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

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Savita Aggarwal wife of Late Shri Ajay Aggarwal, r/o H.No. 1899, Sector 22-B, Chandigarh.

              ---Complainant

Vs

[1]  The New India Assurance Co. Limited, Regd. & Head Office: New India Assurance Building, 87 M.G. Road, Fort, Mumbai – 4000001, through it’s Managing Director.

[2]  The New India Assurance Co. Limited, Divisional Office: 353000 (Manimajra), SCO No. 803, NAC Manimajra (Chandigarh), U.T. 160 101, through it’s Manager.

---- Opposite Parties

BEFORE:    MRS.MADHU MUTNEJA               PRESIDING MEMBER

           SH.JASWINDER SINGH SIDHU        MEMBER

Argued By:    Sh. Rishi Karan Kakkar, Counsel for Complainants.

Sh. Sukaam Gupta, Counsel for Opposite Parties.

PER MADHU MUTNEJA, PRESIDING MEMBER

1.        The instant complaint relates to denial of an insurance claim filed on account of accident of vehicle insured by the Opposite Parties in the name of the deceased husband of Complainant.

          Briefly stated, the Complainant’s husband was the owner of a car which was insured with the Opposite Parties. The registration and insurance policy were in the name of Shri Ajay Aggarwal husband of the Complainant. The Complainant has submitted that even though she had completed all formalities for transfer of vehicle in her name after the death of her husband, but the documents could not be filed on time.

          Unfortunately, the vehicle met with an accident on 4.5.2011. When the Complainant lodged a claim for the same with the Opposite Parties, the claim was refused on the ground that the real owner of the vehicle had already expired and the insurance company was unaware of this fact (copy of rejection letter is at Annexure C-3). The Complainant has stated that the fact about the death of her husband was disclosed to the insurance agent/ representative each time and it was always stated by him that there would be no problem regarding the insurance cover for the vehicle. The Complainant had signed relevant documents for obtaining the insurance policy each time. Hence, as per the Complainant even though the Opposite Parties were already in the knowledge about the death of her husband, the claim has been declined on the ground that the owner of the vehicle is deceased.

          The Complainant has stated that she has deposited complete premium for the said insurance cover for the relevant period and the car was inspected by the authorized surveyor after accident and before repair. The Complainant has therefore filed the present complaint with a prayer that the Opposite Parties be directed to release the amount of Rs.44,266/- spent by her on the repair of the vehicle, along with interest and compensation.

2.        After admission of the complaint, notice was sent to the Opposite Parties.

3.        The Opposite Parties in their joint reply have taken preliminary objections to the effect that the complaint is not maintainable as the Complainant is not a ‘Consumer’ and has no insurable interest.

          As per the Opposite Parties, the vehicle met with an accident on 4.5.2011. On receipt of intimation, Sh.Ravinder Goyal, Surveyor was appointed on the same date to assess the loss. The surveyor submitted his report on 3.6.2011 (Annexure R 1-2/A). After going through the report, the answering Opposite Parties came to know for the first time that the insured/ registered owner of vehicle in question namely Sh. Ajay Aggarwal had expired on 14.5.2008. No intimation regarding the death of the insured was ever given to answering Opposite Parties by Complainant, even though the Complainant continued to renew the policy since 2008 in the name of Late Sh. Ajay Aggarwal without any lapse. According to the Opposite Parties, this is a gross violation of condition No. 9 of terms and conditions of insurance policy, which reads as under:-

“In the event of the death of the sole insured, this Policy will not immediately lapse but will remain valid for a period of three months from the date of the death of insured or until the expiry of this Policy (whichever is earlier). During the said period, legal heir(s) of the insured to whom the custody and use of the Motor vehicle passes may apply to have this policy transferred to the name(s) of the heir(s) or obtain a new insurance policy for the motor vehicle.”

          Opposite Parties have further submitted that a contract could be enforceable only between two existing parties whereas in the instant case one of the parties i.e. husband of the Complainant is not alive.  Hence the contract is incomplete, the same is void-ab initio. While denying all allegations of the Complainant, Opposite Parties have 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, along with the written arguments filed by the learned counsel for the Opposite Parties.

