the State Commission Rajasthan) 1. NATIONAL INSURANCE COMPANY LTD. THROUGH ASSTT. MANAGER, NATIONAL INSURANCE CO. LTD., 2E/9, JHANDEWALAN HAJRATGANJ, LUCKNOW UTTAR PRADESH ...........Petitioner(s) Versus 1. HUKAM BAI MEENA W/O. LATE MITHALAL MEENA, R/O. GRAM RAIPURA, POST KALYANPURA TEHSIL DISTRICT-DAUSA RAJASTHAN 2. SAHARA INDIA COMMERCIAL CORPORATION LTD. Through Branch Manager, Nai Anaaj Mandi, Gangapur Road, Lalsot 3. SAHARA INDIA COMMERCIAL CORPORATION LTD. Command Office, Sahara india Bhawan, 1, Kapoorthala Complex, Lucknow ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Ms. Sonia Sharma, Advocate
Mr. Durgesh, Officer of NIC For the Respondent : For the Respondents
2 & 3 : Mr. Simranjeet Singh, Advocate
Ms. Neha Gupta, Advocate
Ms. Sonali Dhir, Advocate
Mr. Harsh Vardhan, Advocate
Dated : 01 Aug 2018 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)
The husband of the complainant had deposited Rs.10,000/- with the Sahara India Commercial Corporation in one of its schemes Rajat Labh Yojna. The Sahara India Commercial Corporation had taken a Group Personal Accident Insurance Policy from the petitioner company in respect of its employees and depositors. As per the policy for the year 2009-10, a sum of Rs.2.00 lacs was payable to a person depositing less than Rs.70,000/-. Therefore, the life of late husband of the complainant was covered to the extent of Rs.2.00 lacs in the event of his death in an accident in the year 2009-10. On his death, a claim was lodged by the complainant with Sahara India Commercial Corporation, which forwarded the same to the petitioner company. The claim was repudiated on the ground that the claim was delayed as the same ought to have been submitted within one month from the date of the death of the depositor. It was also claimed in the repudiation letter that only Rs.50,000/- was payable under the policy. Being aggrieved, the complainant approached the concerned District Forum by way of a consumer complaint. The District Forum allowed the complaint and directed that out of the claim amount, Rs.50,000/- will be paid by the insurer whereas the balance amount of Rs.1,50,000/- would be paid by Sahara India Commercial Corporation.
2. Being aggrieved from the order passed by the District Forum, both National Insurance Company Ltd. as well as the Sahara India Commercial Corporation preferred separate appeals before the concerned State Commission. Vide impugned order dated 07.9.2016, the State Commission accepted the appeal filed by Sahara India Commercial Corporation and held that the petitioner National Insurance Company Ltd., was liable to pay the entire amount of Rs.2.00 lacs to the complainant. Being aggrieved the petitioner is before this Commission by way of this revision petition.
3. As far as the quantum of compensation payable under the insurance policy is concerned, a perusal of the insurance policy for the year 2009-10 clearly shows that the amount payable in the case of accidental death of the depositor was Rs.2.00 lacs wherever, the deposit was less than Rs.70,000/-. The amount payable in case of accidental death of the depositor was Rs.5.00 lacs in case the deposit was Rs.70,000/- or more. Therefore, the liability of the insurer under the policy for the year 2009-10 in which the husband of the complainant Hukam Bai Meena expired was Rs.2.00 lacs and not Rs.50,000/-.
Clause 3 of the Insurance Policy for the year 2009-10, reads as under:
"3. Limitation of Claim - As per standard terms of the policy any claim occurring under the policy has to be reported within thirty days of occurrence of incident. This period as a special case is extended by fifteen days. The claims will have to be reported in writing within 45 days of occurrence of incident to National Insurance Company, D.O.-IV Lucknow. Any claim reported after 45 days of occurrence will not be entertained. (Since the time is taken for the preparation of policy for October, 2009, 15 days period has been enhanced for reporting the claim and submission of documents. This extension will not be taken as precedent and is only for the month of October, 09)".
4. If we go by the aforesaid term of the insurance policy, the claim ought to have been submitted within 30 days or at best within 45 days from the death of the depositor. It is not in dispute that the claim to the insurer was submitted after one year and four months. However, the case of the complainant with respect to delay in lodging the claim rests upon the Circular No. IRDA/HLTH/MISC./CIR/216/09/2011 dated 20.9.2011, issued by Insurance Regulatory and Development Authority (IRDA). The said circular, to the extent it is relevant, reads as under:
"The Authority has been receiving several complaint that claims are being rejected on the ground of delayed submission of intimation and documents.
The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specified number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances.
The insurers' decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.
Therefore, it is advised that all insurers needs to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time."
5. It is thus evident that a genuine claim is not to be rejected by the insurer only on account of delay in its submission. The insurer is required to enquire from the claimant as to what was the reason or the delay in submission of the claim. The claim should be rejected only where the insurer finds that it was liable to be rejected even if it had been submitted in time. In the present case, admittedly, no attempt was made by the insurer to ascertain the reasons for the delay in submission of the claim from the complainant. Therefore, she did not get an opportunity to explain the said delay. This is not the case of the petitioner that the husband of the complainant had not died in an accident or that he was not a depositor with Sahara India Commercial Corporation. Therefore, it cannot be said that the claim would have been rejected even if it had been submitted in time.
6. The order of the State Commission, which relies primarily on the above referred circulated dated 20.9.2011, issued by IRDA does not call for any interference by this Commission in exercise of its revisional jurisdiction. The revision petition is therefore dismissed.
7. The learned counsel for the petitioner states that they have already made payment of Rs.50,000/- to the complainant. The balance payment shall be made within six weeks from today.
......................J V.K. JAIN PRESIDING MEMBER