State Consumer Disputes Redressal Commission
1.The Senior Branch Manager,The ... vs Smt.Chikkudu Premlatha, Karimnagar . on 28 June, 2011
BEFORE THE A
BEFORE THE A.P STATE CONSUMER DISPUTES
REDRESSAL COMMISSION AT HYDERABAD.
F.A.No.795/2008 against C.C.No.107/2006, DISTRICT FORUM, KARIMNAGAR.
Between
1. The Senior
Branch Manager
The Oriental Insurance Company Limited,
City Branch Office-1,6-2-878, 1st
floor,
Pavani Estates, Capital, Opp:Syndicate
Bank,
Khairatabad, Hyderabad-505 004. Appellant/
Opp.party No.1
2. The Branch
Manager,
The Oriental Insurance Company Limited,
Karimnagar. Appellant/
Opp.party 2
And
Smt.Chikkudu
Premlatha, W/o.late
Yellaiah, age 35
years, Occ:Household,
R/o.H.No.10-1-264,
Bhagyanagar
Locality of
Karimnagar town and District. Respondent/
Complainant.
Counsel for the
Appellants : Mr.Katta Laxmi Prasad
Counsel for the Respondent : M/s.A.Gangadhar.
QUORUM:THE HONBLE JUSTICE SRI D.APPA RAO,
PRESIDENT
AND
SMT. M.SHREESHA, MEMBER
TUESDAY, THE TWENTY EIGHTH DAY OF JUNE TWO THOUSAND ELEVEN.
(Typed to dictation of Smt.M.Shreesha, Honble Member) ***** Aggrieved by the order in C.C.No.107/2006 on the file of District Forum, Karimnagar, opposite parties preferred this appeal.
The case of the complainant in brief is that the complainant is the wife of Sri Chikkudu Yellaiah who worked as Police Constable and died on 28-3-2003 in a Motor Vehicle Accident leaving behind the complainant, her 2 daughters, son and also aged in-laws. Prior to his death, he obtained Janatha Personal Accident Policy (Group) No.431103/47/JPA/7010/1998 covering the period from 11-5-1998 to 15-2-2010 for a sum of Rs.3,00,000/-. After the death of her husband, the complainant approached the opposite parties claiming the death benefits of the insurance policy. Opposite party No.1 repudiated the claim on invalid grounds that the policy was cancelled. Hence the complaint for a direction to the opposite parties to pay the insurance amount of Rs.3,00,000/- with interest and to pay Rs.20,000/- towards mental agony and correspondence with costs.
Opposite parties filed counter denying the averments made in the complaint and stated that the complaint is not maintainable and that there is no privity of contract between them and the complainant. They admitted that they had issued a Group Janata Personal Accident Insurance Policy in favour of Andhra Pradesh Special Police Officers Association covering their police officials as per schedule and therefore Andhra Pradesh Special Police Officers Association is a necessary party and the complaint is not maintainable for non-joinder of necessary party and is liable to be dismissed. They further submitted that the cause of action arose on 28-3-2003 which is the date of death and the complaint is filed in the month of May, 2006 which is beyond 2 years from the date of death and is therefore barred by limitation.
Opposite parties further submitted that as per conditions of the policy the company may at any time by notice in writing cancel the policy, provided the company shall in that case return to the insured the then last paid premium less prorate part thereof for the portion of the current insurance period which shall have expired. Such notice shall be deemed sufficiently given if posted addressed to the insured at the address last registered in the companys books and shall be deemed to have been received by the insured at the time when the same would be delivered in the ordinary course or post. As per the said condition, the company can any time cancel the policy by giving notice during the occurrence of the policy. Under the above policy as number of claims were made, the C.A.G. Auditors have pointed out that the claims experience is more than 710% which is very much higher side and very low premium was collected and as per their objection, the company has reviewed the insurance policy and taken a decision to cancel the insurance policy and issued a notice on 14-3-2002 to cancel the said policy with effect from 30-3-2002. As per conditions of the policy, they addressed a letter on 27-3-2002 offering an amount of Rs.2,96,910/- towards refund of premium for unexpired period of insurance and requested to return the original policy and refund voucher duly singed for releasing the cheque. But they have not returned the duly signed voucher and original policy and filed a Writ Petition against the cancellation of the policy which is still pending.
