BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD

FA  811/2008  against C.C. 205/2005, Dist. Forum, Guntur.         

Between:

M/s. United India Insurance Company Ltd.

Rep. by its Senior Divisional Manager

Divisional Office, Kubera Towers

15/1, Arundelpet, Guntur.                          ***                        Appellant/

                                                                                                O.P. No. 2.

                                                                   And

1. Smt. Gangisetti Subbamma

W/o. Late Ramaswami

2. Gangisetti Krishna

S/o. Late Venkateswarlu

3. Gangisetti Gopi

S/o. Late Venkateswarlu

All are R/o. Naidupalem Post

Bollapalli Mandal

Guntur Dist.                                               ****                       Respondents/

                                                                                                Complainants.

4.  R. Naga Mohana Rao

S/o. Subba Rao, Near Jenda Chetti

Itukabatti Centre, Old Guntur

Guntur.                                                      ***                         Respondent/

                                                                                                O.P. No. 1

Counsel for the Appellant:                          M/s. S.A.V. Ratnam

Counsel for the Resps:                                M/s.  G.V.S. Mehar Kumar

(R1 to R3)

CORAM:

                         HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

     &

                                 SMT. M. SHREESHA, MEMBER

WEDNESDAY, THIS THE TWENTIETH DAY OF OCTOBER TWO THOUSAND TEN

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

1)                The opposite party insurance company preferred the appeal against the order of the Dist. Forum directing it to pay Rs. 50,000/- covered under the policy together with interest and costs.

2)                The case of the complainants in brief is that complainant No. 1 is the mother, complainant Nos. 2 & 3 are children of one Venkateswarlu.    He was a lorry driver working with Op1 owner.  He was covered by Personal Accident Policy.    While so on  2.12.2002  while  the above said Venkateswarlu driving the lorry  AP 16 W  563  from  Palkol to Ujjain  he suddenly developed chest pain due to stress and strain  was admitted in  a charitable hospital  and died on 7.11.2002.    On a report the police registered the case in Crime No. 22/2002.    He was cremated at Ujjain.    He died during the course of employment.   The claim application No. 34/2003 filed before the Assistant Commissioner of Labour-II, Guntur under Workmen’s Compensation Act is pending.   Since there was insurance coverage they sought Rs. 50,000/- be paid together with compensation and costs.

3)                Op1 did not choose to contest the matter and was set-exparte.

4)                The appellant insurance company resisted the case.    It alleged that the complainants never made any claim.   The complaint was barred by limitation.   They had no cause of action to file the complaint.   There was no coverage of policy for the alleged death.   Except their contention that they have requested the insurance company to issue claim form and therefore they could not lay the claim is all false.    Therefore it prayed for dismissal of the complaint with costs.

5)                The complainants in proof of their case filed the affidavit evidence of first complainant and got Exs. A1 to A8 marked, while the insurance company filed the affidavit evidence of its Asst. Manager and got Ex. B1 policy marked.

6)                The Dist. Forum after considering the evidence placed on record opined that the driver/insured  had died of chest pain due to stress and strain and therefore it could be termed  as accidental death  and therefore directed the insurance company to pay Rs. 50,000/- together with interest @ 9% p.a.,  and costs.

7)                Aggrieved by the said decision, the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.    It ought to have seen that the death due to heart attack cannot be termed as ‘accident’.    At any rate the claim is pending before the Assistant Commissioner of Labour-II, Guntur under Workmen’s Compensation Act (W.C. Act).    If the death occurred during the course of employment it was the Commissioner under W.C. Act to  determine and award compensation.      The Dist. Forum has no jurisdiction and therefore prayed that the appeal be allowed. 

8)                The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact and law?

9)                It is an undisputed fact that Op1 is the owner of the lorry under whom deceased Venkateswarlu was working as driver.    The owner had taken Ex. B1 policy wherein the death of the driver in an accident is covered.    It is not the case of the complainants that the deceased driver died in an accident.    According to them while he was driving the lorry he suddenly had chest pain was admitted in a hospital and later succumbed to death.    This death cannot be termed as accidental death.    The death by accident is different from accidental death.    The question is whether heart attack could be construed as an accidental death?  Recently, the National Commission in SBI Life Insurance Company Ltd. Vs. Y.Dayamani reported in III (2010) CPJ 1 (NC) opined that death due to heart attack is not an accidental death.   That apart evidently the complainants had filed claim under the W. C. Act claiming compensation on the ground that he died during the course of employment. 

10)               Section 8 of the W.C. Act makes it clear  that no compensation has to be paid in respect of a workman whose injury has resulted in death except by deposit with the Commissioner and no such payment  made directly by an employer shall be deemed to be a payment of compensation; the employer should not make any payment of compensation directly to the deceased’s heirs and legal representatives or to any of them;    (i)  Section 8 of the Act is designed to protect the heirs and legal representatives of the deceased workman against any kind of exploitation or fraud likely to be practiced on them by or on behalf of the employer or any third party;   (ii) Section 8 of the Act lays down the format for quantum of compensation  payable by an employer when an employee meets with an accident. Its object is that unscrupulous employer should not take advantage of the ignorance of the employee in making payment of a paltry sum. Therefore the Act  safeguards the interest of the workers and any private payment will not discharge the statutory obligation.  

