AVM J. RAJENDRA, AVSM, VSM (RETD.), MEMBER

1.      The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 03.06.2019 passed by the learned State Consumer Disputes Redressal Commission, Raipur, Chhattisgarh (hereinafter to be referred to as “the State Commission”), in Consumer Complaint No. 8 of 2019, wherein the Complaint filed by the Complainant (Appellant herein) was dismissed.

2.      There was a delay of 14 days in filing the Appeal No. 1740 of 2019 by the Appellant. For the reasons stated in the Application of condonation of delay, the delay is condoned.

3.      For the sake of Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. “Smt. Sadhna Agrawal” is identified as the Complainant who is wife of the insured policy holder Late Shri Pradeep Kumar Agrawal (since deceased). “United India Insurance Co. Ltd." is referred to as the Opposite Party/Insurer (OP in short) in this matter.

4.      Brief relevant facts of the case are that the Complainant's late husband, Shri PK Agrawal, was issued a Group Personal Accident Policy No. 27030042100500000022 through the Departmental Officers’ Association upon his retirement from the post of AGM in Coke Zone Project at Bhilai Steel Plant. The policy, issued by the OP, covered all risks and illnesses and was effective from 01.06.2010 to 31.05.2022 for a sum assured of Rs.20,00,000/-. On 09.07.2016, during a marriage ceremony in the family at Raipur, the husband of the Complainant drove his vehicle Registration No. CG-07-ZD-4117 from Avanti Vihar to Hotel Sheetal and an Innova Car (Registration No. CG-04-DN-7520) driven allegedly negligently and recklessly by its driver collided with his vehicle. This collision resulted in severe injuries to the Complainant's husband and substantial damage to the vehicle. Shri PK Agarwal was taken to Ramkrishna Care Hospital where he received treatment for over a month and, unfortunately, he died on 12.08.2016 due to the injuries sustained in the said accident. An FIR was filed against the driver of the Innova (Crime No. 193/16), and no charges were averred against the Complainant's husband.

5.      The total hospital expenditures were Rs.8,44,904/-. Thereafter, the Complainant filed the insurance claim with the OP. It was initially assured by the OP for prompt settlement. However, it was alleged that on 10.04.2017, the OP informed the Officers’ Association Bhilai that the insured, with Membership No. 507, did not possess a valid driving license at the time of the accident on 09.07.2016. Thus, citing breach of policy condition 5(e) as the reason, the claim was repudiated.

6.      Being aggrieved by the repudiation of claim and deficiency in service on the part of the OP/Insurer, the Complainant filed Consumer Complaint (No. 8 of 2019) before the learned State Commission and sought Rs.21,00,000/- along with the interest towards entire claim; Rs.1,00,000/- towards the relief of mental, physical and financial pain. It was specifically stated that the Complainant's husband had a valid driving license till 02.02.2015, and there was no violation of terms and conditions of the policy.

7.      The OP/Insurer denied the claim, stating that the complaint is not maintainable due to non-joinder of parties. Further, the Driving License of Shri PK Agrawal was valid up to 02.02.2015. The Driving License was not renewed as per Section 3 of the Motor Vehicle Act after attaining the age of 66 years. Thus, as on the date of accident on 09.07.2016 he had no valid Driving License. Hence, his act of driving without license is as an offence punishable under section 181 of the Motor Vehicle Act and the claim of the Complainant was repudiated as per the terms and conditions of the policy. Therefore, the complaint of the Complainant deserves to be dismissed.

8.      The State Commission upon due consideration of the matter and the facts and the circumstances of the case dismissed the complaint with following observation: -

“22.  Thus, the deceased Pradeep Kumar Aggarwal did not have a valid and effective driving license on accident date 09.07.2016 and only by the complainant making a plea that this is a group personal accident policy not a motor insurance policy. Therefore, the existence of driver’s license is not a relevant fact for resolving the case, does not release the deceased Pradeep Kumar Aggarwal from driving license. The deceased Pradeep Kumar Aggarwal was himself driving the car No. CG 07 ZD 4117 and met with an accident while driving license is mandatory for driving in public place and since, the vehicle was being run without a driving license. This is a violation of the Motor Vehicles Act which is under paragraph 5(e) of the exclusion of the policy. According to which if the death of an insured member was caused by a violation of any law, the insurance company would not be liable to pay the amount of any damage claim. Insurance in an Agreement and its terms and conditions are binding on both the parties. Terms and conditions of the insurance policy have been violated by the deceased Pradeep Kumar Aggarwal. Therefore, the Complainant is not entitled to get any relief under the insurance policy.

