State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Chander Shekhar on 4 March, 2008
04-03-2008 IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 04-03-2008 Appeal No. A-306/2005 (Arising out of Order dated 02-03-2005 passed by the District Forum ( New Delhi), K.G. Marg, New Delhi, in Complaint Case No. OC/1240/01) Life Insurance Corporation of India, Divisional Office No. 1, 25-K.G. Marg, New Delhi 110001. . . . Appellant Through Mr. G.L. Chawla, Advocate Versus Mr. Chander Shekhar, S/o. Shri Roop Chand Yadav, R/o. WZ/48/2, Village Khyala, Delhi 110088. . . . Respondent CORAM: Justice J.D. Kapoor, President Ms. Rumnita Mittal, Member
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor (Oral)
1. The short question arising for determination in this appeal preferred against the Order dated 02-03-2005 passed by the District Forum is Whether the death of the insured took place in mysterious circumstances and not as a result of an accident?
2. Vide impugned Order dated 02-03-2005, the Appellant-Insurance Company has been directed to pay Rs. 1-00 Lac against the insurance policy as the rejection of the claim by the appellant by holding that as per clause-4 (b), the policy had become null and void due to the death in mysterious circumstances did not find favour with the District Forum.
3. Relevant facts leading to the impugned Order in brief are that the respondent was the nominee assigned in the Life Insurance Policy issued by the appellant in the name of the wife of the respondent for a sum of Rs. 1.00 Lac. In the night of 28-4-1999 and 29-4-1999 at about 12.30 AM when the respondent and his wife was returning after attending a marriage party an accident took place and both of them fell down and became unconscious.
Some passerby took them to Jaina Hospital, Meera Bagh, Delhi and later on, on the next date they were shifted to Maharaja Agrasen Hospital, New Delhi where the wife of the respondent Sangeeta Yadav succumbed to her injuries and the doctors at Maharaja Agrasen Hospital opined brought dead. The claim filed by the respondent with the appellant-Insurance Company was repudiated on the ground that since the death had taken place in mysterious circumstances the claim was not payable.
4. Justifying the repudiation of the claim, the appellant averred that the claim is not maintainable as the death of the wife of the respondent had taken place in mysterious circumstances and whatever amount was payable was offered to the respondent but he failed to deposit the discharge voucher to claim the offered amount as per the terms and conditions of the policy and, therefore, the complaint was not maintainable. It was further contended that as the complaint involved disputed questions of facts requiring elaborate enquiry and evidence for which the proper Forum for the respondent was a Civil Court and, therefore, the complaint should have been dismissed.
5. The District Forum found the rejection wrongful for the following reasons:-
That the O.P (Appellant herein) has not filed any document to show that the death of the insured Smt. Sangeeta Yadav had taken place under mysterious circumstances. Nor has it filed any document showing that the deceased Smt. Sangeeta Yadav was shifted from Jaina Hospital, Meera Bagh, Delhi against the advice of doctors. In the rejoinder the complainant (respondent herein) submitted that the relatives and parents of the deceased had given in writing to the police to waive post-mortem on the body of the deceased as they had not suspected any foul play in the death of the deceased and accordingly the post-mortem was waived as per request of the parents of the deceased Smt. Sangeeta Yadav. Further if the O.P suspected any foul play in the death of the deceased then it was their bounden duty to confirm the facts from the police in this respect but the O.P. had not taken any steps in that direction. Complainant had filed the death certificate of the deceased which has not been objected to by the O.P. in any manner whatsoever. O.P. by repudiating the claim of the complainant has committed deficiency in service and is liable for the same.
6. The Ld. Counsel for the appellant has assailed the impugned Order on the premise that:
i) As per the claimants statement the cause of death is stated that the deceased fell down in the bath room which caused immediate death due to neckline fracture, and date and time of death has been stated as 29-04-1999 at 13.45 PM (about).
ii) The certificate of hospital treatment states that she was admitted at 1-30 AM on 29-4-1999 and the time of death has been shown as 4-00 PM. Column-4 of the said certificate shows that the primary cause of death was head injury.
7. There are two certificates of hospital treatment. In one certificate date of admission into hospital has been shown at 29-4-1999 at 1.30 AM and the nature of injury was stated to be multiple lacerated cuts with bleeding and the wounds were fresh. In Column-8 of the said certificate as per diagnosis RTA with multiple bleeding cuts etc. are mentioned. The date of discharge from the hospital has been mentioned as 29-4-199 at 11-00 AM.
