M/s Bajaj Allianz General Insurance Company Ltd., G.E. Plaza, Airport Road Yerwada, Pune, through its authorized signatory Pune.

2]       The Senior Executive, M/s Bajaj Allianz General Insurance Company Ltd., SCO No.329, Ist Floor, Sector 9, Panchkula.

3]       Mr.B.S.Kalsi, C/o M/s Bajaj Allianz General Insurance Company Ltd., SCO No.329, Ist Floor, Sector 9, Panchkula.

4]       The Senior Officer/Authorized Signatory of M/s Bajaj Allianz General Insurance Company Ltd., SCF No.11, Phase-3B-2, SAS Nagar, Mohali.

……Appellants

V e r s u s

M/s Bebo Technologies Pvt. Ltd., SCO No.156-157, Sector 34-A, Chandigarh, through its authorized signatory Sh.Suresh Sapra, Manager Finance. 

              ....Respondent

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:  JUSTICE SHAM SUNDER, PRESIDENT.

                MRS. NEENA SANDHU, MEMBER.

S.  JAGROOP  SINGH   MAHAL, MEMBER.

Argued by:          Sh. Paras Money Goyal, Adv. for the appellants.

                   Sh. Ajay K. Sapehia, Adv. for the respondent.

PER  JAGROOP  SINGH   MAHAL, MEMBER

                    This appeal has been filed by the OPs against the order dated 16.5.2011 passed by the learned District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter referred to as the District Forum) whereby the complaint was allowed and the OPs were jointly & severally directed as follows ;

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.”

2.                           The facts, in brief, are that the complainant company obtained a Group Mediclaim (Floater) Policy from the OP Insurance Company in respect of its 162 employees and dependents effective from 22.5.2008 to 21.5.2009 on making payment of Rs.2,13,484/- as premium amount.  It was alleged that, suddenly the OP Insurance Company vide letter dated 12.9.2008 cancelled the policy in the midway.  The matter was taken up with the OPs on 01.11.2008 who ultimately demanded a sum of Rs.7,86,520/- as additional premium, without any basis & reasons.  Ultimately on 10.11.2008 the OPs declined the request of the complainant on the ground that the policy had already been cancelled.  It was alleged that 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 deficient, illegal, unfair & unjust act of the OPs.  Hence, this complaint was filed.

3.                           In their joint written reply the OPs admitted the issuance of policy to the complainant company, receipt of premium thereof and thereafter cancellation of the said policy.  It was stated that the 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 a sum of Rs.1,47,391/- was refunded to the complainant company on pro-rata basis for refund of balance premium. All other allegations of the complaint were denied. Pleading no deficiency in service and indulgence in any unfair trade practice, the OPs made a prayer for the dismissal of the complaint.

4.                           Parties led evidence in support of their case. 

5.                           After hearing the ld. Counsel for the parties and on going through the evidence on record, the ld. District Forum allowed the complaint, as stated in the opening para of this order

6.                           Feeling aggrieved, the instant appeal has been filed by the appellants/ Opposite Parties

7.                           We have heard the ld. Counsel for the parties and perused the record carefully.

8.                           The learned Counsel for the appellants/Opposite Parties  has argued that the policy issued by them to the complainant/respondent was legally cancelled, that the complainant did not suffer any loss and obtained a fresh policy from another Insurance Company and therefore, the amount of compensation of Rs.6.00 lacs awarded by the learned District Forum is not proper. There is no dispute about it that the policy Annexure C-2 was effective from 22.5.2008 to 21.5.2009 Midnight, which was purchased by the complainant after paying a sum of Rs.2,13,484/- as premium vide receipts Annexures C-3 & C-4. The Opposite Parties served a notice dated 12.9.2008 (Annexure C-5) on the complainant for canceling the policy. The appellants/Opposite Parties availed of the provisions of Clause 9-Section b of the policy for this purpose. However, a perusal of the said clause shows that the policy could be cancelled by serving a notice of 30 days on the complainant. Admittedly no such notice of 30 days was served by the appellants/Opposite Parties and the cancellation of the policy by them was not proper and legal.

9.                           The contention of the learned Counsel for the complainant/respondent is that they had already paid a sum of Rs.2,13,484/- towards premium but officials of the appellants/  Opposite Parties started demanding another amount of Rs.7,86,520/- from it, which according to the complainant was illegal. This fact was mentioned by the complainant not only in para No.4 of the legal notice but also in para No.6 of the complaint. No doubt the appellants/ Opposite Parties have denied this demand but they have not been able to put forth any justification for canceling the policy, which had already been issued by them after due consideration of the proposal. Demanding extra amount, which is not due, and canceling the policy  without observing due formalities is in fact an unfair trade practice adopted by the appellants/ Opposite Parties.

10.                       The contention of the appellants/ Opposite Parties is that in fact no damage was suffered by the complainant/respondent and therefore, no compensation should have been allowed. We do not find any merit in this contention. The complainant/respondent had obtained the insurance policy with respect to its 162 Members (employees plus dependents), which by an illegal order was cancelled and the appellants/Opposite Parties were rendered without any insurance cover. The mental harassment caused not only to those employees and dependents but also to the complainant who was responsible to extend such a cover to those employees, can well be imagined. We therefore, cannot say if no loss or damage was caused by the appellants/ Opposite Parties to the complainant/respondent.

11.                       Apart from the mental and physical harassment the appellants/ Opposite Parties also caused financial burden on the complainant. The policy had been issued by the appellants/Opposite Parties on payment of a premium of Rs.2,13,484/-. However, subsequently a similar new policy had to be obtained by the complainant, by paying a sum of Rs.3,25,404/- (Annexure C-10). In this manner, the complainant was burdened with an additional amount of Rs.1,11,920/- (Rs.3,25,404/- minus Rs.2,13,484/-) . Since the cancellation of the policy was not in accordance with Rules, the appellants/ Opposite Parties would be liable to pay the difference of amount by way of damages to the complainant.

12.                       It is also argued by the Counsel for the appellants/Opposite Parties that there is no rationale nor any reasoning has been given by the learned District Forum as to how the amount of Rs.6.00 lacs awarded as compensation, was worked out. The order of the learned District Forum is silent in this respect. We are, however, of the opinion that the amount of Rs.6.00 lacs awarded as compensation is on the higher side. Since the action of the appellants/ Opposite Parties was malafide, the cancellation order was not in accordance with Rules, the employees of the complainant were rendered without any insurance cover, thereby causing mental and physical harassment to the complainant and his employees, a compensation of Rs.1.00 lac would be just and proper.

13.                       In view of the above discussion, we are of the opinion that while maintaining the majority order, the modification is necessary.  Hence the present appeal is partly allowed. The amount of compensation is accordingly reduced to 1,11,920/- plus Rs.1.00 lac. Other directions under the impugned order shall remain intact.

14.                       A sum of Rs.25,000/- was deposited by the appellant  at the time of filing this appeal.  After the expiry of the period for filing revision, the aforesaid amount of Rs.25,000/- alongwith interest, if any accrued thereon, shall be paid to the complainant/respondent in partial satisfaction of its claim, in case no stay order is received.

                    Copies of this order be sent to the parties free of charge.