          (Extracted from Translation copy)

9.      Being aggrieved by the impugned order of the State Commission, the Complainant (Appellant herein) has filed this present Appeal no. 1740 of 2019 with the following prayer:

“It is, therefore, most respectfully prayed to this Hon'ble Commission that the appeal of the appellant may kindly be allowed and order passed by state commission may be dismissed and the relief claimed by the complainant in complaint may be granted in the interest of justice.”

10.     In this Appeal, the Appellant mainly raised three issues. Firstly, the State Commission overlooked the fact that the Complainant's husband's death resulted from the negligent driving of another vehicle. This critical detail was not considered, leading to the dismissal of the case. Secondly, the insurance policy was a group accident benefit policy, and her husband's death was accidental, making the OP's repudiation of the claim unwarranted. Lastly, the learned State Commission failed to acknowledge that the complainant held a valid driving license and was not disqualified from driving and the aspect of contributory negligence should have been recognized.

11.    Upon notice on the memo of Appeal, the Respondent / OP has not filed any reply or objections and relied on the pleadings made before the learned State Commission placed on record.

12.    The learned counsel for the Appellant/Complainant reiterated the grounds of appeal and fervently argued that the insurance company's repudiation of a valid claim was erroneous. The Complainant's husband possessed a valid driving license and had no driving disqualifications. The State Commission failed to acknowledge the significance of not entirely rejecting the Complainant's claim. Her husband's death was due to negligent driving of another vehicle. Dismissing the claim is untenable.

13.    The learned Counsel for the Respondent/OP reiterated the fact of their written version and affidavit of evidence filed before the State Commission. He painstakingly argued that the act of deceased fell under the purview of section 181 of the Motor Vehicle Act, indicating a deliberate violation/ breach of the law with criminal intent. This intentional breach is the basis for the inadmissibility of the claim under the exclusion clause of the insurance. He cited the precedent of this Commission in Sharda Bai vs. Manager, Liberty Videocon General Insurance Co. Ltd. (RP/2086/2016), decided on 03.03.2017 that: -

“Since the deceased did not possessed valid and effective license on the date on the date he met with an accident, it is not in dispute that driving a vehicle without a valid driving license constituted a breach of terms of the Group Insurance Policy taken by the bank.”  

14.    The learned counsel further contended that both the Complaint and the Appeal are not maintainable, and they are liable to be dismissed owing to the absence of a necessary and essential party. The policy in question was acquired by the Officer Association of Bhilai Steel Plant under the deceased's name. Consequently, the inclusion of the Officers Association of Bhilai Steel Plant as a party to the Complaint is imperative, as it is the insured and a crucial entity in this matter.

15.    He also placed reliance upon the following judgments: -

(i) Bahubali Traders (P) Ltd. Vs Cholamandalam MS General Insurance Co. Ltd. And Ors (CC No. 98 of 2009), decided on 16.01.2019.

(ii) Narinder Singh Vs. New India Assurance Company Ltd. (CA No. 8463 of 2014), decided on 04.09.2014.

16.    We have examined the pleadings and written submissions on record, the citations relied upon and rendered thoughtful consideration to the arguments advanced by both the parties.  The primary issue and objection raised by the Appellant/ Complainant pertain to the Respondent/OP decision to repudiate the claim on the ground that the deceased, who was the policyholder, did not possess a valid driving license at the time of the accident on 09.07.2016. The Appellant contended that the repudiation was unjustified, as the death of the husband of the Complainant occurred due to the negligent driving of another vehicle. The deceased had held a valid driving license and was not disqualified from driving, which the Respondent failed to consider. The Appellant maintains that the claim should not have been rejected, as the circumstances of the incident indicate the involvement of negligent driving by a third party. On the contrary, the stand of the Respondent/OP revolve around the assertion that the Complainant's claim was rightly repudiated due to a breach of the law with criminal intent and the case fell under specific exclusion clause of the insurance policy. The deceased's deliberate violation of the law by driving without a valid license constituted criminal intent, rendering the claim inadmissible as per the terms of the insurance agreement.

