DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Khushwinder Singh s/o Sh.Randhir Singh, Village Ramgarh, District Fatehgarh Sahib.

              ---Complainant

Vs

M/s New India Assurance Company Limited, through its Divisional Manager, SCO No. 104-106, Sector 34-A, Chandigarh.

---- Opposite Party

BEFORE:    SH. LAKSHMAN SHARMA             PRESIDENT

MRS.MADHU MUTNEJA               MEMBER

           SH.JASWINDER SINGH SIDHU        MEMBER

Argued By:    Sh. Sunil K. Dixit, Counsel for Complainant.

Sh. Sukaam Gupta, Counsel for Opposite Party.

PER MADHU MUTNEJA, PRESIDING MEMBER

1.        The Complainant had got 10 cows insured with the Opposite Party vide Cover Note No. 491141 effective from 08.02.2011 to 07.02.2012 (Cover Note Annexure C-1). Out of these 10 cows, one cow died on 23.02.2011. The Complainant accordingly informed M/s K.M. Dastur Reinsurance Brokers Private Limited, who was the authorized service provider of the Opposite Party. The post mortem of the dead cow was conducted by the local Veterinary Doctor. On receipt of information from the authorized service provider, the Opposite Party appointed Dr. N.K. Vohra, Spot Investigator to verify and identify the dead cow to ensure that it was insured with the Opposite Party. The Complainant also completed all formalities required by the insurance company and the same was sent to the Opposite Party through the authorized service provider.

          Unfortunately, the Opposite Party did not pay the claim taking the objection that the cow had died due to a disease contracted within 15 days of insurance (rejection letter Annexure C-4).

          The Complainant has stated that the Opposite Party had never supplied any terms & conditions of Policy or explained any exclusion clause to the Complainant either orally or in writing. Aggrieved by the act of the Opposite Party, the Complainant served a legal notice upon the Opposite Party, requesting them to pay his claim.

          As the claim has still not been paid, the Complainant has filed the present complaint alleging deficiency in service and unfair trade practice. He has prayed that the Opposite Party be directed to pay the sum insured of Rs.50,000/- for the cow, as well as Rs.45,000/- for deficiency in service and unfair trade practice.

2.        Notice of the complaint was sent to Opposite Party seeking their version of the case.

3.        The Opposite Party in reply has taken the preliminary objection to the effect that the complaint is not maintainable. Opposite Party has pleaded that the Complainant had purchased an insurance policy valid for the relevant period from the Opposite Party through M/s K.M. Dastur Reinsurance Brokers Private Limited. The said Broker had issued a Cover Note No. 491141 on 8.2.2011 at the initial stage. The answering Opposite Party on receipt of intimation from the said Broker had generated the Policy of insurance in lieu of the cover note issued to the Complainant and supplied to the same to the Insurance Broker, vide Dispatch No. 1997, dated 10.02.2011 (Annexure R-1).

          Opposite Party has also submitted that intimation regarding death of the cow was given by the Complainant to M/s K.M. Dastur Reinsurance Brokers Private Limited and not to the Opposite Party and on receipt of information from the said Broker, the Opposite Party had immediately deputed Dr. N.K. Vohra to investigate the matter. The report of the investigator is at Annexure R-2.

          On receipt of the investigation report, the Opposite Party came to know that the cattle in question was affected by some infection on 18.2.2011 and finally, died on 23.2.2011. As per terms and conditions of the policy, death due to disease contracted prior to and within 15 days of commencement of risk are not payable for non scheme cattle and in the present case policy was issued on 8.2.2011 and the cattle died within 15 days (copy of the insurance policy along with its terms & conditions and post mortem report are at Annexure R-3 to R-5). Opposite Party has also contended that the complaint is not maintainable on the ground of non-joinder of necessary and proper party. Hence, the claim has rightly been repudiated vide Annexure R-6.

          On merits, Opposite Party has admitted the issuance of the policy to the Complainant and also stated further that the policy along with terms & conditions were supplied to M/s K.M. Dastur Reinsurance Brokers Private Limited. Denying all other allegations, Opposite Party has prayed for dismissal of the complaint.

4.        Parties led evidence in support of their contentions.

5.        We have heard the learned counsel for the parties and have perused the record.

6.        Annexure C-1 placed on record by the Complainant and Annexure R-7 placed on record by the Opposite Party are the copies of cover Note No. 491141 issued to the Complainant by M/s K.M. Dastur Reinsurance Brokers Private Limited. From a comparison of both these Annexures, it is evident that the copy of cover note placed on record by the Complainant has some information missing; while the cover note placed on record by the Opposite Party contains the following clause: -

“The insured named in the schedule below having this day proposed to effect an insurance described in the said schedule is held covered for a period of fifteen days only from the date of issue of this temporary cover note subject to terms, provisions, exceptions, conditions of the Company’s standard printed policy/ clause as may be applicable to the class of insurance.”      

          As per the aforesaid condition, the cover note was for a temporary period of 15 days only and was subject to terms and conditions of the standard printed policy applicable to the class of insurance. The Complainant has accepted this cover note and is also relying on this cover note (even though his own copy has a blank space in the middle - seems to a carbon copy) to claim the insurance from the Opposite Party.

7.        Interestingly, throughout the complaint, the Complainant has stated that he has purchased the Policy of the Opposite Party through M/s K.M. Dastur Reinsurance Brokers Private Limited. Even the claim form has been submitted with M/s K.M. Dastur Reinsurance Brokers Private Limited on the death of the cow. However, the Complainant has failed to implead the said M/s K.M. Dastur Reinsurance Brokers Private Limited as a Party to the complaint. The Opposite Party has stated that the Policy purchased by the Complainant was handed over to M/s K.M. Dastur Reinsurance Brokers Private Limited for onward transmission to the Complainant. Proof of dispatch of the same has been placed at Annexure R-1.     

