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CASE NO.: Appeal (civil)  4091 of 2006

PETITIONER: Oriental Insurance Company Ltd.

RESPONDENT: Munimahesh Patel

DATE OF JUDGMENT: 12/09/2006

BENCH: ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No. 19538 of 2004)

ARIJIT PASAYAT, J.

Leave granted.

       Appellant 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.  

       Factual position in a nutshell is essentially as follows:

       Smt. Lalitha 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  appellant\026Company 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.  Aggrieved by this order, appeal was filed before the  Commission.  

       After 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 above.                        The Commission 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

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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.  

       In 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.  

       Learned 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.  

       Learned 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.   

       The 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.                   Proceedings 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.          The 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 manner done.   

       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 documents.  Commission 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.  

       Above being the position, the Commission was not  justified to deal with the matter in the manner as was done.   In our view, the directions of the State Commission were more  appropriate keeping in line with the nature of dispute.  Accordingly, the appeal is allowed but with no order as to  costs.