17.    It is an admitted position that the Respondent issued the subject Insurance Policy vide Group Insurance Policy reference No. UIN No. IRDA/NL-HLT/UII/P-P/V.1/378/13-14, titled Personal Accident Policy (Group). Para 2 of the said policy, inter alia, lays down that subject to the terms, provisions, exclusions, definitions and conditions contained in the said policy, if any of the insured persons sustain any bodily injury resulting solely and directly from accident caused by external violent and visible means, and if such injury shall within twelve calendar months of its occurrence be the sole and direct cause to the death of the insured persons, the company shall pay to the insured or his legal personal representative(s) as the case may be the sum or sums set forth in respect of any of the insured persons specified in the schedule.

18.    It is the contention of the Respondent that the deceased Shri Pradeep Kumar Agarwal, while driving car on 09.07.2016, was not in possession of a valid license, as his DL had expired on 02.02.2015, and that his act in driving the vehicle was in violation of the provisions of the MV Act, 1988. Thus, it is contended by the Respondent that the said circumstances fall under Exclusion Clause 4(e) of the policy, which reads as under:

4. EXCEPTIONS

PROVIDED ALWAYS THAT

The company shall not be liable under this policy for:

1. To (d)….xxx…

(e) Payment of compensation in respect of death, injury or disablement of insured person (a) ..xx.. (b)..xx..(c)..xx.. (d)..xx..

(e) ……”arising or resulting from the insured committing any breach of the law with criminal intent”.

(Emphasis supplied)

19.    It is for determination whether this clause, that the Company shall not be liable under the policy for payment of compensation in respect of death, injury or disablement of insured person ‘arising or resulting from the insured committing any breach of the law with criminal intent’, absolves the Respondents from their liability under the said Policy, because, at the time of accident resulting in the death of Shri PK Agarwal while he was driving the car, was not in possession of a valid driving license?  

20.    In catena of judgements, the nature of insurance contracts, scope and restraint to be exercised in interpreting the terms of the insurance contracts are well discussed and crystallized by this Commission as well as Hon’ble Supreme Court. In Civil Appeal No. 4769 of 2022 titled National Insurance Company Ltd Vs The Chief Electoral Officer & Ors, Hon’ble Supreme Court has held as follows:

27. The insurance contracts are in the nature of special class of contracts having distinctive features such as utmost good faith, insurable interest, indemnity subrogation, contribution and proximate cause which are common to all types of insurances. Each class of insurance also has individual features of its own. The law governing insurance contracts is thus to be studied in three parts, namely, (1) general characteristics of insurance contracts, as contracts; (2) special characteristics of insurance contracts, as contracts of insurance, and (3) individual characteristics of each class of insurance.

28.  Now turning to some of the judicial pronouncements, wherein it has been opined that the words used in a contract of insurance must be given paramount importance and it is not open for the Court to add, delete or substitute any words (Suraj Mal Ram Niwas Oil Mills (P) Ltd. vs. United India Insurance Co. Ltd.). Insurance contracts are in the nature where exceptions cannot be made on ground of equity and the Courts ought not to interfere with the terms of an insurance agreement (Export Credit Guarantee Corporation of India Limited vs. Garg Sons International).

29.      This Court in Vikram Greentech India Ltd. v. New India Assurance Co. Ltd. reiterated that the insured cannot claim anything more than what is covered by the insurance policy. The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely. The clauses of an insurance policy have to be read as they are. Consequently, the terms of the insurance policy, that fix the responsibility of the insurance company must also be read strictly.

30. In several other judgements, this court has held that the insurance contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.

