Oriental Insurance Co. Ltd vs Vikrant Tewari & 2 Ors

Sudip Ahluwalia, Member

These Revision Petitions bearing Nos. 2151 of 2017 and 2152 of 2017 have  been  filed  by  the  Petitioner/ Oriental  Insurance  Co.  Ltd. against the Respondents/Complainants challenging the separate impugned Orders dated 27.02.2017 passed by the State Consumer Disputes Redressal Commission, Lucknow, Uttar Pradesh, in Appeals bearing Nos. 2882 of 2016 and 2883 of 2016. Vide such Orders, the State Commission had dismissed both the Appeals while upholding the common Order dated 22.08.2016 passed in CC/291/2008 & CC/386/2012 and common Order dated 22.08.2016 passed in CC/292/2008 & CC/385/2012 respectively by the District Consumer Disputes Redressal Forum, Kanpur.

The said Petitions are being decided by this common Order as both the Petitions have been preferred by the same the Opposite Party/Oriental Insurance Co. Ltd.; and involve the same questions of law with only minor variations on facts like policy nos., amounts, etc. Therefore, for the sake of brevity, RP/2151/2017 is being treated as the lead case, and the facts have been taken therefrom.

The brief facts of the case are that the Complainant No.1 had filed a Consumer Complaint bearing No. 291/2008 stating that he had taken an Insurance Policy from the Opposite Party which was regularly renewed and his wife was also insured under the said Policy who had raised a claim for Knee replacement vide policy No. 1168. Since, the claim  was  found  genuine, the  amount  spent  was  reimbursed  by  theOpposite Parties. However, the said disease was excluded in the new Policy and 100% loading was done on the Complainant’s Policy which was liable to be refunded. The amount paid in excess as loading charges was Rs.42,027/-. Further, the Opposite Party No.1 returned the cheque which was tendered by the Complainant for payment of premium for renewal of the Policy. Thus, it was contended that the Opposite Party No.1 failed to renew the Policy and deprived the Complainant of the benefit of the Mediclaim policy due the Complainant’s claim of Knee replacement and, on the pretext that the claim ratio had gone high. Refusal to renew was illegal. Therefore, the Complaint was filed before the Ld. District Forum seeking renewal of the Policy for a further period of one year.

The Complainants thereafter filed another Complaint bearing No. 386 of 2012 during the pendency of the aforesaid Complaint  (291/2008) contending that the Mediclaim Policy of the Complainant was continuing since 1995, however, the Policy was issued by the Opposite Party in 2007-2008 by writing ‘pre-existing’ disease. On Complaint by the Complainant, the pre-existing disease was deleted by hand. The Ld. District Forum had passed an interim order dated 26.04.2008 in CC/291/2008 to renew the Policy immediately after accepting the cheques  of premium.  However,  the  Policy  was renewed prospectively instead of the due renewal date. Therefore, the Policy remained renewed in 2010-2011 and 2011-2012. Further, the Complainant submitted a cheque bearing No. 383694 dated 03.03.2012 for Rs.50,067/- and the Opposite Party delivered the Policy on 05.03.2012. However, the Opposite Party presented the cheque for encashment on 11.04.2012 which was returned by the Banker for being wrongly stamped. The aforesaid development was informed to the Complainant on 12.04.2012 and the Complainant reached the office of Opposite Party No.1 on 13.04.2012 with cash payment. However, the Complainant was informed that his Policy had been cancelled and a letter dated 13.04.2012 for cancellation of Policy had also been despatched. However, it was found that the date was mentioned as 06.03.2012 on the deposit slip. It was contended by the Complainant that the Policy could be cancelled only after 30 days’ notice to the Complainant. Therefore, the Complaint was again filed before the Ld. District Forum seeking setting aside of the cancellation order along with other ancillary reliefs.

5 The Opposite Party No.1 appeared before the Ld. District Forum and resisted the Complaint bearing No. 291/2008 and denied all the allegations thereby denying deficiency in service on its part. It was contended  that  as  per  guidelines of the Opposite Party Company and IRDA, 200% loading charges could be charged and thus, the Opposite Party had charged 100% Loading Charges and the Complainant was not entitled to refund of loading charges. It was further contended that the Complainant had also filed a Complaint before the Ombudsman Lucknow, U.P. on 20.08.2007 which was dismissed on 07.03.2008 wherein the reliefs of the Complainant were rejected. It was further contended that Policy was refused to be issued as the Claim ratio was very high and the Complainants being Doctors were experts in raising false medical claims. Therefore, the Opposite Party No.1 prayed for dismissal of the Complaint.

