Insurance policy -- Repudiation of claim -- Non-disclosure of earlier policy -- Nothing on the record which proves that the plaintiff-appellant was debarred from taking the insurance with the defendant-respondents after getting the earlier insurance policy cancelled -- Not the case that the plaintiff-appellant was trying to recover his loss from both the insurance companies -- Not a case of double insurance -- Contention that the insurer is not liable to pay the damages and the policy is void due to concealment of material facts has no merit.

(Para 9)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22C – Insurance claim -- Theft of vehicle – Delay in informing insurance company – Repudiation of claim -- Tipper stolen on 24.12.2015, FIR on 26.12.2015 u/s 379 of the IPC -- Intimation to the Insurance Company on 11.03.2016 -- It is not the case of the petitioner-Insurance Company that the investigating agency did not take appropriate steps for tracing the vehicle or that its conclusions attributed lapse/criminal negligence on the part of the respondent No.2-applicant – Permanent Lok Adalat (Public Utility Services) allowed the application and directed the petitioner-Insurance Company to pay sum of Rs.15 Lakhs, Rs.20,000/- as compensation and Rs.5,000/- towards litigation expenses – No illegality, impropriety, perversity or mis-appreciation of law or facts by the Permanent Lok Adalat (Public Utility Services), award upheld.

(Para 10-13)

Motor Vehicles Act, 1988 (59 of 1988), Section 157, 166 – Compensation in motor vehicle accident case -- Insurance policy after death -- Liability of insurance company -- Insurance policy obtained after death was void and no liability arose against the insurance company to pay compensation as no judgment can be passed against a dead person -- Insurance company absolved from the payment of compensation amount.

(Para 10, 11)

Life assured policy – Effective from -- Date of issuance of the policy would be the relevant date for all the purposes and not the date of proposal or the date of issuance of the receipt.

(Para 4, 15)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22C -- Insurance claim -- Theft of vehicle – Late intimation to Insurance company – Breach of policy –Theft of the vehicle on 05.06.2016, FIR on 06.06.2016 -- Information of the theft of the motor cycle to the insurance company after a delay of 31 days i.e. on 06.07.2016 – Held, merely because claim was lodged after delay, it can't be held sufficient to assume that there is a fundamental breach and hence the claim ought to be rejected -- No dispute as regards the aspect of theft as well as the fact that the intimation in this regard was promptly made to the police has a bearing on the award – Respondents-insurance company directed to disburse the sum assured value of the vehicle.

(Para 1-3, 11-15)

A. Insurance Act, 1938 (4 of 1938), Section 45 -- Chronic decease of diabetes mellitus and hypertension – Non-disclosure of – Repudiation of claim -- Natural death – Medical reports do not, in any manner, indicate any other cause of death -- No investigation was carried out by the Insurance company to ascertain the insured’s cause of death, or the fact that the stated chronic disease had any connection to it -- Besides, no element of fraud on the part of insured has either been pleaded or established even prima facie on the record -- Insurance company’s own case is that disclosure of the said chronic disease would have enabled the Company to suitably increase the amount of premium -- It is not their case that the disease disentitles the insured from taking the policy altogether -- Writ petition allowed, direction given to pay insurance claim with 9 % interest.

(Para 9, 10, 14)

B. Insurance Act, 1938 (4 of 1938), Section 45 – Mis-statement at the time of insurance -- Repudiation of claim -- Mandate of Section 45 of the Act is that no policy can be called in question by the Insurance company on the ground of misstatement after two years from the date on which it came into effect, except when a fact which was material to disclose was suppressed by the insured, and it was fraudulently done and the insured knew at the time of making the statement that it was false or it suppressed fact which was material to disclose -- A fact to be material has to be one which has a direct bearing on the cause of death -- Mere proximity to the case of death or any incidental relation to it, would not suffice.

