(Delivered on 10/08/2018)

PER SHRI B.A. SHAIKH, HON’BLE PRESIDING MEMBER.

1.         This is a complaint filed under section 12 read with section 17 of the Consumer Protection Act, 1986.

 2.         The case of the complainant  as set out in the complaint  in brief is as under:

a.         The employees of the Forest Department, Government  of Maharashtra constituted  the fund in the name and  style as “Maharashtra State Forest Employees Welfare Fund”.  The complaint is filed  by the Member Secretary of the said Maharashtra State Forest Employees Welfare Fund, which is herein after  referred to as  complainant,  for the sake of convenience.  The aims and objects  of the said fund is  to protect the right   of employees of the Forest Department and to carry out their welfare activities.  The employees who make the contribution  to the said  fund are made its members. The Group Personal Accident Policy for the members of the complainant  was to be obtained so as to secure protection of benefit and family members of the said employees in case of unfortunate accidental death  of any of them. The Member Secretary of the said fund  Mr. Shailesh Ganeshrao Tembhurnikar being  the head of the Committee constituted for  the above  purpose,  invited competitive offers,  from the interested  insurance companies for  the Group Personal Accident Policy.

 b.         The opposite party (for short  O.P.) which is the insurance company submitted   most competitive offer for  accepting  the risks  by insuring the members  of the complainant  funds. Hence,  its  offer was  accepted by the complainant.  Accordingly, initially 10,165  number of employees  were covered  for  one year with  sum assured  of Rs. 4,00,000/- per member on the premium of Rs. 137/-  per member. The complainant  accordingly paid  consolidated  premium of Rs. 13,92,605/- under the Group for 10,162 member to the O.P. The policy for the  period  from 01/08/2011 to 31/07/2012  was then issued by the O.P. covering 10,165 members  therein.

 c.         Thereafter, the O.P.  accepted additional premium for  remaining  members of the complainant. Accordingly, the premium at the rate of Rs. 137/- per  member was paid for  additional remaining  members. Thus total members  of employees covered under the   policy were 11930. The total insured amount for  all of them was Rs. 47,720 lac for  which the complainant  paid  total premium  of Rs. 16,34,410/- to the O.P.

 d.         However, to the surprise of the complainant, the O.P. sent  a letter dated 09/03/2012 to it ( complainant)  informing  that  the O.P.  that vide  notice  dated 17/02/2012 served  earlier  to the complainant on 22/02/2012 policy has been cancelled   on the ground that  it was not  feasible for the O.P. to continue  the policy  as the loss ratio has gone up by 200%.  There was no justification  for the O.P. to  cancel the  said  policy  on such  ground.

e.         The complainant   vide letters dated 13/03/2012 and 10/04/2012 put its protest  against the   said illegal action and  unilateral  decision  taken by the O.P. and   submitted in those letters that  at no point of time any such notice  dated 17/02/2012 was  given  to the complainant about  cancellation of the policy with effect from 03/03/2012. 

 f.          There has been 10 accidental  death  of  employees  covered under the policy  till 03/03/2012. The claim for the same were  already  made to the O.P. Hence,  the complainant  issued legal notice on 24/05/2012 to the O.P. pointing  out its deficiency  in service  and  adoption of unfair trade practice.  Three more employees covered under the policy namely (i) Nitin Lotan Kapde, (ii) Sitaram Mahadeora Wadhane & (iii) Ravindra Madhukar Thakre  met with an accidental  death  respectively on 20/03/2012, 20/04/2012 and 21/04/2012. The O.P. is liable  to pay  insured sum of Rs. 4,00,000/- for each of the said three  employees i.e. total  amounting  to Rs. 12 lac.

 g.         The O.P. had tried to rely  on the  alleged clause No.6 of the policy  for  its cancellation.  However, the said clause  No. 6 was  never communicated by the O.P. to the complainant.  The said clause No. 6 was never  disclosed  to the complainant  at the time of  finalization of the terms  and conditions of the policy  and  acceptance of  the premium. Hence,  the said clause  No. 6 is not binding  on the complainant  which is also  against the  public policy , law of contract as well as equity.