(Emphasis supplied)

21.    It is to be noted at this juncture that the term 'accident' is not defined under the Insurance Act, 1938. Further, the said Act enables the insurance company to issue different kinds of policies. There is no dispute that the present ‘Personal Accident Insurance Policy (Group)’ is one amongst such approved insurance policies. It is common knowledge that insurance policies are social welfare measures, and the Insurance Act is welfare legislation.

22.    As brought out by Hon’ble Supreme Court in National Insurance Company Ltd Vs The Chief Electoral Officer & Ors (Supra), each class of insurance contract/policy has individual features of its own. While interpreting various clauses and determining rights and liabilities of both the parties, both the general and special characteristics of insurance contracts, as also the individual characteristics of each class of insurance are to be seen meticulously.

23.    It is common knowledge that various kinds of insurance products are available in the market. It is not out of place to mention that the three judgements submitted by the Respondent along with the Written Submissions themselves are arising out of disputes concerning three distinct types of insurance policies. Out of these three judgements relied upon by the Respondent, the Judgement of this Commission in Sharda Bai Vs Manager, Liberty Videocon General Insurance Co. Ltd (RP No.2086 of 2016) decided on 03.03.2017 pertains to a Group Insurance Policy. The case of Bahubali Traders (P) Ltd. Vs Cholamandalam MS General Insurance Co. Ltd and Ors (CC No.98 of 2009) decided on 16.01.2019 pertains to general (Fire & Special Perils) insurance (of stock in trade), and the judgement of Hon’ble Supreme Court in the case of Narinder Singh Vs New India Assurance Company Ltd (Civil Appeal No.8463 of 2014) decided on 04.09.2014 pertains to Motor Vehicle insurance policy.

24.    It is common knowledge that the bundled motor vehicle insurance policies typically contain a Section, ‘Personal Accident Cover for the Owner-Driver’. The conditions for such cover include, inter alia, terms in following wordings:

“This cover is subject to:

1. The owner-driver is the registered owner of the vehicle insured herein;
2. The owner-driver is the insured named in this policy;
3. The owner-driver holds an effective driving license, in accordance with the provisions of Rule 3 of the Central Motor Vehicles Rules, 1989, at the time of the accident.”                                 (emphasis supplied)

25.    The liability of an insurer in case of death or disablement of a owner-driver under the personal accident cover for the owner-driver, when such terms state that the owner-driver should be holding an effective driving license at the time of the accident are present in an insurance policy, is well settled. This Commission in RP No. 3266 of 2008 (Bajaj Allianz general Insurance Co. Ltd and Anr Vs. R Suguna, decided on 16/09.2013, which had the said clauses in a motor vehicle insurance policy, held that:

5. It is admitted case of the parties that complainant husband obtained policy from OP with personal accident coverage of Rs.1,00,000/-. It is also not disputed that on the date of accident i.e. 9.3.2007, insured was not possessing valid driving license as it had already expired on 5.11.2005.

6. Now, the main question to be decided in this case is as to whether; deceased was entitled to personal accident coverage in spite of not holding valid driving license on the date of accident.

7.   Section 3 of the package policy reveals that in case of death of owner-driver of the vehicle in direct connection with the vehicle insured, etc., he was entitled to 100% compensation. The proviso 1 of Section 3 runs as under: This cover is subject to: (a) The owner-driver is the registered owner of the vehicle insured herein; (b) The owner-driver is the insured named in this policy; (c) The owner-driver holds an effective driving license, in accordance with the provisions of Rule 3 of the Central Motor Vehicles Rules, 1989, at the time of the accident. This proviso makes it very clear that owner-driver means, he must be registered owner of the vehicle and his name must be shown as insured in the policy and further, owner-driver must hold effective driving license at the time of accident.

