1.      This revision petition under section 21(b) of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order dated 07.02.2017 in First Appeal No. 338 of 2011 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow (in short, the ‘State Commission’) dismissing the appeal of the petitioner against order dated 31.12.2014 of the District Consumer Disputes Redressal Forum, Hardoi (in short, the ‘District Forum’) in Consumer Complaint no. 92 of 2011.

2.      The brief facts of the case, according to the petitioner, are that as per an Agreement dated 19.11.2009 between the petitioner insurance company and the Government of Uttar Pradesh, a Janta Personal Insurance Accident Policy was to be issued by the petitioner for registered farmers in the age group 12 to 70 years to provide insurance cover of Rs.1,00,000/- against payment of premium on behalf of the insured by the State Government. Farmers were required to be land owners with their name in the khatauni and the premium amount was fixed at Rs.21.84 p per farmer per year. The policy was initially issued for 1 year with effect from 19.11.2009 and covered 12.50 crore farmers. Premium of Rs.54.60 crores was required to be paid by the State Government for the period 19.11.2009 to 18.07.2010; however, only Rs. 36,20,05,480/- was paid and accordingly the policy was issued on pro rata basis. Despite several reminders, copies of which are brought on record, the full premium was not paid by the State Government. Subsequently, the policy was renewed for the next year from 19.07.2010 to 12.10.2010 for which a premium of Rs 12,86,46,575/- was paid and the policy was extended pro rata. On 19.11.2010 and 11.01.2011 the petitioner informed the State Government that in view of non-payment of insurance premium of Rs 5.47 crores, the policy had expired on the midnight of 12.10.2010.

3.      The husband of respondent no. 1 who was a farmer expired on 16.10.2010 in a rail accident and an insurance claim was lodged with the petitioner. The claim was repudiated on the ground that the policy for 19.11.2009 to 12.10.2010 did not cover the death of her husband who expired after the policy cover had ended due to the lapsing of the policy. Respondent 1 approached the District Forum where the petitioner insurance company could not contest the case and the matter came to be decided ex parte. The District Forum upheld the claim and directed payment of Rs 1,00,000/- with interest @ 10% p.a. within 2 months along with RS 2,000/- as compensation and Rs 1,500/- as litigation cost. The petitioner insurance company approached the State Commission in appeal which was dismissed. Hence, this revision petition. 

4.      The District Forum had arrived at the finding below:

“Because the District Magistrate, Hardoi has sent the insurance claim of Smt. Rajkaura under Farmer Accident Insurance Scheme after satisfying himself from the facts and sent the same to the Insurance Company by his letter dated 25.01.2011 for accepting the claim of Rs 1 lakh and providing cheque, there is no direct reason for denying the said insurance claim and we find that above insurance claim was fully liable to be accepted and by keeping it pending instead of accepting the insurance claim, the Insurance Company-opposite party no. 1 has committed deficiency of service. In this situation, the complainant Smt. Rajkaura is entitled to get Rs 1 lakhs of Farmer Accident Insurance Claim from the opposite party no. 1”

The State Commission considered the submission of the petitioner/insurance company in appeal and while dismissing the appeal concluded that:

“ In view of provision of Section 53 of Indian Contract Act it is obvious that in case of any default in payment of premium by Government of U.P., the contract of insurance entered into between the Government and the appellant Insurance Company was voidable at the option of the appellant Insurance Company and the appellant Insurance Company might have voided it in case of short payment of premium amount but appellant insurance company has not exercised its option to void contract and has opted to perform the contract. As such appellant insurance company is bound by the terms and conditions of Agreement deed. Appellant Insurance Company cannot change or modify terms and conditions of contract unilaterally as such appellant Insurance Company is bound to discharge its liabilities in terms of Agreement deed and may claim payment of remaining amount of agreed premium by adopting legal process against the Government.

In view of discussion made above, we are of the view that once the appellant Insurance Company has decided to adhere with the Agreement and to perform its obligation in terms of Agreement it cannot reduce the period of JPA policy in violation of Agreement deed.

Perusal of Agreement deed dated 19.11.2009 shows that it is not an ordinary insurance policy. It is a special insurance policy for the benefit of registered farmers of the state and clause 28 of the Agreement did clearly speak as follows:

In case of any inconsistency between the provisions of the agreement and the provisions of JPA policy document, the provisions of this Agreement shall prevail over the provisions of JPA policy document.

           In view of above clause 28 of the Agreement it is obvious that this Agreement deed shall prevail over any policy document issued by Insurance Company subsequently. As such, the subsequent cover notes issued by appellant Insurance Company reducing period of policy is against agreement deed dated 19.11.2009 and cannot be accepted.

           In view of the discussion above, we are of the view that the JPA insurance policy was effective on 16.10.2010 and the District Consumer Forum has rightly ordered appellant Insurance Company to pay insured amount of JPA policy to the complainant/respondent. The amount of compensation as well as cost awarded by District Consumer Forum also cannot be said to be against law.”         

