WP/6585/2004 of Gulam Dastagir, S/o. Gulam hyder, Vs The Branch Manager, on 28 December 2004

COMMON ORDER:

These two writ petitions are disposed of by a commonorder since the point involved in both the writ petitions is one and thesame.

Conclusion

In W.P. 6584 of 2004, it is stated that the daughter of thepetitioner No.1 has taken L.I.C. policy for a sum of Rs.5,00,000/- withaccident benefits giving the nomination of the petitioners, from the 1[st]respondent. The period of commencement of the policy is 30.3.2002.The daughter of petitioner No.1 was punctual in paying the policyinstalments. She died in a road accident along with her husband.Thereafter the petitioners submitted a claim statement with the 1[st]respondent along with necessary documents, but the respondentsdid not pay the amount. Thereafter, the petitioners gaverepresentations on 28.6.2003 and 8.10.2003 seeking settlement ofthe matter, but no action was taken. Hence the present writ petition.

The respondents filed counter stating that the contract ofinsurance cannot be agitated or adjudicated in the writ petition andthe respondent-Corporation is entitled to investigate into the claim ofthe petitioners. In fact the respondent-Corporation had commencedinvestigation and in the course of investigation several suspiciousand doubtful circumstances came to light. It is stated that both thedeceased and her husband took out a number of insurance policieswithin 12 months to a tune of Rs.5.00 crores. The policies were notonly obtained from the respondent-Corporation but also from severalprivate insurers viz., M/s Birla Sun Life, M/s Bajaj Allianz and M/sKotak Mahendra etc. the premiums of which went into several lakhsof rupees and one of the deceased in fact has submitted some moreproposals for huge insurance cover with private insurancecompanies, which were either declined or remained as unconcludedcontracts. Few days before the alleged accident, changes wereeffected in the nominations of the policies in such a way that neitherof the wife and husband remain as nominee under any of the policies. The alleged accident took place at 3.00 a.m. on 31.3.2003and the investigations reveal that one of the deceased has withdrawnsubstantial amount from ATM machine located at CDR Hospitals,Hyderabad at 2.35 a.m. on the same night, making his balance in thebank almost nil, whereas the accident spot is located 41 kms. fromthe said ATM machine. The identity of one of the deceased and thestatement of witnesses to the police and the private investigators iscontradictory. Therefore, the respondent-Corporation as well as theprivate insurers requested the police to reopen the matter. In view ofvarious suspicious circumstances as stated above, the petitionercannot be permitted to seek payment without investigation as therespondent-Corporation sought for re-investigation and the same ispending and, therefore, the present writ petition is devoid of merit.

The allegations in the other writ petition i.e. W.P. 6585 of2004 are almost one and the same except the relationship of theparties and the amount of policy. In this writ petition, the deceased isthe sister of the writ petitioners and the policy is taken forRs.15,00,000/-. The plea of the respondents is almost similar to thatof the one taken in the counter filed by them in W.P. 6584 of 2004.

Arguments

Learned counsel for the petitioners contended that underClause 8(3) of the Insurance Regulatory and Development Authority(Protection of Policyholders’ Interests) Regulations, 2002 (for short,Regulations, 2002), a claim under a life policy shall be paid or bedisputed giving all the relevant reasons, within 30 days from the dateof receipt of all relevant papers and clarifications required. But, therespondents have not passed any order giving the reasons for notpaying the amount covered under the policy and hence he prays togive a direction to the respondents to pass appropriate orders.

On the other hand, learned counsel for the respondentscontended that in view of the suspicious circumstances with regard tothe deaths of the deceased in both the cases the amount has notbeen paid and the prayer in the writ petitions is with regard to notsettling the claim of the petitioners and consequential direction to pay the insured amount covered under two policies, which cannot bedecided by this court exercising the jurisdiction under Article 226 ofthe Constitution of India and hence he prays to dismiss the writpetitions.