8. Driver has been defined in the package policy as under: DRIVER: Any person including the insured Provided that a person driving holds an effective driving license at the time of the accident and is not disqualified from holding or obtaining such a license. Provided also that the person holding an effective Learner’s license may also drive the vehicle and that such a person satisfies the requirements of Rule 3 of the Central Motor Vehicles Rules, 1989

9.  Thus, it becomes clear that insured will be treated as driver only when he holds effective driving license at the time of accident and is not disqualified from holding or obtaining such a license. Thus, it becomes clear that insured should not have only hold valid driving license at the time of accident, but should also not have been disqualified from holding driving license. Learned District Forum allowed complaint on the basis that deceased was not disqualified from holding or obtaining license which is apparently not proper interpretation of the word driver

10.  Learned State Commission observed that if accident is not on account of negligence of the insured, insurance company cannot repudiate liability whether insured had license or not. Apparently, this observation is not in accordance with law. In the case in hand, complainant is claiming personal accident benefits under the package policy which are admissible only when insured was possessing valid driving license at the time of accident. As insured was not possessing valid driving license at the time of accident, petitioner has not committed any deficiency in repudiating claim and learned State Commission has committed error in dismissing appeal and complaint is liable to be dismissed.

11. Consequently, revision petition filed by the petitioner is allowed and impugned order date 7.7.2008 passed by learned State Commission in Appeal No. 1235 of 2008 M/s. Bajaj Allianz General Ins. Co. Ltd. Vs. Smt. R. Suguna is set aside and complaint stands dismissed. There shall be no order as to costs.

26.    Now, the moot question is, in its absence, whether the said standard condition which is otherwise explicitly stated in motor vehicle insurance policies, viz., “The owner-driver holds an effective driving license, in accordance with the provisions of Rule 3 of the Central Motor Vehicles Rules, 1989, at the time of the accident”, is to be read into the policy in question, in interpreting the exception that “the company shall not be liable under this policy for payment of compensation in respect of death, injury or disablement of insured person arising or resulting from the insured committing any breach of the law with criminal intent”?

27.    The underlying legal principles in the application of the contra proferentem rule in interpreting and analyzing clauses in Insurance Contracts are well established. Hon’ble Supreme Court, in Civil Appeal No. 4130/2020, (Haris Marine Products Vs Export Credit Guarantee Corporation (ECGC) Limited, held:

“B. Rule of contra proferentem

16. It is entrenched in our jurisprudence that an ambiguous term in an insurance contract is to be construed harmoniously by reading the contract in its entirety. If after that, no clarity emerges, then the term must be interpreted in favour of the insured, i.e., against the drafter of the policy. In deciding the applicability of a cover note on houses swept away by floods, a Constitution Bench of this Court in General Assurance Society Ltd. v. Chandumull Jain held as follows:

“In other respects there is no difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberrima fides i.e., good faith on the part of the assured and the contract is likely to be construed contra proferentem that is against the company in case of ambiguity or doubt… (I)n interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves”. (emphasis supplied)

While the court ultimately denied insurer’s liability, it laid down the manner in which ambiguities were to be interpreted. Since then, a catena of judgments has upheld this approach. In United India Insurance Co. Ltd. v. Pushpalaya Printers, a Division Bench of this Court was confronted with interpreting the term ‘impact’ in an insurance policy for protection against damage caused to the insured building. Interpreting the term to include damage caused by strong vibrations by heavy vehicles without ‘direct’ impact, this Court held:

“The only point that arises for consideration is whether the word “impact” contained in clause 5 of the insurance policy covers the damage caused to the building and machinery due to driving of the bulldozer on the road close to the building… (I)t is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations, one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event… Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer”.

(Emphasis supplied)

Similarly, in Sushilaben Indravadan Gandhi Vs New India Assurance Company Ltd., this Court charted the evolution of the rule of contra proferentem, and relied inter alia on its explanation as provided under Halsbury's Laws of England:

“Contra proferentem rule.—Where there is ambiguity in the policy the court will apply the contra proferentem rule. Where a policy is produced by the insurers, it is their business to see that precision and clarity are attained and, if they fail to do so, the ambiguity will be resolved by adopting the construction favourable to the insured. Similarly, as regards language which emanates from the insured, such as the language used in answer to questions in the proposal or in a slip, a construction favourable to the insurers will prevail if the insured has created any ambiguity. This rule, however, only becomes operative where the words are truly ambiguous; it is a rule for resolving ambiguity and it cannot be invoked with a view to creating a doubt. Therefore, where the words used are free from ambiguity in the sense that, fairly and reasonably construed, they admit of only one meaning, the rule has no application.” The rule of contra proferentem thus protects the insured from the vagaries of an unfavourable interpretation of an ambiguous term to which it did not agree. The rule assumes special significance in standard form insurance policies, called contract d’ adhesion or boilerplate contracts, in which the insured has little to no countervailing bargaining power.”

