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Judgment
M. Shreesha, J
Aggrieved by the order dated 08.04.2013 in Consumer Complaint No. 91 of 2006 passed by the State Consumer Disputes Redressal Commission, Maharashtra (in short "the State Commission"), both the Complainant Sh. Santosh Umakant Jawadwar and the Opposite Party namely Tata AIG General Insurance Company Ltd. (hereinafter referred to as "the Insurance Company") preferred these Appeals i.e. FA No. 389 of 2013 and FA No. 407 of 2013 respectively under Section 19 of the Consumer Protection Act, 1986 (for short "the Act'). By the impugned order, the State Commission has allowed the Complaint in part directing the Insurance Company to pay Rs. 55,00,000/- on account of the death of the Complainant's wife and Rs. 5,00,000/- towards educational benefit to the daughter of the Complainant within a period of 60 days from the date of the Order, failing which the amount shall carry interest @ 6% p.a. from the date of the expiry of the stipulated period till the date of realization.
The facts in brief are that the Complainant had taken a Policy bearing No. 020001364400 and paid a premium of Rs. 17,110/- vide DD No. 499898 dated 24.02.2004 for the period covering 27.02.2004 to 26.02.2005. It is averred that the Policy covered all the family members of the Complainant i.e. his wife for an amount of Rs. 50,00,000/- and his daughter Ms. Mansi for an amount of Rs. 10,00,000/-. The Complainant himself was insured for an amount of Rs. 1,00,00,000/-. While so, on 20.02.2005, the Complainant had gone to drop his daughter at her maternal aunt's residence, leaving his wife, Smt. Kalpana who was 8 months pregnant at his residence. It is averred that his wife was advised rest as she was in the advanced stage of pregnancy and, therefore, did not accompany them. Both of them had their dinner at around 6 p.m. and thereafter the Complainant went to visit his relatives. On the way back he picked up his daughter and at about 8.30 p.m. reached his house and found smoke bellowing out of the kitchen window of his second floor flat. Having failed to receive any response from the land-line number at his residence, the Complainant informed the Police and the Fire Brigade.
It is stated that Fire Brigade Officers opened the door and found his wife lying dead with severe burn injuries on the floor of the kitchen. It is averred that the Police found the death to be accidental. However, upon the Complaint filed by his brother-in-law, the Police registered a case under Section 302, 498-A and 34 of IPC. The Complainant was arrested immediately and thereafter released on bail by the Court on 16.03.2005. It is averred that as the Complainant was in grief he could not immediately intimate the Insurance Company but thereafter vide a letter dated 22.09.2005 intimated the Insurance Company and an Officer recorded his statement and also took the statements of the Doctors and the office boy. Thereafter the Complainant did not pursue the claim because of the time consumed in the trial before the Sessions Judge, Nanded, which had acquitted the Complainant holding that the death of his wife was purely accidental. Thereafter, vide letter dated 04.05.2006, the Complainant submitted all the documents together with the copy of the Judgement to the Insurance Company. Subsequently, the Insurance Company repudiated the claim vide a letter dated 06.06.2006 on the ground of delayed intimation and belated submission of documents relying on Conditions No. 8 and 10 of the Policy. The Insurance Company also unilaterally concluded that the death was Suicide and did not settle the claim.
It is averred that the daughter of the Complainant is entitled to reimbursement of Tuition Fees of Rs. 60,000/- for the Academic Year 2005-06 and 2006-07. Further in terms of Clause C-52, a sum of Rs. 5,00,000/- which is 10% of the sum insured is also to be paid. Despite several requests as the claim was not settled, the Complainant approached the State Commission seeking the following reliefs:-
"(a) That this Hon'ble Forum be pleased to direct the opposite party to pay to the Complainant an amount of Rs. 55,00,000/- (Rs. 50,00,000/- basic sum insured + Rs. 5,00,000/- Tuition Benefits, which is the sum insured in respect of hazard insured against with further interest thereon at the rate of 18% p.a. from the date of lodging the claim till its payment and/or realization;
(b) That this Hon'blle Forum be pleased to award compensation for innumerable harassment and mental torture. Complainant demands damages liquidated to Rs. 5,00,000/-.
