BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH ========== Complaint Case No: 281 of 2009 Date of Institution : 27.02.2009 Date of Decision : 16.05.2011 M/s Bebo Technologies Pvt. Ltd., SCO No.156-157, Sector 34-A, Chandigarh, through its authorized signatory Sh.Suresh Sapra, Manager Finance. ….…Complainant V E R S U S 1] M/s Bajaj Alliance General Insurance Company Ltd., G.E. Plaza, Airport Road Yerwada, Pune, through its authorized signatory Pune. 2] The Senior Executive, M/s Bajaj Alliance General Insurance Company Ltd., SCO No.329, Ist Floor, Sector 9, Panchkula. 3] Mr.B.S.Kalsi, C/o M/s Bajaj Alliance General Insurance Company Ltd., SCO No.329, Ist Floor, Sector 9, Panchkula. 4] The Senior Officer/Authorized Signatory of M/s Bajaj Alliance General Insurance Company Ltd., SCF No.11, Phase-3B-2, SAS Nagar, Mohali. ..…Opposite Parties CORAM: SH.LAKSHMAN SHARMA PRESIDENT SH.ASHOK RAJ BHANDARI MEMBER MRS.MADHU MUTNEJA MEMBER Argued by: Sh.Ajay Kumar Sapehia, Advocate for the complainant. Sh.Rajesh Verma, Advocate for the OPs. PER ASHOK RAJ BHANDARI, MEMBER 1] The brief facts of the case are as under:- That the complainant company obtained a Group Mediclaim (Floater) Policy (Ann.C-2) from the OP Insurance Company in respect of its 162 employees and dependents valid from 22.5.2008 to 21.5.2009 on making payment of Rs.2,13,484/- as premium amount. All of a sudden, the OP Insurance Company sent a letter dated 12.9.2008 to the complainant company regarding cancellation of the policy. The matter was taken up with the OPs, who ultimately demanded on 01.11.2008 a sum of Rs.7,86,520/- as additional premium, without any basis & reasons. Ultimately on 10.11.2008 the OPs declined the request o the complainant saying that the policy had already been cancelled. However, the OPs never conveyed any order or any explanation or details as well as did not give any reasons for cancellation of the policy in question in midway. As a result thereof, the complainant company had purchased a new policy in the meantime by paying premium of Rs.3,25,404/- just due to the unfair & unjust act of the OPs suddenly leaving his employees unsecured qua medicalim in between despite having received the premium. It is averred that the due to above deficient, illegal, unfair, and wrong act of the OPs, the complainant had to suffer a lot. Hence, the present complaint has been filed. 2] OPs filed their joint reply and admitted the issuance of policy to the complainant company, receipt of premium thereof and thereafter cancellation of the said policy. It is stated that OPs have rightly cancelled the policy as per Section 9(b) of the terms by giving 15 days notice, as such there existed no subsisting contract thereafter and moreover, after the cancellation of the policy as sum of Rs.1,47,391/- has been refunded to the complainant company on pro-rata basis for refund of balance premium. Pleading no deficiency in service and indulgence in any unfair trade practice, OPs have prayed for dismissal of the complaint. 3] Parties led evidence in support of their contentions. 4] We have heard the ld.Counsel for the parties and have perused the entire record along with written arguments. 5] The basic facts of the case have already been enumerated in the foregoing paragraphs. 6] The case of the complainant against the OPs is that it had obtained a Group Medical (Floater) policy (Annexure C-2) from the OP Insurance Company in respect of its 162 employees + their dependents valid from 22.5.2008 to 21.5.2009 on making lumpsum payment of Rs.2,13,484/- as premium. All went well for the initial period of 4 months. Then all of a sudden, on 12.9.2008, the OPs sent a letter to the complainant saying that the policy in question has been cancelled. The complainant took up the matter with the OPs for restoration of the policy but nothing came out for a long time. Eventually on persistent enquiries from the OPs, the complainant were told on 1.11.2008 to pay an additional sum of Rs.7,86,520/- without giving any reasons or justification. The complainant refused to pay this additional premium. Ultimately on 10.11.2008, the Ops declined the request of the complainant for restoring the cancelled insurance policy saying that the request of the complainant has been declined as the policy already stands cancelled. 7] It is also fact that the OPs had not given any proper intimation or details or provided relevant rules of the insurance policy for canceling the policy suo-moto without stating proper reasons and that too midway during the validity period of the insurance policy. Since, the complainant was bereft of all the insurance benefits for its employees, they had to take an altogether new insurance policy with some other company by paying the premium of Rs.3,25,404/-. Based on these grounds, the complainant has alleged gross deficiency in service and unfair trade practice on the part of the OPs and has demanded compensation, cost of litigation etc. 8] The OPs in their joint written statement/reply while admitting the core facts of the case, and also having received the amount of the premium to the extent of Rs.2,13,484/- have stated that it was within its rights to cancel the policy under Section 9(b) of the Terms & Conditions of the insurance policy after giving 15 days notice to the complainant. As such after cancellation of the policy, no contract subsisted between the parties as the insurance premium was also refunded to the complainant to the extent of Rs.1,47,391/- on prorata basis. Based on these pleadings and averments, the OPs have prayed that there is no deficiency in service and indulgence in any unfair fair trace practice on their part and that the complaint be dismissed with costs. 