28.    The critical aspect to be noted in the case is non-existence of the said specific condition in the present accident coverage policy, concerning holding of an effective driving license as a necessary condition for payment of claim, which is otherwise, well-known to be widely used by Insurance Companies in motor vehicle insurance policies. Thus, when such specific condition is absent in a particular insurance product/policy, the same cannot be straightaway read into the contract in line with the  principles of interpretation of insurance contracts, as discussed in the judgements of Hon’ble Supreme Court supra. It is known that insurance companies offer different schemes and types of insurance products to people with specific contract/policy terms for each scheme. In the present case, it is undisputed that the death of Shri PK Agarwal was due to the said road accident on 09.06.2016. It is also undisputed that he did not have a valid driving license when the accident happened. It is thus important to determine whether the said death was due to committing “breach of law with criminal intent” or an accident associated with breach of law. As regards the meaning/ definition of the term ‘Accident’ in the context of an insurance claim, citing from precedents and other authorities, Hon’ble Supreme Court, in CA No. 3413 of 2019 (Smt Alka Shukla Vs Life Insurance Corporation of India) held:

7.        The policy of insurance indicates that a claim on account of the accident benefit is payable only if the following conditions are satisfied: (i) the assured sustained bodily injuries resulting solely and directly from an accident; (ii) the accident was caused by “outward, violent and visible means”; and (iii) that such injury “solely and directly and independently of other causes” results in the death of the assured. These conditions are cumulative. The terms “bodily injury” and “outward, violent and visible means” have not been defined in the policy. In Union of India v Sunil Kumar Ghosh, this Court dealt with the expression ‘accident’ and held thus:

“13…An accident is an occurrence or an event which is unforeseen and startles one when it takes place but does not startle one when it does not take place. It is the happening of the unexpected, not the happening of the expected, which is called an accident. In other words an event or occurrence the happening of which is ordinarily expected in the normal course by almost everyone undertaking a rail journey cannot be called an “accident”. But the happening of something which is not inherent in the normal course of events, and which is not ordinarily expected to happen or occur, is called a mishap or an accident.” 

P Ramanatha Aiyar’s Law Lexicon, defines the expression ‘accident’ as:

“an event that takes place without one’s foresight or expectation; and event that proceeds from an unknown cause, or is an unusual effect of a known cause, and therefore not expected, chance, causality, contingency.” 

The expression ‘accident’ in the context of an accident insurance policy has been explained in MacGillivray on Insurance Law:

“In the context of an accidental insurance policy the word is usually contained in phrases such as “injury by accident”, “accidental injury”, “injury caused by or resulting from an accident” or “injury caused by accidental means” and in each of these phrases it has the connotation of an unexpected occurrence outside the normal course of events.” 

29.    It is also necessary to understand the term ‘intention’ as applied in criminal law. Hon’ble Supreme Court, in Criminal Appeal No. 2043 of 2023 (Anbazhagan Vs The State represented by The Inspector of Police), while explaining the term ‘intention’ as applied in criminal law, held:

“28. …..XXX… Intention requires something more than a mere foresight of the consequences. It requires a purposeful doing of a thing to achieve a particular end. This we may make it clear by referring to two passages from leading text-books on the subject. Kenny in his Outlines of Criminal Law, Seventeenth Edition at page 31 has observed:-

“To intend is to have in mind a fixed purpose to reach a desired objective; the noun ‘intention’ in the present connection is used to denote the state of mind of a man who not only foresees but also desires the possible consequences of his conduct…….. It will be noted that there cannot be intention unless there is also foresight, since a man must decide to his own satisfaction, and accordingly must foresee, that to which his express purpose is directed……… Again, a man cannot intend to do a thing unless he desires to do it.”