It is specifically stated that both the deceased personshave taken policies to a tune of Rs.5.00 Crores within a span of 12months in between January and December, 2002. The policies werenot only obtained from the respondent-Corporation but also fromseveral private insurers viz., M/s Birla Sun Life, M/s Bajaj Allianz andM/s Kotak Mahendra, the premiums of which went into several lakhsof rupees. It is also stated that one of the deceased has submittedsome more proposals for huge insurance cover with privateinsurance companies, which were either declined or remainedunconcluded contracts. Apart from that, same attempts were alsomade to obtain further policy of rupees One crore from therespondent-Corporation, which was not considered. It is also statedthat few days before the alleged incident, changes were effected inthe nominations of the policies in such a way that neither of the wifeand the husband remain as nominee under any of the policies. It isalso stated that one of the deceased withdrawn substantial amountfrom ATM machine located at CDR Hospitals, Hyderabad at 2.35a.m. on the same night, making the balance in the bank almost nil.Within 25 minutes thereafter the accident took place at a distance of41 kms. During the course of investigation, several suspiciouscircumstances have been emerged. As the respondents havecommenced investigation and in the course of investigation severalsuspicious and doubtful circumstances came to light, therespondents did not settle the claim. No doubt, under Clause 8(3) ofthe Regulations, 2002 a claim under a life policy shall be paid or bedisputed giving all the relevant reasons, within 30 days from the dateof receipt of all relevant papers and clarifications required. But, aclaim of warrant or investigation shall be completed within six monthsfrom the date of lodging the claim. Under Section 46 of the InsuranceAct, 1938 the holder of a policy of insurance issued by an insurer in respect of insurance business transacted in India, after thecommencement of this Act, shall have the right notwithstandinganything to the contrary contained in the policy or an agreementrelating thereto to receive payment in India on any sum claimedthereby and to sue for any relief in respect of the policy in any court ofcompetent jurisdiction in India and if the suit is brought in India anyquestion of law arising in connection with any such party shall bedetermined in accordance with law in force in India.

Issues

Therefore, this Section gives a right to the claimant to filea suit for grant of relief in respect of the policy in a court of competentjurisdiction. Since serious disputes questions of fact with regard to themanner of taking place of the accident and the suspiciouscircumstances have come to light in regard to the manner of takingpolicies worth about Rs.5.00 Crores and that the attempts have alsobeen made to obtain policy worth about Rs.1.00 Crore from therespondent-Corporation and identity of one of the deceased is alsoclouded in suspicion, it is not desirable to resolve those complicateddisputes questions of fact while exercising the power under Article226 of the Constitution. When a right is given to the petitioners to takeappropriate remedy under Section 47 of the Insurance Act, thepetitioners have to establish their right in a court of competent civiljurisdiction. It is not a case of denying the benefit under the policywithout any reasons. In such view of the matter, the petitioners haveto take recourse to Section 47 of the Insurance Act by availing thealternative remedy. Even though alternative remedy is not a bar forthis court in exercising the jurisdiction under Article 226, but it is acase where serious disputed questions of fact emerge from thepleadings.

In the alternative, learned counsel for the petitionersrequested this court to give a direction to the respondents to considerthe claim and if the claim is not settled, that the same should becontained reasons for not paying the amounts under the policies.

Though no prayer is sought for the said purpose, but in view of thefact that the respondents filed their counter stating the reasons for notpaying the amount in view of the suspicious circumstances, nodirection need be given.

The writ petitions are devoid of merit and therefore theyare liable to be dismissed. However, this order will not preclude thepetitioners from taking recourse to Section 47 of the Insurance Act.

_________________

K.C. Bhanu, J.

Date: 28--12—2004.

MVB.

// TRUE COPY //

..... REGISTRAR

SECTION OFFICER

To

1 The Branch Manager Life Insurance Corporation of India Jedcherla Brach &Mandal, Mahaboobnagar District.2 TheSenior Divisional Manager, Life Insurance Corporation of India Hyderabad Division, OPP; Secretariat Saifabad, Hyderabad.

3. 2CD copies.