BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 1675/2007 against C.C. 52/2007, Dist. Forum, Vijayawada.
Between:
The New India Assurance Company Ltd.
Rep. by its Branch Manager
Branch Office-620701, Prakasham Road
Governorpet, Vijayawada. *** Appellant/
O.P.
And
Sunkara Krishna Rao
D.No. 9-51-13,
Aggiramudu Street
Kothapet, Vijayawada-1. *** Respondent/
Complainant
Counsel for the Petitioner: M/s. Kota Subba Rao
Counsel for the Respondent: Served.
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT.M.SHREESHA, LADY MEMBER.
WEDNESDAY, THE NINETEENTH DAY OF MAY TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D.Appa Rao, President.)
***
1) This is an appeal preferred by the opposite party insurance company against the order of the Dist. Forum directing it to renew the medi-claim policy for the period from 7/2005 to 7/2006 together with costs of Rs. 2,000/-.
2) The case of the complainant in brief is that he took medi-claim policy for the year 2002-2003 and renewed it from 2003-2004 and 2004-2005. When he submitted the application for renewing the policy for the period from 2005-2006 along with premium amount, it refused to renew on account of high claims ratio. Having encashed the cheque, non-renewing the policy is illegal. He sent notice for which the insurance company gave reply enclosing the cheque towards refund of premium. Non-renewal is willful, deliberate, and intentional and therefore prayed for renewal of policy besides compensation of Rs. 1 lakh together with costs.
3) The insurance company resisted the case. While admitting the issuance of medi-claim policy it stated that the complainant claimed Rs. 36,143/-, Rs. 36,674/- and Rs. 7,340/-. In 2004-2005 he made six claims for himself and his wife. Finally he sent Rs. 3,964/- towards renewal of premium, 45 days prior to expiry of the policy for which a receipt was given. Due to high claims in the last two years it was not willing to renew the policy any more. Therefore it sent refund of premium. Policy condition No. 11 stipulates that it could be renewed on mutually agreeable basis. It is up to it to renew the policy or not. In fact it may cancel any existing policy at any time and refund the insured a pro-rata premium for the unexpired period of the policy. Non-renewal of policy does not constitute deficiency in service. The claim is ex-facie vexatious, and therefore prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A7 marked , while the insurance company filed the affidavit evidence of its Divisional Manager. It did not file any documents.
5) The Dist. Forum after considering the evidence placed on record and importantly relying decision of Hon’ble Supreme Court in Biman Krishna Bose Vs. United India Insurance Company reported in 2001 CPJ 10 (SC) directed the insurance company to renew the medi-claim policy for the subsequent period together with costs of Rs. 2,000/-.
6) Aggrieved by the said decision the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the terms and conditions of the policy authorizes them to renew or not The insurance company could itself cancel the policy at any time by virtue of terms of the policy. The Dist. Forum ought to have relied the decision of a larger bench of Hon’ble Supreme Court in The General Assurance Society Ltd. Vs. Chandmull Jain reported in 1966 ACJ 267. In fact there was no deficiency in service on its part, and therefore prayed that the complaint be dismissed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the appellant insurance company has issued medi-claim policy for the complainant and his wife originally from 24.7.2002 to 23.7.2003 and later renewed on 24.7.2003 to 23.7.2003 and finally from 24.7.2004 to 23.7.2005. When the complainant sought for renewal of the policy for the fourth time commencing from 24.7.2005 it was refused on the ground that earlier the complainant had claimed the amounts repeatedly between 2003-2004. He made three claims for himself and his wife for an amount of Rs. 36,143/-, Rs. 36,674/- and Rs. 7,340/-. He made six claims during the period 2004-2005. When he sought for renewal of policy the insurance company refused to renew on the ground of high ratio claims. Questioning the said decision as illegal and arbitrary the complainant filed the complaint directing the insurance company that his policy should be renewed. No doubt the premium that he had paid for renewing the policy was encashed however, by issuing notice it refused to renew enclosing the cheque.
9) The question centers around is whether the insurance company has a right to refuse the renewal of policy?
10) It is an undisputed fact that under condition No. 10 the policy may be renewed by mutual consent. However, if it cancels the policy it shall allow refund of premium at short period rate only, provided no claim has occurred up to the date of cancellation. Under clause 11 the policy is issued subject to review.
11) The Hon’ble Supreme Court in The General Assurance Society Ltd. Vs. Chandmull Jain reported in 1966 ACJ 267 held that where the parties agreed upon certain terms which were to regulate their relationship, it was not for the court to make a new contract, however reasonable, if parties had not made it for themselves. This was an answer to the contention that the policy gave a mutual right to the parties to cancel the policy at any time was so unreasonable that it should not be allowed to stand. Their Lordships’ opined that the right to terminate cannot by reason of any circumstances be read as a right to terminate for a reasonable cause. No reasons need be assigned for cancellation. That was a case where the insurer had acted arbitrarily for extraneous reasons where the policy was cancelled on the ground that the complainant had gone to the court. Evidently, the reason that was furnished by the insurer shows that it was a case of vindictiveness. In this context it was held that the cancellation of the policy on the ground that the complainant has gone to the court was wrong.
12) The learned counsel for the appellant relied a decision in United India Insurance Company Ltd. Vs. John reported in 2005 ACJ 782 distinguishing the decision Biman Krishna Bose Vs. United India Insurance Company Ltd. 2001 CCJ 1100 (SC. It opined that the Supreme Court decision would apply only in cases where the insurer had acted arbitrarily for extraneous reasons.
13) Coming to the facts, it is not in dispute that the complainant had taken medi-claim policy. However, when it found that he was claiming repeatedly for himself and his wife having paid more than three terms it did not intend to renew on the ground of high ratio claims. It is for the insurance company to renew it or not. Having known that he was laying claims and repeatedly taking treatment it is up to the insurance company to renew it or not. No body can compel the insurance company to renew and later ask them to pay for the treatment. When the terms and conditions of the policy authorizes them either to renew it or not it was within its right not to extend. We are fortified with the view expressed by their Lordships of the Hon’ble Supreme Court referred to above. In the circumstances, we are of the opinion that the insurance company was right in not renewing the policy.
14) In the result the appeal is allowed setting aside the order of the Dist. Forum. Consequently the complaint is dismissed. No costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 19. 05. 2010.
*pnr
“UP LOAD – O.K.”