(Emphasis supplied)

29. Russell on Crime, Twelfth Edition, 1st Volume at page 41 has observed:-

“In the present analysis of the mental element in crime the word “intention” is used to denote the mental attitude of a man who has resolved to bring about a certain result if he can possibly do so. He shapes his line of conduct so as to achieve a particular end at which he aims………… Differing from intention, yet closely resembling it, there are two other attitudes of mind, either of which is sufficient to attract legal sanctions for harm resulting from action taken in obedience to its stimulus, but both of which can be denoted by the word “recklessness”. In each of these the man adopts a line of conduct with the intention of thereby attaining an end which he does desire, but at the same time realises that this conduct may also produce another result which he does not desire. In this case he acts with full knowledge that he is taking the chance that this secondary result will follow. Here, again, if this secondary result is one forbidden by law, then he will be criminally responsible for it if it occurs. His precise mental attitude will be one of two kinds-(a) he would prefer that the harmful result should not occur, or (b) he is indifferent as to whether it does or does not occur.”

(Emphasis supplied)

30.    In the present case, it cannot be said that the deceased Shri PK Agarwal intended his death to arise or result from his committing of alleged breach of law, i.e., not holding a driving license at the time of driving the car. We are conscious that driving a vehicle without a license is liable for criminal prosecution under Section 181 read with Section 3 of the Motor Vehicle Act. But it would be totally a different subject, which is to be dealt with separately in the criminal adjudication wherein, after due process of law, if he is found guilty, he would have been punished. However, in this particular case, as he died, there was no scope/ possibility of criminal prosecution.

31.    As brought out above, had there been a specific clause in the present policy that ‘not holding a valid license by the insured at the time of accident’ would be a ground for repudiating the claim, it would definitely have been a good ground of defence for the Respondent. It is pertinent to note that one of the judgements cited by Respondent - Sharda Bai Vs Manager, Liberty Videocon General Insurance Co. Ltd (RP No.2086 of 2016) decided on 03.03.2017 pertains to a Group Insurance Policy. In the said order of this Commission, it was only mentioned that the insurer resisted the claim on the ground that the deceased was driving the tractor without a valid and effective driving license and thereby he violated condition No.3(6) of the Insurance Policy. While the order of this Commission did not specifically mention the said condition/ exception No. 3(6), the perusal of the orders of the learned District Forum, Durg in CC No.15/160 dated 04.04.2015 and order of learned State Commission, Chattisgarh in Appeal No. FA/2015/ 526 dated 21.03.2016, from which the said RP arose, reveal that both the Fora recorded that the said group insurance policy contained a specific provision that ‘if any vehicle is being driven by the insured without valid and effective driving license, then the Insurance Company is not liable to pay the compensation’. The same is not the case in the present Appeal and there is no such clause in the present group insurance policy. The other two judgements relied upon by the Respondent also pertain to general and motor vehicle insurance policies, and as such, are not applicable in the present facts and circumstances of the case.

32.    Examination of the relevant portions of the Repudiation letter dated 10.04.2017 and the decision based on the exclusion clause in the contract reveals a significant observation of deliberate omission by the OP/insurer to state the complete phrase "with Criminal Intent" in the said letter repudiating the claim. For the sake of ready reference, the relevant portion of repudiation letter notified by the Respondents vide letter dated 10.04.2017 as well as the Clause 4. Exceptions (e)…(e) of the Group Insurance Contract are reproduced below: -

REPUDIATION LETTER

Further on verification of the vehicle documents, it was found that his Driving License: DLCG07/1989/0012543 was valid up to 02/02/2015 i.e., not valid on the date of accident. Thus, this case falls under the exception 5(e) of the policy stating “Claim is not payable as cause of death is arising or resulting from the insured committing any breach of law”.

4. EXCEPTIONS

“(e) Payment of Compensation in respect of death, injury or disablement of insured person….

….e) arising or resulting from the insured committing any breach of the law with criminal intent.”