In Column-9, the condition at the time of discharge was mentioned as satisfactory.
8. However, with another writing, which was interpolated subsequently, the patient was advised to stay for observation but left the hospital against medical advice. There is another Casualty medical attendance certificate which shows the time of death as 4-00 PM and the date as 29-04-1999.
Place of death is shown as Brought Dead and cause of death as Head injury.
9. It is on the premise of these documents that the appellant argued that the observation of the District Forum was not correct and the deceased was shifted against medical advice. The observation of the District Forum that the accident was a road accident is also not correct.
10. It is on the aforesaid premise that the Sr. Divisional Manager of the appellant-Company sent an undated letter No. DO-I. Claims/310 informing the claimant that the deceased died under mysterious circumstances and as per policy condition No.4 the policy had become null and void. However, the premium paid is refundable without interest and since the policy stands nominated to the claimant, he should return to them the enclosed discharge form duly executed to enable them to make the payment by crossed cheque.
11. The letter reads as under:-
Re: Death Claim under Policy No. 112180892 in the name of Late Smt. Sangeeta Yadav, Sum assured Rs.
1,00,000/-
With reference to your claim under the above policy of your deceased wife, we have to inform you that as the deceased died under mysterious circumstances, as per policy condition Clause 4B the policy has become null and void.
However, premium paid is refundable without interest. Since policy stands nominated to you we send herewith the necessary form of discharge which please return to us duly executed to enable us to make the payment by crossed cheque.
12. At the outset, clause 4(b) of the policy needs to be reproduced and reads as:-
Notwithstanding anything within mentioned to the contrary, it is hereby declared and agreed that in the event of death of life assured occurring as a result of intentional self-injury, suicide or attempted suicide, insanity, accident other than an accident in a public place or murder at any time on or after the date on which the risk under the policy has commenced but before the expiry of three years from the date of this policy, the Corporations liability shall be Limited to the sum equal to the total amount of premiums (exclusive extra of premiums, if any) paid under this policy without interest. Provided that in case the life assured shall commit suicide before the expiry of one year reckoned from the date of this policy the provisions of the clause under the heading Suicide printed on the back of the policy.
13. The Ld. Counsel has relied upon the Order of the National Commission in Branch Manager, LIC of India & Anr v. Ram Chander Singh. After perusing the order, we find that scope of Clause-4(b) was not discussed by the Commission and only on the facts of the said case the rejection of claim was found to be correct. There was a special female clause in the aforesaid case, which is on the premise of clause 4(b).
14. In the aforesaid case it was found that one Ram Lakhan Devi died on 25-08-1991 due to burn injuries caused by heater as a result of the garments of the deceased catching fire. Since the special female clause of the policy excluded such cases and limited the amount to be payable to the premium actually collected, the rejection of the claim was held to be valid. There is a distinction of earth and sky, and mist and mast, in the facts of the case referred to by the Ld. Counsel and the facts of the present case.
15. The document, which the counsel is mainly relying upon, is only a certificate. The Ld. Counsel has also contended that there is contradictory version of facts as in the certificate of indemnity and burial or cremation, the cause of death has been shown as fall in the bathroom causing immediate death due to neckline fracture, whereas in the report, it has been alleged that an accident took place and the deceased and her husband fell down and some passerby took them to Jaina Hospital and later on shifted to Agrasain Hospital where the deceased succumbed to her injuries.
16. We have closely perused and scanned all the documents referred to and relied upon by the appellant particularly the certificate of indemnity and burial or cremation. This document has not been filled up by the husband of the deceased; whereas the only signature of the husband has been obtained by pointing out the place by tick marking as to where he should sign and is written by somebody else.
17. In such cases it is only the medical record and medical treatment which is relevant and not some information filled up by some third person who just goes to the cremation ground and fills up the form on behalf of somebody else. If there was a case of instant or immediate death due to fall in the bathroom, where was the occasion for taking the deceased to the hospital where after giving treatment her condition was found to be satisfactory or from where she was shifted to Agrasain Hospital.
Therefore, this certificate of burial or cremation is of no avail and is found to be a document facts of which were not written as disclosed by the respondent. Had there been death due to neckline fracture where was the question of both these hospitals finding multiple lacerated wounds, as mentioned in the records, which were fresh; and where was the occasion for the primary cause of death having been opined by doctor as head injury. Therefore, the documents relied upon are self-defeating as it was a simple case of road accident in which the deceased suffered multiple wounds and injuries and after not being satisfied with the treatment of Jaina Hospital she was got discharged and admitted to another hospital. The endorsements that the patient left against medical advice were interpolated later on, and even if it is correct, it is the choice and prerogative of the patient from which hospital to get treatment. Leaving one hospital against medical advice is not significant if the patient feels that his life is not safe in that hospital and cannot allow himself to die.