11)              In   Rajak Haji Jumma  Vs. United India Insurance Company Ltd. reported in  1995 (1) LLJ 168 (Bombay).   the  Bombay High Court held  where  the employer had deposited a sum of Rs. 27,000/-  with the Court of  Commissioner for  Workmen Compensation.  However the insurance company was not liable to indemnify when the insurer  was not impleaded  when a claim was made referring to  Section 19 (1) of the  W.C. Act  which reads as under :

19.   Reference to  Commissioners:   (1)   If any question arises  in any proceedings  under this Act as to the liability  of any person to pay compensation (including any question as to whether a person injured  is or is not a workman) or as to the  amount or duration or compensation (including any question as to  the nature or extent of disablement) the question shall, in default  of agreement, be settled by a commissioner. 

Liability of the employer:    The liability of the employer arises as soon as the injury is caused and at any subsequent occasion.  It cannot be suspended. 

Liability of the  insurance company:   If the insurance company  has agreed to discharge the liability  of the employer under  the Workmen’s  Compensation Act  the  liability of the insurance company  to indemnify  the insurer shall  have to be determined by the Commissioner for Workmen’s  Compensation  in the very same proceedings  by virtue of  the provisions  contained  in Section 19(1)  of the Act. 

Scope of  expression “any person” :   The insurer  also will come  within the scope of  “any person”  contemplated in Section 19 of the Act and thus within the jurisdiction of the Workmen’s Compensation  Commissioner. 

12)              In fact in the above decision, it had relied yet another decision  of   High Court of Rajasthan  in  Madan Gopal Vs. Anandi Lal reported in (1992) ACJ 543  referring to the expression ‘any person’  it was held  that  “includes  the insurance company  concerned.  It is therefore  obvious  that  if  the insurance company has  agreed to discharge  the liability of the employer under  Workmen’s  Compensation Act, the liability of insurance  company to indemnify the insurer shall  have to be determined by the Commissioner for  Workmen’s Compensation  in the very same proceedings  by virtue  of provisions contained  in Section  19(1) of the Act.   In that case since the   primary  liability being  on the employer  and the amount was determined the High Court obviously  by invoking its jurisdiction directed the Commissioner for Workmen’s Compensation  to determine afresh .....  after giving due  opportunity to the appellant and respondent to file supplementary  pleadings and lead  such evidence  as they wish to lead.    It was also mentioned that  notice had to be issued to the insurance company  in Form-J under rule 39 of  the Workmen’s  Compensation Rules, 1924.  Therefore under the policy  the complainants are not entitled to compensation under the Consumer Protection Act.    The complaint is mis-conceived and liable to be dismissed. 

13)               In the result the appeal is allowed setting aside the order of the Dist. Forum.   Consequently the complaint is dismissed.  However, in the circumstances of the case no costs.

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER           

   Dt.  20. 10. 2010.  

*pnr

“UP LOAD – O.K.”

 her husband late  Ch. Komuraiah  @  Kumar Yadav  took Janata Personal Accident   policy (JPA) for a sum of Rs. 5 lakhs  covering the period from  5.5.1999 to 4.5.2014.  He was correspondent of   Prathibha Vidyalayam a day and residential school besides owner of a fertilizer shop.   While so on 6.5.2005 when he went to meet his relatives in a function he was shot dead by the police in the midnight of 7.5.2005.    It was registered as case in crime No. 88/2005.    To cover up their latches the police prepared a false case branding him as extremist.  The death was accidental.   He has no concern either with naxalites or extremists.    He was leading a normal life along with his family members.    In fact he was having an account with  Andhra Bank,  and enjoying  electricity and telephone connections.    When she made claim  followed by legal notice for which  the insurance company repudiated  she filed the complaint  claiming Rs. 5 lakhs together with compensation and costs.

3)                The appellant insurance company resisted the case.   While admitting  the issuance of policy it alleged that the assured was a commander in CPIML Janashakthi an extremis wing since one year and on 7.5.2005 he died in an exchange of fire with the police.   Since he was involved in the illegal activities and died in a police encounter his risk was not covered by virtue of clause-4 (d) of terms and conditions of the policy.    Therefore the claim was repudiated and prayed that the complaint be dismissed. 

4)                The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A15 marked, while the insurance company filed Exs. B1 to B3. 

5)                The Dist. Forum after considering the evidence placed on record, and relying a decision on the said aspect opined that he died due to external injuries and the death could be termed as accidental death, and therefore directed the insurance company to pay the amount covered under the policy together with interest and costs. 

6)                Aggrieved by the said decision, the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.    It ought to have seen that insured had suppressed his association with extremist organization by falsely declaring that he was a businessman.    He died in a police encounter.    The death cannot be termed as accidental; admittedly he died in an encounter and therefore prayed that the appeal be allowed. 