The Opposite Party Nos.1 and 2 appeared before the Ld. District Forum in Complaint bearing No. 386/2012 and resisted the Complaint and denied all the allegations thereby denying deficiency in service on their part. It was contended that the cheque was sent for encashment on 06.03.2012 and the same was dishonoured on 12.04.2012. Consequently, the Policy was rejected on 13.04.2012 as per Section 64 V.B. of the Insurance Act, 1938. It was stated that there was no rule of the company to issue 30 days’ notice in case of dishonour of cheque and when the Company is intimated about dishonour of a cheque, the policy is to be immediately cancelled. Therefore, the Opposite Parties prayed for dismissal of Complaint .

The Ld. District Forum vide its Order dated 22.08.2016 disposed off the Complaints bearing No. 291/2008 and 386/2012 by the common impugned Order and observed that the Opposite Party had no right to cancel the Policy without 30 days’ notice to the Complainant. It was further observed that the Assistant Manager of Opposite Party No.1 was enemical with the Complainant due which the Complainant was not even given any opportunity in violation of the principles of natural justice. Therefore, the acts of the Opposite Parties were held to be deficient in service. However, the contention of the Complainant for refund of Loading Charges was rejected in view of the Insurance Act and judgement of Hon’ble High Court of Delhi in ‘Ashok Kumar Deegra v. Oriental Insurance Co. Ltd. AIR 2004 Delhi 161’. Therefore, the Opposite Parties were directed to renew the Policy policies bearing Nos. 222104/48/2007/1168 and 222104/48/2012/2304 and pay Rs.5,000/- towards cost.

Aggrieved by the above common Order, Appeal bearing No. 2882 of 2016 was filed by Appellant/Oriental Insurance Co. Ltd. before the State Consumer Disputes Redressal Commission, Lucknow, U.P. which was decided by the impugned Order dated 27.02.2017.

The Ld. State Commission vide the impugned Order had dismissed the Appeal while upholding the Order of Ld. District Forum and observed in CC/291/2008 that the Ld. District Forum rightly ordered renewal of Policy with consequential benefits in view of the judgement of Hon’ble Supreme Court of India in ‘Biman Krishna Bose v. United India Insurance Company Limited and Another (2001) RD-SC 358’, and in CC/386/2012 that the cancellation of Policy without opportunity to the Complainant to make deficiency good or to make fresh payment was highly arbitrary and unfair and thus, the order of Ld. District Forum to renew the Policy in this year also was upheld.

Hence, the present Revision Petitions have been filed by the Petitioner/Oriental Insurance Co. Ltd. against the separate impugned Orders dated 27.02.2017 of the Ld. State Commission in Appeal Nos. 2882/2016 and 2883/2016.

Heard the Ld. Counsel for Petitioner and Respondents No. 1 and 2. Perused the material available on record.

There is little controversy to the direction of both the Ld. Fora so far as it relates to renewal of the Policy, which was the subject matter of the first Consumer Complaint (No. 292 of 2008).  In that case, the Ld. District Forum had correctly declined to order refund of the amount of Rs. 11,497/- charged by the Insurance Company as the permissible loading charges, but had nevertheless directed renewal of the Insurance Policy from the date when it had fallen due, since such renewal had been declined by the Insurance Company on the ground that the claim ratio had gone high. This was ex-facie an arbitrary reason, and the Ld. State Commission rightly relied upon the decision of the Hon’ble Apex Court in “Biman Krishna Bose V/s United India Insurance Co Ltd., reported in (2001) RD – SC 358”, in which it was held –

“If we take the view that mediclaim policy cannot be renewed with retrospective effect, it would give handle to the insurance company to refuse the renewal of the policy on extraneous consideration, thereby depriving the claim of the insured for treatment of diseases which have appeared during the relevant time and further deprive the insured for all time to come to cover those diseases under the insurance policy by virtue of the exclusion clause. This being the disastrous effect of wrongful refusal of renewable of the insurance policy, the mischief and harm done to the insured must be remedied. We are, therefore, of the view that once it is found that the act of an insurance company was arbitrary in refusing to renew the policy, the policy is required to be renewed with effect from the date when it fell due for its renewal.”

The real controversy therefore now revolves around the non-renewal of the Policy which was the subject matter of the second Consumer Complaint (No. 385 of 2012). In this matter essentially a question of fact was involved, as to whether there had been any inordinate or motivated delay on the part of the Petitioner/Insurance Company, which had the effect of depriving the complainant from getting the Policy renewal within the permissible time. It is to be noted first of all that a Policy can be renewed within a grace period of 30 days from the due date. The decisions of both the Ld. Fora below are concurrent and have gone in favour of the complainant. In its Revisional Jurisdiction, there is hardly any scope for this Commission to interfere with such concurrent findings on facts, as visibly there is no perversity in the matter of appreciation of evidence by the Ld. Fora.

