OF 2008 AGAINST C.C.NO.41 OF 2006 DISTRICT CONSUMER FORUM ADILABAD

Between

United India Insurance Co., Ltd.,
Rep. by its Divisional Manager,
Divisional Office, 11/1582, M.G.Road
PB No.75, Warangal

                                                        Appellant/opposite party

        A N D

Shammunisa Khan W/o late SS Khan
aged 50 years, Occ: Household

R/o House No.222, Janaram Village
Revenue Mandal, Janaram
District Adilabad

                                                        Respondent/complainant

Counsel for the Appellant             Sri Ravishankar Jandhyala

Counsel for the Respondent          Served

 QUORUM:          

 SRI SYED ABDULLAH, HON’BLE MEMBER

&

                            SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER

                                TUESDAY THE NINETH DAY OF NOVEMBER

                                            TWO THOUSAND TEN

Oral Order ( As per R.Lakshminarsimha Rao, Member)
                                       ***

1.     The opposite party is the appellant.

2.     The facts of the case are that the husband of the complainant S.S.Khan was a retired police constable and during his service all the police constables and police officers working in Districts of Adilabad and Karimnagar has obtained the Janatha Personal Accident Insurance policy of opposite party by paying the premium through deduction from their salaries.  The opposite party has issued the policy bearing No.050600/47/51/1364/98 valid for a period from 5.2.1999 to 4.2.2009 for a period of 10 years for a sum of assured `3 lakh.  On 13.1.2006 the insured S.S.Khan met with a motor vehicle accident and received grievous injures and succumbed to the injuries.  The police, Jannaram has registered a case in Crime No.4 of 2006.  The complainant being wife of the deceased sent information through telegram dated 28.1.2006 to the opposite party about the death of the insured.  The opposite party vide its letter dated 10.2.2006 informed the complainant that they have cancelled the policy w.e.f., 27.4.2002 suo moto by invoking cancellation clause of the policy.  Hence the complainant filed the complaint before the District forum seeking relief against the opposite party to pay the sum assured of `3 lakh with interest, compensation and costs.

3.     The opposite party filed affidavit admitting the obtaining of Janata Personal Accident Insurance Policy on 4.2.1998 by the Police officers Association covering the risk of their 5350 members for an amount of Rs.3 lakhs each.  The policy was issued subject to the terms and conditions laid therein.  The Comptroller and Auditor General of India pointed out that the police personal all over the state of Andhra Pradesh were covered under Group personal Accident Police issued by the State Sector Branch under the control of DO VI, Hyderabad and there is no need to issue another policy.  The opposite party therefore cancelled the policy and intimated the same to the police officer association on 12.4.2002 stating that the cancellation was effective from 27.4.2002.

4.     Both parties filed their respective affidavits and Exs.A1 to A7 were marked on behalf of the complainant and no documents were filed on behalf of the opposite party.

5.     The District Forum allowed the complaint directing the opposite party to pay an amount of `3,03,732/- with interest and costs.

6.     Aggrieved by the said order the opposite party preferred this appeal contending that there is an alternative remedy provided for adjudication of the dispute between the parties and in view of the judgment of the High Court reported in 1989 AP 140.  The terms of the contract govern the field The principle is upheld by the Supreme Court 1966 ACJ 267.  The cancellation of the policy was within the right of the opposite party insurance company.

7.     The point for consideration is whether the cancellation of the policy by the opposite party insurance company was in accordance with the law?

8.     There is no dispute between the parties in regard to the issuance of insurance policy bearing No.050600/47/51/1364/98 for the period commencing from 5.2.1999 to 4.2.2009 for the sum assured `3 lakhs.  It is also not disputed that the husband of the complainant met with a motor vehicle accident on 13.1.2006 and to the effect a case in Crime No.4/06 of the police Jannaram was registered.  The husband of the complainant sustained grievous injuries and he had succumbed to the injuries.  The claim of the complainant was repudiated on the premise that the insurance policy was cancelled w.e.f., 27.4.2002 by invoking the operative clause of the insurance policy.

9.     It is the contention of the complainant that the opposite party insurance company has raised the plea of the cancellation of the insurance policy only to avoid and escape the liability of the payment of the amount due to her.  It is contended on behalf of the insurance company that the insurance policy obtained by the police officers Karimnagar and Adilabad from the opposite party no.1 insurance company covering accidental risk of 5350 members was cancelled and intimated the cancellation to the police officer’s association on 12.4.2002 that the cancellation was effective from 27.4.2002.  The power of the opposite party insurance company to cancel the insurance policy has been under challenge by the complainant.  The District Forum has relied upon the decision of the Hon’ble National Commission in S.K.Exports Pvt. Ltd., Vs.  New India Assurance Company Llimited and others reported in 2004 CTJ 427, wherein it was held that where there are two interpretations of insurance law reasonably possible, the interpretation in favour of the insured has to be accepted.

10.    We do not understand how the principle laid down in the above mentioned case is applicable to the facts of the case on hand.  The terms and conditions of the insurance policy have empowered the opposite party insurance company to cancel the insurance policy.  The cancellation of the insurance policy and its intimation to the police welfare association who had obtained the insurance policy for covering the risk on the life of its members who included the complainant’s husband herein has not been challenged by the complainant. 

11.    It is pertinent to note that the opposite party insurance company has referred to the pendency of the W.P.No.12057 of 2002 filed by the police officers association for revocation of the cancellation of the insurance policy.  It is submitted on behalf of the insurance company that the Hon’ble High Court has not issued any interim orders of such nature as to the entitlement  of the complainant to the benefits under the insurance policy.  A writ petition covering the comprehensive issue of the cancellation of the insurance policy and its validity is being enquired by the High Court.  It is not known what happened to the writ petition.  The complainant has not come up with any petition impleading herself before the High Court, in the writ petition.  As the scope of enquiry in the writ petition is wide enough to cover all the disputes revolving around the cancellation of the insurance policy, we do not feel there is any justification for the District Forum to proceed with the case to determine the rights of the parties under a cancelled insurance policy which have been very much a issue in the writ petition pending before the High Court.  Therefore, we are inclined to set aside the order passed by the District Forum.  The result of the writ petition would be the cause of action for the complainant to invoke her right under the insurance policy in question.

11.    In the result the appeal is allowed.  The order of the District Forum dated 13.6.2007 is set aside.  Consequently the complaint is dismissed.  No costs.

                                                                                MEMBER

                                                                                MEMBER

                                                                               09.11.2010

KMK*