Jammu & Kashmir High Court
Oriental Insurance Co. Ltd vs J&K State Consumer Disputes ... on 3 December, 2021
Sr. No. 14
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
OWP No. 273/2019
CM No. 1384/2019 (01/2019)
CM No. 2272/2021
Oriental Insurance Co. Ltd. .....Appellant(s)/Petitioner(s)
Through: Mr. Divyanshu Malhotra, Advocate.
Vs
J&K State Consumer Disputes Redressal ..... Respondent(s)
Commission, Jammu and ors.
Through: Mr. Ashish Sharma, Advocate with
Mr. Munish Kumar Sharma, Advocate.
Coram: HON'BLE MR. JUSTICE DHIRAJ SINGH THAKUR, JUDGE
HON'BLE MR. JUSTICE MOHAN LAL, JUDGE
ORDER
03.12.2021
(OPEN COURT)
Per-Thakur-J
1. The present petition has been filed, challenging the order dated
30.11.2018 passed by the J&K State Consumer Disputes Redressal
Commission, Jammu (hereinafter referred to as the "State Commission"),
whereby the appeal filed by the Insurance Company has been dismissed and
the award passed by the District Consumer Disputes Redressal Forum,
Jammu (hereinafter referred to as the 'District Forum') was upheld.
Briefly stated the material facts are as under:-
2. The Government of Jammu and Kashmir entered into a
Memorandum of Understanding (hereinafter referred to as the "MoU") with
the appellant-Insurance Company for ensuring the employees of the
government under Group Janta Personal Accidental Insurance Scheme for an
amount of Rs. 2.5 lacs each in regard to individual employees. The MoU
envisages the insurance cover, to be provided on yearly basis for a period of
three years upon payment of the premium due at the appropriate time.
3. It appears that the first policy, which came to be issued by the
company expired on 13.06.2012 and the second was issued on 18.07.2012.
There was, thus, some delay between the expiry of previous policy and the
issuance of the new one. Unfortunately, in the interregnum on 06.07.2012,
the insured-Sanjay Kumar (hereinafter referred to as the 'deceased') died
on account of a snake bite. A claim was lodged by the respondents with the
Nodal Officer appointed by the government, who appears to have
communicated the same to the Insurance Company. The claim was not
accepted on account of the fact that the death had occurred during a period
when the insurance policy was not in force.
4. One important fact, which requires to be highlighted is that the
government had deducted Rs. 99/- from the salary Account of the deceased
towards premium for the Group Janta Personal Accidental Insurance Scheme
much before the death of the deceased, which ought to have been deposited
with the Insurance Company well on time with a view to enable it to renew
the policy, which, however, was not done. According to the stand of the
government, which is on record, no specific reasons have been given as to
why the amount of premium even when deducted from the petitioner's
Account and many other similarly situated employees, was not deposited on
time. All that is referred to in the petition is that the amount of premium
deducted could not be deposited on account of unavoidable procedural
delays.
5. In the background of the aforementioned facts, the matter came to
be considered by the District Forum, where the respondents filed a claim
petition, which was allowed by virtue of order dated 23.10.2017. An appeal
preferred by the Insurance Company against the said award also came to be
dismissed by virtue of the impugned judgment and order. Hence, the present
petition.
6. The entire basis for the State Commission for dismissing the appeal
filed by the Insurance Company rests on the MoU executed between the
government of Jammu and Kashmir and the Insurance Company. According
to the State Commission, the MoU was to remain in force w.e.f 2011 to 2014.
According to the agreement, a premium of 3.6 crores had been agreed to be
paid by the government in this behalf over a period of three years. According
to the State Commission, since the Insurance Company had accepted the
premium after the expiry of the first policy after delay of one month and four
days, the acceptance of premium for issuance of the second policy binds the
Insurance Company, which cannot be permitted to raise a plea that the
insurance policy subsequently issued would not cover the death of the
deceased. The State Commission, accordingly, proceeded to allow the claim
besides awarding litigation expenses to the extent of Rs. 5,000/- and
additional compensation of Rs. 5,000/- in favour of the petitioner.
7. Learned counsel for the petitioner-Insurance Company has relied
upon Section 64-VB of the Insurance Act, 1938 (hereinafter referred to as the
"Act") which specifically envisages that no insurer shall assume any risk in
India in respect of any insurance business on which premium is not ordinarily
payable outside India unless and until the premium payable is received by
him or is guaranteed to be paid by such person in such manner and within
such time as may be prescribed or unless and until deposit of such amount as
may be prescribed, is made in advance in the prescribed manner.
8. A perusal of the aforementioned Section indicates that with a view
to cover an individual under an insurance policy, receipt of the premium may
not be always necessary, inasmuch as, the Section also envisages the
coverage of the risk, if the payment even if not received is guaranteed to be
paid by such person within such manner and such time, as may be
prescribed. Unfortunately, neither of the parties have placed on record the
MoU, which was executed between the government and the Insurance
Company, though both the parties have heavily relied upon the said MoU.
Whether the terms and conditions of the MoU contained any clause, which
would cover the risk of the employees notwithstanding the expiry of the
period covered under the policy, is not known. Therefore, it would be difficult
for us to uphold the order passed by the State Commission based upon any
such MoU, terms and conditions whereof were not clearly brought either to
the notice of the District Forum or the State Commission.
9. Be that as it may, in the absence of any such condition in the MoU,
which would enable the extension of the insurance cover beyond the expiry of
the period contained in the policy upon assurance of the government towards
payment of premium for the next policy, it must be presumed that there is no
such condition, in which case, the Insurance Company would be expected to
extend the cover or renew the policy only upon receipt of the actual payment
by the government.
10. Considering the impact of Section 64-VB of the Act and in the
absence of clarity on the terms of the MoU, in our opinion, we cannot hold
the company liable to compensate the official respondents on account of the
death of the said Sanjay Kumar.
11. Be that as it may, notwithstanding the fact that we have held the
company not liable, yet we are informed that the awarded amount to the
tune of Rs. 2,64,976/- is already deposited in the Registry of this Court. We
are of the opinion that the said amount can be released in favour of the
claimants, accordingly, with a liberty to the Insurance Company to recover
the said amount from the government, inasmuch as, in our opinion, the
government had already deducted the amount of premium from the salary
Account of the deceased, yet failed to deposit the same within time with the
Insurance Company.
12. The vague explanation rendered by the government in its reply that
the premium was not deposited on account of unavoidable procedural delays,
in our opinion, is not a satisfactory explanation. While the intention of the
government in extending the benefit of Group Janta Personal Accidental
Insurance Scheme to cover any untoward incident in an employee's life can
be said to be a noble step, yet the government had, in fact, not been diligent
enough to execute that intent with promptitude.
13. Considering the fact that the amount is a meager amount and the
fact that the deceased was an employee of the government and is survived
by a wife and two children, we hope that the government would not resist the
recovery proceedings, which we have authorized the Insurance Company to
initiate in this regard.
14. Be that as it may, the appeal is allowed. The judgment and order
impugned passed by the State Commission is set aside. The awarded
amount be released immediately by the Registrar Judicial of this Court in
favour of the claimants along with interest, which may have accrued on the
amount deposited upon proper verification and identification by the learned
counsel for the respondents.
15. Writ petition is, accordingly, disposed of along with connected
applications.
(Mohan Lal ) (Dhiraj Singh Thakur)
Judge Judge
Jammu
03.12.2021
Ram Krishan
Whether the order is speaking? Yes/No
Whether the order is reportable? Yes/No
