National Insurance Co. Ltd vs Reji V. & 3 Ors

These two revision petitions have been filed by the petitioner National Insurance Co. Ltd. against the order dated 26.9.2015 of the State Consumer Disputes Redressal Commission, Kerala, (in short 'the State Commission') passed in Appeal Nos.54/14 & 67/14.

Brief facts of the case are that 1st respondent/complainant is the widow and 2nd and 3rd respondents/complainants are the children of Capt. C.S. Anil Prakash who died in air crash at Hyderabad on 29.12.2004. He was a holder of HSBC Classic V Card having No.456342420000952219. Authorities of the opposite party No.1/respondent No.4 HSBC had assured that a Classic Card holder would get personal accident insurance for Rs.15 lacs in the event of loss of life in an accident. On 29.12.2004, Anil Prakash died in an air accident at Hyderabad while he was working as Chief Flying Instructor in Andhrapradesh Avitation Academy. 2nd Opposite party Insurance Company repudiated the claim of complainants. Therefore, complainants filed the complaint claiming the Insurance amount of Rs.15 lacs and Rs.2,00,000/- as compensation.

The complaint was resisted by both the opposite parties i.e. by the petitioner and respondent No.4 by filing their respective written statement. However, the District Consumer Disputes Redressal Forum, Vazhuthacaud, (in short 'the District Forum') partly allowed the complaint and directed the opposite party no.2/petitioner herein to settle the claim on non-standard basis by allowing 50% of the amount assured (that is 50% of Rs.15 lacs) with 8% p.a. interest from the date of filing of the complaint (that is from 21.03.2006) within two months from the date of receipt of the order.

Aggrieved by the order of the District Forum dated 31.10.2013 the complainant as well as the opposite party No.2/petitioner herein preferred separate appeals before the State Commission. The State Commission dismissed the appeal No.54/14 filed by opposite party no.2/petitioner herein and allowed the appeal No.67/14 filed by the complainant and modified the order of the District Forum to the effect that the complainants are entitled to the entire amount assured under the policy i.e. Rs.15 lacs with interest @12% per annum from 29.12.2004 till realization.

Hence the present revision petition by the opposite party No.2/petitioner herein.

Heard the learned counsel for the parties and perused the record. Learned counsel for the petitioner stated that the insurance was attached to the credit card issued by the HSBC Bank and the condition for availing insurance benefit was that the card holder should be an active member. As per the brochure, the following definition has been given for an active member:-

"All benefits listed below are provided by the National Insurance Company Ltd. and are available only to "active" primary Credit cardholders (excluding Zero lost card liability).

An 'active' primary Classic Credit card for the purpose of a PAC claim is defined as a Credit card that has been utilised at least three times for the purpose of customer initiated purchase and/or cash advance transactions within 89 days prior to the date of accident to the Credit cardholder."

The case of the complainants is that the husband of the complainant No.1 has died in an air accident and the insurance cover is for Rs.15,00,000/- as per the following provision given in the brochure:-

"2. Personal accident insurance

Effective 1 September 2002, primary Classic Credit cardholders are covered for up to Rs.15,00,000 in the event of loss of life in an air accident. For loss of life due to other accidents the cover is Rs.1,50,000."

The basic condition for availing the cover is that the card holder has to be an active member as per the definition of active member given in the scheme. For a cardholder to be an active member, the card must have been used atleast three times within 89 days prior to the date of accident either for purchases or for cash withdrawals. In the present case, card has not been used three times within 89 days prior to the date of accident and therefore, the bank informed to the Insurance Company that he was not an active member vide letter dated 03.03.2005.

Learned counsel for the Insurance Company further stated that the instant case is covered under the following exception:-

"Exceptions:

Payment of compensation in respect of Death From intentional self-injury suicide or attempted suicide. Whilst under influence of intoxicating liquor or drugs.

Whilst engaging in aviation, ballooning or whilst mounting into. Dismounting from traveling in any balloon or aircraft other than as a passenger (fare paying or otherwise) in any duty licensed standard type of aircraft anywhere in the world."

The learned counsel for the petitioner argued that, from the complaint, it is clear that he was working as Chief Flying Instructor in Andhra Pradesh Aviation Academy and therefore, his case falls under the above exceptions. The investigator in his report has informed that in the inquiry of Director General of Civil Aviation, it has come out that Capt. C.S.Anil Prakash was employed as Chief Flying Instructor (CFI) at the Andhra Pradesh Aviation Academy, Secunderabd during his accidental death on 29.12.2004. Captain C.S. Anil Prakash was piloting the aircraft at the time of accident. The only passenger in the said flight was AME (Aircraft maintenance Engineer) Rejanikanth who had sustained severe injuries. The cause of crash was pointed out as the improper handling by the pilot of the said aircraft.