(Para 10, 14)

A. Consumer Protection Act, 1986 (68 of 1986), Section 12 -- Second complaint -- Withdrawal of the earlier complaint – Bar to second complaint -- Having not argued, before the State Commission, the point of the present complaint being barred in view of the withdrawal of the earlier complaint, the National Commission was not justified, in allowing the respondent-Insurance Company to urge that point therefrom.

(Para 5)

B. Consumer Protection Act, 1986 (68 of 1986), Section 12 – Code of Civil Procedure, 1908 (V of 1908), Order 23 Rule 1(4) -- Theft of vehicle --Withdrawal of the complaint – Maintainability of second complaint – Complaint filed after theft due to non-settlement of claim by the Insurance Company -- Repudiation of the claim was made during the pendency of the said complaint -- Complaint withdrawn by the advocate on the pretext of the case being prolonged by the advocate of the Insurance Company, without having express instructions for withdrawal of the said complaint -- For the fault of the advocate, the complainant cannot be made to suffer -- Complaint cannot be thrown out on the threshold of Order XXIII Rule (1)(4) CPC and in the peculiar facts, it requires consideration on merits.

(Para 8)

C. Insurance law -- Theft of vehicle -- Repudiation of claim -- No-standard claim -- Vehicle left unattended by driver with keys inside -- It is not the case of the Insurance Company that the Claimant consented or connived in the removal of the vehicle, would not be theft, in the eye of law -- Time gap between the driver alighting from the vehicle and noticing the theft, is very short as is clear from the facts of the case -- It was not a fundamental breach of Condition warranting total repudiation -- 75% ought to have been awarded on a non-standard basis.

(Para 11-16)

Motor Vehicles Act, 1988 (59 of 1988), Section 166 -- Compensation in motor vehicle accident case -- Insurance premium paid – Insurance policy made effective from next day – Accident during interregnum period – Liability of Insurance company – Held, Court unable to persuade itself as to how once the Insurance Company having received the entire premium, it could thereafter convey unilaterally that the policy would come into operation from the next following date by sending it through Post, and to turn around and say that insured had agreed and consented to the same coming in operation w.e.f. the next day of having paid premium – Held, once amount was accepted by Insurance Company from insured, thereafter it was merely a formality of conveying terms and conditions of policy in the event of vehicle meeting with an accident.

(Para  3-10)

Insurance law -- Death of constable by sunstroke – Compensation –Specific clause in the MoU, providing for payment of compensation in the event of death (only) resulting “solely and directly” from the accident caused by external violent and any other visible means --  Second part of the same sentence begins with “only” -- In the event of a death, it is only in the scenario where the consequent situation arises, i.e., it has to be solely and directly from an accident caused by external violence -- There was no semblance of any violence being the cause of death -- Last aspect which reads as “any other visible means” would be an expression to be read in the context of ejusdem generis with the external violent death and cannot be read in isolation itself – Sunstroke cannot be included within scope of insurance cover.

(Para 31-34)

Consumer Protection Act, 1986 (68 of 1986), Section 17 -- Insurance claim -- Damage of the plant and machinery due to fire -- Reinstatement value -- Depreciated value – Complainant claimed Rs. 76,64,000/- being the value of the new machinery -- Surveyor in its report determined the loss on the basis of reinstatement value at Rs. 29,17,500/- and on the basis of depreciated value at Rs. 12,60,000/--- Considering second part of Clause 9, in case company is unable to reinstate or repair the property insured, the insurance company shall be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition -- For the aforesaid purpose, the report of surveyor wound be relevant evidence to consider the sum required to reinstate or repair -- Complainant held entitled to the reinstatement value and not the depreciated value/ Rs. 29,17,500/- with interest @ 7% from the date of order of the State Commission i.e., 10.11.2014 till the actual payment.

