BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSIONAT HYDERABAD.
F.A. 194/2008 against C.C. 9/2006, Dist.. Forum-I, Hyderabad.
Between:
1. The Oriental Insurance Company Ltd.
Regd. Office: At Oriental House
P.B. No. 7037, A-2527, Asif Ali Road
New Delhi
2. The Oriental Insurance Company Ltd.
Divisional Office at 36-12-24,
Jetty Towers, Innispeta,
Main Road, Rajahmundry-533 101
Rep. by its Divisional Manager
3. The Oriental Insurance Company Ltd.
Regd. Office at 6-8-871,
Green Lands, Begumpet, Hyderabad
Rep. by its Asst. General Manager *** Appellants/
Ops 1 to 3.
. And
Associate Bank Officers’ Association
Rep. by its Secretary
SBH Buildings, Gunfoundry
Hyderabad-500 001. *** Respondent/
Complainant.
F.A. 195/2008 against C.C. 10/2006, Dist.. Forum-I, Hyderabad.
Between:
1. The Oriental Insurance Company Ltd.
Regd. Office: At Oriental House
P.B. No. 7037, A-2527, Asif Ali Road
New Delhi
2. The Oriental Insurance Company Ltd.
Divisional Office at 36-12-24,
Jetty Towers, Innispeta,
Main Road, Rajahmundry-533 101
Rep. by its Divisional Manager
3. The Oriental Insurance Company Ltd.
Regd. Office at 6-8-871,
Green Lands, Begumpet, Hyderabad
Rep. by its Asst. General Manager *** Appellants/
Ops 1 to 3.
. And
Associate Bank Officers’ Association
Rep. by its Secretary
SBH Buildings, Gunfoundry
Hyderabad-500 001. *** Respondent/
Complainant.
F.A. 196/2008 against C.C. 11/2006, Dist.. Forum-I, Hyderabad.
Between:
1. The Oriental Insurance Company Ltd.
Regd. Office: At Oriental House
P.B. No. 7037, A-2527, Asif Ali Road
New Delhi
2. The Oriental Insurance Company Ltd.
Divisional Office at 36-12-24,
Jetty Towers, Innispeta,
Main Road, Rajahmundry-533 101
Rep. by its Divisional Manager
3. The Oriental Insurance Company Ltd.
Regd. Office at 6-8-871,
Green Lands, Begumpet, Hyderabad
Rep. by its Asst. General Manager *** Appellants/
Ops 1 to 3.
. And
Associate Bank Officers’ Association
Rep. by its Secretary
SBH Buildings, Gunfoundry
Hyderabad-500 001. *** Respondent/
Complainant.
F.A. 197/2008 against C.C. 12/2006, Dist.. Forum-I, Hyderabad.
Between:
1. The Oriental Insurance Company Ltd.
Regd. Office: At Oriental House
P.B. No. 7037, A-2527, Asif Ali Road
New Delhi
2. The Oriental Insurance Company Ltd.
Divisional Office at 36-12-24,
Jetty Towers, Innispeta,
Main Road, Rajahmundry-533 101
Rep. by its Divisional Manager
3. The Oriental Insurance Company Ltd.
Regd. Office at 6-8-871,
Green Lands, Begumpet, Hyderabad
Rep. by its Asst. General Manager *** Appellants/
Ops 1 to 3.
. And
Associate Bank Officers’ Association
Rep. by its Secretary
SBH Buildings, Gunfoundry
Hyderabad-500 001. *** Respondent/
Complainant.
F.A. 198/2008 against C.C. 13/2006, Dist.. Forum-I, Hyderabad.
Between:
1. The Oriental Insurance Company Ltd.
Regd. Office: At Oriental House
P.B. No. 7037, A-2527, Asif Ali Road
New Delhi
2. The Oriental Insurance Company Ltd.
Divisional Office at 36-12-24,
Jetty Towers, Innispeta,
Main Road, Rajahmundry-533 101
Rep. by its Divisional Manager
3. The Oriental Insurance Company Ltd.
Regd. Office at 6-8-871,
Green Lands, Begumpet, Hyderabad
Rep. by its Asst. General Manager *** Appellants/
Ops 1 to 3.
