NATIONAL CONSUMER DISPUTES REDRESSALCOMMISSION NATIONAL CONSUMER DISPUTES REDRESSALCOMMISSION NEW DELHI REVISION PETITION NO. 2517 of 2005 (From the order dated 22.6.2005 in Appeal No. 1054/2004 of the State Commission, Madhya Pradesh arising out of Order dated 23.4.2004 in Complaint No. 830/2003 of the District Forum, Bhopal, Madhya Pradeshl) Life Insurance Corporation of India, Career Agent Branch, 2nd Floor, Above MPFC Office, 6, Malviya Nagar, Bhopal (M.P.) Petitioner Versus Shri Devi Das Sirsode Janata Shed No.25, Gautam Nagar, Bhopal (M.P.) Respondents A N D REVISION PETITION NO. 2518 of 2005 (From the order dated 22.6.2005 in Appeal No. 105 5/2004 of the State Commission, Madhya Pradesh arising out of Order dated 23.4.2004 in Complaint No.797/2003 of the District Forum, Bhopal, Madhya Pradesh) Life Insurance Corporation of India, Career Agent Branch, 2nd Floor, Above MPFC Office, 6, Malviya Nagar, Bhopal (M.P.) Petitioner Versus Shri Devi Das Sirsode Janata Shed No.25, Gautam Nagar, Bhopal (M.P.) Respondents BEFORE : HONBLE MR. JUSTICE M.B.SHAH, PRESIDENT. DR. P.D. SHENOY, MEMBER. For the Petitioner in : Mr. S.P. Mittal, Both the petitions Advocate DATE : 20th OCTOBER, 2005 O R D E R M.B.SHAH, J.
PRESIDENT.
In
both these Revision Applications question is with regard to interpretation of
clause 10(a) of the Endowment Assurance Policy with Profits
(With Accident Benefit). Complainant
Shri Devi Das Sirsode, took the policy for a sum of Rs.25,000/-
which carried accidental benefit. He had also taken second similar policy for a sum of Rs.50,000/-. Due to an
accident on a railway track, his both legs were amputated from above the knee
joint. His claim for accident benefit
insurance coverage was however, repudiated by the petitioner Life Insurance Corporation of
India (LIC) on the ground that the disability suffered by the Complainant did
not constitute permanent disability as contemplated under Clause 10 of the insurance
policy because till today he was in employment and earning his livelihood. As the amount was not paid, Complainant
approached the District Forum and in both the cases, the District Forum
directed the LIC to pay the amount of accidental benefit as per the terms of
the policy. Against the said judgment and order passed by the District Forum,
the LIC preferred appeals No.1054 of 2004 and 1055 of 2004 before the State
Commission, Madhya Pradesh. The State Commission, after appreciating the
relevant term of the policy dismissed both the appeals by judgment and order
dated 22.6.2005. Against that judgment and order the aforesaid Revision
Petitions are filed.
The relevant part of the Clause 10(a)
which gives benefit to the assured on account of disability is as under:
Accident Benefit: If at any
time when this Policy is in force for the full Sum Assured, the Life Assured,
before the expiry of the period for which the premium is payable or before the
Policy anniversary on which the age nearer birthday of the Life Assured is 65
(whichever is earlier) is involved in an accident resulting in either
permanent disability as hereinafter
defined or death and the same is proved
to the satisfaction of the Corporation, the Corporation agrees in the case of :
(a) Disability
to the Life Assured:- (i) to pay in monthly instalments spread over 10
years an additional sum equal to the Sum Assured under this Policy. If the Policy becomes a claim before the
expiry of the said period of 10 years, the disability benefit instalments which
have not fallen due will be paid along with the claim; (ii) to waive the
payment of future premiums.
.
The disability above referred to must be disability which is the
result of an accident and must be total and permanent and such that there is
neither then nor at any time thereafter any work, occupation or profession
that the Life Assured can ever
sufficiently do or follow to earn
or obtain any wages, compensation or profit.
