The main legal point established in the judgment is the authority of the Insurance Company to cancel the policy under the specified conditions, the requirement of notice and refund of the last paid premium, and the obligation of the claimant to file the complaint within the prescribed period.

ORDER

S.K. Naik, Member - The New India Assurance Co. Ltd., the petitioner herein, offered insurance cover for a period of ten years on payment of one-time-premium under the Janatha Personal Accident Insurance Policy scheme. Deceased Guru Shanthappa M., husband of respondent/complainant No. l availed the policy covering the period from 13th of March, 1998 to 12th of March, 2008 for a sum of Rs. 5.00 lakh and paid the relevant one time-premium of Rs. 1,375. Guru Shanthappa M., however, died on 19th of September, 2002 on account of a snake bite. Respondent/complainant No. 1, being the nominee of the Life Assured, approached the petitioner/Insurance Company for the settlement of the claim arising out of the said policy on 11th of January, 2003. On a reply received thereto stating that her claim is not maintainable as the policy stood cancelled w.e.f. 1st of July, 2002; the widow of the Life Assured, along with her daughter, filed a complaint before the District Consumer Disputes Redressal Forum, Chitradurga ( District Forum for short), seeking a direction to the petitioner/Insurance Company to honour their claim. The complaint was contested by the petitioner/Insurance Company. Parties thereafter led their respective evidence, after a consideration of which the District Forum allowed the complaint and directed the petitioner/Insurance Company to pay the policy amount with benefits to the complainants within two months, failure of which was to attract interest @ 12% per annum till its payment and in addition it ordered payment of Rs. 1,500 towards the cost of litigation.

2. Aggrieved thereupon, the petitioner/Insurance Company filed an appeal before the Karnataka State Consumer Disputes Redressal Commission ('state Commission' for short), who vide the order impugned held that the stand of the petitioner/Insurance Company, that in terms of Condition No. 5 of the Policy they had duly served the notice for cancellation of the policy, was not sustainable and in any case since the insured has not played any fraud in obtaining the policy and further that the Insurance Company does not disclose the reasons for cancellation of the policy, it dismissed the appeal.

3. Yet dissatisfied with the concurrent findings of the two Fora below that the opposite party/Insurance Company is in revision before us.

4. We have heard the learned Counsel for the petitioner/Insurance Company and the learned Counsel for the respondents/complainants.

5. Since the main contention of the petitioner/Insurance Company is that in terms of the policy and, in particular, in terms of Condition No. 5 they were fully authorized to cancel the policy after following the procedure so prescribed therein and further that in terms of Condition No. l the nominee/claimant/complainant having failed to approach them within the prescribed period, their action of not entertaining the claim cannot be faulted; it would be useful first to examine the said conditions, which read as under:

"CONDITIONS

1. Upon the happening of any event which may give rise to a claim under this policy the Insured shall forthwith give notice thereof to the Company. Unless reasonable cause is shown, the Insured/Nominee should within one calendar month after the event which may give rise to a claim under the policy, give written notice to the Company with full particulars of the claim.

2. ...............................

3. ...............................

4. ...............................

5. The Company may at any time by notice in writing cancel this Policy. Provided that the Company shall in that case return to the Insured the then last paid premium less a pro-rata 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's 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.

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