F.A.No.1512/2008 AGAINST C.C.No.273/2007, DISTRICT FORUM-1, Hyderabad.

Between:

Susheela Devi ,W/o. late R.Chain Rai,

Aged : 72 years, Occ:Household,

R/o.Flat No.103, Hill Rock Apartment,

Road No.4, Banjara Hills, Hyderabad.              … Appellant/

                                                                                  Complainant

         And

The New India Assurance Company Ltd.,

Represented by its Divisional Manager,

Amrutha Estates, Somajiguda, Hyderabad.  …. Respondent/

                                                                                  Opp.party

Counsel for the Appellant     : M/s.Kishore Rai

Counsel for the Respondents: M/s.KNV.Radha Krishna

QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO , PRESIDENT,

AND

          SMT.M.SHREESHA,  HON’BEL MEMBER

.

WEDNESDAY, THE TWENTY FOURTH DAY OF  NOVEMBER,

TWO THOUSAND TEN

Order Order : (Per   Smt.M.Shreesha, Hon’ble Member)

                                                ***

            Aggrieved by the order in C.C.No.273/2007 on the file of District Forum -1, Hyderabad , the complainant preferred this appeal. 

        The brief facts as set out in the case are that the complainant  has  a Medi Claim policy since 1995 and is paying premium  of R.6,029/- every year.  She  earlier had  two policies, but cancelled one policy and at present is holding policy  No.612200/48/06/20/70000769 and   she never defaulted in payment  of premiums since 1995  and she was holding the Medi Claim Policy for a sum of Rs.2 lakhs  and the opposite party  unilaterally reduced the same to Rs.1 lakh. The policy expired on  6.8.2006  and  though the complainant sent proposal  for  renewal of the policy in the first week of July 2006  on which date the complainant was told to get  some medical tests done and the  same was submitted  to the opposite party on 18.7.2006. The complainant   sent a demand draft for a sum   of Rs.6,141/-  being the premium  amount for the insured sum of Rs.2 lakhs  and the opposite party encashed the  DD   and instead of renewing  the  policy for Rs.2 lakhs  reduced it to Rs.1 lakh  and also reduced the premium  to Rs.3125/-   and sent a  refund voucher for Rs.3,016/-. The complainant did not accept that voucher  and  the  said amount  is still lying with the opposite party.  Through letter dt.5.9.2006  the complainant approached Insurance Regulatory  and Development Authority  and received a reply on 2.10.2006    and once again  on 9.12.2006 she received a reply   stating that the policy was renewed for  Rs. 1 lakh .  Hence the complaint seeking direction to the opposite party  to renew the policy  for Rs.2 lakhs, to pay compensation of Rs.1 lakh and to pay costs of Rs.5000/- . 

        Opposite party filed counter admitting that the opposite party had reduced the policy amount from Rs.2 lakhs to Rs.1 lakh  and refunded an amount of Rs.3,016/-  from the  premium amount sent by the complainant and this reduction was done as per  prerogative of the insurance  company. 

        The District Forum   based on the evidence adduced i.e. Exs.A1 to A16      and pleadings put forward  dismissed  the complaint  on the ground that   it is the   discretion  of the opposite party whether to  renew  the policy for the same amount or not.

        Aggrieved by the said order, the complainant preferred this appeal.

        The facts not in dispute are that the complainant   had taken Medi Claim Policy for Rs.2 lakhs and is paying  monthly premium of Rs. 6,029/-  since the year 1995  but thereafter when she sent a proposal for the renewal of the policy  in July,2006  she was asked to undergo some tests, which reports she submitted  along with the premium of Rs.6,141/-  for issuing of policy for Rs.2 lakhs. It is the  case of the complainant  that the opposite party unilaterally  reduced the  policy amount to Rs.1 lakh  and refunded  Rs.3,016/-, which the complainant did not  accept. It is also an admitted fact that the complainant vide  Ex.A5 dt.5.9.2006 has  written to  the Insurance Regulatory  Development Authority  seeking  the renewal of the policy for Rs.2 lakhs. Vide Ex.A8 dt.9.12.2006  I.R.D.A. replied that the policy was renewed for Rs.1 lakh. The learned  counsel for the appellant/complainant contended that the act of the opposite party in unilaterally reducing the policy amount from Rs.2 lakh to Rs.1 lakh  amounts to deficiency in service  as it is a concluded contract  which cannot be  reduced  unilaterally.  The appellant is suffering  from  renal failure and has to be  on dialysis  twice a week and other expenses, medicines and  conveyance costs are to be  covered.   If the respondent/ opp.party has not accepted the renewal  of the policy it cannot be attributed to deficiency in service as the Contract  Act clearly stipulates the definition of  ‘offer’ and ‘acceptance’. After  the insured discloses  the ailments and furnishes the medical records it is the discretion of the opposite party   whether to accept the proposal for renewal or  reduce the amount  or reject it.  The learned counsel for the respondent/opp.party also drew our attention to clause 6©  of the Renewal of the Medi Claim Policy,2007   in which it is stated as follows:

        “Decision to accept or reject the coverage of any person at renewal of this insurance shall rest solely with the Company. The Company may at its discretion revise the premium rates and/or the terms and conditions of the  policy every year upon renewal thereof.  Renewal of this policy is not automatic”        

  If the respondent/opp.party has exercised its discretion it cannot amount to deficiency in service as Clause  6©  clearly stipulates that the renewal of the policy is not ‘automatic’.  Therefore this appeal fails and is accordingly dismissed.

        In the result this appeal fails and is accordingly dismissed.

                                                                                        PRESIDENT

                                                                                        MEMBER

                                                                                        Dt.24.11.2010