18. A cumulative effect of all these facts and circumstances lends credence to the version given by the respondent before the District Forum as well as in the report and no other inference or presumption can be raised as to the death being not due to head injury sustained in a road accident. This is a case of complete non-application of mind by the officials of the appellant Company.
If there was some dispute that the death has taken place due to mysterious circumstances merely because the relatives of the deceased did not opt for post-mortem the appellant should have lodged a report with the police or obtained the result concluding that the death had taken place under mysterious circumstances. Time and again we have deprecated the approach of the insurance companies in rejecting the rightful claims of the consumers by picking up a flimsy clue from here and there and on trivial grounds and thus compelling the consumers to seek redressal of their grievance by approaching the District Forum as if the legal process is very cheap, little realizing how much damage and sufferings they are inflicting upon such consumers. It was for such an approach of the public officers whose work culture has degenerated into inefficiency and the malafide and capricious approach, the Supreme Court in case after case and recently in Ghaziabad Development Authority v. Balbir Singh 2004) 5 SCC 65, called upon the District Forum and the Commissions that if they come to the conclusion that the claim was rejected or action was influenced by capricious, whimsical or arbitrary causes, the compensation should be recovered from the salary of those officers who are responsible for wrongly repudiating the claim.
19. The observations of the Supreme Court in the said case are noteworthy and are reproduced hereunder for the benefit of the insurance companies:-
This Court then went on to hold as follows:
10.
who should pay the amount determined by the Commission for harassment and agony, the statutory authority or should it be realised from those who were responsible for it? Compensation as explained includes both the just equivalent for loss of goods or services and also for sufferance of injustice. For instance in Civil Appeal No.... of 1993 arising out of SLP (Civil) No.659 of 1991 the Commission directed the Bangalore Development Authority to pay Rs.2446.00 to the consumer for the expenses incurred by him in getting the lease-cum-sale agreement registered as it was additional expenditure for alternative site allotted to him. No misfeasance was found. The moment the authority came to know of the mistake committed by it, it took immediate action by allotting alternative site to the respondent. It was compensation for exact loss suffered by the respondent.
It arose in due discharge of duties.
For such acts or omissions the loss suffered has to be made good by the authority itself. But when the sufferance is due to mala fide or oppressive or capricious acts etc. of a public servant, then the nature of liability changes. The Commission under the Act could determine such amount if in its opinion the consumer suffered injury due to what is called misfeasance of the officers by the English Courts. Even in England where award of exemplary or aggravated damages for insult etc. to a person has now been held to be punitive, exception has been carved out if the injury is due to, 'oppressive, arbitrary or unconstitutional action by servants of the Government' (Salmond and Heuston on the Law of Torts).
Misfeasance in public office is explained by Wade in his book on Administrative Law thus:
"Even where there is no ministerial duty as above, and even where no recognised tort such as trespass, nuisance, or negligence is committed, public authorities or officers may be liable in damages for malicious, deliberate or injurious wrong-doing. There is thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury." (p.777).
The jurisdiction and power of the courts to indemnify a citizen for injury suffered due to abuse of power by public authorities is founded as observed by Lord Hailsham in Cassell & Co. Ltd. v. Broome [1972 AC 1027:
(1972) 1 All ER 801] on the principle that, 'an award of exemplary damages can serve a useful purpose in vindicating the strength of law'. An ordinary citizen or a common man is hardly equipped to match the might of the State or its instrumentalities. That is provided by the rule of law. It acts as a check on arbitrary and capricious exercise of power.
In Rookes v. Barnard [1964 AC 1129: (1964) 1 All ER 367, 410] it was observed by Lord Devlin, 'the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service'. A public functionary, if he acts maliciously or oppressively and the exercise of powers results in harassment and agony then it is not an exercise of power but its abuse.
No law provides protection against it.
He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil.
It may result in improving the work culture and help in changing the outlook.
Wade in his book -
Administrative Law, has observed that it is to the credit of public authorities that there are simply few reported English decisions on this form of malpractice namely, misfeasance in public offices, which includes malicious use of power, deliberate mal-administration and perhaps also other unlawful acts causing injury. One of the reasons for this appears to be development of law which apart, from other factors succeeded in keeping a salutary check on the functioning in the government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them.
