CONSUMER DISPUTES REDRESSAL COMMISSION

MAHARASHTRA STATE, MUMBAI



FIRST APPEAL NO.446, 447 & 448 OF 2007 Date of filing : 17/04/2007

IN CONSUMER COMPLAINT NO.348, 349 & 350/2005

DISTRICT CONSUMER FORUM, KOLHAPUR

@ MISC.APPLICATION NOS.626 TO 631/2007 Date of order : 18/03/2009



The Divisional Manager

National Insurance Co.

Kolhapur Divisional office

Commercial Complex

205-B, E ward, New Shahupuri

Kolhapur 416 001 ………..Appellant/org.O.P.

v/s.

1. The Ajra Urban Co-op. Bank Ltd.(In A/446/2007)

Employees Credit Society Ltd.

Main Road, Ajra, Taluka Ajra

District Kolhapur

2. The Ajra Urban Co-op. Bank Ltd.(In A/447/2007)

Employees Credit Society Ltd.

Main Road, Ajra, Taluka Ajra

District Kolhapur

3. Janata Sahakari Bank Ltd. (In A/448/2007)

Main Road, Ajra, Taluka Ajra

Dist.Kolhapur ………Respondents/org.complainants



Corum: Justice Mr.B.B.Vagyani, Hon’ble President

Mr.S.R.Khanzode, Hon’ble Judicial Member

Present : Mr.N.G.Ghotekar -Advocate for the appellant

Mr.G.N.Mahat-Advocate for the Respondents.

O R D E R



Per Justice Mr.B.B.Vagyani, Hon’ble President

1. Heard Mr.N.G.Ghotekar-Advocate for the appellant /National Insurance Co. Ltd. and Mr.G.N.Mahat-Advocate for the respondent bank.

2. In appeal no.446/2007 there is delay of 57 days in filing the appeal. In appeal nos.447/2007 & 448/2007 there is delay of 4 days in filing the appeals. Appellant has filed separate applications for condonation of delay. Delay is satisfactorily explained. Delay is not deliberate of intentional. Law point is involved in all the three matters. We are therefore inclined to condone the delay. Accordingly delay is condoned. Misc. Applications for condonation of delay stand allowed. Law point involved in these three appeals is identical. Therefore we propose to dispose of these three appeals by common order.

3. In consumer complaint no.348/2005, Janata Group Accident Insurance policy was taken in the year 1998 and was to expire on 7/12/2008. Insurance Co. unilaterally terminated the policy by notice dated 12/7/2005. Insurance Co. returned Rs.12,107/- to the bank.

4. In consumer complaint no.349/2005, Janata Group Accident Insurance policy was taken in the year 1998 and was to expire on 5/3/2011. Insurance Co. unilaterally terminated the policy on 12/7/2005 and returned Rs.3,37,655/- to the bank.

5. In consumer complaint no.350/2005, Janata Group Accident policy was taken in 1998 and was to expire on 14/3/2011. Insurance Co. unilaterally terminated the policy by letter dated 12/7/2005 and returned Rs.2,36,485/- to the bank.

6. Feeling aggrieved by the unilateral termination without any valid reason of Janata Group Accident policy, the banks filed consumer complaint.

7. Consumer complaints were opposed by the Insurance Co. Insurance Co. has taken a stand that as per clause of the contract, the policies are terminated unilaterally.

8. District Consumer Forum however did not accept the defence raised by the Insurance Co. District Consumer Forum relied upon decision of Hon’ble Bombay High Court, Bench at Nagpur in the case of Western Coalfields Ltd. and others V/s. New India Assurance Co. Ltd. 2006(1) Maharashra Law Journal 244. Reliance on the decision of Hon’ble Bombay High Court, Bench at Nagpur in the case of Western Coalfields Ltd. and others V/s. New India Assurance Co. Ltd. is erroneous.

9. District Consumer Forum did not consider the decision of Full Bench of Supreme Court in the case of General Assurance Society Ltd. V/s. Chandumull Jain and another reported in 1966 AIR 1644 : 1966 SCR (3) 500. It is observed by the Supreme Court that a contract of insurance is a species of commercial transactions. Documents like proposal, cover note and the policy are commercial documents and to interpret them commercial habits and practice cannot altogether be ignored. Condition of cancellation is incorporated in the insurance contract, which reads as under:-

“5. The Company may at any time by notice in writing terminate this Policy provided that the company shall in that case return to the Insured the then last premium in respect of such persons in respect of whom no claim has arisen, less pro-data part thereof for the portion of the current Insurance period which shall have expired. Such notice shall be deemed sufficiently given if posted addressed to the Insured at the address last registered in the Company books and shall be deemed to have been received by the Insured at the time when the same would be delivered in the ordinary course of post.”

10. Clause no.5 of the Insurance contract gives right of termination to the Insurance Co. Supreme Court observed that there is nothing wrong including such a condition for the cancellation of insurance contract. Supreme Court observed that clause of cancellation is common term in the policy and must therefore be accepted as reasonable and that the right to terminate at will cannot, by reason of the circumstances, be read as a right to terminate for a reasonable cause. Because of well settled legal position, we hold that award passed by the District Consumer Forum is contrary to the well settled legal position.

11. Learned Advocate Mr.Mahat argued that the notice in writing terminating the policy was not given by the Insurance Co. Factual position is quite different. In para 1 of the complaint, reference of termination of contract by notice is made clear. Notice of termination is also placed on record. It is material to note that amount due to the bank was already returned to the bank. Under the circumstances, we hold that the procedure for termination of the policy is strictly followed by the Insurance Co. In the result, we pass following order:-







ORDER

1. Misc. Applications for condonation of delay stands allowed.

2. Appeal nos.446, 447 & 448/2007 are allowed.

3. Impugned awards passed in consumer complaint nos.348/2005, 349/2005 & 350/2005 are hereby quashed and set aside.

4. Consumer complaints stand dismissed.

5. Misc.applications for stay stands disposed of.

6. No order as to cost.

7. Copies of the order be furnished to the parties.





(S.R.Khanzode) (B.B.Vagyani)

Judicial Member President