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HIGH COURT OF GUJARAT
MR. JUSTICE ANIRUDDHA P. MAYEE, J
HDFC ERGO GENERAL INSURANCE CO. LTD. – Appellant
Versus
TEJPAL B. CHAWLA – Respondent
R/SPECIAL CIVIL APPLICATION NO. 17469 of 2023
(A) Insurance Act - Section 4 - Sarva Suraksha Policy (Plus) - Claim for loss of job - The petitioner insurance company denied a claim under the first policy for a second loss of job, asserting it was repetitive and exceeded policy limits - The Insurance Ombudsman found no restriction on the number of claims for loss of job under the policy, only a cap on the total payment - The Ombudsman directed payment for the admissible claim as the total sum insured was not exhausted. (Paras 2, 3, 8, 9)
(B) Insurance Policy Interpretation - The policy allows for multiple claims for loss of job until the sum insured is exhausted, subject to the maximum payment of 3 EMIs per claim - The court upheld the Ombudsman's decision, stating the insurance company failed to adhere to the policy's terms. (Paras 4, 9)
Facts of the case:
The respondents purchased two Sarva Suraksha Policies, filed claims for job loss, and had one claim disallowed by the insurance company, leading to an appeal to the Insurance Ombudsman.
Findings of Court:
The Ombudsman ruled the insurance company must honor the claim as the sum insured was not fully utilized and the policy allowed for multiple claims for job loss.
Issues: The main issues were whether the insurance company could deny a second claim for loss of job under the first policy and the interpretation of policy coverage.
Ratio Decidendi: The court ruled that the policy permits multiple claims for job loss until the sum insured is exhausted, and the insurance company's refusal was unjustified.
Result: Special Civil Application dismissed.
JUDGMENT :
(ANIRUDDHA P. MAYEE, J.)
1. The present Special Civil Application has been filed by the petitioner insurance company praying for the following reliefs:-
“15A. Be pleased to admit and allow this petition.
B. The Hon'ble Court may be further pleased to consider that the judgment/award of the Ld. Insurance Ombudsman, Ahmedabad vide complaint No. AHD-G-018-2324-0025 dated 02/08/2023 (Annexure A) is illegal, wrong and be further be pleased to quash and set aside the impugned award and/or modify the same considering merits of the case.
C. As an ad-interim ex parte relief, the Hon'ble Court may stay the judgment/award of the Ld. Insurance Ombudsman, Ahmedabad vide complaint No. AHD-G-018-2324-0025 dated 02/08/2023 (Annexure A).
D. Be pleased to pass such other and further awards may be deemed just and proper looking to the facts and circumstances of the case and in the interest of the justice.
2. The brief facts of the case are that, the respondents had purchased the Sarva Suraksha Policy (Plus) for the period commencing from 08.06.2015 to 07.06.2020 [“1st policy” for the sake of brevity]. That the respondent No.1 lost his job on 15.12.2017 and thereafter lodged the claim with the petitioner – HDFC ERGO General Insurance Company Limited [“insurance company” for the sake of brevity] on 26.12.2017. That the claim came to be settled by the petitioner insurance company by payment of Rs.31,371/-. That the respondents purchased another fresh policy i.e. Sarva Suraksha Policy (Plus) from 03.01.2020 to 02.01.2024 [“2nd policy” for the sake of brevity]. That the respondents lodged the claim for 2nd loss of job on 20.02.2020 in the 2nd policy. That the said claim was also settled by the petitioner insurance company by payment of Rs.40,242/- on 08.01.2021. The respondents once again intimated the claim for 2nd loss of job on 07.01.2020 under the 1st policy. That the said claim was assessed and disallowed by the petitioner insurance company as the benefit under the loss of job coverage has already been accrued by the respondents upon settlement of claim relating to the 1st loss of job on 15.12.2017. That aggrieved, the respondents filed a complaint before the learned Insurance Ombudsman, Ahmedabad. By the impugned order, the learned Insurance Ombudsman has allowed the complaint of the respondents and held that the maximum sum insured of Rs.1,00,000/- is not exhausted as the insurance company had paid claim only to an amount of Rs.31,371/-. Therefore, the petitioner insurance company has not acted in accordance with the terms and conditions of the policy and therefore, the decision of the petitioner insurance company to repudiate the claim was set aside and the award came to be passed directing the petitioner insurance company to make payment towards the admissible claim for loss of job subject to available sum insured in the full and final settlement of the claim.
Aggrieved, the petitioner insurance company has preferred the present Special Civil Application.
3. Learned counsel for the petitioner insurance company Mr. Vibhuti Nanavaty submitted that the claim of the respondents upon assessment was disallowed as the incident of loss of job had already been indemnified by the petitioner insurance company under the 1st claim. For the 2nd loss of job, learned advocate submitted that the claim for the 2nd loss of job dated 20.02.2020 under the 1st policy is repetitive and redundant. He submits that the claims lodged by the respondents are in excess of the benefits provided in the policy coverage and since the claim for the same loss of job was already settled by the petitioner insurance company from the 2nd policy, the claim for the 2nd loss of job could not be raised for the 2nd time under the 1st policy. He submits that technically, after the settlement of the claims of the respondents for the two loss of jobs, the same loss of job could not be granted under the 1st policy as it would raise a 3rd claim for the two loss of jobs. He submits that
Insurance policies allow multiple claims for loss of job until the sum insured is exhausted, subject to maximum payment limits.
The Ombudsman should not reject a claim based on the total value of the stock exceeding the limit if the claim amount is within the prescribed limit.
The court clarified that the monetary limit in the Insurance Ombudsman Rules applies to compensation, not to the claims themselves, allowing for broader jurisdiction.
The absence of a specific bar in the 2016 Regulations regarding the consideration of renewed policies for claim settlement and the need to protect the rights of policyholders.
The Insurance Ombudsman can only award compensation under regulatory rules and lacks authority to mandate policy issuance at prior premiums.
An insurance policy lapses if the premium is not paid within the grace period; revivals after the insured's death are impermissible under contract terms.
Insurer cannot raise unpleaded policy limit defence in appeal under Employees Compensation Act.
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