. And
Associate Bank Officers’ Association
Rep. by its Secretary
SBH Buildings, Gunfoundry
Hyderabad-500 001. *** Respondent/
Complainant.
Counsel for the Appellants: M/s. S. Agastya Sharma
Counsel for the Resps: M/s. P.A.V. Bala Prasad.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
MONDAY, THIS THE SECOND DAY OF AUGUST TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) These appeals are preferred by the insurance company against the common order of the Dist. Forum in the complaints filed by the Associate Bank Officers’ Association directing it to pay the amounts as agreed under various policies.
2) The Dist. Forum in the light of fact that all these complaints are between the same parties they were disposed of by a common order. It had taken the pleadings in C.C. No. 9/2006 as a representative case.
3) The case of the complainant in brief is that members of its association had taken long term JPA policy on 11.2.1999 by paying premium of Rs. 8,21,250/- from the appellant insurance company for covering the risk of 928 members for Rs. 5 lakhs or Rs. 10 lakhs as the case may be. The duration of the policy is 10 years. While so, the appellant insurance company unilaterally cancelled the policies by letter dt. 7.3.2002. It is patently arbitrary, illegal and capricious. When writ petitions were filed they were dismissed directing them to file the cases before a competent civil court. Therefore they came up with these complaints seeking amounts covered under the policies together with compensation and costs.
4) The appellant insurance company resisted the case. While denying each and every fact alleged by the complainant it stated that they had power to cancel the policy by invoking condition No. 6. Refund of premium is contemplated u/s 64 VB of the Insurance Act, 1938. Before taking a policy decision, they have taken into consideration the incurred claim ratio of long term JPA policies which have been continuously rising over the past few years. Therefore they took a decision for immediate cancellation of all those long term JPA policies of higher sums viz., insured above Rs. 1 lakh issued before May, 1999. They have not cancelled all the policies. The classification is reasonable. For cancellation of policy, the only obligation is that it should give reasonable notice in writing to the insured and refund the premium received, after deducting a pro-rata part of it for the insurance period that has already been expired. There is nothing unjust or inequitable. The matter does not come under the provisions of the Consumer Protection Act. The cancellation was done in the best interests of majority of the policy holders. There is nothing like unfair trade practice, and therefore prayed for dismissal of the complaint with costs.
5) The complainant in proof of his case, filed affidavit evidence and got Exs. A1 to A4 marked while the appellant filed the affidavit evidence of its Regional Manager and did not file any documents.
6) The Dist. Forum after considering the evidence placed on record opined that since insurance policy is a contract and by invoking condition No. 6 the insurance company cannot unilaterally cancel the policy. Cancellation of policies of above Rs. 1 lakh would amount to discrimination. This would itself constitutes deficiency in service allowed the complaints directing the appellant to pay the amount covered under the policies together with costs of Rs. 2,000/- each.
7) Aggrieved by the said decision the insurance company preferred the appeals contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the parties under contract are governed by terms and conditions annexed to the policy. It was legitimately entitled to invoke condition No. 6 of the terms and conditions for cancellation of policy. It cannot be assailed either on the ground of deficiency in service or unfair trade practice, more so when the parties had signed the contract of insurance on their own volition. In the writ petition, the High Court has directed them to invoke the jurisdiction of a civil court and contrarily they have filed the complaints before the Dist. Forum. The question as to invocation of condition No. 6 is valid or not cannot be determined in summary proceedings. Therefore it prayed that the appeals be allowed, consequently dismiss the complaints.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis- appreciation of fact or law ?
