This is an interesting case where the insurable interest, devolving upon a widow of a farmer, has been repudiated by the first respondent Iffco Tikio General Insurance Company Ltd. (hereinafter referred to as the Insurance Company).

The background is that the Insurance Company undertook to indemnify farmers under the ‘Sankat Haran Kisan Gramin Bima Yojana’, the policy and the terms and conditions whereof have been filed on record.   

The husband of the first respondent/complainant late Gurmej Singh @ Gurpej Singh was entitled to avail the benefit of the said policy where a sum of Rs.2.00 Lakhs to the maximum was payable on injury or death if a farmer purchases fertilizer under the said Scheme.  There is no dispute that the complainant’s late husband purchased fertilizer for a sum of Rs.10,620/- on 12.01.2011 through the Jind Central Cooperative Bank Limited, Branch Jajanwala, Tehsil Narwana, District Jind, Haryana, the second respondent.  

While performing his agricultural operations in the field, the insured Gurmej Singh fell down from the tractor and suffered a serious fracture in his hip on 06.02.2011. He ultimately died on 05.05.2011. The aforesaid dates remain undisputed. The complainant, who is the widow of late Gurmej Singh, applied for the indemnification as per the policy which was repudiated on 11.10.2011.  The repudiation letter dated 11.10.2011 is extracted hereunder:

Aggrieved by the repudiation, the complainant preferred a claim petition before the DCDRF Jind (hereinafter referred to as the District Commission) that was resisted by the Insurance Company tooth and nail.  The District Commission recorded the following findings and rejected the complaint:

“5. We have heard the arguments of Ld. Counsel of both the parties and also perused the record placed on file. The husband of the complainant purchased IFFCO fertilizer from opposite party No.2 of Rs.10,620/- vide receipt No.952788 dated 12.1.2011 and there was a scheme of insurance of Rs.2,00,000/- on purchase of fertilizer from the opposite party No.1. On dated 6.2.2011 the complainant's husband fell down from the tractor and died on 5.5.2011 during treatment. The police was registered a DDR No.8 dated 14.6.2011 regarding the death of complainant's husband. The complainant applied for compensation and submitted all the necessary documents with the opposite party No.1 but the opposite party No.1 rejected the claim of the complainant vide letter dated 11.10.2011. 

6. On the other hand, the opposite parties have averred that no post-mortem was conducted after the death of the husband of the complainant which was necessary for taking the claim. The complainant's husband purchased fertilizer on 12.1.2011 and accident, as stated by the complainant took place on 6.2.2011 but the policy commences on 31^st day from the date of purchase of fertilizer and remained in operation for 12 months further.  In this way, the accident took place when the policy was not in operation. 

7. It is clearly mentioned in serial No.7 of the terms and conditions that risk under the "sankat Haran" Bima policy shall incept from the 31st day of purchase of any brand of IFFCO fertilizer, as mentioned in the cash receipt or Debit memo and shall remain in force for a period of 12 months calculated from the 31 day of issue of cash receipt or debit memo.

8. In view of the facts and circumstances of the case, we are of the view that the accident took place when the policy was not in operation. Therefore, the opposite parties have rightly repudiated the claim of the complainant. No deficiency is established on the part of the opposite parties. Therefore, the complaint of the complainant is dismissed. Parties will bear their own costs, Copies of order be supplied to the parties under the rule. File be consigned to the record-room.”

The ground for repudiation by the Insurance Company as well as by the District Commission are one and the same, namely, that since the policy had to commence from 31^st day of the purchase of the fertilizer, and since the accident occurred in between, the policy had not commenced as per the terms thereof and consequently the claim was not indemnifiable.  Thus, the principal reason to reject the claim was that the accident took place on 06.02.2011 whereas the policy was to commence after 12.02.2011, and hence, since the policy had not commenced operating on the date of the accident, the claim was not indemnifiable.

The complainant filed an appeal before the SCDRC Haryana (hereinafter referred to as the State Commission) and the appeal was allowed reversing the order of the District Commission with the following findings:

“6. We have seen the policy. It is not disputed by the respondents that Gurmej Singh purchased IFFCO fertilizer and was also provided insurance cover with a maximum limit of Rs. 1 lac. The date of death of Gurmej Singh is also not disputed as 5^th May, 2011. 

7. Though the policy was to commence from 31^st day of the purchase of the fertilizer, certainly the insurance cover had commenced from February 12^th 2011, while Gurmej Singh died on May 05^th 2011.  The accident might have taken on February 06^th 2011. However, the cause of action is 'death' and not 'accident', which was beyond 30 days of purchase of fertilizer and thus, the insurance cover had commenced. 

8. In this view of the matter, the appeal is accepted, impugned order is set aside and the complaint is allowed. The respondents are directed to pay the insured amount of Rs.1 lac alongwith interest at the rate of 9% per annum from the date of death till its actual realization. The respondents are further directed to comply with the direction within 30 days from the date of receipt of this order.”

The present revision petition has been filed by the Insurance Company alleging that the impugned order of the State Commission proceeds on an erroneous assumption of fact and therefore deserves to be set aside as it is contrary to the terms of the policy. 

The revision petition was entertained on 17.09.2014 and the following interim order was passed:

“De hors, the outcome of the present revision petition, the petitioner directly remitting a sum of Rs.7,500/- to the respondent no.1 by way of demand draft being travelling and sundry expenses, issue notice to the respondents, returnable on 16.3.2015.

In the meanwhile, operation of impugned order shall remain stayed, till next date subject to petitioner’s depositing 50% of the awarded amount along with interest, within four weeks from today, with the District Forum.   On receipt of the amount, District Forum, shall put the same in fixed deposit in a Nationalized Bank, initially for a period of one year.

