Rejecting the contention of New India Assurance Co Ltd about collusive intent between the claimants and the police, hospital and officials of Rashtriya Ispat Nigam Ltd (RINL), the national consumer disputes redressal commission (NCDRC) directed the insurer to pay Rs2.62 crore as the death insurance claim to the heirs of eight employees and also pay Rs35,000 each as cost and litigation expenses.
In an order last week, the NCDRC bench of Subhash Chandra (presiding member) and Dr Sadhna Shanker (member) says, "The claims by New India Assurance is contrary to the report of the police, the post-mortem report and the report of the police as accepted by the executive magistrate. The contention that all these agencies had colluded and that the claims were ineligible under the scheme of group insurance cannot be considered to be valid for the reason that no cogent evidence has been brought on the record to establish such a finding. No documents have also been brought on record to indicate whether New India Assurance has contested the findings of the police or hospital authorities or challenged the closure of investigation reports in these cases."
While a surveyor's report has been held to be an essential and necessary requirement under law, the bench noted that the finding of a surveyor is not that sacrosanct or final that it cannot be disregarded if it is found to be arbitrary or perverse. "In the present matters, in the absence of evidence on record, the surveyor's report has to be held to be conjectural and based on surmises as no cogent evidence to establish the finding of accidental death has been brought on record. The surveyor's report can, therefore, be considered to be arbitrary and perverse," the bench says.
In 2016, Rashtriya Ispat Nigam, a public sector undertaking (PSU), obtained a group insurance policy from New India Assurance covering personal accident insurance in respect of its employees called the personal accident insurance policy (group) and paid a premium of Rs7.60 crore, including goods and services tax (GST).
Based on the employee category, the policy provided different insurance coverage amounts. Under this policy, the insured employees in the schedules attached to the policy were covered for accident and injury, which was to be verified and certified by a medical practitioner.
Kare Nagaraju, working as a foreman at the company, died on 7 December 2016 near the scooter parking area near his house after he left home for work. His wife K Suneetha discovered his body at around 11am and, with the help of his friends, shifted him to Vizag Steel government hospital. The hospital authorities declared Mr Nagaraju as 'brought dead' and sent his body for post-mortem to King George Hospital. The post-mortem report concluded the cause of Mr Nagaraju's death as a head injury.
On 14 December 2016, RINL intimated New India Assurance about the death of Mr Nagaraju and, on 31 March 2017, submitted the insurance claim form with the necessary documents. After receiving the claim form, New India Assurance appointed a surveyor or investigator to investigate the cause of death of Mr Nagaraju. On 22 March 2018, the investigator submitted his report stating that the death of Mr Nagaraju was not accidental in nature and therefore, the claim was not payable. Based on the report, the insurer rejected the death insurance claim.
Ms Suneetha, the wife of Mr Nagaraju and their two children, filed a complaint before the Andhra Pradesh state consumer disputes redressal commission. While allowing the complaint, the state commission directed New India Assurance to pay within two months Rs31 lakh with an interest of 9%pa (per annum) from the date of repudiation (or from 10 May 2018) till the date of realisation with Rs25,000 towards the cost.
New India Assurance filed its first appeal before NCDRC. It contended that the delay in intimation by Ms Suneetha and RINL was to hide material facts as this was a case of suspicious death. "The state commission erred in not appreciating that there was no eye witness on record and that the claim form, which required an eye witness to the accident, was signed by a person who had been admittedly called by the wife of the deceased after she found him lying in a pool of blood in a public parking area, and since the wife of the deceased had contacted only two persons and not alerted neighbours or any watchman who would have ordinarily been present to verify the genuineness of the claim, there was indication of collusion and fabrication of the story."
The counsel for Ms Suneetha submitted that "All relevant documents such as post-mortem certificate and final report of the police following completion of the investigation and confirming death due to head injury had been filed. The death of the insured (Mr Nagaraju) was stated to be due to a sudden and unforeseen event and as per the post-mortem, the injuries sustained were not due to illness. The doctor who conducted the post-mortem had clearly opined that the cause of death was a head injury. Therefore, in terms of the policy and the definition of injury and accident, the claim was admissible."
The bench observed that there is no dispute regarding the policy or its coverage in view of the premium being paid in full. "From the record it is evident that intimation of the death of the insured employee was submitted by RINL within a week of the incident...The provision regarding intimation of an accident or incident resulting in death under the policy clearly states that information has to be provided within a period of one month. In view of the fact that RINL intimated the cause of death to New India Assurance as required under the policy, Ms Suneetha cannot be deprived of a claim for this reason."
"When there is an investigation report of the police indicating an accident resulting in head injury and a post-mortem report indicating that the death was a result of a head injury, the investigator cannot superimpose his conclusions on such findings or pass aspersions on the genuineness of such reports to state so unless he has cogent evidence to the contrary. The contention that there was collusion between the authorities to establish 'accidental' death is not based on any evidence brought on record by New India Assurance and must, therefore, be treated as conjectural," the bench says.
"Repudiation of the claim of insurance has accordingly been rightly set aside by the state commission," NCDRC says, adding, "We, therefore, do not find any reason to consider the conclusion of the state commission to be illegal or perverse which warrants our interference. The appeal is, therefore, disallowed and the order of the state commission is affirmed."
There were six other appeals filed by nominees of RINL employees for death insurance claims from New India Assurance.
The bench observed that in all the cases, except the first appeal (FA)761 of 2022, claims have been made under the policy for various amounts depending upon the grade of the employee as per the policy. These claims were based upon the first information report (FIR) lodged and investigated by the police and post-mortem reports of the King George Hospital. The conclusion of the post-mortem report was 'accidental death' in all cases except in FA761 of 2022. In one case (FA No.758 of 2022) while the post-mortem report held death to be accidental, the expert opinion stated it could not be conclusively stated whether the cause was a pre-existing disease.
"In terms of the judgment in FA no.755 of 2022, the repudiation of the claims in FA nos757, 758, 759, 760 and 762 of 2022 by New India Assurance are contrary to the report of the Police, the post-mortem report and the report of the police as accepted by the executive magistrate," the bench says.
In the case of FA no761 of 2022, the death of the insured was following hospitalisation, treatment and discharge as a 90% disabled paraplegic. However, the claim was filed after a delay of three years. As per the policy, the respondent is eligible for the coverage for hospitalisation and treatment in addition to the claim for death.
NCDRC says, "In view of the circumstances of death, and the fact that the nature and seriousness of the injury entailing protracted treatment would have led to the delayed filing of the claim, it would be logical to consider the deceased to be insured and as being eligible for the same. Accordingly, FA761 of 2022 is allowed with the direction that the complainants who are legal heirs of the deceased be paid Rs27.90 lakh along with Rs25,000 as costs under the policy and litigation costs of Rs10,000. If the insurance amount of Rs27.90 lakh is not paid within 8 weeks of receipt of this order, the same shall be paid with 6% interest till realisation."
The bench allowed the first appeals numbered 755 to 760 and 762 of 2022 and asked New India Assurance to comply with its directions within eight weeks.
(First Appeal Nos755 to 760 and 762 of 2022 Date: 19 September 2024)