 h.         Thereafter, complainant obtained Group Insurance Policy  from  another  insurance company namely Oriental Insurance Company which   had  offered lowest premium  at the rate of Rs. 113/- per member for 106 days. The complainant  was  required to pay additional amount of Rs. 13,48,090/- to the  Oriental Insurance Company for  insuring its member  for  residual period  of 106 days for the reason that   complainant  cannot  go  without  insuring its members who are day to day facing the danger from wild life being serving in forest.

 i.          The O.P. has not  refunded  the premium for  the balance period from 03/03/2012 to 31/07/2012 amounting to Rs. 6,74,306/-. The complainant  was required to pay the  aforesaid extra premium  of Rs. 13,48,090/- to secure the policy  for the period    from 27/04/2012 to 10/08/2012 for residual period for  Oriental  Insurance Company. Thus the complainant  was thus  required to pay more  Rs. 6,73,784 (Rs. 13,48,090/-  - Rs. 6,74,306/-) to recover its employees in fresh  policy for residual period.

3.         Hence, this complaint  is filed by the complainant  against  the  O.P. seeking  direction  to pay it  following  amounts.

 4.         The O.P. appeared before this Commission and filed  reply /written version  along with  preliminary  objection  and thereby resisted the complaint. The defence raised by the O.P. in brief is as under:

 i.          The Maharashtra State Forest Employees Welfare Fund is  neither a living person  nor is any statutory persona juris (Juristic Person). Hence,  complaint  filed by  it is not maintainable.  The complainant  has suppressed  the material  facts that  it had reported the matter  to Insurance  Regulatory and Development Authority (for short (IRDA) which  directed  the O.,P. to make  proportionate  refund  of the premium  of  residual  period  to the complainant and accordingly the O.P. refunded an amount of Rs. 6,71,113/- to the complainant  which it received under protest. The  complainant  has not joined  the IRDA as O.P. to the  complaint  and hence, the complaint is bad for non joinder of necessary party i.e. IRDA.

 ii.          It is not  disputed that the bid of Rs. 137/- per person  for  insurance  cover of Rs. 4,00,000/- for  each  of the  member of the complainant  given by the O.P.  was accepted by the complainant  and that  total  premium of Rs. 13,92,605/- was paid  by the complainant  to the  O.P.  It is also  not disputed that  the  insurance policy  was accordingly  issued by the O.P.  in the name of  complainant for  the period 01/08/2011 to 31/07/2012 it was special  Tailor made Group Personal Accident Policy .  The  insurance cover was given  for  the death of  10,162 employees. It was made clear to the complainant  that the O.P.  may  terminate  the policy  at any time on 15 days notice and that  in case of the said  termination  of policy, the O.P.  shall be liable  to repay on demand  a ratable  proportion of the premium for  the unexpired term from the date of  the cancellation.  Moreover,  it was also  made  clear to the complainant  that the premium  will be  refunded  only  if there is no claim under the policy. There is also provision  of the arbitration  under the policy contract in case dispute and difference arises. The complainant had not objected to  any of the said terms and conditions of the policy.     Initial number of insured person  was increased from 10,165 to 11,930, by  accepting  additional  premium  at the  rate of 137 per  person from the complainant.  

 iii.         However, loss ratio  under the said  policy  went  up by more than  242.95% on account of 9 death claims made causing  liability of Rs. 36,00,000/-. The O.P. company is   a Public Sector  undertaking of Government of India, is not  expected  to sustain prolonged loss so as to bring it to financial crisis. Hence, the O.P.  cancelled the  policy with effect from 03/03/2012 by issuing  15  days  notice to the complainant. It is not disputed  that  two  more insured persons  died on 20/03/2012 and 20/04/2012 who were  members of the complainant, creating further  liability  of Rs. 8,00,000/-. The O.P. has denied that liability  on the ground  of  claims being  post cancellation  of  insurance policy.

 iv.        The complainant  opted to go to another  insurance company and  obtained  insurance policy  for residual  period of 106 days with effect from 24/04/2012 to 31/07/2012 by paying  premium  of Rs. 13,48,090/-.

 v.         The O.P. already settled  the five claims  and  ready to settle remaining  four claims  regarding death  of the members occurred  prior  to cancellation  of the policy  i.e.  prior to 03/03/2012. The complainant  was not entitled  to get refund  of the premium  of  proportionate  basis. However,  as per  direction given by the IRDA the O.P. returned  of Rs. 6,71,113/- to the  complainant  towards  premium of  residual  period,  after cancellation  of the policy.

 vi.        Hence,  for all these reasons,  the O.P. requested that  the complaint may be dismissed with cost.