5.      None appeared on behalf of respondent no. 1 to argue the matter when the matter came up for final arguments. I have heard the learned counsel for the petitioner and respondents 2 and 3 and carefully considered the material on record.

6.      Learned counsel for the petitioner argued that the scheme of insurance cover viz., Janta Personal Insurance Accident Policy was based upon an Agreement between the petitioner Insurance Company and the Government of U.P. represented by its Commissioner and Secretary, Board of Revenue pursuant to a Government Order no. 3695/1-9-2009-962 LC/09 TC-1 dated 14.10.2009 and was valid for a period on one year from 19.11.2009. While the policy was in favour of un-named persons, the premium for the policy of individual farmers was to be paid by the Government to cover 2.50 lakh persons in the age group of 12 to 70 years subject to them being registered owners of lands and subject also to claims being permissible only for one claim per person irrespective of number of holdings. A Bank Guarantee was provided by the petitioner Insurance Company as performance guarantee to the State Government. The claim of respondent 1 was repudiated since the policy had lapsed on 12.10.2010 despite several reminders to the State Government to pay the premium in order to renew the scheme. It is the petitioner’s case that the orders of the fora below are flawed in that they are based upon a material irregularity and an erroneous interpretation of the Agreement between the petitioner and the State Government, an erroneous interpretation of the law as well as contrary to the terms of the contract of insurance in the policy. It is argued that the Agreement provided for insurance cover for which premium was required to be paid by the State. Despite several notices and follow up, the State failed to deposit the premium amount and renew the policy. The petitioner then informed the State Government that the policy stood lapsed for default. Hence, it is contended that the repudiation of the policy is correct and valid. The conclusion of the State Commission that in view of the Agreement, the policy could not have been voided by the petitioner and that it had, in fact, not voided the policy and therefore, being a special policy, the claim could not have been repudiated by it for these reasons is argued to be based on an incorrect interpretation of the policy. It was contended, based on the record of correspondence with the State Government, that the issue of payment of premium had been brought up on numerous occasions between 08.06.2010 and 11.01.2011, including informing the State that the District Magistrates be advised not to forward claims to the petitioner in view of the policy not having been renewed. It was also contended that finally, on 11.01.2011, the State Government had been informed that the policy stood terminated/lapsed and it was advised not to forward claims under the Janta Personal Accident Insurance Policy. However, the impugned order of the State Commission had not considered these submissions and evidence and had relied, instead, on the interpretation of subsistence of the Agreement dated 19.11.2009 between the petitioner and the State Government to conclude that, in view of the Agreement being in place, since this was not voided by the petitioner, the policy cannot be said to have lapsed and therefore the repudiation of the claim on this basis by the petitioner was incorrect. For these reasons, it is averred by the petitioner that the order of the District Forum and the State Commission was based on a material irregularity warranting interference of this Commission.  Reliance is placed on the judgment of the Hon’ble Supreme Court in Life Insurance Corporation of India Vs. Mani Ram, III (2005) CPJ 31 (SC) which laid down that non-payment of premium of a life insurance policy, including the grace period of one month, would entail lapse of policy and the insurance company would be wholly justified in rejecting the claim of the complainant for which no exception can be taken.

7.      Respondent no. 1 did not appear or file any submissions or written arguments. The learned counsel for respondents 2 and 3 contended that respondent no. 1 was not a ‘consumer’ qua the petitioner Insurance Company since there was no nexus between them and therefore the petitioner had no cause of action. It was also submitted that they constituted only proforma parties and that no order should be passed against them. 

8.      From the foregoing, it is apparent that the State Commission has arrived at the finding that the order of the District Forum was in order since as per section 53 of the Indian Contract Act, even in a situation of failure by the Government to pay the premium, the Agreement would continue until it was voided by the petitioner Insurance Company which had not been done. The finding of the State Commission is that since the petitioner insurance company did not exercise its option to void the contract and has opted to perform the contract, it was bound by the terms and conditions of Agreement deed. It also concluded that the Insurance Company could not change or alter the terms and conditions of contract unilaterally as therefore it was bound to discharge its liabilities as per the Agreement deed and could claim payment of the balance amount of the premium by adopting legal process against the Government.

