Insurance policy cancellation requires valid notice to the insured; mere assertion of cancellation without proof is insufficient.

1. This appeal has been preferred by the appellant / complainant under S.15 read with S.17(1)(a)(ii) of the Consumer Protection Act, 1986, against the order of the learned District Consumer Disputes Redresssal Forum, Erode passed in C.C. No. 37/2006, dated 9.8.2011, dismissing the complaint.

2. For the sake of convenience and brevity, the parties are referred to here as they stood arrayed in the District Forum.

3. The factual matrix giving rise to the present appeal is that the complainant had filed a complaint before the learned District Forum, Erode (hereinafter referred to as District Forum) seeking a direction to the opposite parties to pay Rs.3,00,000 together with 12% interest from the date of complaint and Rs.10,000 as compensation for the mental agony, loss and injury suffered by her besides costs, alleging inter alia, that her husband one Thiru. K.S. Chinnasamy, since deceased had become a member in the JASPER CLUB, DOLLAR SAVE CARD scheme on 5.5.1999 with membership No. 174303 and by virtue of such membership, he was issued an insurance policy by the 1st opposite party vide policy No. 090823 and the sum insured was Rs.3,00,000 and the coverage period was 10 years, i.e. from 7.5.1999 to 6.5.1999 by paying premium amount of Rs.510; that on 28.11.2004, the complainant's husband met with a road accident and he died of injuries sustained in the said accident on 30.11.2004 at Sri Ramakrishna Hospital, Coimbatore during the currency of the said insurance policy; that when the complainant as widow and nominee of the deceased / insured approached the 1st opposite party for issuing of claim form, she was informed that the said insurance scheme was cancelled with effect from 1.5.2003 and hence the complainant was not entitled to claim any amount from the insurer and hence the complaint.

4. Initially, the opposite parties did not appear before the learned District Forum and contest the claim of the complainant and hence they were set ex parte and based on the materials available on record the learned District Forum had allowed the complaint by its order dated 5.3.2007 against which the opposite parties had preferred appeal in F.A. No. 407/2009 before this State Commission and by an order dated 6.6.2011, the order of the learned District Forum was set aside and the matter was remanded back to the learned District Forum for fresh disposal according to law; that thereafter the opposite parties took part in the enquiry before the learned District Forum by filing written version and marking documents and after enquiry, the learned District Forum had by its order dated 9.8.2011, dismissed the complaint holding that the insurance policy was lawfully cancelled by the opposite parties even before the death of the insured and as such the complainant was not entitled to any claim under the cancelled policy. Hence, the complainant has come forward with this appeal before this Commission.

5. The gist of the memorandum of grounds of appeal is that the learned District Forum had failed to note that the insurance policy was unilaterilly and unlawfully cancelled in as much the intimation or notice of such cancellation was not given to the insured; that the learned District Forum has failed to consider that the opposite parties had not proved that the alleged notice of cancellation was served on the insured; that the learned District Forum has failed to note that the contract of insurance is based on utmost mutual good faith between the parties which is the paramount requirement.

6. The point for consideration is whether the order of the learned District Forum has to be set aside and the complaint has to be allowed?

7. Point: As already noticed, the complainant