(Para 5-7)

Consumer Protection Act, 1986 (68 of 1986), Section 17 -- Deficiency in service -- Insurance law – Refund of premium after death – Repudiation of insurance claim – Medical test on 30.7.2017, death by cardiac arrest soon thereafter on 8.8.2017 -- Pre-condition for the home loan was that life of the borrower will have to be insured -- Loan amount was sanctioned, the premium amount was kept aside and was credited to the insurance Company and the insured was subjected to a medical test which showed normal health status -- Entire procedure would suggest, at least from the insurer’s perspective, that the insurance process was complete & all mandatory requirements were met -- No contrary communication by the LIC indicating otherwise as well -- When the death information was conveyed to the respondents, Insurance company issued a back dated letter deferring the insurance process, which was followed by refund of the premium a few days later, and then the repudiation after that – Case shows clear malafide on the part of LIC -- Clear case of deficiency of service and a non-bonafide conduct by the LIC – LIC directed to process the complainant’s insurance claim and remit the payable sum.

(Para 1, 5, 25-27)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22-C -- Motor Vehicles Act, 1988 (59 of 1988), Section 157 – Sale of vehicle – Non-transfer of Insurance policy – Theft of vehicle – Repudiation of claim -- Permanent Lok Adalat/ PLA declined to give relief to purchaser of vehicle – Order of PLA set aside, claim of insured declared value awarded alongwith interest @ 6% p.a. 

(Para 3-8)

A. Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, Clause 3(ii), 3(iv) – Exclusion clause in insurance policy – Disclosure/ Notice to insured --  It is the foremost duty of the insurer to give effect to a due disclosure and notice in its true letter and spirit – Non-disclosure and a failure to furnish a copy of the said contract by following the procedure required by statute, would make the said clause redundant and non-existent -- Any non-compliance would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder.

(Para 15, 42)

B. Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, Clause 3(ii), 3(iv) -- Insurance policy – Duty of insurance company -- Insurer and his agent are duty bound to provide all material information in respect of a policy to the insured – If proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand – It is duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge -- Any non-compliance, offending clause, be it an exclusion clause, cannot be pressed into service by the insurer.

(Para 21)

C. Doctrine of Blue Pencil --  Insurance policy – Offending clauses -- Doctrine of “blue pencil” which strikes off the offending clause being void ab initio, has to be pressed into service – Said clause being repugnant to the main contract, and thus destroying it without even a need for adjudication, certainly has to be eschewed by the Court, requires an effacement in the form of declaration of its non-existence, warranting a decision by the Court accordingly.

(Para 22)

D. Consumer Protection Act, 1986 (68 of 1986), Section 12, 17, 21 -- Consumer – Plaintiff in a suit -- Consumer under C.P. Act, 1986 is at an elevated place than the plaintiff in a suit -- A dispute before the Consumer Commission is to be seen primarily from the point of view of the consumer as against the civil suit -- It is only to avoid any possible bottleneck in granting the relief.

(Para 28)

E. Consumer Protection Act, 2019 (35 of 2019), Section 2(46)(47), 47, 49 58, 59 -- Unfair contract – Unfair trade practice – Power of State Commission/ National Commission -- Section 47 and 58 of the 2019 Act have been introduced to facilitate the State Commission and the National Commission to exercise jurisdiction over a contract which is unfair – The power is not only with respect to identifying a contract as unfair or not, but also to grant the consequential relief -- Under sub-section (2) of Section 49 and 59 of the 2019 Act, the State Commission and the National Commission, respectively, may declare any terms of the contract being unfair to any consumer to be null and void -- In these provisions, there exists ample power to declare any terms of the contract as unfair by the State Commission and the National Commission – Consequence of the declaration of that term as unfair, would make the contract active and executable to the benefit of the consumer -- Therefore, this provision takes care of a possible mischief by the insurer as against the consumer.

