Insurance Company Ltd. Vs. Munimahesh Patel  Insc 580 (12 September 2006)
Pasayat & Lokeshwar Singh Panta
out of SLP (C) No. 19538 of 2004) ARIJIT PASAYAT, J.
calls in question legality of the judgment rendered by the National Consumer
Disputes Redressal Commission, New Delhi (in
short the 'Commission'). The Commission upset the order of the State Commission
and held that the appellant was liable to pay to the respondent (hereinafter
referred to as the 'complainant') a sum of Rs.5 lakhs together with interest @
6% p.a. from the date of the complaint.
position in a nutshell is essentially as follows:
Devi Patel wife of the complainant had obtained a Janata Personal Accident Policy
for a sum of Rs.5 lakh in August, 1998, for which a premium was paid and
accepted and the policy was issued. The insured died on account of an accident
by way of falling into a well and drowning. FIR was lodged, autopsy was
performed and appellant was informed. Various documents were also furnished
claiming payment in spite of the policy. When the appellantCompany did not
settle the claim, a complaint came to be filed before the Madhya Pradesh State
Consumer Redressal Commission, Bhopal (in short 'the State Commission')
alleging deficiency in service on the part of the appellant. State Commission
after hearing the parties dismissed the complaint leaving the complainant to
take appropriate proceeding for establishing his claim and for seeking the reliefs
in the court of competent jurisdiction.
by this order, appeal was filed before the Commission.
hearing the parties, the Commission passed order dated 2.5.2002 allowing the
complaint and setting aside the order of the State Commission. Since this order
had been passed ex-parte against respondent, on an application moved by the
respondent the earlier order was recalled and both the parties were given
opportunity to present their case. It directed payment of the amount as noted
accepted that there was no dispute regarding genuineness of the policy. But it
noted that there was dispute about disclosure made in the proposal form and the
information given. It accepted that she was not employed as stated in the
proposal form. Commission did not consider it necessary to go into that
question and held that though there may have been some information given which
has no relation with the actual state of affairs, yet the factum of the
accident resulting in death and policy was not in dispute and, therefore, the
claim of the complainant was to be allowed.
support of the appeal, learned counsel for the appellant submitted that the
principle of good faith which is inherent in insurance was not there. The
complainant was guilty of making false statement in the proposal form.
counsel for the appellant has brought on record a copy of the proposal form in
which it is mentioned that the respondent's wife i.e. the insured was a
teacher. This is at variance with the actual copy of another form has also been
produced and shows that the respondent accepted that she was a house wife. The
State Commission, therefore, dismissed the appeal in view of the disputed
factual position and directed the complainant-respondent to seek remedy, if
any, available in any other appropriate forum. Learned counsel for the
appellant further submitted that when there is suppression of material fact
which is relevant to the coverage of policy, the respondent was not entitled to
any relief and the Commission had accepted that she was not a teacher. He,
therefore, contended that the respondent was not entitled to any relief.
counsel for the respondent on the other hand submitted that no interference is
called with the decision of the Commission. He also stated that no such
proposal form as claimed by the appellant was submitted.
Commission noted that the specific stand of the appellant was that there was mis-declaration
in the proposal form and the false claim that the respondent's wife was a teacher
which as now appears is not the correct position. It also accepted that she was
really not a teacher.
before the Commission are essentially summary in nature and adjudication of
issues which involve disputed factual questions should not be adjudicated. It
is to be noted that Commission accepted that insured was not a teacher.
Complainant raised dispute about genuineness of the documents (i.e. proposal
forms) produced by the appellant.
Commission having accepted that there was wrong declaration of the nature of
occupation of the person insured, should not have granted the relief in the
nature of the proceedings before the Commission as noted above, are essentially
in summary nature. The factual position was required to be established by
was required to examine whether in view of the disputed facts it would exercise
the jurisdiction. The State Commission was right in its view that the complex
factual position requires that the matter should be examined by an appropriate
Court of Law and not by the Commission.
being the position, the Commission was not justified to deal with the matter in
the manner as was done.
view, the directions of the State Commission were more appropriate keeping in
line with the nature of dispute.
the appeal is allowed but with no order as to costs.