9] After having detailed analysis of the entire case, it is observed that the complainant had obtained the Group Mediclaim (Floater) Policy from the OPs after paying due and full premium valid for a period of one year. The OPs on their own without stating any cogent reasons or justification as also without quoting proper clauses of the Insurance Policy, cancelled the same thereby leaving the employees of the complainant high and dry and in the midstream, totally unprotected and uncovered. The only document supplied by the OPs to the complainant is the cover note Ann.C-2, which does not contain any such clause authorizing the OPs to cancel the policy without reason. Even at a later stage, when the OPs were confronted with the fact as to why they had cancelled the policy improperly, they produced a copy of some insurance policy running into 6/7 pages. When asked to show the Clause 9(b) in the Policy in respect of their case, the ld.Counsel for the OPs was not able to locate/show any such clause in the policy. Subsequently, the ld.Counsel as an afterthought made an application on 28.10.2010 stating that Section 9(b) earlier quoted by him in the written statement/reply basically pertains to some other Insurance Policy i.e. “Individual Health Guard Policy Wordings”. It was prayed that the same be now read as Section 5.9 of the policy, which gives right to the company/OPs to cancel the policy by giving prior notice of 30 days and refund of premium on prorata basis. 10] It is the open admission of the OPs themselves that at no stage they gave 30 days notice to the complainant and also did not tell them about Section/Clause 5.9 of the policy at any stage. All these subsequent developments are only a highly belated thought. The complainant was neither given the detailed terms & conditions of the policy nor ever shown the so called Section 5.9 nor given 30 days notice for its cancellation. Therefore, on all counts, the OPs have miserably failed to establish their case to any extent. The action taken by the OPs by unilaterally canceling the insurance policy is unfair, unjust, arbitrary and hence untenable, illegal and invalid. 11] It is well established that the complainant company suffered immensely on account of sudden, unpredicted and unanticipated withdrawal of the insurance policy by the OPs with the result that the 162 employees of the OPs remained uncovered and unprotected against medical and health risks for quite some time i.e. between the date of cancellation of the policy and issuance of new policy by another company. 12] Even the refund of the premium to the complainant on prorata basis was done much after the expiry of the validity period of the insurance policy and only after the filing of the present complaint. The insurance premium was refunded on 2.11.2009 whereas the policy in question would have expired in normal course on 21.5.2009. The present complaint has been filed on 27.2.2009. 13] However, the refund of the premium was done only during the pendency of the present complaint and not before, which means the OPs thought it fit to refund the premium only after the complainant filed a case in the Forum and not before, which clearly establishes and proves not only deficiency of service on the part of OPs but also indulgence in unfair trade practice by them. 14] Another point, which finds mention in the case file is that after canceling the policy and when the complainant persisted with the OPs to tell them the reasons and also requested for restoring the same, instead of restoring the policy, the OPs demanded high premium of Rs.7,86,520/-, which is more than even three times of the original premium for covering the same risks as heretofore. How the company arrived at this magical figure of Rs.7,86,520/- is neither known to the complainant not this Forum. 15] Last but not the least, there is a letter on record issued by the OPs (Ann.C-7), dated 30.9.2008 in which the OPs have tried to justify the cancellation of the original policy and also its demand for the additional premium of Rs.7,86,520/-. The relevant exact of the letter is as under:- “Considering the case history, we suggest the only way to continue the policy will be to have the claims review clause incorporated in the policy as given below. In furtherance to this, we collect the difference in premium to bring down the claim ratio to 87.5% and continue the policy. The wording of claims review clause has been attached for your kind reference. “If the Claims Ratio on Earned Premium basis exceeds 87.5% on quarterly review of the policy, additional premium will be payable by the Insured to adjust the Claims Ratio to 87.5%. Once the loss ratio on Earned Premium basis crosses 87.5% and Insurers advise additional premium, no claim would be payable till the premium payment is made, or effectively the policy would cease to exist. For the purpose of this warranty claims Ratio shall mean claims paid, claims reported and open, and claims incurred but Not Reported (IBM). Earned Premium shall mean Net Earned i.e. exclusive of Service Tax, and Brokerage.” A close perusal of the relevant extract, as quoted above, does not give any justification or clarify on the issue at all. The only thing the company has tried to do is confuse and confound the complainant. Even in the said letter, the amount of Rs.7,86,520/- has not been mentioned at all. It appears that the same has come from some unidentified source. 16] The complainant has prayed compensation on account of paying the premium of Rs.3,25,404/- for the second time to another insurance company for getting the same insurance cover for its employees. However, the consequential losses suffered by the complainant cannot be compensated under the present law. Therefore, the claim of the complainant to that extent is not admissible. 