7)                The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact and law?

8)                It is an undisputed fact that the assured had taken JPA Policy Ex. A1 for sum assured of Rs. 5 lakhs.  While so on 6.5.2005 he died in an encounter for which a case was registered vide Ex. A10, inquest report Ex. A11 and post mortem examination Ex. A12.   The complainant contends that the deceased was no way concerned with the extremist group wing Janashakthi.  He was doing business living an ordinary family life, and doing business in fertilizers evidenced under pass book Ex. A2 issued by Andhra Bank in the name of Kavitha Fertilizers, Pesticides & Seeds besides running a day and residential school Prathibha Vidyalayam vide card Ex. A13.    The allegation that he had mis-represented stating that he was a businessman obtained a policy cannot be true.   When the policy was issued obviously after satisfying with his credentials the insurance company must have issued the policy.   He was also having electricity service connection to his residence vide Ex. A4. 

9)                While the complainant alleges that he left his home to his relatives to attend to a function and the police shot him dead in the midnight alleging that he was an extremist,  the insurance company by relying the very same FIR Ex. A10 alleges that he died of injury arising or resulting from the insured committing breach of law with criminal intent attracting clause 4(e) of terms and conditions of the policy, and therefore not entitled to any claim. 

Exclusion Clause 4(e) reads as follows:

Provided always that the company shall not be liable under this policy for … 4(e) Arising or resulting from the insured committing any breach of the law with criminal intent. 

10)              The moot question is whether the death  was accidental or attracts the above clause in order to justify repudiation of claim by the insurance company.  This question is no longer res-integra covered by a decision of  this Commission  in   United India Insurance Company Vs.  Bairi Rajaiah  reported  in II (2001) CPJ 291.  That was a case where  the assured was killed in an encounter  with the police.    It was observed that

The F.I.R. did not establish convincingly that the death of the insured arose or resulted “from the insured committed any breach of the law with criminal intent”. Even according to the F.I.R., the insured was not possessing any gun to open fire at the police party at the time of the  encounter.    His dead body had a bomb in the pocket. Moreover, the F.I.R. is not reliable evidence. No other material was placed by the appellant before the District Forum to establish satisfactorily that the death of the insured arose or resulted from any breach of the law committed by the insured. The burden was on the appellant to establish that the death of the insured occurred under Exception 5(e) which reads as follows :

“The Company shall not be liable under the policy for :

xxx         xxx             xxx           xxx           xxx           xxx

5. Payment of compensation in respect of death ...(e) arising or resulting from the insured committing any breach of the law with criminal intent.”

There can be no doubt that in the present case death of the insured resulted “solely and directly from accident caused by external violent and visible means” and not by natural causes. On this aspect we are supported by the decision of the National Commission in Smt. Manda Savarna v. LIC of India, 1986-1999 CONSUMER 3498 (NS).

11)              Coming to the facts,  in FIR  Ex. A10  there was a mention  that  on the information furnished by  town C.I. Sri Amarender Reddy that Janashakthi  Naxals of Vemulawada  intend to kidnap  a person belonging to  Prathibha school, S.I. of Police Vemulawada along with his   some other colleagues  were going towards  Lingampally village at about 2.30  in the early hours  by the time they reached  Mulavagu Mattadi  they found four persons were coming opposite to them.   When they questioned  as to their identity  they opened fire,   immediately they  went into the shrubs and asked them to stop fire.   Despite their repeated pleas to surrender they opened fire without any abetment and in order to save themselves  they opened fire against them.    After abatement of  sounds of fire  they found with the help of lights  a person aged about 32 years died of bullet wounds.    Later they recognized him as deceased who was working with   CPIML outfit as Commander.  They found  a .32 revolver  by his side besides a bag. 

12)              It  is not known   whether any final report was filed.    It is not known whether any investigation was made by the police to  find out whether he was the person who was shot dead by the police for his connections with extremists and was indulged in criminal activities.    The insurance company did not file  investigation report or final report as observed in the above decision.  The  FIR cannot be taken as substantive  evidence  for the facts mentioned therein.  The insurance company could not file the affidavits of the villagers to show that he was in any way have connections  with the above said organization.  It might be  the very same assured was  kidnapped by the extremists  as is evident from in the first  part of the FIR. When the complainant could prove that he was having  fertilizers shop, besides running  a  school and doing banking transactions, it cannot be said that he was involved  in those activities.  When the death was  solely and directly from accident caused by external violent and visible means  the insurance company was liable to pay the amount covered under the policy.   The repudiation was unjust and we do not see any mis-appreciation of fact or law by the Dist. Forum in this regard.   There are no merits in the appeal.

13)              In the result the appeal is dismissed with costs computed at Rs. 5,000/-.  Time for compliance four weeks. 

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER           

   Dt.  20. 10. 2010.  

*pnr

“UP LOAD – O.K.”