This Commission has nevertheless also gone through the documents available on record, with a view to ascertain whether the conclusions of both the Ld. Fora below were logical or not. It is seen that the Policy in question was issued on 04.03.2011, and that the period of insurance covered therein was from 09.03.2011 to the midnight of 08.03.2012. Obviously the Policy was issued since the concerned cheques towards payment of the premium had been delivered to the Insurance Company just a day before issuance of the Policy. Copies of the concerned cheques are on record on page No. 140 of the paper book in R.P. No. 2152 of 2017. But the cheques were subsequently dishonoured not due to any insufficiency of funds, but on account of certain clerical defect in the stamp of the drawer/Account Holder. The date of such dishonouring by the Banker of the Insurance Company was 12.04.2012, which was 6 weeks after the cheques had been delivered to the Company by the Complainant. Had the reason for dishonouring of the cheques become known to the Complainant within a reasonable time, he certainly would have had the scope to rectify the mistake and deliver the premium within the admissible grace period of 30 days. In this regard, the specific allegation of the Complainant was that the delay had been motivatedly resorted to by the Insurance Company out of vindictiveness, and the strained relationship its Assistant Manager had with the complainants in the past.

Now the letter sent to the Complainant by the Petitioner’s ‘Banker (Punjab National Bank) on 23rd of May 2012 clearly mentioned, “that the cheques in question were received from the representative of The Oriental Insurance see Co. on 11.4.12 and were attended to on the very same day. The said cheques were not in order since these were without proper stamp and were returned on the next day that is on 12.4.12 to the representative of the Oriental Insurance Co. On the request of the said Representative, returning the memo was also issued mentioning the reasons for returning of the cheques…..”

(Emphasis added)

It therefore becomes crystal clear from the aforesaid letter issued by the Chief Manager of the Petitioners’ own Banker, that the cheques in question had been delivered to it from the Petitioner’s side as late as on 11.04.2012, i.e., when the grace period of 30 days for paying up the premium had already lapsed. But, the Petitioner/Insurance Company in its subsequent letter dated 19.04.2012 to the Complainant gave an entirely different version by stating, “The Premium receipt was issued against the said cheque on 05.03.2012, As per practice & rules all the premium collections cash/cheques/DD received on a particular day are sent to the bank on the following day. Accordingly, your cheque along with other collections of premium on 05.03.2012 was sent to our Bank on 6.03.2012 as 03.03.2012 & 04.03.2012 were holidays.…”    (Emphasis added)

In the aforesaid manner, the Petitioner/Insurance Company did seek to wash its hands off any allegation of delay in sending the cheques in question to its Bank for realization, whether motivatedly or otherwise. But the statement made in its letter dated 19.04.2012 is not supported by any material on record, after first of all being directly negated by the Banker’s letter dated 23rd of May 2012 to the complainant, already referred to earlier. The Petitioner from its side did not place on record the actual receipt or Deposit Slip which ought to have been received from its Banker to prove that the cheques in question had actually been delivered in the Bank on 06.03.2012, as claimed in the letter dated 19.04.2012. Interestingly, it is seen from the Index of documents filed on behalf of the Petitioner in Appeal No. 283 of 2016 in the Ld. State Commission, which is on page 122 of the paper book in R.P. No. 2152 of 2017, where there is the reference to “Copy of the pay in slip of the cheque” which was purportedly Annexure no. 7 in the concerned Index. But the copy of such ‘pay in slip‘ has not actually been filed/placed on record to show exactly on which date the cheques in question had been delivered to the Petitioner’s Bank.

In such circumstances there is no scope to accept the Petitioners’ version that there was no inordinate delay on its part in sending the cheques in question to its Banker. On the contrary, it is established from the record that the cheques were sent 6 weeks later on 11.04.2012 by which time the grace period of 30 days had already lapsed. Both the Ld. Fora below were consequently of the view that this had been done intentionally to deprive the Complainants from renewing their Medical Insurance Policy, in view of the chequered and strained relationship between the parties over a long period of time. Let us even assume it to be not a case of vindictiveness on the part of the Insurance Company, still the inordinate delay which resulted in lapsing of the grace period available to the Complainants to pay the premium within time after the formal defect in their cheques had become known. Yet, undisputedly the delay in sending the cheques to the Bank was certainly an act of culpable omission and manifest deficiency in service on part of the Insurance Company.

For the aforesaid reasons, this Commission finds no grounds to interfere with the concurrent decisions of both the Ld. Fora below.

The Revision Petitions are therefore dismissed. Parties to bear their own costs.

Pending application(s), if any, also stand disposed off as having been rendered infructuous.