(Para 29-34)

F. Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, Clause 3(ii), 3(iv) –– Exclusion clause in Insurance policy -- Unfair contract -- Both the forums concurrently held that respondent No. 1/ Insurer was conscious of the fact that the contract was entered into for insuring a shop situated in the basement -- Even as per the common law principle of acquiescence and estoppel, respondent No. 1/ Insurer  cannot be allowed to take advantage of its own wrong, if any -- Non-compliance of Clauses (3) and (4) of the IRDA Regulation, 2002 preceded by unilateral inclusion, and thereafter followed by the execution of the contract, receiving benefits, and repudiation after knowing that it was entered into for a basement, would certainly be an act of unfair trade practice.

(Para 37-39)

A. Motor Vehicles Act, 1988 (59 of 1988), Section 166 -- Compensation in motor vehicle accident case – Standard of proof -- Standard of proof in claim petitions filed under the Motor Vehicles Act, cannot be equated with that of criminal cases -- In criminal cases, the prosecution has to prove its case beyond reasonable doubt, whereas, in cases before the Motor Accidents Claimants Tribunal, the claimants are only required to prove their case on the touchstone of preponderance of probabilities.

(Para 7)

B. Motor Vehicles Act, 1988 (59 of 1988), Section 166 -- Compensation in motor vehicle accident case – Delay in FIR – Eye-witness not accompanied injured to hospital – Effect of -- Injured did receive serious and multiple injuries in the accident in question -- Just because there happened to be some delay in naming the offending vehicle, and the eye-witness not accompanying the injured to the hospital, would not in any way raise a question mark about the authenticity of version given by the injured/claimant qua the involvement of the offending vehicle in the accident in question -- Delay, if any, cannot thus be a ground to suspect the involvement of the offending vehicle in the accident in question -- Injured/claimant received serious injuries for which he remained hospitalized for many months -- It is but natural that the injured/claimant would have been in a severe shock, on account of the serious injuries received including amputation of his right leg -- Hence, the delay if any in the registration of the FIR cannot be a ground to disbelieve the involvement of the offending vehicle in the accident in question.

(Para 7)

C. Motor Vehicles Act, 1988 (59 of 1988), Section 166 -- Compensation in motor vehicle accident case -- Claim from Mediclaim policy – Compensation for medical expenses by MACT Tribunal -- Whether the Tribunal erred in granting compensation to the injured claimant qua the medical expenses incurred since he had also received money qua the same from his Mediclaim policy -- Compensation awarded under the Motor Vehicles Act is statutory in nature, whereas, under an insurance policy, it is akin to a contract between the insured and the insurer -- In an insurance policy, the insured contributes his own money, whereas, the amount of compensation received under the Motor Vehicles Act, on account of an injury received or death is not a result of any contribution made by the claimants -- Court found no error in the impugned award. Helen C. Rebello’s case 1998 AIR (SC) 3191 relied.

(Para 7)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22(c) -- Health Insurance Policy – Claim was repudiated on the ground that as per requirement of the policy, hospital should have more than 4 or 6 indoor beds as per interpretation of Section 56(1) of the Life Insurance Policy – Permanent Lok Adalat held that timely requirement of administering/giving medical treatment was more important than to follow the aforesaid condition and no hard and fast condition can be adopted and granted a lump sum amount of Rs.10,000/- to both the petitioners – Evidence on record that total amount of Rs.21,000/- has been incurred towards medical expenses – Direction given to respondent no. 2 to make good the remaining amount of Rs.11,000/- within a period of one month -- Delay would attract interest @ 6% per annum.

(Para 2-7)

Consumer Protection Act, 1986 (68 of 1986), Section 12 -- Theft of vehicle – Delay in informing and lodging its claim before the Insurance Company – Repudiation of claim – Legality of -- When the complainant had lodged the FIR immediately after the theft of the vehicle, and when the police after the investigation had arrested the accused and also filed challan before the concerned Court, and when the claim of the insured was not found to be not genuine, the Insurance Company could not have repudiated the claim merely on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft.

