Jammu & Kashmir High Court
Oriental Insurance Co. Ltd vs J&K State Consumer Disputes Redressal on 3 December, 2021
Bench: Dhiraj Singh Thakur, Mohan Lal
Sr. No. 14
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
OWP No. 273/2019
CM No. 1384/2019 (01/2019)
CM No. 2272/2021
Oriental Insurance Co. Ltd. .....Appellant(s)/Petitioner(s)
Through: Mr. Divyanshu Malhotra, Advocate.
Vs
J&K State Consumer Disputes Redressal ..... Respondent(s)
Commission, Jammu and ors.
Through: Mr. Ashish Sharma, Advocate with
Mr. Munish Kumar Sharma, Advocate.
Coram: HON'BLE MR. JUSTICE DHIRAJ SINGH THAKUR, JUDGE
HON'BLE MR. JUSTICE MOHAN LAL, JUDGE
ORDER
03.12.2021 (OPEN COURT) Per-Thakur-J
1. The present petition has been filed, challenging the order dated 30.11.2018 passed by the J&K State Consumer Disputes Redressal Commission, Jammu (hereinafter referred to as the "State Commission"), whereby the appeal filed by the Insurance Company has been dismissed and the award passed by the District Consumer Disputes Redressal Forum, Jammu (hereinafter referred to as the 'District Forum') was upheld.
Briefly stated the material facts are as under:-
2. The Government of Jammu and Kashmir entered into a Memorandum of Understanding (hereinafter referred to as the "MoU") with 2 OWP No. 273/2019 the appellant-Insurance Company for ensuring the employees of the government under Group Janta Personal Accidental Insurance Scheme for an amount of Rs. 2.5 lacs each in regard to individual employees. The MoU envisages the insurance cover, to be provided on yearly basis for a period of three years upon payment of the premium due at the appropriate time.
3. It appears that the first policy, which came to be issued by the company expired on 13.06.2012 and the second was issued on 18.07.2012.
There was, thus, some delay between the expiry of previous policy and the issuance of the new one. Unfortunately, in the interregnum on 06.07.2012, the insured-Sanjay Kumar (hereinafter referred to as the 'deceased') died on account of a snake bite. A claim was lodged by the respondents with the Nodal Officer appointed by the government, who appears to have communicated the same to the Insurance Company. The claim was not accepted on account of the fact that the death had occurred during a period when the insurance policy was not in force.
4. One important fact, which requires to be highlighted is that the government had deducted Rs. 99/- from the salary Account of the deceased towards premium for the Group Janta Personal Accidental Insurance Scheme much before the death of the deceased, which ought to have been deposited with the Insurance Company well on time with a view to enable it to renew the policy, which, however, was not done. According to the stand of the government, which is on record, no specific reasons have been given as to why the amount of premium even when deducted from the petitioner's Account and many other similarly situated employees, was not deposited on time. All that is referred to in the petition is that the amount of premium 3 OWP No. 273/2019 deducted could not be deposited on account of unavoidable procedural delays.
5. In the background of the aforementioned facts, the matter came to be considered by the District Forum, where the respondents filed a claim petition, which was allowed by virtue of order dated 23.10.2017. An appeal preferred by the Insurance Company against the said award also came to be dismissed by virtue of the impugned judgment and order. Hence, the present petition.
6. The entire basis for the State Commission for dismissing the appeal filed by the Insurance Company rests on the MoU executed between the government of Jammu and Kashmir and the Insurance Company. According to the State Commission, the MoU was to remain in force w.e.f 2011 to 2014. According to the agreement, a premium of 3.6 crores had been agreed to be paid by the government in this behalf over a period of three years. According to the State Commission, since the Insurance Company had accepted the premium after the expiry of the first policy after delay of one month and four days, the acceptance of premium for issuance of the second policy binds the Insurance Company, which cannot be permitted to raise a plea that the insurance policy subsequently issued would not cover the death of the deceased. The State Commission, accordingly, proceeded to allow the claim besides awarding litigation expenses to the extent of Rs. 5,000/- and additional compensation of Rs. 5,000/- in favour of the petitioner.
7. Learned counsel for the petitioner-Insurance Company has relied upon Section 64-VB of the Insurance Act, 1938 (hereinafter referred to as the "Act") which specifically envisages that no insurer shall assume any risk in 4 OWP No. 273/2019 India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
8. A perusal of the aforementioned Section indicates that with a view to cover an individual under an insurance policy, receipt of the premium may not be always necessary, inasmuch as, the Section also envisages the coverage of the risk, if the payment even if not received is guaranteed to be paid by such person within such manner and such time, as may be prescribed. Unfortunately, neither of the parties have placed on record the MoU, which was executed between the government and the Insurance Company, though both the parties have heavily relied upon the said MoU. Whether the terms and conditions of the MoU contained any clause, which would cover the risk of the employees notwithstanding the expiry of the period covered under the policy, is not known. Therefore, it would be difficult for us to uphold the order passed by the State Commission based upon any such MoU, terms and conditions whereof were not clearly brought either to the notice of the District Forum or the State Commission.
9. Be that as it may, in the absence of any such condition in the MoU, which would enable the extension of the insurance cover beyond the expiry of the period contained in the policy upon assurance of the government towards payment of premium for the next policy, it must be presumed that there is no such condition, in which case, the Insurance Company would be expected to extend the cover or renew the policy only upon receipt of the actual payment by the government.
5 OWP No. 273/2019
10. Considering the impact of Section 64-VB of the Act and in the absence of clarity on the terms of the MoU, in our opinion, we cannot hold the company liable to compensate the official respondents on account of the death of the said Sanjay Kumar.
11. Be that as it may, notwithstanding the fact that we have held the company not liable, yet we are informed that the awarded amount to the tune of Rs. 2,64,976/- is already deposited in the Registry of this Court. We are of the opinion that the said amount can be released in favour of the claimants, accordingly, with a liberty to the Insurance Company to recover the said amount from the government, inasmuch as, in our opinion, the government had already deducted the amount of premium from the salary Account of the deceased, yet failed to deposit the same within time with the Insurance Company.
12. The vague explanation rendered by the government in its reply that the premium was not deposited on account of unavoidable procedural delays, in our opinion, is not a satisfactory explanation. While the intention of the government in extending the benefit of Group Janta Personal Accidental Insurance Scheme to cover any untoward incident in an employee's life can be said to be a noble step, yet the government had, in fact, not been diligent enough to execute that intent with promptitude.
13. Considering the fact that the amount is a meager amount and the fact that the deceased was an employee of the government and is survived by a wife and two children, we hope that the government would not resist the recovery proceedings, which we have authorized the Insurance Company to initiate in this regard.
6 OWP No. 273/2019
14. Be that as it may, the appeal is allowed. The judgment and order impugned passed by the State Commission is set aside. The awarded amount be released immediately by the Registrar Judicial of this Court in favour of the claimants along with interest, which may have accrued on the amount deposited upon proper verification and identification by the learned counsel for the respondents.
15. Writ petition is, accordingly, disposed of along with connected applications.
(Mohan Lal ) (Dhiraj Singh Thakur)
Judge Judge
Jammu
03.12.2021
Ram Krishan
Whether the order is speaking? Yes/No
Whether the order is reportable? Yes/No