Gollavilli Primary Agricultural Co-op. Credit Society Ltd. vs Oriental Insurance Co. Ltd. and Another

C.Y. Somayajulu, J.—Petitioner a society registered under the provisions of Andhra Pradesh Cooperative Societies Act, 1964, in pursuance of the decision taken by the Andhra Pradesh Cooperative Banks Association on 27.3.1999, to continue the benefit of the Janata Group Accident Insurance Scheme for the members of the various Cooperative Primary Agricultural Societies, in order to cover the risk of its members paid the required premium of Rs. 8.70 for each of its members on 28.5.1999 to the respondent No. 1. N. Satyanarayana, a member of the petitioner society, who was bitten by a dog on 2.5.1999 and was undergoing treatment died on 3.7.1999 due to rabies, as certified by the Civil Assistant Surgeon, Government Hospital, Amalapuram. Consequently petitioner made a claim for payment of Rs. 1,00,000 due to the death of the said Satyanarayana; which was turned down by respondent No. 1 on the ground that the risk commenced on 2.5.1999 long before the payment of premium on 28.5.1999. Hence, this petition for a direction to the respondent No. 1 to pay the amount of Rs. 1,00,000 due to the death of its member Satyanarayana.

The contention of the learned Counsel for the petitioner is since N. Satyanarayana and others were members of the Janata Group Accident Insurance Scheme for the period 1998-99 also, even assuming that the risk which resulted in his death commenced even before payment of premium for 1999-2000 on 28.5.1999 petitioner is entitled to receive payment from the respondent No. 1 since he was covered by the Janata Group Accident Insurance Scheme for 1998-99 also.

The contention of the learned Counsel for the respondent No. 1 is that during 1998-99 the Janata Group Accident Insurance Scheme policy taken by the petitioner was in force from 13.4.1998 to 12.4.1999 and since the risk took place on 2.5.1999, subsequent to the expiry of the period of policy for the period 1998-99 and since risk took place prior to the payment of premium for 1999-2000, question of respondent No. 1 paying any amount to the petitioner does not arise. In reply, the contention of learned Counsel for the petitioner is that since premium for 1998-99 was paid on 8.6.1998 risk for 1998-99 should cover the period 8.6.1998 to 7.6.1999 and so the petitioner is entitled to the relief sought. He placed strong reliance on G. Laxminarasamma (Smt.) Vs. Director, A.P. Engg. Research Labs Himayathsagar, Hyderabad and another, .

At the outset it should be stated that the case of the petitioner is that since it took out the policy to cover the risk of its members for 1999-2000 and since its member Satyanarayana died on 3.7.1999 it is entitled to receive Rs. 1,00,000 from respondent No. 1. There is no whisper about its paying the premium for 1998-99. It is only during the course of arguments, the learned Counsel for the petitioner contended that since petitioner was a member of Janata Group Accident Insurance Policy for 1998-99 also, petitioner is entitled to the benefit under the scheme in respect of the death of its member Satyanarayana.

The documents produced by respondent No. 1 show that the group insurance policy issued by respondent No. 1 to the petitioner for the year 1998-99 was valid from 13.4.98 to 12.4.1999. The risk in this case admittedly took place on 2.5.1999, subsequent to the expiry of the policy for the period 1998-99. The contention of the learned Counsel for the petitioner that since premium for the year 1998-99 was paid on 8.6.1998 the risk period should be from 8.6.1998 to 7.6.1999 and since the accident took place on 2.5.1999, well within the period of one year from the date of payment of premium petitioner is entitled to Rs. 50,000 as per the policy for 1998-99 if not Rs. 1,00,000 as per the policy of 1999-2000. I am not able to agree with his contention because the policy issued by respondent No. 1 shows that its validity period is from 13.4.1998 to 12.4.1999. Remittance of the amount might have been delayed by the petitioner. Even otherwise, if the contention of learned Counsel for the petitioner is accepted, the petitioner would be having the benefit of two policies for parts of May and June 1999, because as per the policy issued by respondent No. 1 for 1999-2000 its validity was from 28.5.1999 to 27.5.2000 and according to the Counsel for the petitioner, the policy for 1998-99 should be from 8.6.1998 to 7.6.1999. How can there be two policies in operation between 28.5.1999 to 7.6.1999?

G. Laxminarasamma (Smt.) Vs. Director, A.P. Engg. Research Labs Himayathsagar, Hyderabad and another, , relied upon by the learned Counsel for petitioner has no application to the facts of this case. No doubt the premium in that case also was paid after the risk took place and yet the insurer was directed to pay the amount on the ground:

(4) ...Nothing is produced before the Court by the management of respondent No. 2 Insurance Company to show that the Group Janata Personal Accident Policy would cover only accidents and not deaths....

But in this case, as stated earlier, even the communication sent to the petitioner shows that in cases when death occurs due to an accident only would the claim be answered by the insurer. So, as stated above, date of accident but not date of death is relevant for making the insurer liable.

The policy for the year 1999-2000 commenced on 28.5.1999 and was valid till 27.5.2000. No doubt the death of the victim took place on 3.7.1999, i.e., after payment of the premium, but the date of death of the victim is of no consequence to decide this case, because his death was the result of an accident that took place on 2.5.99, prior to the date of commencement of the policy. From the ''urgent circular'' dated 28.4.99 of the District Cooperative Central Bank Limited, Kakinada, produced by the petitioner it is seen that "insurance amount would be paid only (if) the death occurred due to an accident". So, death of a member due to an accident is the sine qua non for the petitioner''s eligibility to receive the insurance amount. It is well-known that in cases of death due to an accident the insurance must be available on the date of accident, but not on the date of death. If the policy is taken subsequent to the occurring of the accident and if the victim dies as a result of the said accident, even if the policy of insurance is taken before the death of the victim it can be of no avail because the contract of insurance was not in force by the date of accident and since it is well-known that all contracts of insurance are contracts uberrima fides, i.e., contract of utmost good faith. So all the material facts, which have a bearing on the contract have to be disclosed to the insurer, In this case since the risk took place subsequent to the expiry of the policy for 1998-99 and before the commencement of the policy for 1999-2000, the petitioner cannot be granted any relief.

In the above circumstances, petitioner is not entitled to any relief. Hence, the writ petition is dismissed. No costs.