(c) That this Hon'ble Court be pleased to direct the opposite party to pay to the Complainant costs and legal expenses liquidated to Rs. 2,00,000/-;
(d) That this Hon'ble Forum be pleased to allow Complainant to enhance the claim based on Tuition Benefits for the remaining Eligibility period for Kum. Mansi;
(e) Such further and other reliefs as the nature and circumstances of the case may require;"
The Insurance Company filed their Written Versions before the State Commission stating that the death of the Complainant's wife was stated to have taken place on 22.02.2005, whereas the intimation of the claim was given on 22.09.2005, after an unexplainable and inordinate delay of seven month. Hence the claim was repudiated vide letter dated 06.06.2006 as there was a breach of the provisions of 8 and 10 of the Policy. It is also averred that the contents of the Charge-Sheet filed by the Police makes it clear that the death of the Complainant's wife was due to suicide and Exclusion No. 1 of the Policy states that the Policy does not provide benefit for any loss resulting in whole or in part, directly or indirectly, in respect of suicide, attempt to suicide or self-inflicted injuries. The Hon'ble Sessions Judge in its Judgement dated 07.04.2006 recorded that 100% burns on the body of the deceased, may be suicidal and that only for the limited purpose of giving the Complainant, the benefit of doubt, it has been recorded in the said Judgement that the possibility of accidental death cannot be ruled out. It is denied that the Insurance Company had distorted the facts and the claim has been wrongly repudiated.
The State Commission based on the evidence adduced allowed the Complaint with the afore-noted reliefs after observing as follows:-
"6. On perusal of the file placed before us, we observe that matter pertains to the year 2006. It was placed on the board for hearing and disposal from the sine die list. On occurrence of incidence of death of Mrs.Kalpana S. Jamadwar due to100% burn the case of accidental death was lodged. However, later on complaint from the brother of late Mrs.Kalpana S. Jamadwar, the Criminal Case No.65/2005 for the offence under section 498-A, 302 r/w 34 I.P.C. was registered in the concerned police station. Police filed charge-sheet stating that death of the insured was due to abetment to commit suicide caused by the Complainant. The Sessions Court framed one of the issues as "whether said death was homicidal, suicidal or accidental" among other grounds. The finding of the Sessions Court to the issue relating to death is "possibility of accidental cannot be ruled out". It was observed in the judgement both possibilities, i.e. the death either may be suicide or it may be of accidental. Since abetment of the Complainant leading to death of late Mrs.Kalpana S. Jamadwar was not proved by the prosecution, the Complainant herein was acquitted and set at liberty. The Opponent Insurance Company heavily relied on the finding of the Sessions Court in the criminal case. Written version and pleadings of the Opponent Insurance Company are mainly based on the findings of the Sessions Court in the criminal case. There is no conclusive evidence adduced on record as admissible under Provisions of Section 13(4) of the Consumer Protection Act, 1986 to establish that death of the Complainant's wife (Mrs.Kalpana S. Jamadwar) was as a result of suicide, (since abetment by the Complainant leading to commit suicide by Mrs.Kalpana S. Jamadwar was not proved for want of evidence on record) and the insurance company failed to adduce any documentary evidence to establish death of Mrs.Kalpana S. Jamadwar was due to suicide. Issues framed by the Sessions Court and finding thereon indicates that death due to suicide by abetment was not proved by the prosecution and therefore, the Sessions Court held "possibility of accidental death not ruled out". Therefore, one of the grounds for repudiation of insurance claim (exclusion under condition (1) Part-B of the Policy) is unfounded and not sustainable in law.
In the course of pleading, the Ld.Advocate of the Opponent Insurance Company did not come forward with satisfactory explanation as to how the claim on account of alleged suicide can be repudiated without adducing tangible evidence to prove their point. Also no satisfactorily explanation came forward as to how the delay in notifying the claim in genuine cases empowers the Insurance Company to foreclose the claim and therefore the stipulation will not hold good in the eyes of the law. We have considered this case in its entirety and come to the conclusion that the Insurance Company could not prove operation of exclusion clause (1) of Part 'B'of the policy terms and conditions for repudiation of the claim and stipulations in Part-B of Policy Condition Nos.(8) and (10), do not hold good." (Emphasis supplied.)
The facts not in dispute are that the Complainant had taken an Accident Guard Policy for the period from 27.02.2004 to 26.02.2005, covering the risk of the Complainant for Rs. 1,00,00,000/-, that of his wife for Rs. 50,00,000/- and that of his daughter for Rs. 10,00,000/-; that the Complainant's wife died due to severe burn injuries on 22.02.2005; that the Complainant's brother-in-law filed Criminal Case No. 147 of 2005 under Section 302, 498-A and 34 IPC; that the Insurance Company was intimated on 22.09.2005 and that the claim was repudiated on account of violation of Conditions No. 8 and 10 vide letter dated 06.06.2006.