(Para 9)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22C – Constitution of India, Article 226 -- Repudiation of insurance claim – Award by PLA -- Small amount involved – Writ jurisdiction -- Scooter was stolen FIR in this respect was duly registered -- Police authorities not being able to trace the vehicle, submitted an untraced report – Permanent Lok Adalat directed the payment of Rs.43,655/-along with interest on account of theft of a scooter along with Rs.5000/- each for mental agony, harassment and litigation charges -- Keeping in view the petty amount involved, Court did not find it a fit case for interference in exercise of writ jurisdiction.

(Para 3-6)

Consumer Protection Act, 1986 (68 of 1986), Section 2, 21 -- Insurance of hypothecated securities by Bank – Part of hypothecated securities left out from coverage -- Deficiency in service – If the bank had exercised liberty to effect insurance, it was their duty to take out policies covering the entire set of hypothecated assets -- Effecting insurance was not their absolute obligation -- But such obligation they had taken it upon themselves -- Commission was right in holding that the complainant had suffered loss because of inaction and negligence on the part of the Bank -- This constituted deficiency in service -- Any loss arising out of such deficiency was compensable under the provisions of the Consumer Protection Act, 1986.

(Para 14,15)

A. Legal Services Authorities Act, 1987 (39 of 1987), Section 22-C – Theft of vehicle -- Insurance claim – Repudiation of -- Delay in FIR for 24 days – Explanation of – Effect of -- From the very moment of the theft, the appellant/ his driver have been trying hard to get the FIR registered -- They moved the SHO, the DSP, the IG and finally, filed a Criminal Complaint before the Ld. Judicial Magistrate -- If the FIR was not registered promptly and there is inaction on the part of the police officials, the appellant cannot be faulted and penalised for this – Insurance company was also intimated and a Claim Form was submitted to it on the same day – Not the case of the insurance company that there was no theft -- Matter was investigated and finally, an un-traced report was filed – Held, claim of the appellant was wrongly rejected on the ground of delay – Insurance claim allowed with 8% interest from the date of claim application till payment.

(Para 8-16, 18)

B. Legal Services Authorities Act, 1987 (39 of 1987), Section 22-C -- Theft of vehicle -- Negligence of -- Insurance claim – Neither in the FIR nor in the criminal complaint filed by the appellant, was there any averment that the truck had been left unattended with the Ignition Key and the Cabin Key in it -- Merely because in the Claim Form, there is a mention that the Ignition Key and the Cabin Key had been left in the truck cannot lead to an inference of negligence warranting repudiation of the claim -- Insurance claim allowed with 8% interest from the date of claim application till payment.

(Para 17,18)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22C – Theft of insured Vehicle – Insurance claim -- Delayed information to company – Delay in FIR – Effect of -- Delay in intimation of the theft to the insurance company is not sufficient to deny the claim -- Delay in lodging of the FIR by itself will not be material – As investigator/surveyor appointed by the petitioner/Insurance company has specifically concluded genuine case of theft – Value of stolen vehicle Rs. 13 lacs, Rs. 50,000/- for harassment and Rs.5,000/- as cost of litigation awarded by PLA confirmed.

(Para 1, 5-7)

A. Legal Services Authorities Act, 1987 (39 of 1987), Section 22 C -- Insurance claim – Decision on merit – Objection to – Held, PLA is entitled to adjudicate the matter.

(Para 6,8)

B. Legal Services Authorities Act, 1987 (39 of 1987), Section 22 C -- Vehicle insured as private vehicle – Used on hire – Repudiation of claim -- Non-Standard claim – Right of -- Permanent Lok Adalat did not award entire amount as assessed by the surveyor of the Insurance Company – Awarded repair charges on Non-Standard basis with 6% interest from the date of application till realisation alongwith compensation of Rs.15,000 and Rs.10,000 as litigation expenses – Held, Insurance Company, cannot repudiate the claim in toto – Award passed by PLA affirmed. Amalendu Sahoo’s case 2010(2) R.C.R (Civil) 635 (SC) relied.

(Para 4,6,8,9)

Consumer Protection Act, 1986 (68 of 1986), Section 12 -- Theft of vehicle – Delay in informing Insurance company – Effect of -- Insurance Claim – Repudiation of -- When an insured has lodged the FIR immediately after the theft of a vehicle occurred and when the police after investigation have lodged a final report after the vehicle was not traced and when the surveyors/investigators appointed by the insurance company have found the claim of the theft to be genuine, then mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the claim of the insured.

(Para 20)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22C -- Insured Vehicle sold – Insurance policy – Status of – Loss to vehicle – Permanent Lok Adalat held that Insurance Company cannot escape from its liability in view of subsisting insurance policy taken by previous owner – A sum of Rs.62,100/- alongwith interest @ 8% as well as Rs.5500/- for harassment awarded --  Contention that once the policy in question was not transferred after sale of the vehicle, the Insurance Company, cannot be held liable there being no privity of contract between the Insurance Company and the subsequent owner -- Keeping in view the facts and circumstances of the case, especially, amount involved, no ground whatsoever to interfere in the impugned award -- Question involved, kept open, to be decided in appropriate proceedings.

(Para 5-8)

Legal Services Authorities Act, 1987 (39 of 1987), Section 22-C -- Mediclaim policy for 1 year – Waiting period of 24 months -- Insured suffering from diabetes -- Argued that patients with diabetes are at a higher risk for getting infections, phimosis and surgery was carried out due to an acute clinical episode which is merely a complication of the medical condition of diabetes.

--       Held, in case such an argument is accepted, it will inevitably lead to a situation where the claim of a person suffering from diabetes, hypertension etc. can be rejected at the threshold itself as the probability and propensity of such a person, developing certain diseases increases or is more than a person not suffering such a medical condition.

--       There is neither any assertion or evidence on record that insured is guilty of any concealment as far as his diabetic condition nor is he asserted to be suffering from phimosis before the purchase of the policy/Mediclaim.

--       Application u/s 22-C of the Act filed by the insured was allowed by the Permanent Lok Adalat while observing that such a stipulation of a waiting period of 24 months, especially when the term of the mediclaim itself is one year, is illogical and such a clause cannot bind the purchaser of the policy.

Order passed by the Permanent Lok Adalat affirmed.

(Para 4-8)

Consumer Protection Act, 1986 (68 of 1986), Section 12 -- Breach of condition of Insurance policy -- Insurance of vehicle for personal use -- Vehicle given on hire – Accidental occurred -- Non-standard claim – Right of -- Guidelines set-out in Narayan Prasad Appaprasad Pathak’s case (2006) CPJ 144 (NC) followed (Condition of limitation as to use – Pay upto 75% of admissible claim) -- Held, insurance company cannot repudiate the claim in toto – Insurance company is directed to pay a consolidated sum of Rs.2,50,000/- even though compensation claimed is Rs.5,00,000/-.

(Para 14-17)

Insurance Act, 1938 (4 of 1938), Section 39 – Government Savings Certificates Act, 1959 (46 of 1959), Section 6, 7, 8(2) – Indian Succession Act, 1925 (39 of 1925), Section 370 -- National Saving Certificates – Nominee -- Effect on succession -- Language of Section 39 of the Act is not capable of altering the course of succession under law – It is difficult to treat a nominee as being equivalent to an heir or legatee -- Though language and phraseology of Section 6 of the Act is different than the one used in Section 39 of the Insurance Act, yet, the effect of both the provisions is the same -- Any amount paid to the nominee after valid deductions becomes the estate of the deceased -- Such an estate devolves upon all persons who are entitled to succession under law, custom or testament of the deceased holder -- Nominee becoming entitled to the payment of the amount on account of national savings certificates received by him u/s 6 read with Section 7 of the Act who in turn is liable to return the amount to those, in whose favour law creates beneficial interest, subject to the provisions of sub-section (2) of Section 8 of the Act, 1959. Hindu Succession Act, 1956 (30 of 1956), Section 8, 15.

(Para 11, 13)