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Insurance Company penalised for not informing the consumer about the exclusion clause of the policy

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI

REVISION PETITION NO. 2368 OF 2016

(Against the Order dated 11/05/2016 in Appeal No. 39/2012 of the State Commission Jharkhand)

TUNTUN PRASAD SAH
RESIDENT OF MAHADEO BATHAN,
P.O. LEHTI
DISTT. GODDA ...........Petitioner(s)
Versus
BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD. & ANR.
BRANCH OFFICE-KAHALHOAN,
N.T.P.C. ROAD, KAHALGAON,
BHAGALPUR
BIHAR ...........Respondent(s)

BEFORE:
     HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT
     HON’BLE MRS. M. SHREESHA, MEMBER

Dated : 02 Nov 2017

ORDER

         Challenge in this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short “the Act”), by the Complainant is to the order dated 11.05.2016, passed by the Jharkhand State Consumer Disputes Redressal Commission, Ranchi (for short “the State Commission”) in First Appeal No.39 of 2012. By the impugned order, the State Commission has overturned the order dated 20.12.2011, passed by the District Consumer Disputes Redressal Forum, Godda (for short, “the District Forum”) in Complaint Case No.43 of 2010 and has thus dismissed the Complaint. In the first instance, the District Forum had accepted the Complaint filed by the Petitioner herein, alleging deficiency in service on the part of the United India Insurance Company Limited (for short “the Insurance Company), Respondent No.1 herein, in repudiating the claim made by him under the Cattle Insurance Policy dated 29.07.2009. The said policy had been obtained by Vananchal Gramin Bank, Mahagama, (for short “the Bank”) as a condition for release of the amount raised as loan by the Petitioner for purchase of 10 Cows, on account of the death of two Cows on 30.07.2009. Allowing the Complaint, the District Forum had directed the Insurance Company to pay to the Complainant sums of ₹25,000/- and ₹46,000/- in respect of two insured Cows with interest @ 9% p.a. from 01.08.2009 till actual realization; a sum of ₹5,000/- as compensation and ₹2,000/- as litigation costs. As a default stipulation, the District Forum had also directed that if the said amount was not paid to the Complainant within 45 days of its order, it shall carry interest @ 12% p.a. till the date of actual payment.

      The State Commission has come to the conclusion that since the two Cows had died due to illness within 15 days of the issue of the afore-said policy, the claim fell within the Exclusion Clause, namely, “the Company would not be liable to pay claim in the event of death of insured animal due to disease occurring within 15 days from commencement of the risk”.

         Since the factum of said policy having been obtained by the Bank and the death of the Cows is not in dispute, we deem it unnecessary to burden this order by narrating the facts, giving rise to the present Petition, in extenso. The short question falling for consideration is as to whether the Insurance Company could rely on the afore-quoted Exclusion Clause and repudiate the claim on the said Clause, in the light of a specific averment in the Complaint that the policy, containing terms and conditions governing it, had not been supplied to him.

        Having heard learned Counsel for the Complainant and the Insurance Company, and perused the documents on record, including the terms of the policy, the Written Version filed on behalf of the Insurance Company and the Affidavit filed by the Bank before the District Forum, we are of the opinion that the order impugned is unsustainable.

      In the Complaint, it was a specific averment of the Complainant that the policy was handed over by the Insurance Company to the Bank only with the letter of repudiation and not when the same was obtained by the Bank in its capacity as the Insured – as recorded in the policy on record. In the Written Version filed on behalf of the Insurance Company, except for a bald denial of all the facts stated in the Complaint, there was no specific denial of the afore-stated averment in the Complaint. Furthermore, apart from the fact that in the Written Version filed on behalf of the Bank, while clearly stating that the policy in question had been obtained by the Bank from the Insurance Company at the time of sanction of the loan, it is also categorically stated that at the time of accepting the proposal, the Insurance Company had not explained the afore-said Exclusion Clause to them or the Complainant, which is now being invoked for repudiating the claim. It is pertinent to note that even in the affidavit filed on behalf of the Bank, the same stand was maintained.

     In view of the afore-noted factual scenario, we do not find even a shred of evidence which may even remotely suggest that the said Exclusion Clause in the policy had been explained to the Complainant or even to the Bank, whose clear stand is that they had received the policy only with the letter of repudiation. That being so, we have no hesitation in concluding that the Insurance Company cannot rely on the said Exclusion Clause to repudiate the claim, without apprising the Complainant about the same.

     For the afore-going reasons, the Revision Petition is allowed; the impugned order is set aside and the order passed by the District Forum is restored in entirety, leaving the parties to bear their own costs.

     We direct that the amount due to the Complainant in terms of the order passed by the District Forum, shall be remitted to him within four weeks from the date of receipt of copy of this order, failing which the said amount shall carry interest @ 12% p.a. from the date of this order till actual realization.

     It will be open to the Insurance Company to withdraw the amount, if any, deposited by it before the District Forum.

        The Revision Petition stands disposed of in the above terms.

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