Accidental injuries which independently of all other causes and
within ninety days from the happening of such accident result in the
irrecoverable loss of the entire sight of both eyes or in the amputation of
both hands at or above the wrists, or in the amputation of both feet at or
above ankles, or in the amputation of one hand at or above the wrist and one
foot at or above the ankle, shall also be deemed to constitute such
disability
The
State Commission interpreted the clause 10(a) of the policy and arrived at a
conclusion that in case of a permanent disability the aforesaid clause is
required to be read in two parts both independent to each other and is required
to be read disjunctively and it divided
the clause as stated above and held that:
(i) The first part relates to disability which
should not only be total and permanent but should be such so as to render the
insured incapable of doing any work, occupation or profession for whole of his
life and (ii) the second part of the definition is illustrative in nature and
provides that in case of accidental
injuries resulting in irrecoverable loss
of entire sight of both the eyes, or in amputation of both the hands at or above wrist, or in amputation of both
feet at or above ankles or in amputation
of one hand at or above wrist and one
foot at or above ankle shall also
be deemed to constitute permanent
disability. The said
part of the clause is very
clear and it says that such disability
constitute to permanent disability. The
State Commission emphasised the words
shall also be used in the
latter part of clause giving meaning to
the word
disability and held that it
makes abundantly clear that
happening of any of these
contingencies would also constitute
disability as envisaged
under the said clause.
In
the above set of circumstances, once the disability under the second
part is permanent, the LIC was unjustified in repudiating the claim. The State Commission also referred to the
decision in the case of Asha Goel vs. vs. LIC
AIR 2001 SC 549 =(2001) 2 SCC 160 wherein the Apex Court cautioned
the officers of the LIC against
mechanical rejection of the claims
of policy holders by observing as under:
In the course
of time the Corporation has grown in size and at present it is one of the
largest public sector financial undertakings.
The public in general and crores of policy holders in particular look
forward to prompt and efficient service from the Corporation. Therefore, the authorities-in-charge of management
of the affairs of the Corporation should bear in mind that its credibility and
reputation depend on its prompt and
efficient service. Therefore the
approach of the Corporation in the matter of repudiation of a policy admittedly issued by it
should be one of extreme care and caution.
It should not be dealt with in a mechanical and routine manner.
In
our view, the aforesaid reasoning and interpretation cannot be said in any way
erroneous. The State Commission rightly
read the clause giving meaning to the word disability by dividing it into two
parts. Firstly, the disability which is the result of an accident should be
total and permanent, such that after the
accident assured cannot do any work,. Occupation or profession to obtain any wages, compensation or
profit. Secondly, if the accidental injuries has resulted
in permanent loss of the limbs as
mentioned therein, then it shall
also be deemed to constitute such disability. Hence, first part deals with the capacity of
the assured to earn livelihood, and the second part deals with the injury to
the limbs as mentioned above. In our view, this is the only reasonable
interpretation of the reading of the said condition of the insurance
policy. May be that it is clumsily
drafted by not providing the condition into two parts. However, it is to be noted that before the
second part it is not provided that in addition to what is provided in the
first part is required to be satisfied.
On the contrary, the second part is a deeming fiction which provides
that injuries to the limb, as mentioned in the said condition, would also
deemed to be constituted such disability.
In
the present case, there is no dispute
that disability was the result of accident. Secondly, it was permanent. The accidental injuries resulted in
irrecoverable loss because of amputation
of both the feet at or above the ankles.
If this is so,
then, if the employer continues the assured in service
on compassionate ground or otherwise, it
would not mean that the assured has not suffered permanent disability as defined under the
clause. In any set of
circumstances, in such a case, such ex
gratia or on compassionate ground, continuing the assured in service by the
employer (may be the Government or other statutory body or private individual) is not for the
benefit of the Insurance Company. The
Insurance Company cannot deprive the assured the benefit under the policy.
Further, in any case if the
terms of the policy are vague, it should be interpreted for the benefit
of the assured as it would serve the
purpose and object of getting insurance coverage. The law on this subject is settled by the Apex Court in
Skandia Insurance Co. Ltd. Vs. Kokilaben
Chandravadan & Ors. (1987) 2 SCC 654, Shashi Gupta vs. LIC of India -(1995) Suppl 1 SCC 754; B.V. Nagaraju vs.
M/s. Oriental Insruance Co. Ltd. (1996) 4 SCC
648; LIC vs. Raj Kumar Rajgarhia & Anr. (1999) 3 SCC 465.
Finally, we observe that it
is necessary for the officers of the LIC
to change their negative approach in dealing with such claim and the
insurance coverage should not be nullified by backward looking interpretation
of the Act. The terms and conditions of
the policy should not be read with a non-benevolent eye which would result in
frustrating the purpose and philosophy of the legislation without being
informed of the true goals sought to be achieved by the LIC Act.
In
this view of the matter, it cannot be said that the order passed by the State Commission confirming the
order of the District Forum, is in any way erroneous. In the result, these revision petitions are
dismissed.
Sd/
…J.
(M.B.SHAH)
PRESIDENT
Sd/
..
(P.D.SHENOY)
MEMBER