6.        Addressing the preliminary objection by the Opposite Parties to the effect that the Complainant is not a ‘Consumer’ qua them, the Complainant has failed to place on record any proof to show that after the death of her husband, she got the policy transferred in her name. It is incumbent upon the Complainant to get the policy transferred in her name. In the absence of which, to our mind, the Complainant cannot be said to be a ‘consumer’ qua the Opposite Parties for the policy issued by them as per the provisions of Consumer Protection Act, 1986. On his death, the husband of the Complainant ceased to be a “consumer” and the relationship between the deceased as a “consumer” and the insurance company as a “service provider” came to an end. 

7.        This is a unique situation where no written intimation has been given by the Complainant to the Opposite Parties regarding the death of her husband. However, it has been averred in the complaint that the Agent of the insurance company was informed each time about the death of the owner of the vehicle at the time of issuance of cheque. It has been averred that all cheques were issued by the Complainant and all relevant papers for issuance of insurance were also signed by the Complainant. The opposite parties have not denied receipt of cheques from the complainant. Even the policies continued to be issued. However, no copies of papers alleged to have been signed by the complainant for issuance of policy are on record.  The Opposite Parties have submitted that they came to know about the death of the husband of the Complainant (insured) only after receipt of the report of the Surveyor, the relevant portion of which is reproduced hereinbelow: -

“The representative of the insured was called and advised to show the place of accident. The undersigned visited the site of accident and verified the spot of accident. He was advised to complete the claim papers i.e. insured’s signature ID proof and his bank name and A/c number. On this query he disclosed that the owner of the vehicle had already expired. The relevant papers i.e. death certificate was submitted and accordingly, he got expired on 14.5.2008 however the insurance was renewed time to time in his name with NCB. Now the claim papers were signed by his wife (legal heirer).”   

Hence, in terms of clause 9 of the terms and conditions of the insurance policy, reproduced above, as well as the report of the surveyor, who had opined that “the claim is not payable as per the terms and conditions of the policy”, the claim was repudiated by the Opposite Parties.

8.        Even otherwise also, it is a settled principle of law that an incomplete contract is not enforceable. Insurance is a contract between the insured and the insurer. There cannot be a contract with a dead person; hence the contract between the insurance company and insured is void ab-initio. Furthermore, a contract of insurance is one of “Uberrima Fide” and demands full disclosure of all facts and circumstances affecting the risk and is automatically vitiated by non-disclosure whether innocent or fraudulent.

9.        According to the Opposite Parties, the Complainant is a third party as she is not the owner of the vehicle and hence, there is no contractual relationship between the third party and insurer. In support of their contention, Opposite Parties have relied on National Insurance Co. Limited Vs. Laxmi Narain Dhut, III(2007) CPJ 13 (SC). Unequivocally, as per the terms and conditions of the policy, reproduced above, the Complainant was required to get the vehicle transferred in her name or in the name of other heirs within 03 months from the date of death of the insured. The Complainant has not done so, but is still claiming the benefit of the insurance policy because she has made the payment to the Opposite Parties for the insurance cover issued for the vehicle though in the name of her husband. It is reiterated here for clarity that the date of death of Ajay Aggarwal is 14.5.2008, while date of accident is 4.5.2011.  

10.       Looking at the entire the situation, we cannot accept the version of the complainant to substantiate the claim for payment against the insurance policy.  The claim was rightly repudiated/rejected by the insurance company.

          However, as the opposite parties have accepted the premium amounts for insurance for all subsequent years, we are of the view that they are liable to refund the amount accepted by them from the Complainant. So all amounts paid by the Complainant towards premium for all subsequent years after the death of the husband be refunded by the Opposite Parties to the Complainant along with interest @9% per annum, from the date of their respective receipts, till actual realization. The case is partly allowed to this extent only.  No costs.

11.       The refundable amounts be paid by the opposite parties to the complainant within 45 days of the receipt of this order, failing which Opposite Parties shall be liable to pay the refundable amount along with interest @18% per annum instead of 9% per annum, from the date of their respective receipts, till the actual date of payment.  

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

Announced

18^th September, 2012.                                            

Sd/-

(MADHU MUTNEJA)

 PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER