Life Insurance Corporation Of India vs Kempanna

This revision petition arises out of the order dated 10.6.2014 passed by the State Consumer Disputes Redressal Commission, Karnataka, (in short 'the State Commission') in FA No.920 of 2012 wherein the appeal filed by the petitioner against the order dated 29.02.2012 of the District Consumer Disputes Redressal Commission, Tumkur, (in short 'the District Forum') in consumer complaint No.99 of 2011 has been dismissed.

Brief facts relevant for decision of the present revision petition are that the respondent obtained Jeevan Anand Life Insurance Policy from the petitioner Insurance Company which was for the period commencing from 28.12.2004 till 28.12.2030. The sum assured was Rupees One Lakh and the premium payable per year was Rs.4,142/-. The policy also had provision for accident benefit to the insured. Respondent complainant suffered from brain fever and was admitted in the hospital on 06.04.2009 and due to brain fever both the eyes of the complainant were affected adversely and the complainant lost 100% eyesight of both the eyes. Thus, the complainant became permanently disabled and he filed claim for accident benefit under the policy. The claim was repudiated vide letter dated 18.11.2010 by the Insurance Company on the ground that the loss of eyesight and the consequent permanent disability was not a result of any accident but was due to illness and accordingly the claim was not covered under the provisions of the policy. Aggrieved by the repudiation of the claim, the respondent complainant filed consumer complaint before the District Forum being complaint No. 99/2011. The complaint was resisted by the Insurance Company on the same grounds on which the repudiation was made. However, the District Forum allowed the complaint vide its order dated 29.02.2012 directing the Insurance Company to pay Rs.1,00,000/- along with interest @ 9% as well as waiver of the remaining premiums in respect of the policy. The petitioner Insurance Company preferred an appeal against the order of the District Forum before the State Commission being FA No.920 of 2012 and the same was dismissed by the State Commission vide its order dated 10.6.2014.

Hence the present revision petition.

Heard the learned counsel for both the parties and perused record.

The learned counsel for the petitioner stated that both the fora have overlooked the fact that the accident benefit is to be given on permanent disability only when the permanent disability is a result of an accident. In the present case, the permanent disability is a result of illness which cannot be considered as an accident. The District Forum has considered the definition of accident as given in the Workmen Compensation Act which cannot be considered for deciding the case under the Consumer Protection Act, 1986. The accident must involve injury due to external violent means and in the present case there is no external violent means that has inflicted the injury affecting the eyes of the complainant. The State Commission has also summarily dismissed the appeal filed by the petitioner and has upheld the order passed by the District Forum. The State Commission has not examined the issue whether the permanent disability in the present case is a result of any accident or a result of a disease. Thus, the orders passed by both the fora below are illegal and need to be set aside.

On the other hand, the learned counsel for the respondent complainant stated that the word "accident" has not been defined in the policy and therefore, it is to be interpreted on the basis of some other definition of accident. Accordingly, the District Forum has taken the definition of accident from the Workmen Compensation Act and there is no illegality in doing so. After full examination of the points raised in the appeal filed by the petitioner, the State Commission has found no illegality in the order of the District Forum and has upheld the same. Thus, both the fora below have given concurrent finding so far as the fact of permanent disability is concerned and both the fora have come to the conclusion that permanent disability in the present case is a result of accident. In such a situation, the scope under the revision petition is quite limited as facts cannot be reassessed in the revision petition against the concurrent finding of fact by the fora below.

I have given a thoughtful consideration to the arguments advanced by both the learned counsel for the parties and have examined the material on record. Permanent disability due to loss of sight in both the eyes is not disputed by the Insurance Company. Only objection raised by the Insurance Company is that the permanent disability has not been caused by accident. The word "accident" is not defined in the policy. It is also a settled law that if a word is not defined in the policy, the court can take help from outside to interpret that word as held by the Hon'ble Supreme Court in United India Insurance Co. Limited Vs. Harchand Rai Chandan Lal, 2004 AIR (SC) 4794, as under:-

"6. ....The terms of the policy have to be construed as it is and we cannot add or subtract something: Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.

...It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment.

Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous."

Similarly it is also a settled principle of law that if there is ambiguity in interpretation of any clause or any word in the policy, then, it is to be interpreted in favour of the insured and against the Insurance Company.

Based on the above examination, it is clearly brought out that the word "accident" is not defined in the policy and ambiguity has been created by the Insurance Company by not defining the word "accident" in the policy, therefore, the District Forum can take the help of other definitions to interpret the word "accident" and in doing so the Forum can construct the interpretation favouring the insured complainant. Relying on the two above mentioned legal principles and also looking at the long-term nature of the insurance policy in question as well as the limited amount involved in the matter, I am of the view that no interference is called for from this Commission against the concurrent finding given by the fora below. In taking this view, I am supported by the judgement of the Hon'ble Supreme Court in Lourdes Society Snehanjali Girls Hostel and Ors. Vs. H&R Johnson (India) Ltd. and others, (2016) 8 Supreme Court Cases 286, wherein, the following has been held:-

"23. The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons."

Though this Commission would not like to interfere on the merit of the decision given by the fora below, however, it is seen that the District Forum has allowed lump sum payment of Rs.1,00,000/- which is equal to the sum assured instead of this sum to be paid in 10 years in equal monthly instalments as per the provision 10 and 10A of the policy in respect of accident benefit. As disability occurred in 2009, it is now going to complete 10 years and therefore, if the payment is made today of all the instalments, it will be equal to Rs.1,00,000/- only. Hence, practically it is not going to make any difference and the order of the District Forum has to be upheld but with interest for only 5 years.

Based on the above discussion, the order dated 29.02.2012 of the District Forum is upheld with slight modification that the amount of Rs.1,00,000/- (rupees one lakh) shall be payable to the complainant by the Insurance Company but with interest @6% p.a. for 5 years only. The order of the District Forum in respect of waiver of the future premiums is also maintained. This order be complied with by the Insurance Company within a period of 30 days from the date of receipt/service of this order. The revision petition no.3610 of 2014 is accordingly disposed of.