8.        The examination of the report and opinion of Dr. N.K. Vohra, Investigator, who has been appointed by the Opposite Party in the instant case to investigate the matter, reveals the following: -

“Opinion: - In my opinion, the Micro Chip of the dead animal do resembles as shown in the fitness certificate. But the animal was died within 15 days from the date of insurance, which falls within waiting period clause. The claim may be repudiated according to terms and conditions of the Policy.”

9.        The Opposite Party has placed on record the insurance policy issued in the name of the Complainant at Annexure R-3. As per this policy, under special conditions at Sr.No.1, it is mentioned as under: -  

“1)   Death due to Diseases contracted prior to and within 15 days of commencement of risk are not payable for Non-scheme Cattle.”

10.       Furthermore, the exclusion clause mentioned in Annexure R-4, which is Cattle Insurance (Market Agreement), makes it abundantly clear that the disease contracted within 15 days from the date of risk are not covered. The relevant clause to this effect is reproduced below:-

7.    EXCLUSIONS

(A)   COMMON EXCLUSIONS

xx    xxxxx             xxxxx       xxxxx       xxxxx

ix)   Any non-scheme claim arising due to diseases contracted within 15 days from the date of risk are not covered.”              

11.       As per the post mortem report (Annexure R-5), the cow was affected with the ailment on 18.02.2011 and died on 23.02.2011. The cause of death of the cow has been given as Posterior Paresis. This is paralysis of the posterior part of animal due to septic sores causing septicemia and eventual death.

12.       The learned counsel for the Complainant at the time of arguments was strong in the contention that as the Policy had not been received by the Complainant, the Complainant was not aware or bound by the terms and conditions contained therein. Hence, the amount was payable to the Complainant as per the terms and conditions of the Policy. In support of this, learned counsel for the Complainant has placed reliance on Reliance General Insurance Company Limited & Others Versus Rajbir Kaur, IV (2010) CPJ 400. Reliance has also been placed on The New India Assurance Company Limited Versus Manjit Kaur, decided on 09.03.2011 by the Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh, in Appeal Case No. 03 of 2011, wherein it was opined that as the Opposite Party had failed to supply the copy of terms & conditions of policy to the Complainant, the repudiation was held to be not justified. 

          The learned counsel for the Complainant has also relied on Oriental Insurance Company Versus Narinder Singh, decided on 15.9.2010 by the Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh, in Appeal Case No. 208 of 2010, wherein the District Forum had allowed the claim. The ground taken was that that cow had died of heart attack which is not a disease but a sort of medical accidental death. The period of death was 9 days from the date of taking the policy. 

13.       The Opposite Party has categorically contended that the Policy was handed over to M/s K.M. Dastur Reinsurance Brokers Private Limited for onward transmission to the Complainant and relied on Sacred Farm Products (India) Versus National Insurance Company Limited and Anr., I (2004) CPJ 188, wherein the contention of the Complainant was held to be only an allegation and bald averment and hence not acceptable. The repudiation of the claim was held to be justified.

          The Opposite Party has also relied on General Assurance Society Limited Versus Chandmull Jain and Another, 1966 AIR (SC) 1644, wherein the Hon’ble Supreme Court of India has defined the contract of insurance. Para 11 of the judgment reads as under:-

“11.  A contract of insurance is a species of commercial transactions and there is a well-established commercial- practice to send cover notes even prior to the completion of a proper proposal or while the proposal is being considered or a policy is in preparation for delivery. A cover note is a temporary and limited agreement. It may be self-contained or it may incorporate by reference the terms and conditions of the future policy. When the cover note incorporates the policy in this manner, it does not have to recite the term and conditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the cover note refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and conditions may be expressed in the proposal or the cover note or even in the letter of acceptance including the cover note. The incorporation of the terms and conditions of the policy may also arise from a combination of references, in two or more documents passing between the parties. Documents like the proposal, cover note and the policy are commercial documents and to interpret them commercial habits and practice cannot altogether be ignored. During the time the cover note operates, the relations of the parties are governed by its terms and conditions, if any. but more usually by the terms and conditions of the policy bargained for and to be issued. When this happens the terms of the policy are incipient but after the period of temporary cover, the relations are governed only by the terms and conditions of the policy unless insurance is declined in the meantime…………………………….”

14.       Even if the insurance policy was not received by the Complainant, the cover note itself contains the relevant condition, complete copy of which has been placed on record by the Opposite Party at Annexure          R-7; and relevant portion of which has already been reproduced above. As per this the validity of the cover note was for a period of 15 days only from the date of issue and was subject to terms and conditions of the policy, inclusive of exceptions. If the Complainant relies on this cover note to prove the policy, the Complainant will also have to accept this exclusion for non-payment of the insurance claim. The cow has died within 15 days. As per Annexure C-6 (repudiation letter) placed on record by the Complainant, the claim has been repudiated on the following ground:-

“Death due to disease contracted prior to and within 15 days of commencement of risk are not payable.”

          Hence, the Opposite Party has repudiated the claim of the Complainant by relying on the terms and conditions of the policy (as per the report of the Investigator).

15.       In the given situation, this Forum do not think that there is any need to interfere and pass orders in contravention to the stand taken by the Opposite Party. The complaint is accordingly, dismissed. No cost.     

16.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

25^th September, 2012.                                           

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

 MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER

“Dutt”