DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110 092

C.C. No.311/2019 (OLD CASE NO. CC/1303/2009)

QUORUM:

Order By: Ms. Rashmi Bansal (Member)

JUDGMENT

By the present judgement, the commission is disposing of the complaint of the complainant alleging deficiency of service, as against OP in rejecting his insurance claim of indemnity.

1. Complainant is a charitable hospital trust. It is the case of the complainant that it has obtained an insurance policy of medical establishment, errors and omissions from OP, for one year starting from 29.04.1996 to 28.04.1997, to cover the claims/judgements arising out of claims of death or bodily injury suffered or alleged to have been suffered by any patient, due to any error, omissions or negligence on the part of the complainant or its staff, covered up to an amount of Rs.50 lakh, on which a premium of Rs.84,788/-  was paid by the complainant including service tax. Complainant submits that the policy was continuously renewed from year to year without any break and subsist even today without any default in the renewal of the insurance policy. It is further submitted that on 15.07.1997, a civil suit no. 228/1997 was filed against the complainant by one of its patient in the State Consumer Dispute Redressal Commission, alleging negligence in treatment and deficiency of services and immediately upon receiving the summons, the complainant intimated the OP vide its letter dated 27.09.1997 about the said suit, clearly stating that OP would be liable for any/all expenses and compensation, if any, to be paid in the matter. A follow-up reminder dated 15.02.2019 was also sent by the complainant to OP.
2. Complainant submits that vide order dated 19.07.2007, the Hon'ble State Commission passed a judgement, holding complainant deficient in their service and directed to pay them a sum of Rs.25,000/- to the family of deceased. That on 22.02.2008, the complainant has intimated to OP about the judgement and requested them to pay the said amount with Rs. 18,000/- towards payment of lawyer fee in that matter, thus the complainant sought reimbursement of Rs. 43,000/- in total from the OP. Complainant further submits that thereafter several reminder letters dated 16.06.2008, 28.08.2008, were sent to OP through registered post but no reply was received from the OP. Complainant further submits that on 09.03.2008, the complainant had received a letter from OP stating that matter was being looked into by them but thereafter they again did not get back to the complainant. Thereafter, complainant issued another reminder dated 23.10.2008 but OP did not respond. Complainant submits that there has been no breach on the part of the complainant. In fact they were cheated and let down by OP. The OP, vide letter dated 12.01.2009 has repudiated the claim of the complainant. Complainant issued a legal notice dated 27.05.2009, received by OP on 28.05.2009, but same remained unanswered by OP. Complainant submits that OP has rejected its claim without any ground and is liable to pay Rs. 43,000/-  with other expenses with interest at the rate 18% from 22.02.2008 till now (Rs.25,000/- towards the claim made against the complainant and Rs.18,000/- towards the lawyer fee for handling the CC228/1997).
3. Upon notice, OP filed its reply stating that as per the law of contract of insurance, the insured is under a solemn obligation to act and take proper necessary steps to recover the insured property and minimise the loss and further to give immediate intimation of the loss to the insurer without any delay, in which complainant has failed. OP admits issuance of insurance policy dated 29.04.1996 to the complainant and stated that OP has rightly repudiated the claim of the complainant due to breach of policy terms and conditions number 5B, 10.1, 10.2. The OP submits that the complainant had not continued the policy with the OP after its expiry on 28.08.1997 and no other details of insurance policy is available in the file. The policy condition number 10.1, requires that OP has to be informed about any event or circumstances that would have give rise to a claim being made against the complainant, and which may form the subject of indemnity under the policy. It also requires that every claim, writ, summons or process and all the documents relating to the event shall be required to be forwarded it to the company immediately they are received by the insured.  OP was informed for the first time on 22.02.2008, after the order of the ld.  commission on 19.07.2007. Though, the case before the State Commission was contested by the complainant, but OP had not been impleaded as the party to the proceedings, despite being the necessary party. Further, the complainant has also breached policy condition number 10.2 as they had made the payment of Rs.25,000/- on 27.12.2007 without informing or taking consent from the insurance company.
4. It is further submitted by OP that condition 5B of the policy requires that in the event of non- renewable or cancellation of the policy, the OP will allow a time limit of not exceeding 90 days from the date of expiry or cancellation of the policy, for notification of claims for accident which had taken place during the policy period, and it is amply clear that complainant has breached the condition number 5B of the policy also. OP was informed after expiry of 111 days from the date of delivery of the copy of the order on 02.11.2007 and 212 days after pronouncement of the order and as per condition 5B the limitation is of 90 days only. 
5. OP states that the complainant had got the summons of the complainant case before the State Commission in 1997 itself but the claim/summons were not lodged with OP on or before the expiry of 90 days after the summons served upon them and after pronouncement of the judgement on 19.07.2007, even then also no intimation was given to the OP even on or before the expiry of 90 days after the pronouncement of the order against them, OP also submits that the order of the State Commission was notified as ready on 25.10.2007 for the delivery to both parties and same was obtained by the hospital on 02.11.2007 and payment was made on 27.12.2007 without consent/permission of OP and for the first time, OP was intimated on 22.02.2008, and in all sequences of dates, the complainant has not complied with the condition number 5B of the policy besides breach of condition 10.1 and 10.2.  OP submits that claim of the complainant is not admissible as per interpretation of the policy term and conditions and even otherwise in case the date of final order of the state commission would be considered as the first notification of the claim by the complainant. Further the State Commission has not passed any order against OP for payment to the complainant has the claim of the complainant is repudiated for the breach of condition 5B, 10.1 and 10.2 of the policy. Hence, the claim of the complainant has rightly been rejected by it and on the basis of the same, the present complaint is liable to be dismissed.
