State Consumer Disputes Redressal Commission
Reliance General Insurance Company ... vs Rupinder on 16 June, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No. 479 of 2016
Date of institution : 23.06.2016
Reserved on : 05.06.2017
Date of decision : 16.06.2017
The Reliance General Insurance Company Limited through its
General Manager, 4-1-327 to 337, 4th Floor, Sagar Plaza,Abida
Road, Hyderabd-500 001 (A.P.), through its authorized signatory.
.......Appellant-Opposite Party No.2
Versus
1. Rupinder wife of Late Sanjeev Kumar, resident of Bhumbli,
Tehsil and District Gurdaspur.
2. Sunidhi minor d/o Sanjeev Kumar through her next friend and
natural guardian/mother Rupinder, respondent No.1, resident
of Bhumbli, Tehsil and District Gurdaspur.
3. Khushansh minor s/o Sanjeev Kumar through his next friend
and natural guardian/mother Rupinder, respondent No.1,
resident of Bhumbli, Tehsil and District Gurdaspur.
......Respondents Nos.1 to 3/Complainants
4. The State Bank of India, Branch Dhariwal, Tehsil and District
Gurdaspur through its Branch Manager.
........Respondent No.4/Opposite Party No.1
First Appeal against the order dated
13.5.2016 of the District Consumer
Disputes Redressal Forum, Gurdaspur.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Shri Harcharan Singh Guram, Member
Present:-
For the appellant : Shri Sandeep Suri, Advocate. For respondent Nos.1-3 : Shri Shub Karman, Advocate For respondent No.4 : Ex parte.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The instant appeal has been filed by the appellant/opposite party No.2 against the order dated 13.5.2016 passed by District First Appeal No.479 of 2016 2 Consumer Disputes Redressal Forum, Gurdaspur (in short, "District Forum"), whereby the complaint filed by respondents Nos.1 to 3/complainants, under Section 12 of the Consumer Protection Act, 1986 (in short, "the C.P. Act"), was allowed and the appellant/opposite party No.2 was directed to pay the impugned 'insurance claim' pertaining to the related Policy in question along with all the eligible benefits as applicable in case of 'accidental deaths' etc. if any, along with ₹5,000/- as compensation for the undue harassment inflicted besides ₹3,000/- as cost of litigation within 30 days of receipt of the copy of the order, otherwise the entire awarded amount shall attract interest @ 9% P.A. from the date of filing of the complaint till actually paid.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
3. Brief facts, as averred in the complaint, are that Sanjeev Kumar, husband of complainant No.1 and father of complainants Nos.2 and 3, was serving as Constable/Driver in the Central Reserve Police Force and was posted in the office of the Commandant-96, BN, C.R.P.F. C/o 56, APO. He had opened salary/PMSP account bearing No.30296739834 in the State Bank of India, Dhariwal Branch, Gurdaspur, Punjab. It is further averred that opposite party No.1-Bank had collaboration with opposite party No.2-Insurance Company and, as such, Late Sanjeev Kumar was insured by them, vide Personal Accident Cover for Paramilitary Salary Package under Silver Variant bearing No.111134291400034 for a sum assured of ₹3,00,000/- against his personal accidental death. That policy was First Appeal No.479 of 2016 3 valid from 4.4.2014 to 3.1.2015. Unfortunately, Sanjeev Kumar, died in an accident at Village Kot Santokh Rai, Tehsil and District Gurdaspur on 17.02.2014. The age of the deceased/insured at that point of time was 32 years, who left behind his widow and two minor children (son and daughter), i.e. complainants Nos.1 to 3. The death claim was submitted to opposite party No.2 through opposite party No.1-Bank, vide claim No.2141106886. The claim has been rejected by opposite party No.2-Insurance Company only on the ground that there was delay in giving intimation with regard to the death of the insured. It will be appropriate to mention that after the death, postmortem of the deceased/insured was carried out and a perusal of post mortem report reveals that the cause of death was accident and not otherwise. Aggrieved by the rejection of the death claim, the complainants filed the present complaint before the District Forum.
4. Upon notice both the opposite parties appeared and filed their separate replies. Opposite party No.1 took preliminary objections in its reply that the complaint is not maintainable against it as the complainant is not its 'consumer' and the complaint does not lie against it. The complaint is liable to be dismissed for want of impleading necessary parties. The role of opposite party No.1 is only as a corporate agent/facilitator and actual insurance policy was issued by opposite party No.2. The complaint against opposite party No.1 is not maintainable and reference to Section 230 of the Indian Contract Act has been made wherein it is mentioned that an agent can neither sue nor be sued except under special circumstances. The averments made in the complaint have been admitted being First Appeal No.479 of 2016 4 matter of record. A prayer for dismissal of the complaint qua it has been made.