17] From the above detailed analysis of the entire case, it is quite clear that the OPs have done nothing to solve the problem of the complainant and restore the policy after it was illegally cancelled by them despite having received the Insurance Premium from the complainant for full one year. For a period of more than 1½ years from the date of the issuance of the policy, they have only been harassing and torturing the complainant company by using strong arm tactics and also illegally demanding huge amounts as additional premium for restoring exactly the same policy. It is quite surprising to note that another company i.e. Oriental Insurance Company have issued the same policy covering the same medical and health risks by charging a sum of Rs.3,25,404/- whereas OPs were demanding about Rs.10.00 lacs for that kind of policy and that too without providing any detailed calculation etc., which is patently illegal and unjustified. 18] Keeping in view the foregoing observations, in our considered opinion, the present complaint has a lot of merit, weight and substance and it deserves acceptance. We therefore allow the complaint in favour of the complainant and against the OPs and pass the following order:- The OPs shall jointly & severally pay the following amounts to the complainant:- i) To pay Rs.6.00 lacs (Less Rs.1,47,391/-) i.e. Rs.4,52,609/- as compensation for causing immense harassment besides financial losses to the complainant on account of their gross deficiency in service as well as indulgence in unfair trade practice. ii) To pay Rs.7000/- as cost of litigation. The aforesaid order be complied with by the OPs jointly & severally, within a period of 30 days from the receipt of its certified copy, failing which the OPs shall, jointly and severally, pay the amount of Rs.4,52,609/- along with interest @18% per annum from the date of cancellation of the policy i.e. 12.9.2008 till the date of actual payment besides paying Rs.7000/- as cost of litigation. 19] Certified copy of this order be communicated to the parties, free of charge. After compliance, the file be consigned to the record room. Announced 16.05.2011 Sd/- (LAKSHMAN SHARMA) PRESIDENT Sd/- (ASHOK RAJ BHANDARI) MEMBER ---------------------- (MADHU MUTNEJA) MEMBER M/S Bebo Technologies Pvt. Limited. Versus M/s Bajaj Alliance General Insurance Co. & Ors. (Complaint No.281 of 2009) Date of Order : 19.05.2011 DISSENTING ORDER PER MADHU MUTNEJA, MEMBER 1] I have had the privilege of reading the order dated 16.5.2011 passed by Ld. Member Sh.Ashok Raj Bhandari and duly endorsed by the Ld.President Sh.Lakshman Sharma, allowing the complaint and directing the OPs to pay compensation of Rs.4,52,609/- to the complainant along with Rs.7000/- as cost of litigation. However, I cannot bring myself to sign in agreement to this order. My views are different and in my opinion the complainant has no case, at all. 2] The complainant had entered into a contract with the OP for a Group Insurance of its employees. The contract of insurance was rescinded by the OPs. The power to rescind finds mention in Clause 5.9 of the Policy, which is reproduced below:- “5.9 The Policy may be renewed by mutual consent. The Company shall not however be bound to give notice that it is due for renewal and that Company may at any time cancel this Policy by sending the Insured 30 days notice by registered letter at the Insured’s last known address and in such event the Company shall refund to the Insured a pro-rata premium for unexpired Period of Insurance. The Company shall however remain liable for any claim which arose prior to the date of cancellation. The Insured may at any time cancel this Policy and in such event the Company shall allow refund of premium at company’s short period rate only (table given here below) provided no claim has occurred upto the date of cancellation. Accordingly, the OPs issued a notice dated 12.9.2008 to the complainant and offered to refund the money. The refund of Rs.1,47,391/- was sent to the complainant through cheque bearing No.014014, dated 22.10.2008 for the cancelled policy, vide letter dated 31.10.2008 and not during the pendency of the complaint as alleged by the complainant. The complainant accepted the cheque without any demur or protest. After accepting the amount, the complainant cannot now allege deficiency in service and unfair trade practice by the OPs in not continuing with the contract. 3] A fresh contract was offered to the complainant by the OPs after incorporating the claim review clause. This offer was not accepted by the complainant, hence no cause remained for the complainant to prefer any complaint. 4] No deficiency in any transaction between the parties has been alleged and none proved; also no claim has been preferred. The basis of the cause of action is thus missing. In the absence of this, no amount was payable by the OPs and as such the present complaint again merits dismissal. 5] In my view, when no loss has accrued to the complainant, then allowing the complaint and granting compensation of Rs.4,52,609/- would not be appropriate, especially when the complainant has received the amount of premium refunded by the OPs on prorata basis vide letter dated 31.10.2008. 6] Relying on the points of difference as given above, I completely disagree with the order of the Ld.Member. The complainant has not been able to prove or make out any case of deficiency in service or unfair trade practice by the OPs. I, therefore, dismiss the complaint. No order as to cost. 7] Certified copies of this order be communicated to the parties, free of cost. After compliance file be consigned to record room. Announced 19.5.2011 Sd/- (MADHU MUTNEJA) MEMBER Om/-
| | MR. A.R BHANDARI, MEMBER | HONABLE MR. LAKSHMAN SHARMA, PRESIDENT | , | | 