33.    The above omission in the decision communicating the repudiation of the claim stands in contrast to the full exclusion clause which reads as "breach of the law with criminal intent." This inconsistency renders the OP's attempt to establish the criminal intent of the insured inconclusive. Moreover, it is imperative to acknowledge that the provisions of the Motor Vehicle Act are not pertinent to this scenario, as the current case pertains to a life insurance claim rather than a motor accident claim. Further, in any case, it is essential for a party claiming an exception in a contract to establish the same to the reasonable satisfaction of the court. However, other than mere assertion, the Respondents failed to lead an iota of evidence in this regard.

34.    It is an established position that the terms of an insurance contract are to be understood and executed as stated thereat. There is limited scope for either party to introduce new conditions or interpret such conditions in their absence. In the event of absence of clarity, the decision needs to be in favour of the insured. Further, in any case, the burden of proving that a claim falls under an exception clause in on the party claiming it. While the Respondents have repeatedly argued that mere driving of a motor vehicle at public place without valid driving license in violation of the Motor Vehicle Act in itself constitutes the criminal intent, and thus the repudiation of the claim is within the scope of the terms of contract. However, it is an established principle of jurisprudence that for a criminal intent to be established there shall be a reasonable nexus between the actions of such person and the outcome of the same. In the present case, by no stretch of imagination, it can be stated that Shri PK Agarwal decided to drive the motor vehicle on the said day for the purpose of causing such accident which resulted in his death. Other than repeatedly asserting that the said violation of Motor Vehicle Act itself constitutes criminal intent, the Respondents have not led any evidence to support the contention that the case falls within the scope of the said exception, based on which the claim was repudiated. On the other hand, it is intriguing to note from the Letter of Repudiation dated 10.04.2017 that the Respondents have cleverly deleted the portion of ‘Criminal Intent’ while denying liability. This indicates that the Respondents are conscious of the facts of the case, the terms of contract, absence of any criminal intent and the limited scope for repudiation of the claim in the absence of such criminal intent. Even while being well aware of their liability, the Respondents still persisted with denial of the claim. This tantamounts to deficiency in service and unfair trade practice by the Respondent.

35.    Thus, in the light of above discussion, it is clear that, in the absence of a specific clause in the subject insurance policy laying down a condition that the deceased ought to be in possession of a valid driving licence for obtaining the benefit of the insurance claim, the same cannot be extraneously introduced. Further, the said condition cannot be presumed into the exception mentioned in the present policy vide words “arising or resulting from the insured committing any breach of the law with criminal intent”. It is also clear that, by no stretch of imagination, a death resulting from an ‘accident’ can be said to have arisen/resulted from the insured committing a breach of law with criminal intent’ as elaborately discussed in preceding paragraphs. Thus, we consider that the exception relied upon by the Respondent that ‘the company shall not be liable under this policy for payment of compensation in respect of death, injury or disablement of insured person arising or resulting from the insured committing any breach of the law with criminal intent” does not hold good in repudiating the claim of the Petitioner.

36.    As regards compensation for delay in settlement of the claim towards deficiency in service and unfair trade practice, the Hon’ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 7.4.2022 has held that:-

“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts.  The Commission in the Order impugned has granted interest from the date of last deposit.  We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.

At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”

37.    Based on the above discussion, we find that the findings recorded by the learned State Commission are not sustainable in law. The Order passed by the State Commission is, therefore, set aside and the present Appeal No. 1740 of 2019 is allowed.

ORDER

1. The Respondent Insurance Company shall pay the sum assured i.e. Rs. 20 Lakh to the Appellant/Complainant, along with simple interest @ 9% per annum from 10.04.2017, the date on which her clam was repudiated till the date of payment, within a period of one month from the date of this order. In the event of default, the amount payable shall carry interest @ 12% per annum for such period till the realization of the entire amount.

2. The Respondent Insurance Company shall pay cost of litigation to the Appellant/Opposite Party quantified as Rs.50,000/-, within a period of one month from the date of this order.

38.    Consequently, the instant First Appeal No. FA/1740/2019 stands disposed of. All the pending Applications, if any, also stand disposed of.