The brief point which falls for consideration herein is whether the repudiation by the Insurance Company is justified. Learned Counsel appearing for the Insurance Company vehemently contended that there was an inordinate delay in reporting the incident, that the forensic expert negated the theory of accidental death; that the Complainant failed to submit the relevant documents substantiating his claim; that the State Commission has grossly erred in giving weightage to the outcome of the criminal case based on benefit of doubt on an issue not contemplated in the charge-sheet filed; that the State Commission has erred in ignoring the General Exclusion No. 1 under the Policy and has relied on Judgement of the Hon'ble Apex Court in Deputy Inspector-General of Police & Anr. Vs. S. Samuthiramreported in (2013) 1 SCC 598 wherein the Hon'ble Apex Court has observed that mere acquittal of an employee by a Criminal Court has no impact on the disciplinary proceedings initiated by the Department. Learned Counsel further relied on R.P. Kapur Vs. Union of India AIR 1964 SC 787 in which it was held that even in the case of acquittal, Departmental Proceedings may follow where the acquittal is other than honourable. She also relied on the Judgement of the Hon'ble Supreme Court in Management of Reserve Bank of India Vs. Bhopal Singh Panchal (1994) 1 SCC 541 in which the Hon'ble Apex Court has upheld the decision of the Appellant Bank not to treat the suspension period as duty and not to grant full pay and allowances for the suspension period, because the Respondent employee was acquitted by the High Court on benefit of doubt.
For better understanding of the case the repudiation letter is reproduced as hereunder:-
"With regard to the above claim lodged with us, we would like to advise you as follows.
It is noted that the death of Mrs. Kalpana had taken place on 22/02/2005. The notification of claim was given to us vide your letter dated 22/09/2005 in terms of Uniform Provision No. 8 of Accident Guard Policy, "It is a condition precedent to Our Liability hereunder that written notice of claim must be given by You to Us within seven (7) days after an actual or potential loss begins or as soon as reasonably possible and in any event no later than thirty (30) days after an actual or potential loss begins." The claim was notified to us after an inordinate delay of 7 months. This tantamounts to breach of Uniform Provision No. 8 of the Policy.
Without prejudice to admission of liability we had called for the documents to substantiate the loss under the scope of the Policy. We had deputed our official who visited Nanded and met you for collection of relevant information and documents. We had vide our subsequent letters dated 19/10/2005, 22/11/2005 & 14/01/2006 requested you to please arrange to submit the following documetns:-
Claim Form.
Death Certificate.
Certified copy of charge-sheet.
The photographs of the kitchen/house/dead body taken.
A copy of the File of Mrs. Kalpana showing her treatment details of Dr. Rachita Bidwai's clinic.
Other medical prescriptions/treatment records;
An authority letter from you, authorizing the Company to seek copies of medical records from the doctors treating Mrs. Kalpana Jawadwar.
We regret that we have still not received above documents. The reason cited that the matter is pending with the Sessions Court does not hold good as submission of above documents has nothing to with the outcome of the trial of the case at Court of Sessions. We would like to inform you that Uniform Provision 10 of the Policy. "Time For Filing of Claim Forms and Evidence" has not been complied with.
It is noted the Police Authorities have conducted investigation and charge sheet has been filed. It is further noted that the charges have been framed under Section 306, 498-A r/w 34 of IPC.
As is evident from the contents of Charge-sheet, the death of Mrs. Kalpana is due to suicide. In terms of Exclusion No. 1 of the Policy, "This Policy does not provide benefits for any loss resulting in whole or in part from or directly or indirectly in respect of suicide, attempted suicide or intentionally self-inflected injury or illness.
In view of the foregoing, we regret to inform you that the claim is not tenable under the scope of the Policy." (Emphasis supplied.)
Condition No. 8, Condition No. 10 and Exclusion 1 of the Policy have been applied to this case as follows:-
"Part-C of Condition no.(8) about notifying the claim to the Opponent which stipulates that "notice of claim must have been given by the Complainant within a period of seven days after an actual or potential loss i.e. from the date of death of late Smt. Kalpana Santosh Jamadwar and in any case not later than 30 days from the date of incidence".