On the other hand, learned counsel for the respondents/complainants stated that no brochure, which has been referred to by the learned counsel for the opposite party, was supplied to the insured. In the policy, the printed/typed condition is only the following:-

"An 'Active' Gold Cards for the purpose of a Claim is defined as a card that has been utilized at least five times for the purpose of a customer initiated purchase and of cash withdrawal transaction within 90 days prior to the date of accident to the cardholder."

Beneath the above typed matter, the following line has been added in ink in somebody's hand writing:-

"For silver cards 3 transactions required."

The original of this document has never been filed and it is not clear as to who has made this hand written amendment in the policy. The State Commission has not given importance to this hand written addition in the above document and the claim has been allowed as if no such condition was there.

Learned counsel further stated that the air craft was being tested and co-passenger was an engineer, who had also not paid any fare. Thus, the deceased cannot be treated as an instructor as he was not instructing anybody in the air craft. It was further argued by the learned counsel for the respondents/complainants that the investigator's report relied by the Insurance Company is of a private investigator and it is not known whether the agency is registered with Government of India or Government of Kerala. Thus, the report of the investigator cannot be relied upon. Learned counsel further stated that the case of the Deceased Life Assured (DLA) is not covered under the exceptions of the policy and the claimants are entitled to get insurance claim amount of Rs.15,00,000/-.

I have given a thoughtful consideration to the arguments advanced by the learned counsel for both the sides and perused the record. The claim has been repudiated basically on two grounds. The first is that the case of the complainant is covered under the exception given in the policy. The second reason for repudiation was that the insured was not an active member as per the definition given in the brochure/policy. So far as the first point is concerned, it is seen that the exception is valid only for travellers in the plane (other than the passengers fare paying or otherwise) while mounting or dismounting from the aeroplane. In the present case, though the deceased was not a passenger as he was himself piloting aircraft, but he has not died while mounting or dismounting from the aircraft, rather, he died in the plane crash itself. An argument can be raised that he was engaged in the aviation and therefore, the exception clause will be applicable. However, it is seen that inspite of mentioning "engaging in aviation" separate qualification has been given for the travellers, who will be covered under this exception and therefore, the whole exception clause would be read with the qualification of death while mounting or dismounting from the aircraft. Had this not been the position, the exception clause would have read only as "engaging in aviation". Thus, this exception clause is not applicable in the present case.

Now coming to the second ground rejecting the claim of the complainants that the DLA was not an active member as he did not use the card for purchase or for taking out the cash using the card three times within 90 days prior to the date of death. It is seen from the statement submitted by the bank that the following entries are available in the statement:-

Date

Nature of Transaction

TXN Amount

26.09.2004

CSA

-10.2

26.09.2004

CSA

-3100

11.10.2004

NPM

4000

13.11.2004

PRC

-3040

29.11.2004

NPM

2000

NOTE:

NPM = Payment

PRC = Purchases

CSA = Cash Advance

From the above, it is clear that three eligible transactions have been done within 93 days before the death and accordingly, the DLA does not seem to have been an active member as per the definition given in the policy. The State Commission has observed that there is a hand written addition in the policy document and it is not clear as to who has added these lines ""For silver cards 3 transactions required.", Therefore, the State Commission has not considered this condition as a necessary condition for payment of the insurance claim. There is no doubt that the DLA had silver card and for golden card, the condition of 4 transactions is printed on the policy, therefore, it will be unreasonable to assume that there would not be any condition for silver card holder. However, the bigger question is whether this type of condition can be attached to a policy. In the present case, as per this condition, the complainant is not entitled to get any claim as the DLA did not have 3 transactions within 90 days before his death. Had the DLA died 4 days earlier, the complainant would have been entitled to get the claim of Rs.15,00,000/-. Thus, this seems to be a sort of gamble, which depends upon the date of death, which is totally uncertain. From the legal point of view, this condition seems to be void under Section 29 of the Indian Contract Act, 1872. The Section 29 reads as under:-

"29. Agreements void for uncertainty- Agreements, the meaning of which is not certain, or capable of being made certain, are void."

From the above, it is clear that definition of active member as given in the policy is covered under this Section because it is not capable of being made certain. The condition cannot be made certain as the insured cannot decide his date of death. Hence, the contract based on this definition of active member as given in the policy is a void contract, therefore, this condition cannot be read against the insured.

From the above examination, it is clear that out of the two reasons assigned for repudiating the claim of the complainants by the Insurance Company, one condition (exception clause) is not applicable in the present case and the second condition (not being an active member) cannot be applied on the insured as the contract in respect of this condition is itself void.

Based on the above discussion, I do not find any force in the revision petition and consequently, revision petitions No.994 and 995 of 2016 are dismissed.