Aggrieved by the Order dated 10.09.2018 of the State Consumer Disputes Redressal Commission, Himachal Pradesh (hereinafter referred to as the ‘State Commission’), Sarju Ram through his legal heir - Shyam Lal/ Complainant/ Petitioner has filed this Revision Petition under Section 21(b) of the Consumer Protection Act, 1986 (for short ‘the Act’) against Senior Branch Manager, Oriental Insurance Company Ltd. & Anr. (hereinafter referred to Respondents/ Opposite Parties/ Insurance Company) with prayer to set aside the Order of State Commission, which had set aside the Order of the District Consumer Disputes Redressal Forum, Shimla (hereinafter referred to as the ‘District Forum’) dated 24.03.2017. The District Forum had allowed the Complaint. I will not go into the details of the Complaint as it has been adequately covered in the Orders of the District Forum and the State Commission. 2. The brief fact of the case as narrated in the Complaint is that the Complainant is the son and legal heir of late Sh. Sarju Ram, who was owner of a vehicle, which was insured with the Insurance Company for the period from 23.04.2011 to 22.04.2012. The vehicle met with an accident on 21.06.2011 in which it was totally damaged. The Complainant intimated the Insurance Company about the accident which appointed a Surveyor for the assessment of the loss. The Complainant stated that he submitted his claim with the Insurance Company after completion of all formalities but the claim was repudiated on the ground that at the time of renewal of the Policy, the insured in whose name the Policy was issued had already expired. Aggrieved by this, the Complainant filed a Complaint in the District Forum with prayer to direct the Insurance Company to make payment of Insurance Claim alongwith interest and other reliefs. 3. The District Forum allowed the Complaint and held as under: “12. As a sequel to our above discussion, this complaint is allowed and the OP is directed to pay a sum of Rs. 3,45,000/- along with interest at the rate of 9% per annum from the date of filing this complaint up till payment within 45 days from the date of this order to the complainant. The opposite party shall also pay a sum of Rs. 10,000/- as punitive compensation to the complainant along with a sum of Rs. 5,000/- as litigation cost.” 4. Aggrieved by the Order of the District Forum, the Insurance Company filed an Appeal before the State Commission. The State Commission allowed the Appeal, set aside the award given by the District Forum and dismissed the Complaint. 5. I have heard the Learned Counsel for both the parties and perused the material available on record. 6. The Learned Counsel of the Petitioner/ Complainant argued that his claim was repudiated by the Insurance Company on the ground that the Policy was renewed in the name of a dead person. The District Forum had allowed the Complaint. He argued that the Complainant had informed the Insurance Agent about the death of his father but still he renewed the Policy in the name of his deceased father. He relied on the Order of the Hon’ble Supreme Court in United India Insurance Co. Ltd. v. Santro Devi, (2009) 1 SCC 558, decided on 02.12.2008. The relevant portion of the Order reads as under: “In this case, the statute itself takes care of validity of the contract. It is mandatory. Once a valid contract is entered into, only because of a mistake or otherwise, the name of the original owner has been mentioned in the certificate of registration and/or the documents of hypothecation of the vehicle with the bank had still been continuing in his name, it cannot be said that the contract itself is void unless it was shown that in obtaining the said contract a fraud had been practiced. Not only the particulars of fraud had not been pleaded, but even no witness was examined on behalf of the appellant. It cannot, thus, be said that a case of fraud in the matter of entering into the contract of insurance had been made out by the appellant.” 7. The Learned Counsel of the Insurance Company argued that the party should be alive at the time of entering into a Contract. Since, the Policy has been issued in the name of a dead person, the Policy is void ab initio. He argued that the Registration Certificate was also not changed in the name of the Complainant. He argued that the Order of the Hon’ble Supreme Court in United India Insurance Co. Ltd. v. Santro Devi (Supra) does not apply as that case deals with 3rd Party liability. 8. The State Commission dismissed the Complaint and allowed the appeal filed by the Insurance Company on the ground that the insurance policy issued in favour of the deceased insured is void ab initio. However, it allowed the premium collected from the Complainant to be returned. There are certain facts of the case, which need to be mentioned at the outset. First is about a policy having been renewed in the name of a deceased policy holder. The second is that this renewal was done by the son / legal heir of the deceased through a broker of the Insurance Company. The Complainant states that the broker was informed about the death of his father, who was the original policy holder. I do not see any malafide intention on the part of the Complainant to have continued with the name of his deceased father in the Policy. Perhaps the broker had not informed him about the implications. Even otherwise, the broker should have inquired about the Policy Holder. There is no evidence produced stating that the Complainant wilfully suppressed such information. 9. The Insurance claim was repudiated by the Insurance Company mainly on the ground that the contract with a dead person is void ab initio. Only in the passing a mention has been made towards the end that the name of the registered owner was also not changed in the Registration Certificate by the legal heirs till date. The question before me is are these two issues a fundamental breach in condition of the insurance policy in the circumstances of the case. As I have already observed the main ground for repudiation was renewal of the insurance policy in the name of the deceased and that it is the responsibility of the broker to inquire before recommending renewal of the Policy about the whereabouts of the main Policy Holder and only on satisfying himself, should have made recommendation to the Insurance Company either for renewal or non-renewal. Evidently, this was taken up in a routine manner by the broker and the Insurance Company also in a routine manner renewed the policy. On this count, though technically the contract is void, but in the given circumstances, I hold that the Insurance Company cannot take advantage of denying the claim to the Complainant. On the other issue, regarding change of name in the Registration Certificate, in the circumstances of the case, though again a breach, it is not a fundamental breach, in view of the fact that there was a valid registration and that the vehicle was not being driven without a registration certificate. Further, the Insurance Company has not taken this ground in the written statement filed before the District Forum. 10. The State Commission has dealt with the matter in a technical manner and while dismissing the Complaint, it has ordered for refund of the premium amount alongwith compensation of Rs. 25,000/- towards mental agony and Rs. 10,000/- towards cost of litigation. I find this contradictory. The State Commission has technically held that the Insurance Policy was void ab initio. In such circumstances, giving such relief would not arise. The Order of the District Forum is more well-reasoned and has directed an amount to be paid to the Complainant by the Insurance Company based on the Surveyor’s report. Even the Insurance Company in its written version had stated that if the claim is payable, then the same should be as assessed by the Surveyor. The Surveyor in its report assessed the gross liability of the insurer as Rs. 3,45,000/- and Rs. 1 lakh towards the salvage value. However, after a lapse of so many years, the accident having taken place in 2011, the assessment of salvage value at this stage would be difficult to make and therefore, it is not being taken into account. As ordered by the District Forum, an amount of Rs. 3,45,000/- needs to be paid by the Insurance Company to the Respondent / Complainant. 11. In view of the aforesaid discussion, the Revision Petition is allowed and the Order of the State Commission set aside. The Order of the District Forum is partly upheld with modified directions as under: The Insurance Company shall pay Rs. 3,45,000/- alongwith interest @ 6% per annum from one month after the date of submission of the final survey report, which is 22.02.2012 till realisation within a period of eight weeks of this Order, failing which, the rate of interest shall stand enhanced to 9% per annum for the same period. Further the Insurance Company shall pay an amount of Rs. 25,000/- towards cost of litigation. |