 5.         The complainant filed rejoinder to the complaint  after the  O.P. filed its aforesaid  reply. The complainant in that rejoinder denied the  defence taken  by the O.P. in above reply and  submitted in brief that  the O.P.  remitted  the premium of Rs. 6,71,113/- to the complainant  after five months from the date of filing of the present  complaint, which was accepted  under protest  by the complainant.  As it was received  after filing  of complaint ,  the said fact could not  be  mentioned  in the  complaint.  The O.P. had no right to cancel the policy by giving 15 days notice. The letter dated 17/02/2012 allegedly  sent  by the O.P. was not received  by the complainant.  The  postal acknowledgement  filed on record by the O.P.  does not bear  signature  of any of the official of the complainant.  The defence raised by the O.P.  in its reply thus cannot be  accepted.

 6.         The complainant  filed evidence affidavit of  its Secretary  Mr. Yashvir Singh Raghuvir Singh. The complainant  also filed copies of flowing  documents.

            Policy  Cover Note issued by the O.P., letters  issued by the O.P and Chief Conservator of Forest, quotation submitted by the O.P., legal notice issued by the complainant to  the O.P. copy of receipts , details of  insurance claim passed by the O.P., claim made to the O.P. in respect of death of four employees. The  said  documents  are filed along with  three  lists respectively  dated 20/02/2013, 04/05/2016 and  28/11/2016.

 7.         On the other hand, the O.P. filed  copies of following  documents  in support of its aforesaid  defence.

            Competitive bids, letter of approval of quotation, Tailor made policy ,  letter dated 17/02/2012 issued about  the cancellation of policy  with acknowledgement, letter dated 09/03/2012 written by the O.P. to the complainant  informing that the policy is cancelled, the letter of settlement of claim dated 14/03/2012,  statement  in  tabular   form about settlement of claim, complaint  to IRDA dated 02/01/2013 for mid term cancellation, communication   with respect  to refund  of amount  of Rs. 6,71,113/- to the  complainant, legal notice issued by the complainant to the O.P. dated 24/05/2012 &  reply given to that notice.

 8.         The learned advocate of the complainant  also filed written notes of argument . We have  heard him  orally also at the time of  final hearing.  None appeared for the  O.P. at the time of  final hearing of the complaint.  Moreover, the O.P. has not filed written notes of argument  though ample  time was given for  filing the  same.  We have  also perused  the record and proceedings of  the complaint.

 9.         The learned advocate of the complainant  during the course of  hearing  took us through  the documents filed on record by both the parties and  pleading  of both  the parties and submitted that  there is no evidence to prove that  any such  terms and conditions  of the policy  about  its unilateral cancellation by the O.P. were  communicated to the complainant.  Therefore, according to him the condition about  unilateral cancellation of the policy  by  giving 15 days notice is  not binding  on the complainant.  He further submitted that  otherwise also the premium for  residual  period was not refunded by the O.P. at the time of cancellation of the policy, but it was refunded  after five months of filing of present complaint and it was accepted  by the complainant  under protest and hence,  the O.P. cannot take advantage  of the same  for  holding  that  the   policy  has been  lawfully  terminated  with effect from 03/03/2012.  He also submitted that  the  complaint  filed by present complainant  is maintainable in law as admittedly the policy was issued in the name of the complainant  by the O.P. and there was relationship  consumer and service provider in between  the complainant and  O.P.  due to that reason.  He therefore,  requested that  all the claims made in the complaint as above may be granted.

 10.       So far as the question of maintainability  of the complaint  is  concerned, we find that  as admittedly the O.P. issued policy in the name of the complainant  covering  its  large  number of members  which are  more than 10,000, the relationship  of consumer  and service provider  exists  in between  the complainant and  O.P. and hence, complaint is maintainable in law.

 11.       Moreover, the IRDA  is not necessary  party to the complaint as  no relief  is sought  by the complainant  against the IRDA. Therefore, we find  no substance  in the preliminary  objection raised  by the O.P.