In case, petitioner fails to deposit the said amount within the specified period, then stay granted today shall stand vacated automatically, without any further order.”

The first respondent/complainant put in appearance and the matter kept on being adjourned for one reason or the other.  On 12.09.2017 an order was passed to proceed ex-parte against the Bank/second respondent who had not appeared.  Even otherwise, the second respondent had not contested the matter and the revision petition stood adjourned during the period of Pandemic and even thereafter. No brief synopsis was filed by the first respondent/complainant and a cost of Rs.5,000/- was imposed in default of not filing the written synopsis.  On 19.04.2024 further time was sought to file the written synopsis and it is in this background that the matter has come up for final hearing before this Bench today (09.08.2024).

We have heard learned counsel for both the parties at length and we find that the Insurance Company has unjustifiably repudiated the claim and has compelled the widow of a farmer to contest this litigation quite contrary to the intention and purpose of the Scheme under which the risk was clearly covered as would be evident from the findings recorded by us hereinafter.

To analyse the same, it would be apt to mention the terms and conditions of the policy which are on record.  The preamble of the policy undertakes to pay the insured person, his or her beneficiary/nominee or legal heirs, as the case may be, in respect of events occurring during the period of insurance in the manner and to the extent set-forth in the policy, including the endorsements provided in the policy, terms and conditions and the exceptions therein.

The policy could be availed of provided a farmer purchased fertilizer during the period of 12 months preceding the date of accident and during the currency of the Scheme upon its commencement.  The period of cover defined under Clause-7 is as follows:

“7.      Period of Cover:

Risk under the "SANKAT HARAN" Bima policy shall incept from the 31^ST day of purchase of any brand of IFFCO fertiliser, as mentioned in the Cash Receipt or Debit memo and shall remain in force for a period of 12 months calculated from the 31^ST day of issue of cash receipt or debit memo.”

The indemnification is on the happening of any such event causing injury as defined under Clause-13 which is extracted hereunder:

“13.    Injury

It shall mean accident bodily injury solely and directly caused by external, violent and visible cause. This definition includes accidental bodily injury resulting from exposure to element of the cause. Snake bite, drowning, Rail / Road accidents included.”

Clause-B of the policy defines coverage which includes death caused due to any such bodily injury.  The coverage is extracted hereunder:

“B.      COVERAGE

In case of bodily injury which solely and directly causes Insured Person’s death loss of limb or permanent total disablement within 12 months of injury, we shall pay to the Insured Person or his/her nominees or in absence of nominees to legal heirs of Insured Person(s) the sum or sums hereinafter set forth in.

Since there is no dispute about any exclusion, it is not necessary to refer to the Exclusion Clause contained in the policy. 

The only ground taken for repudiating the claim is that on the date of the accident the policy had not yet commenced as the 31^st day from the date of purchase of the fertilizer was 12.02.2011 whereas the accident had occurred prior to that on 06.02.2011.

The repudiation and the order of the District Commission was based on the aforesaid facts which has been reversed by the State Commission holding that death occurred after the policy had commenced, as the claim was admissible.

In our opinion, the State Commission has on appreciation of the facts and the terms and conditions of the policy arrived at a correct conclusion.  On the date when the policy commenced, i.e. 12.02.2011, the insured had only met with an accident prior to that, but unfortunately he died subsequent thereto on 05.05.2011.  The death therefore had occurred after the policy had commenced.  The policy nowhere prohibits or restricts such a claim, inasmuch as even though the bodily injury had been caused in an accident prior to the commencement of the policy, the death occurred thereafter.  In such cases even though we entirely agree with the findings recorded by the State Commission, yet even otherwise this is a fit case where the rule of contra proferentem should be applied in favour of the claimant, inasmuch as there is no inherent prohibition for awarding a claim if the consequential contingency after an accident, as in the present case, the death had occurred on 05.05.2011 admittedly during the subsistence of the tenure of the policy.  The policy commenced on 12.02.2011 and is valid for one year as per the terms and conditions contained in the policy under Clause-7 quoted hereinabove.  The fertilizer was purchased during the period of 12 months preceding the date of accident and therefore this condition under Clause-5 is also fulfilled.  Consequently, for all intents and purposes, the policy clearly intends to cover such a risk and we would therefore also invoke the contra proferentem rule to clear any such ambiguity that has been introduced by the repudiation and was confirmed by the District Commission.  The approach of the Insurance Company as well as the District Commission was therefore erroneous.

The policy itself as per its name indicates is for relieving people from calamities.  This is a case where the widow lost her sole bread-earner after an accident.  It was therefore a catastrophe which the Scheme intends to cover.  Otherwise also the Consumer Protection Act, 1986, as applicable in the present controversy, is a beneficial piece of legislation where the policy has to be interpreted in order to extend benefit to a consumer, of course, within the four corners of law.  The State Commission therefore was fully justified in disagreeing with the order of the District Commission as well as the reasons contained in the repudiation letter.  We find no merits or justification to entertain this revision petition, and as a matter of fact entertaining this revision petition and its pendency for 10 years must have greatly inconvenienced the first respondent/complainant. 

We therefore dismiss the revision petition with liberty to the first respondent/complainant to apply for an expeditious execution in the event the Insurance Company fails to satisfy the decree awarded by the State Commission vide order dated 12.05.2014.  The Insurance Company shall ensure the payment within two months from today and in the event of any default in complying with the direction of the State Commission within the said period, the rate of interest shall stand enhanced to 12% till the date of actual payment.

The revision petition is accordingly dismissed with the aforesaid observation.