Various decisions rendered from time to time have been referred to by Wade on Misfeasance by Public Authorities.
We shall refer to some of them to demonstrate how necessary it is for our society.
In Ashby v. White (1703) 2 Ld. Raym 938 the House of Lords invoked the principle of ubi jus ibi remedium in favour of an elector who was wrongfully prevented from voting and decreed the claim of damages.
The ratio of this decision has been applied and extended by English Courts in various situations.
In Roncarelli v. Duplessis (1959) 16 DLR 2d 689 the Supreme Court of Canada awarded damages against the Prime Minister of Quebec personally for directing the cancellation of a restaurant-owner's liquor licence solely because the licensee provided bail on many occasions for fellow members of the sect of Jehovah's Witnesses, which was then unpopular with the authorities. It was observed that, 'what could be more malicious than to punish this licensee for having done what he had an absolute right to do in a matter utterly irrelevant to the Alcoholic Liquor Act? Malice in the proper sense is simply acting for a reason and purpose knowingly foreign to the administration, to which was added here the element of intentional punishment by what was virtually vocation outlawry.
In Smith v. East Elloe Rural District Council [1956 AC 736: (1956) 1 All ER 855)] The House of Lords held that an action for damages might proceed against the clerk of a local authority personally on the ground that he had procured the compulsory purchase of the plaintiff's property wrongfully and in bad faith.
In Farrington v. Thompson [1959 UR 286] the Supreme Court of Victoria awarded damages for exercising a power the authorities knew they did not possess.
A licensing inspector and a police officer ordered the plaintiff to close his hotel and cease supplying liquor.
He obeyed and filed a suit for the resultant loss. The Court observed:
"Now I take it to be perfectly clear, that if a public officer abuses his office, either by an act of omission or commission, and the consequence of that is an injury to an individual, an action may be maintained against such public officer."
In Wood v. Blair [The Times, July 3, 4, 5, 1957 (Hallet J and Court of Appeal] a dairy farmer's manageress contracted typhoid fever and the local authority served notices forbidding him to sell milk, except under certain conditions. These notices were void, and the farmer was awarded damages on the ground that the notices were invalid and that the plaintiff was entitled to damages for misfeasance. This was done even though the finding was that the officers had acted from the best motives.
11. Today the issue thus is not only of award of compensation but who should bear the brunt. The concept of authority and power exercised by public functionaries has many dimensions. It has undergone tremendous change with passage of time and change in socio-economic outlook. The authority empowered to function under a statute while exercising power discharges public duty. It has to act to subserve general welfare and common good. In discharging this duty honestly and bana fide, loss may accrue to any person. And he may claim compensation which may in circumstances be payable. But where the duty is performed capriciously or the exercise of power results in harassment and agony then the responsibility to pay the loss determined should be whose? In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead.
Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system. Public administration, no doubt involves a vast amount of administrative discretion which shields the action of administrative authority. But where it is found that exercise of discretion was mala fide and the complainant is entitled to compensation for mental and physical harassment then the officer can no more claim to be under protective cover. When a citizen seeks to recover compensation from a public authority in respect of injuries suffered by him for capricious exercise of power and the National Commission finds it duly proved then it has a statutory obligation to award the same. It was never more necessary than today when even social obligations are regulated by grant of statutory powers. The test of permissive form of grant is over. It is now imperative and implicit in the exercise of power that it should be for the sake of society. When the Court directs payment of damages or compensation against the State the ultimate sufferer is the common man. It is the tax payers' money which is paid for inaction of those who are entrusted under the Act to discharge their duties in accordance with law.
It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries."
We are in full agreement with what is observed herein. Thus the law is that the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen.
20. Foregoing reasons persuade us to dismiss the appeal with a cost of Rs. 25,000/-. However, the alternative order passed by the District Forum for payment of 12% interest, for failure to make payment within thirty days, is illegal as no such order can be passed under Sec. 14 (1)(d) of the Act while awarding compensation by way of interest if not by way of enhanced interest, as there is a provision for seeking execution of order by invoking Sec. 25 and 27 of the C.P. Act. Any such alternative order is bad in law and as such the said part of the impugned order is set aside. Rest of the order is maintained.
21. Appeal is disposed of in above terms. Payment shall be made within one month from the date of receipt of a copy of these orders.
22. Copy of Orders, as per statutory requirement, be forwarded to the parties and also to the concerned District Forum and thereafter the file be consigned to record. FDR/Bank Guarantee, if any, be released under proper receipt.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member HK