 12.       The O.P.  has strongly  relied on  alleged condition  number 6 of the policy  that  the O.P.  may terminated the insurance policy  at any time on giving  15 days  notice to the  insured and that the O.P. will be  liable to  repay on demand a ratable  proportion  of the premium for the un expired  term  from  the date of  the  cancellation   and that premium  will be   refunded only if there  is no claim  under the policy.

 13.       However, there is no document  to show that  the said condition  of the policy was brought  to the notice  of the complainant  or  said term and condition was   communicate   along with   policy cover note issued  to the  complainant by the O.P.  Hence, it cannot be said  that the complainant  was made aware  of that condition  at the  time of taking  of the policy. Hence,  said condition is not binding  to the complainant.

 14.       It is pertinent to note that  as per direction of  the IRDA, admittedly the O.P. refunded  the premium of residual  period  on 17/05/2013 to the complainant, amounting to Rs. 6,71,113/-.  The  receipt  about the same  is filed  by the appellant  at page No. 38 of the compilation of the complaint.  It shows that  the said amount  was received  by the complainant  under protest, on 17/05/2013. In our view  O.P.  cannot raise a   defence  that it was not  necessary  to refund  the said premium  to the complainant at the time of  cancellation  of the policy  unilaterally, when  it  subsequently  refunded said premium  of Rs. 6,71,113/- for  residual  period  on  proportionate  basis  to give effect to  cancellation  of the policy.  The said premium  of Rs. 6,71,113/- ought to have been  refunded  to the complainant   on or before the date of cancellation  of the policy  i.e.  on or before 03/03/2012. However,  as it was refunded on 17/05/2013 and as it was accepted  under protest by the  complainant , it can be said that  the policy  was not terminated  in accordance  with law. Hence,  it is crystal clear  that the said policy  was in force  till the date of  its expiry. The O.P. is therefore under obligation  of said insurance contract to settle  the remaining  four claims  arising  out of accidental  death of  3 members of the complainant who were  covered  under the policy  for sum assured  of Rs. 4,00,000/- each.  Thus, the complainant  is entitled  to get total sum assured  of Rs. 12,00,000/-  towards death   claim of its 3 members namely Nitin Lotan Kapde, Sitaram  Mahadeorao  Wadhane and Ravindra Madhukar Thakre  to be paid to their  beneficiaries under the  policy.

 15.       We also hold that as the policy was  not legally cancelled  by the O.P. and as the complainant  was required to obtain fresh  policy  from another  insurance company by  paying  additional  premium of Rs. 13,48,090/- for residual period , the complainant is entitled  the difference of the premium by deducting  refund premium of Rs. 6,71,113/- from the paid up premium of Rs. 13,48,090/-.  Thus, on the said  deduction,   difference of amount  comes  (Rs. 13,48,090/- - Rs. 6,71,113/-) to  Rs. 6,76,977/-, to which  the complainant is entitled  from the O.P.

 16.       We also  hold that  the O.P. rendered  deficient  service to the complainant   and adopted unfair trade practice  by  illegally  terminating   the policy  and hence, the complainant  is entitled  to compensation of Rs. 1,00,000/- with litigation cost of Rs. 20,000/-. We also hold that  the complainant is entitled  to interest at the rate of 12% p.a. over  Rs. 12,00,000/- and Rs. 6,76,977/- from the date of  complaint, till realisation of the same by it.  Thus, we proceed to pass the following order.

ORDER

i.          The complaint  is partly allowed.

 ii.          The O.P. shall  pay to the complainant  Rs. 12,00,000/- with interest at the rate of 12% p.a. from the date of the complaint i.e. from 25/02/2013 till  realisation of the same by the complainant towards the death   claim of its three  members namely Nitin Lotan Kapde, Sitaram  Mahadeorao  Wadhane and Ravindra Madhukar Thakre  to be paid  to their   respective  beneficiaries  under the policy.

 iii.         The O.P. shall  pay to the  complainant  Rs. 6,76,977/- with  interest  at the rate of 12% p.a.  from the  date of complaint  i.e. from 25/02/2013 till realisation  by the same  by the complainant,  towards difference in the paid  up  premium.

 iv.        The O.P. shall pay to the complainant,  compensation of Rs. 1,00,000/- and litigation cost of Rs.20,000/-.

 v.         Copy of order be furnished to both parties, free  of cost.