5. Opposite party No.2 took preliminary objections in its reply that the complainants have no cause of action to file the present complaint. The liability of the Insurance Company is only as per the terms and conditions of the Policy. The terms of the Policy have not been complied with. The account holder of the SBI died on 17.2.2014 and as per the terms of the Policy, intimation was to be given within 90 days from the date of death and the claim was filed on 13.8.2015 after the delay of 177 days, which is breach of the terms and conditions of the Policy. As a result of the same the Insurance Company lost its right to early investigation into the matter and, as such, the claim was repudiated, vide letter dated 19.3.2015, which was sent to Koshalaya Devi, mother of Sanjeev Kumar, deceased/insured. The other facts were also admitted by the Insurance Company. However, it is submitted that there is violation of the terms and conditions of the Policy. The claim has rightly been repudiated on the ground of delay, vide letter dated 19.3.2015. It is further submitted that no legal heir certificate has been produced on the file and till then it is denied that the complainants are the legal heirs of the deceased/insured. Denying any deficiency in service, a prayer for dismissal of the complaint was made.
6. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaint, vide impugned order. Hence, this appeal. First Appeal No.479 of 2016 5
7. We have heard learned counsel for both the sides and have carefully gone through the records of the case.
8. It was argued by learned counsel for the appellant/opposite party No.2 that Sanjeev Kumar, insured, died on 17.2.2014 and the intimation and claim was submitted simultaneously after 177 days on 13.8.2014. As per the terms and conditions of the Insurance Policy, intimation regarding the death of the insured is required to be given within 90 days and the claim is required to be submitted within further 90 days i.e. 180 days. Learned counsel made reference to clause 6(ii) of the terms and conditions of the Insurance Policy, which has been annexed with the grounds of appeal as Annexure A-
4. Since there is a violation of terms and conditions of the policy, the claim has been rightly repudiated by the Insurance Company. He relied upon following judgments:-
i) "GENERAL ASSURANCE SOCIETY LTD. v.
CHANDUMULL JAIN AND ANR." (SC) 1966 AIR 1644
ii) "Vikram Greentech (I) Ltd. & Anr. v. New India
Assurance Co. Ltd." Civil Appeal No.2080 of 2002
decided on 1.4.2009 by the Hon'ble Supreme Court;
iii) "Budha Ganesh v. New India Assurance Company Ltd." 2014(1) CPJ 411 (NC).
9. On the other hand, it was argued by learned counsel for complainants Nos.1 to 3 that firstly complainants Nos.2 and 3 are minors and as such, the question of delay in giving intimation to opposite party No.2-Insurance Company on their part does not arise at all. Even if the intimation is given late by one of the natural First Appeal No.479 of 2016 6 guardians or otherwise guardian, complainant No.1 in the present case, in such a case that cannot be used to the disadvantage of the minor complainants in any manner. It was further argued that the ground of delay has been wrongly taken by opposite party No.2- Insurance Company just to repudiate the valid claim of the complainants. Admittedly, the deceased/insured had nominated his wife, complainant No.1, as the nominee in the Bank Account but no intimation regarding repudiation of the claim was sent to her. Rather it was sent to the mother of the deceased/insured; namely, Koshalaya Devi only. It was further argued that complainant No.1 is a lady of less than 30 years and belongs to a small village in District Gurdaspur and being a rustic villager, she was not even aware about the insurance having been obtained by opposite party No.1 from opposite party No.2 for her husband, being account holder in the Bank. Otherwise also when the husband dies in a prime age of a lady, she cannot come out of the shock within a short span of 90 days specifically when she falls in the category of rustic villagers, where there is no one to guide her qua her rights etc. He relied upon the judgment of the Hon'ble National Commission in "Reliance General Insurance Co. Ltd. v. Sri Avvn Ganesh" 2012(2) CLT 664 (NC). It was further argued that the District Forum has passed a well reasoned order and the same is liable to be upheld.
10. We have given thoughtful consideration to the arguments raised by the learned counsel for both the sides.
11. A perusal of the record reveals that the deceased Sanjeev Kumar at the time of his death in the accident was 32 years old. First Appeal No.479 of 2016 7 Post mortem was conducted on the dead body of the deceased Sanjeev Kumar on 18.2.2014 and a copy of the Post Mortem Report has been produced on record as Ex.C-5 by the complainants. A perusal of Ex.C-5 reveals that the cause of death has been mentioned as accidental death due to head injury. The matter was also reported to the police of PS-Dhariwal, vide DDR No.4 dated 18.2.2014, Ex.C-4. It is also not disputed by the Insurance Company that the husband of complainant No.1 i.e. deceased/insured, Sanjeev Kumar was holding PMSP Account No.30296739834 with opposite party No.1-Bank and Rupinder, complainant No.1, was nominated as a nominee being wife. It is also admitted that the Personal Accident Insurance Policy was for ₹3,00,000/- in respect to such bank account holders. So far as the facts are concerned, the same are admitted by the parties. The only question, which needs to be answered, what is the effect of delay in giving intimation to the opposite party-Insurance Company about the death of the deceased/insured?
12. Learned counsel for the opposite party-Insurance Company made reference to clause 6 (A) (ii) of the terms and conditions of the said Insurance Policy, Ex.OP2/6 and it would be appropriate to reproduce Clause 6 thereof, which reads as under:-
"6. Claim process:
(A) For Personal Accident Insurance (Death) claim:
i. The Claimant on death of the primary Salary Account holder shall be :First Appeal No.479 of 2016 8
a) The nominee, registered with the bank for the respective account in single name (Bank's role will be limited only to certify that the person nominated is the nominee as per the records of the Bank).
b) In case of accounts having more than one name, the surviving account holder/s would be the claimant(s)/beneficiaries for the purpose of insurance claim. (Bank's role will be limited only to certify that the names of the surviving account holders).
c) In cases other than (a) and (b) the claim shall be settled as per the procedure of Reliance General Insurance Company Ltd. (RGICL). The identification of legal heirs and the authenticity of the claim would be the responsibility of RGICL.
ii. RGICL should entertain claims, where intimation from branch/claimant is received by them by e-mail/fax/letter within 90 (Ninety) days of the death of the Salary Package Account Holder. Further a period of maximum 90 days be allowed for submission of all claim related documents, relevant supportive documents by the branch/claimant subsequent to submission of intimation (i.e. period for intimation+ claim=90+90=180 days maximum).
iii. ...............................
iv. .................................
v. .................................
First Appeal No.479 of 2016 9
vi. .................................
vii. ..................................
viii. ...................................
A perusal of clause 6(i) of the terms and conditions, reproduced above, reveals that the nominee has the right to inform the Insurance Company and the Insurance Company can pay the amount to the beneficiary on the basis of nomination. Now the material clause is clause 6(ii) in which cumulative period of 180 days maximum (90 + 90=180 days maximum) has been given, which clearly indicates that the intimation plus lodging of claim period is referred under this clause. Admittedly, the rustic villagers, the people who are coming from the village background are not aware about the minor details of law and the technicalities on the basis of which their rights can be declined. It is not disputed that the intimation about the death was given after 90 days but at the same time it is also not disputed that the claim along with all the relevant documents was lodged by the complainants within 180 days of the death of the deceased/insured. Once the Insurance Company itself is not disputing the cause of death i.e. accidental death, it cannot use a hyper-technical approach for rejecting the claim.
13. Insurance Regulatory and Development Authority (in short, "IRDA") issued Circular to all life-insurers and non-life insurers dated 20.9.2011 regarding delay in claim intimation/documents submission with respect to all life insurance contracts and all non-life individual and group insurance contracts. The same is reproduced hereunder:- First Appeal No.479 of 2016 10
"INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Ref. IRDA/HLTH/MISC/CIR/216/09/2011 Dated:20.09.2011 CIRCULAR To All life insurers and non-life insurers. Re: Delay in claim intimation/documents submission with respect to i. All life insurance contracts and ii. All Non-life individual and group insurance contracts.
The Authority has been receiving several complaints 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 insurer's 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 First Appeal No.479 of 2016 11 the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policyholders losing confidence in the insurance industry, giving rise to excessive litigation.
Therefore, it is advised that all insurers need 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.
The insurers are advised to incorporate additional wordings in the policy documents, suitable enunciating insurers' stand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
Sd/- J. Harinarayan CHAIRMAN."
A perusal of the above reproduced circular reveals that the claims should not have been rejected on technical grounds and it is 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 First Appeal No.479 of 2016 12 have otherwise been rejected even if reported in time. The delay in the present case appears to be due to the shock and sorrow, which complainant No.1 was suffering on account of early death of her husband and complainants Nos.2 and 3 being minors were not in a position to intimate or lodge their claim. Ordinarily a prudent man can imagine the state of affairs that how a young widow specifically when she is having small children will be thinking. It is difficult to come out of this shock and trauma within a period of 90 days. She remains under devastating grief, may be feeling that she has been robbed of the rest of life. She may be sitting cross-legged on white mat spread in the room or courtyard. The vacuum remains. The silence haunts. A strong association exists between spousal bereavement and death. Time is great healer. Otherwise also the Insurance Company will not be prejudiced in any manner with regard to the investigating part because medical evidence in the shape of post mortem report with regard to the cause of death of the deceased/insured is available as Ex.C-5, which has been conducted by the Board of Doctors. It is neither alleged nor proved that there is any manipulation. Otherwise, the young personnel, who had been serving the para military force i.e. CRPF has died at a prime age of 32 years and declining of claims on technical grounds is highly arbitrary and whimsical. When young person, as a sole bread earner, dies; widow and children suffer economic vulnerability and poverty. If widow is not economically powered, she is in for more trouble. The claim allowed will help the widow and children in the education, otherwise they may have to forgo their education. First Appeal No.479 of 2016 13
14. There is a popular saying 'What insurance companies give you 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. The person, who lodges claims, knows the other side of the story. 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 not good to the idea of insurance, which man formulated to his own use.
15. Hon'ble National Commission in para no.4 of Sri Avvn Ganesh's case (supra) has held as under:-
"4. Even a cursory perusal of the detailed discussion in the State Commission's order would be sufficient to demonstrate that all conditions for acceptance of the insurance claim except the point of reporting the "loss"
within one month of its occurrence had been
substantially fulfilled. In this case, the delayed
First Appeal No.479 of 2016 14
intimation of the death of the insured due to the injuries he suffered on account of the "accident" (namely, falling off his bicycle and thereafter vicious dog bites on his inner thighs and scrotum) cannot be held to be ruinous to the insurance claim because the facts and circumstances of the death were clearly established on the basis of medical records as well as deposition of the doctor who attended on the deceased insured. Therefore, unlike in cases of theft of movable insured property, the delay in intimation was not prejudicial to the Insurance Company in that it was not prevented, because of delay, from carrying out any investigation into the facts and circumstances leading to the Insurance Claim to satisfy itself if the "accident" and consequent "loss" fell within the (other) substantive conditions of the insurance policy. It is difficult to imagine that the complainant could have cooked up the story that his father died of dog bites in the manner stated and that too in active collaboration and collusion with a doctor at a hospital."
The present case is squarely covered by the aforesaid judgment of the Hon'ble National Commission. Moreover, the judgments relied upon by the learned counsel for the opposite party are in respect of general and non-life insurance and, as such, cannot be made applicable to the facts of the present case.
16. In view of above discussion, we do not find any illegality or infirmity in the impugned order passed by the District Forum.
17. There is no merit in the present appeal and the same is hereby dismissed.
18. The appellant/opposite party had deposited a sum of ₹25,000/- at the time of filing of the appeal. It deposited another sum of First Appeal No.479 of 2016 15 ₹1,38,689/- on 11.8.2016 in pursuance of the order dated 18.7.2016. Both these amounts, along with interest which has accrued thereon, if any, shall be remitted by the registry to the District Forum, after the expiry of 45 days of the sending of certified copy of the order to the parties.
19. The opposite party is directed to deposit the entire amount payable to the complainants as per the impugned order of the District Forum minus the amount deposited in this appeal before this Commission in the District Forum and thereafter the District Forum shall deposit the share of two minors i.e. complainants Nos.2 and 3, in the shape of FDRs in a nationalized Bank, in favour of the minor complainants, which may earn maximum interest and complainant Nos.2 and 3 shall be entitled to withdraw the amount of interest accrued on the said FDRs, from time to time, for their daily pursuits, through their mother/guardian. Complainants Nos.2 and 3 shall be entitled to withdraw the entire outstanding amount of the FDRs, when they will attain the age of 21 years. The remaining amount shall be paid by the District Forum to complainant No.1.
20. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER June 16, 2017 Bansal