While clarifying that the complainant is not entitled to benefits under multiple sub-clauses, the national consumer disputes redressal commission (NCDRC) says the consumer has a right to cover his insurance claim under the sub-clause which gives him a higher benefit. NCDRC then enhanced the claim to Rs2.61 lakh from Rs1.50 lakh with 9% interest and directed United India Insurance Co Ltd to pay Rs40,000 as compensation and litigation cost to the complainant.
In an order, the NCDRC bench of Dr Inder Jit Singh (presiding member) says, "...we are of the view that complainant is not entitled to benefits under multiple sub-clauses. As his claim under clause or sub-clause (e) has been accepted, he cannot make an additional claim under subclause (f) due to the exception clause. However, we are of the view that if the complainant is to be given the benefit of only one clause or sub-clause, even though his case is covered under multiple clauses, he has a right to get his claim covered under the subclause which gives him a higher benefit."
"Hence, although we find that he cannot claim benefit under both sub-clauses (e) and (f), but has a right to choose the subclause which gives him the higher benefit. As clause or sub-clause (e) gives him a benefit of Rs1.20 lakh but clause (f) gives him a benefit of Rs2.61 lakh, we are of the view that the insurance company must give him the benefit under (the) subclause with higher monetary benefit," it says.
Hajipur, Bihar-based Rajendra Prasad Rai had filed the revision petition challenging an order passed by the Bihar state consumer disputes redressal commission. In 1991-92, he bought a personal accident policy for Rs2 lakh from United India Insurance by paying Rs10,000 as a premium per year. As per the policy terms, the yearly premium amount was to be added to the sum assured every year.
While the personal accident insurance policy was in service, on 25 May 2005, Mr Rai met with an accident and was admitted to a hospital. He filed a first information report (FIR) and also informed United India Insurance about the accident. On 25 August 2005, he submitted an insurance claim with the insurer.
However, he alleged that, even after submitting all necessary documents, United India Insurance closed the file with 'no claim' remark. When he resubmitted the claim, and sent reminders and a legal notice, the insurance company sent him an intimation asking him to receive Rs1.50 lakh as a full and final settlement.
When Mr Rai protested, United India Insurance told him that since he had opted for table III of the policy, he is not entitled to a claim of more than Rs1.50 lakh. He then asked the insurer to provide information about his proposal form and other details. He was asked to deposit the cost of the documents. After paying the money, he received the details.
While Mr Rai was under the impression that he was paying Rs10,000 premium under table IV, the copy of the form provided to him showed that his option filled up for schedule IV was crossed and, on the paper itself, it was written 'with full cover'.
He then filed a writ petition before the Patna High Court (HC), which asked him to approach the concerned consumer forum. Mr Rai then filed a complaint against United India Insurance before the Hajipur district consumer disputes redressal forum.
While partially allowing the complaint, the district forum directed the insurer to pay Rs1.50 lakh to Mr Rai. Not satisfied with the order, he filed an appeal before the state commission. While partly allowing the appeal, the state commission directed United India Insurance to pay Rs1.50 lakh with 9% interest and Rs15,000 as compensation and litigation cost to Mr Rai.
Still not satisfied with the order, he then approached NCDRC. He claimed his total entitlement under the insurance policy was Rs3.30 lakh, including Rs30,000 as medical benefits.
United India Insurance contended that its offer of Rs1.50 lakh to settle the claim is in order and as per the terms and conditions of the insurance policy. It further submitted that, as per the order by the state commission, it had already paid Rs2.11 lakh to Mr Rai, and thus the insured had forfeited his right to challenge it.
The insurance company also informed that, in 2002, it remodelled the format of individual personal accident policies as a whole for all the policyholders.
After hearing both parties and perusing documents available on record, NCDRC observed that United India Insurance has not given any specific response to Mr Rai about choosing table III, which was the top table in the old policy, covering benefits 1 to 6, along with an extension for medical expenses. However, in the subsequent restructured policy, benefits under 1 to 6 have been put under the newly formed table IV, but the insurer continued to show him under table III under the restructured policy.
Referring to a judgement by the Supreme Court (SC) in Canara Bank vs United Insurance Co, Dr Singh from NCDRC noted that in a commercially sensible manner- coverage clauses should be read broadly, and ambiguity, if any, to be resolved in favour of insured-exclusions is to be read narrowly.
"Even if there is an ambiguity, the Consumer Protection Act being a beneficial legislation, it must be interpreted in favour of the consumer. Hence, we find that Mr Rai is entitled to claim of Rs2.61 lakh under the policy in place of Rs1.20 lakh, along with interest and with medical expenses under extended medical benefits (Rs30,000). Hence, the orders of the state commission and district forum need modification to this extent," he says.
NCDRC asked United India Insurance to make all payments to Mr Rai within two months, failing which it will have to pay an interest of 12% on the total amount.
(Revision Petition No1934 of 2018 Date: 7 August 2023)