"Part-C, condition no.(10) stipulates about "submission of claim form in all respects within a period of 30 days from the date of incidence."
"Part-B of Condition no.(1) "suicide, attempted suicide (whether sane or insane) or intentionally self-inflicted injury or illness......... is not covered."
Having regard to the facts and circumstances of the case that the Complainant's wife who was 8 months pregnant sustained burn injuries and died and also that the Complainant's brother-in-law had filed Criminal Case against him and Complainant had to attend the Sessions Court, we are of the view that the reasons given for delay in intimation are reasonable and substantial. Merely because there was a delay in intimation and neither the fire accident nor the death is in dispute, repudiation on the ground of delay in intimation alone is not justified. We place reliance on the Circular Dated 20.09.2011 issued by the Insurance Regulatory & Development Authority in which repudiation on grounds of delay in intimation was deprecated. The said Circular is reproduced as under:-
"INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
IRDA/HLTH/MISC/CIR/216/09/2011 Date: 20.09.2011
CIRCULAR
To: All life insurers and non-life insurers
Re: Delay in claim intimation/documents submission with respect
to
All life insurance contracts and
All Non-life individual and group insurance contracts
The Authority has been receiving several complaints that claims are being rejected on the ground of delayed submission of intimation and documents.
The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specified number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances.
The insurers decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.
Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.
The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurers stand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
J.Harinarayan
CHAIRMAN"
Learned Counsel appearing for the Complainant vehemently contended that the Sessions Court had acquitted the Complainant and, therefore, the Insurance Company cannot itself conclude that the death is on account of 'Suicide'. It is seen from the Judgement of the Sessions Court dated 07.04.2005, that it is observed that 'this is settled principle of law that when there are two probabilities and possibilities, one accidental and another suicidal, possibility favourable to accused needs to be considered and benefit of that possibility shall be given to the accused.' Having observed so, the Sessions Court also gave a finding that there is no material on record to substantiate that there was any cruelty extended to the wife of the Complainant; that there is no offence disclosed to have been committed by the Accused; that the Police Inspector, who inspected the Complainant's residence at the time of the cause of action, concluded that it was 'an accidental burn while cooking'. As the facts and circumstances of the instant case are different from the ratio that has been laid down by the Hon'ble Supreme Court in the afore-noted judgements relied upon by the Counsel of the Insurance Company, we are of the considered view that the State Commission has rightly given a finding that there was no conclusive evidence adduced on record as admissible under Provisions of Section 13(4) of the Consumer Protection Act to establish that the death of the Complainant's wife was as a result of suicide. Therefore, we are of the opinion that the contention of the Insurance Company that the death was on account of Suicide, is unsustainable on account of the fact that there is no documentary evidence filed to substantiate the same. When the Sessions Court's Judgment clearly shows that the death due to suicide by abetment was not proved by the Prosecution, the stand taken by the Insurance Company that the 'death was by suicide' was totally unjustified. Therefore, we are of the opinion that the State Commission has rightly allowed the Complaint in part.
Now we address ourselves to the contention raised by the Complainant in FA No. 389 of 2013. Learned Counsel appearing for the Complainant contended that the State Commission has rejected the plea for compensation for the mental and physical agony and also for litigation expenses and has further awarded only simple interest of 6% p.a. only in case of default. We find force in the contention of the Complainant that interest @ 6% p.a. was only awarded in case of default. Having given a finding that the repudiation by the Insurance Company was unjustified, the State Commission ought to have awarded interest from the date of repudiation till the date of realization. Hence to meet the ends of justice, we modify the order of the State Commission awarding interest @ 6% p.a. on the amount awarded by the State Commission from the date of repudiation i.e. 06.06.2006 till the date of realization together with costs of Rs. 25,000/-. We are not inclined to award any further compensation as interest has already been awarded by way of damages. Time for compliance four weeks from the receipt of a copy of this order, failing which, the amount shall attract interest @ 9% p.a. for the same period.
In view of the afore-going discussion, First Appeal bearing No. 389 of 2013, filed by the Complainant, is allowed in part to the extent indicated above and First Appeal bearing No. 407 of 2013, filed by the Insurance Company is hereby dismissed. The Statutory Deposit made by the Insurance Company in First Appeal No. 407 of 2013 shall stand transferred to the Legal Aid Account.