The opposite parties submitted that the insurance policy was cancelled with effect from 30-3-2002 and the deceased died on 28-3-2003 after cancellation of the policy and therefore the complainant is not entitled to claim any amount and submitted that there is no deficiency in service on their part and prayed for dismissal of the complaint Based on the evidence adduced i.e. Exs.A1 to A8 and B1 to B3 and the pleadings put forward, the District Forum allowed the complaint directing the opposite parties to pay the amount Rs.3,00,000/- with interest at 9% p.a. from the date of complaint i.e. 5-6-2006 and costs of Rs.1,000/-.
Aggrieved by the said order, the opposite parties preferred this appeal.
The facts not in dispute are the issuance of the policy to the Andhra Pradesh Special Police A/c. Battalion covered under CBO-1 A.P. Special Police Force and the period of coverage being from 19.2.98 to 15.2.2010. This is a Group Janata Personal Accident Policy (Long Term) covering A.P. Special Force Battalion and allied wings. While so, on 28.3.03 the insured C.H.Yellaiah, a Police Constable, died in a motor vehicle accident which is evidenced under Ex.A2 FIR, Ex.A3 Panchanama and Ex.A4, Post Mortem Report. Ex.A5 is the Legal Heir Certificate evidencing the complainant as the wife of the insured. Ex.A7 is the Claim Form for an amount of Rs.3 lakhs. It is the case of the appellants/opp.parties that the policy was cancelled way back on 14.3.02 and notices were given vide Ex.B2 dt.14.3.2002 and Ex.B3 dt.27.3.2002. The appellants/opp.parties relies on condition no.6 of the policy :
6.The Company may at any time by notice in writing, terminate this Policy, provided that the Company shall in that case return to the insured the then last paid premium in respect of such persons in respect of whom no claim has arisen less a prorate part thereof for the current insurance period which shall have expired. Such notice shall be deemed sufficiently given if posted and addressed to the insured at the address last registered in the Companys books and shall be deemed to have been received by the Insured at the time when the same would be delivered in the ordinary course of post.
OR the policy may be cancelled at any time by the Insured by a notice in writing under certificate of Posting or a Regd. A.D. Such notice shall be deemed to be effective from the date of dispatch of the same by the Insured.
PROVIDED no claim has arisen under the within mentioned policy prior to the dispatch of such notice by the Insured to the Company, the Insured would be entitled to the return of premium less premium at Companys short period rates for the period the Policy has been in force.
The learned counsel further contended that the Writ Petition is pending with the High Court. The Police Officers Association questioned the cancellation of the policy in W.P.No.12057 of 2002 and Honble High Court by an order dt.7.9.2007 allowed the Writ Petition and squashed the letter dt.12.4.02 sent by the Insurance Company cancelling the policy. In the instant case also the learned counsel for the appellants only mentioned that the Writ Petition is pending but has not stated if there was any stay. The facts in the instant case are also very similar wherein the policy was cancelled merely invoking condition no.6 without assigning any reasons thereof. Merely giving a letter dt.14.3.2002 that the policy would be cancelled w.e.f. 30.3.2002 cannot be a sufficient notice or notice furnishing reasons. The Honble High Court in W.P.No.12057/02 has observed as follows:
in a case of this nature, even if there is any genuine reason for cancelling the policy, the petitioner is entitled for a show cause notice and after inviting explanation, the authorities are at liberty to take action what ever is justifiable, though the conditions of the policy do not say so. In this case, no such effort was made by the respondent company, which is a public authority. No reasons whatsoever have been furnished by the respondents in the said letter or in the counter for cancelling the policy. In fact, in the guise of enabling condition no.6 of the terms of the policy, the respondents cannot unilaterally cancel the policy.
Since the facts in the instant case are also similar where there is a unilateral cancellation of the policy without assigning any reasons we are of the considered view that there is deficiency in service on behalf of the Insurance Company in not settling the claim after C.H.Yellaiahs death. Therefore we see no reasons to interfere with the well considered order of the District Forum. Therefore this appeal fails and is accordingly dismissed.
No costs.
In the result this appeal is accordingly dismissed confirming the order of the District Forum. No costs. Time for compliance four weeks.
Sd./PRESIDENT.
Sd./MEMBER.
Pm* Dt.28-06-2011