9) It is an undisputed fact that the complainants Associate Bank Officers’ Association had taken Group JPA long term policy covering the risk of 657 for Rs. 65,70,00,000/- for assured sum of Rs. 10 lakhs each. It was issued in the year 1999 for a period of 10 years. Premium amounts were collected vide Ex. A2. While so on 7.3.2002 the insurance company by issuing Ex. A1 notice informed the complainant that by invoking clause-6 the policy has been cancelled. On cancellation of policy they were entitled to an amount of Rs. 5,64,816/- for which a voucher was enclosed directing them to sign and return in order to issue a cheque for the said amount. They have made a caveat that irrespective of the fact whether the original policy and voucher duly discharged were received by it or not the policy would be deemed to have been cancelled with effect from 22.3.2002 and the insurance company shall not be on risk from that date. Aggrieved by the said cancellation they filed batch of writ petitions and by order dt. 16.9.2002 the writ petitions were dismissed with an observation to file a suit before an appropriate forum. Assailing the said order they filed Writ Appeal Nos. 2081, 2092/2002, 109, 141 and 157/2003. By order dt. 12.3.2003 writ appeals were dismissed with a direction “the petitioner has got an efficacious alternative remedy available in law where all questions can be decided on considering the nature of controversy raised.” On that they filed these complaints questioning the unilateral cancellation of policies.
10) Since the complainants have been questioning the cancellation of policies in terms of clause-6 it is pertinent to note the said clause which reads as follows:
“The Company may at any time by notice in writing cancel policy provided that the Company shall in that case return to the insured the then last paid premium less prorata part thereof for the portion of the current insurance period which shall have expired. Such Notice shall be deemed sufficiently given if posted addressed to the insured at the address last registered in the Company Books and shall be deemed to have been received by the insured at the time when the same would be delivered in the ordinary course of post. Long term policies may be cancelled at the request of the insured after retaining the premium for the expired risk on annual basis (part of the year shall also be reckoned as year) calculated on the basis of the same premium structure which was used for collecting premium at the time of issuing the policy.”
11) In fact the National Commission in Oriental Insurance Company Vs. Bopanna Lakshmi Naga Malleswari in R.P. No. 1478/2007 Dt. 29.1.2010 considered the said question. The National Commission after satisfying with notice of cancellation as required under condition No. 6 observed : “The insurance company having taken a policy decision to cancel all the long term single payment policies and having cancelled the same in terms of condition No. 6 in our view, the cancellation of the policy cannot be questioned.”
It was further observed that deceased member having been communicated, there was no insurable interest on the date of his death either by the deceased member or his nominee on the date of his death when the policy was not subsisting.” Evidently that was a case of single policy holder.
12) Coming to the facts, the very complainants have filed Ex. A1 cancellation notice dt. 7.3.2002 issued by the insurance company invoking the above said clause. The insurance company had cancelled the policy for the reasons mentioned in Ex. A1 which we have already mentioned above. Since it is a question of policy and within its right under the terms of the policy, the question of arbitrariness will not arise. They are parties to the agreement. The very bank officers having consented for above said condition had taken the policies. Having agreed for such a term, they are estopped from contending that the insurance company cannot unilaterally cancel the policy.
13) Learned counsel for the complainants contended that payment of money is a condition precedent for cancellation of policy. In the very notice they have made it clear that they are enclosing vouchers for the amount and they would send cheque on receipt of voucher. It is substantial compliance. Irrespective of the fact whether the original policy and voucher duly discharged were received by it or not the policy would be deemed to have been cancelled w.e.f. 22.3.2002 and the company shall not be on risk from that date. The learned counsel for the insurance company contended that it is not too late a day to send the voucher after signing on the same they would issue a cheque. Therefore it cannot be said that cancellation is vitiated for non-refunding of the amount. The complainants as well can send the discharge vouchers even now, seek whatever the amounts they are entitled to. When the appellants agreed to pay the amounts the question of directing them to pay is superfluous.
14) The Dist. Forum could not have allowed the complaints on the ground of discrimination in between one set of policyholders and another set of policyholders. Since it is a policy decision and it cannot be questioned as was observed by the National Commission. The complainants are not entitled to raise the question of discrimination etc. before the consumer fora. Therefore, we are of the opinion that there are no merits in the complaints.
15) In the result the appeals are allowed setting aside the order of the Dist. Forum, consequently the complaints are dismissed. No costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 02. 08. 2010.
*pnr
“UP LOAD – O.K.”