6. OP has relied upon the Supreme Court order Deokar exports Private Limited versus New India assurance Co Ltd, CA5103 of 2002, decided on 23.09.2008, holding that in a contract of insurance, right and obligations are strictly governed by the policy of insurance. No exception or relaxation can be made on the ground of equity. Therefore, the OP submits that complainant deserves no relief and there is no deficiency of services on the part of OP and complaint is liable to be dismissed.
7. Complainant has filed a rejoinder negating the contention of the OP and reiterated his version in the complaint. It has been contended by the complainant that insurance policy was renewed in a timely manner. Each year beginning from 1996–97 till date and the policy is still subsisting on 28.02.2008. Complainant further relied on the table, annexed as CW1/2 and it is submitted that complainant had regularly informed the OP about the case before the State Commission by way of different letters and also has intimated about the judgement as well as the further details to OP. This is further submitted that clause 5B of the insurance policy 90 days limitation for making the claim from the OP is only in the event of non-renewal or cancellation of the policy. In the present case, the insurance policy was renewed in a timely manner each year beginning from 1996–97 till date and was in operation when the claim was made on 22.02.2008.
8. Both the parties have filed their respective evidences and documents in support of his case.  The complainant has filed insurance policy, EX CW1/1; the chart showing the renewal of insurance policy, EXCW1/2; the copy of letter dated 27.09.1997 and 15.02.1999, EXCW1/3 and CW1/4; letter dated 22.02.2008, EXCW1/5; copy of the letter dated 16.06.2008, with proof of dispatch, EXCW1/6; copy of letter dated 28.08.2008, with copy of dispatch, EXCW1/7; copy of letter dated 09.03.2008, EXCW1/8; copy of letter dated 23.10.2008, along with dispatch receipt, EXCW1/9; letter dated 12.01.2009, EXCW1/10; copy of the legal notice dated 27.05.2009, with dispatch receipt, EXCW1/11;
9. In support of his case, the OP has relied upon the documents filed by the complainant.
10. Commission has considered the documents on record by both the parties and heard the argument. The policy in issue is not disputed. Documents on record show that the policy was obtained on 29.04.1996 for a period of one year starting from 29.04.1996–28.04.1997. There is no document on record filed by the complainant to show that the policy has been continued after its expiry on 28.08.1997. The schedule of renewal of the policy as filed by the complainant also does not bear any confirmation from OP or supported by any documents, therefore, this is not established that the policy has been continuously renewed by the complainant.
11. Further, It is also a matter of record that insurance company was not impleaded as necessary party before the State Commission nor there is any document on record to establish that the OP has been intimated about the claim in consonance of policy condition 10.1 which requires that every claim, writ, summons or process and all the documents relating to the event shall be required to forward it to the company immediately they are received by the insured. 
12. Further, complainant has breached the policy condition No.5B which states that in the event of non-renewable or cancellation of the policy, the OP will be intimated within extended period of time of 90 days from the date of expiry or cancellation of the policy. As a matter of record, the case was filed in 1997, and the judgement was delivered on 19.07.2007 and was ready for delivery upon both the parties by 25.10.2007 and has been received by the complainant on 02.11.2007. complainant has failed to show that OP was intimated in terms of the requirement of the policy. Documents on record further show that OP was intimated for the first time  on 22.02.2008, i.e.  after the expiry of 111 days from the date of delivery of the copy of the order and 212 days after the pronouncement of the order where is condition 5B of the policy provides for the limitation of 90 days only.
13. Further, complainant has also acted in violation of condition 10.2 which requires that no payment or offer shall be made or given by or on behalf of the insured without the written consent of the insurance company. The documents on record shows that the complainant had made the payment of Rs.25,000 on 27.12.2007 without informing or taking consent from the OP. Therefore, there is clear violation of policy condition number 10.2.
14. This is the settled principle of law of insurance that the rights and obligations are to be strictly followed and no relaxation can be made on the ground of equity.
15. Complainant has filed the only the original insurance policy for the year 29.04.1996–28.04.1997. The exhibit CW 1/2 shows the list of the some policies, however, no policy as such filed by the complainant.
16. Further, the letter dated 27.09.1997 as allegedly sent by the complainant to the OP about intimating about the case before the State Commission does not bear any stamp to show that letter has been delivered upon OP. The reminder dated 15.02.1999, and 15.02.1999 also does not bear any signature, or any proof to show that the letter has been served upon the OP. In the absence of proof, this cannot be established that OP has been intimated by complainant in time. The letter dated 22.02.2008 was the first letter showing the time of delivery upon OP for the first time.
17. The complainant has failed to show that the policies were renewed, that the OP has been intimated within the time limit as per terms and conditions of the policy, and to show that the payment was made to the complainant before the State Commission with the intimation of OP.
18. Considering the facts and circumstances and a settled principle of law, this commission is of considered view that complainant has failed to establish his case against OP for deficiency in service and therefore the complaint is dismissed.

Copy of the order be supplied / sent to the parties free of cost as per rules.

File be consigned to Record Room. 

Announced on 05.02.2024.