9.      It is manifest from clause 3 of the Agreement between the petitioner Insurance Company and the Government of U.P. that the arrangement of the Janta Personal Accident Policy was for 1 year and as per clause 28 provisions of the Agreement would prevail over those in the JPA policy document. The petitioner was required to provide a Bank Guarantee as Performance Security of 10% of the total annual premium amount equivalent to Rs 5.46 crores in favour of the    Commissioner and Secretary, Board of Revenue, UP. The Schedule of the Policy states that insurance under the Policy, in addition to the special conditions, is subject to general terms, conditions, clauses, warranties specified in Janta Personal Accident Insurance policy and that the schedule and policy are to be read together. However, the Agreement does not state, as has been concluded by the State Commission in the impugned order, that the even in a situation of failure by the Government to pay the premium, the Agreement would continue until it was voided by the petitioner Insurance Company. The Agreement provides for a Performance Guarantee which the State Government could have invoked in case the Agreement were to prevail. It has not done so. In a catena of judgments of the Hon’ble Supreme Court and this Commission, it has been held that a contract of insurance must be read “as is”. Therefore, the policy condition that stipulates that failure to renew the policy by paying the annual premium would render the liability to provide insurance cover as lapsed due to non-compliance, as held in Mani Ram (supra) has been erroneously interpreted by the State Commission. The State Government had a Performance Guarantee of Rs 5.46 crores which could have been invoked by it to enforce implementation of the insurance scheme in case the policy was valid under the Agreement as concluded by the State Commission. It has chosen not to do so for reasons best known to it. Be that as it may be, the argument that the policy subsisted even in a situation of nonpayment of premium cannot be countenanced in view of the foregoing. 

10.    This Commission, in exercise of its revisional jurisdiction, is not required to re-assess and re-appreciate the evidence on record when the findings of the lower fora are concurrent on facts. It can interfere with the concurrent findings of the fora below only on the grounds that the findings are either perverse or that the fora below have acted without jurisdiction. Findings can be concluded to be perverse only when they are based on either evidence that have not been produced or based on conjecture or surmises i.e. evidence which are either not part of the record or when material evidence on record is not considered. The power of this Commission to review under section 21 of the Act is, therefore, limited to cases where some prima facie error appears in the impugned order. As laid down by the Hon’ble Supreme Court in Rubi (Chandra) Dutta (2011) 11 SCC 269 decided on 18.03.2011, Lourdes Society Snehanjali Girls Hostel and Ors vs H & R Johnson (India) Ltd., and Ors  (2016) 8 SCC 286 decided on 02.08.2016 and T Ramalingeswara Rao (Dead) Through LRs & Ors Vs. N Madhava Rao and Ors, Civil Appeal No. 3408 of 2019 decided on 05.04.2019, revisional jurisdiction is warranted to be exercised in cases of concurrent findings on facts by the lower fora only where there is either a jurisdictional error or a material irregularity resulting in miscarriage of justice. In the instant case, the conclusion that the Agreement provided for the continuation of the arrangement of the scheme of insurance since it had not been voided by the petitioner is clearly against the evidence on record as per the Agreement dated 19.11.2009 and the letters dated 08.06.2010, 23.07.2010, 11.08.2010, and 01.09.2010 issued by the Senior Divisional Manager of the petitioner to the Commissioner & Secretary, Board of Revenue, Government of U.P. requesting to pay the premium, letters dated 27.09.2010 and 06.10.2010 specifically intimating that the policy will lapse on 12.10.2010 and thereafter letters dated 19.11.2010 and 11.01.2011 conveying that the insurance risk stands terminated with the insurance company not at risk any more. These documents are not denied by the respondents 2 and 3. The State Government has not considered this evidence and concluded that the Policy was not voided by the petitioner under the Agreement and therefore should be construed to be subsisting amounts to a material irregularity. Clause 28 of the Agreement mentions that in the event of any inconsistency between the provisions of the Agreement and the provisions of the policy document, the provisions of this Agreement shall prevail; the interpretation of the State Commission that there was inconsistency between the Agreement and the Policy regarding the renewal through payment of premium and hence the provisions of the Agreement must prevail is, however, erroneous. There is no provision in the Agreement with regard to the continuation of the policy on account of failure to pay premium. The scheme was continued in the past as per the record on a pro rata basis by the petitioner Insurance Company only against payment of premium by the State Government. It is evident that the payment of premium was an essential requirement of the scheme which was covered through the Agreement. From a reading of the Agreement, it is evident that the procedural aspects of the scheme of insurance are elaborated therein with regard to the processing of claims and addressing of claim related issues.  The impugned order is, therefore, perverse on these grounds and is liable to be set aside.

11.    In view of the discussion above and in the facts and circumstances of this case, the revision petition is found to have merits and is accordingly allowed. The impugned order of the State Commission is set aside. Resultantly, the order of the District Forum is also set aside. There shall be no order as to costs. All pending IAs, if any, also stand disposed of with this order.

12.    Before parting with this case, it would be germane to point out that in the imbroglio between the petitioner and respondent 2, the benefit of a laudable scheme of financial security has been denied to respondent 1 who is the widow and nominee of a farmer entitled to benefits of the Janta Personal Accident Insurance Scheme launched by the Government. It is, however, left open to the State Government to consider this issue in whatever manner it considers appropriate.