Interpretation of insurance policy conditions and the requirement of compliance with the specified conditions for a valid insurance claim

ORDER

Justice K.S. Chaudhari, Presiding Member - This appeal has been filed by appellant against order dated 11.7.2012 passed by State Commission in Complaint No. 03/191 by which complaint was allowed.

2. Brief facts of the case are that respondent No. 1's husband and respondent No. 2's father-Complainant/D. Janaradanan, was in employment of Air India as a Flight Engineer holding flight engineer's valid license bearing No. 153 effective from 08.01.1976. The said license was renewed from time to time thereafter. The complainant was also a member of Indian Flight Engineers' Association (IFEA), Mumbai. This Association is affiliated to International Federation of Airline Pilots's Association (IFEA) and International Transport Workers' Federation (ITE). The complainant subscribed through India Flight Engineers' Association to a policy, namely Loss of Flying License Insurance policy initially for a period 08.09.1999 to 07.09.2000 for sum assured of Rs. 10,00,000/-. The said Insurance Policy was renewed and was enhanced with sum assured of Rs. 20,00,000/- by maintaining all other terms and conditions originally incorporated in the earlier Insurance Policy. The renewal insurance policy of sum assured of Rs. 20,00,000/- was valid for a period 29.09.2000 to 28.09.2001. Insurance Policy was issued with the stipulation of the proposal based on current valid license issued by the competent authority, in this case the Air India, employer of the complainant. Under this policy provision to indemnify the complainant for loss of license due to rendering permanent total disablement was provided for. More specifically this provision in the preamble of the policy reads as " . in the event of the person insured during the period of insurance suffering any bodily injury whatsoever or suffering any illness whatsoever resulting at any time whether during or after the period of insurance (Not beyond the period of two years after the expiry of the insurance) in the capacity (as hereinafter defined) then compensation will be paid to the person insured as follows by the Company." Complainant was declared permanently medically unfit by Air Force Central Medical Establishment (AF-CME), New Delhi, w.e.f. 13.12.2001 resulting into loss of license and certificate of validity, Complainant was ceased to fly aircraft as Flight Engineer and was grounded for the office duty. Since the policy covered indemnity for loss of license the Complainant filed insurance claim under the policy somewhere in February, 2002 exactly within three months i.e. after he was declared medically unfit w.e.f. 13.12.2001 and it was offered to honour part claim at the rate of 18% of the sum assured under the policy as against 100% claim. However, this settlement offered by the Opponent Insurance Company was declined by the Complainant and finally the Opponent Insurance Company repudiated the claim under the policy on 03.02.2003, i.e. exactly after a year from filing the claim in February, 2002 on the ground of breach of policy condition Nos. 6 and 9. Alleging deficiency on the part of opposite party, complainant filed complaint before State Commission. Opposite party resisted complaint and submitted that claim was rightly repudiated on account of breach of policy condition Nos. 6 & 9 i.e. non-disclosure of pre-existing disease and delay in intimation of disease to opposite party and prayed for dismissal of complaint. Learned State Commission after hearing both the parties allowed complaint and directed opposite party to pay Rs. 20.00 lakhs with interest @ 15% p.a. from the date of repudiation till payment and further directed to pay Rs. 50,000/- towards compensation for mental agony and Rs. 25,000/- as cost of litigation against which this appeal has been filed.

3. Heard Learned Counsel for the parties and perused record.

4. Learned Counsel for appellant submitted that in spite of breach of condition Nos. 6 & 9 of the policy, Learned State Commission committed error in allowing complaint, hen