Consumer Forum asks insurance firm to pay Rs 49 lakh to engineer

Observing that New India Assurance had arbitrarily repudiated the insurance claim payable under a policy and rendered deficiency in service, the Maharashtra Consumer Commission has asked the firm to pay Rs 49 lakh to a former Air India flight engineer by August 25.

The amount includes Rs 20 lakh policy amount, Rs 28.5 lakh interest on the original claim at the rate of 15 percent per annum from February 2003 when the claim was repudiated, Rs 50,000 compensation for mental agony and Rs 25,000 as costs of the litigation, a three-member bench ruled recently.

If the amount is not paid within the specified period, penal interest at the rate of six per cent will be payable by the opponent insurance company till the actual payment is made, Commission president S B Mhase and members S R Khanzode and Narendra Kawde said.

"The complainant deserves to be suitably compensated on account of inordinate delay and for the mental agony together with cost of litigation," said the bench.

Complainant D Janardanan was employed with Air India as flight engineer holding a valid licence effective from January 8, 1976. The licence was renewed from time to time. He was also a member of Indian Flight Engineers' Association (IFEA), which is affiliated to International Federation of Airline Pilots' Association (IFEA), and International Transport Workers' Federation (ITE).

Janardanan subscribed through IFEA to Loss of Flying Licence Insurance policy initially from September 8, 1999 to September 7, 2000, for Rs ten lakh. The policy was renewed from September 29, 2000 to September 28, 2001 and enhanced with sum assured of Rs 20 lakh by maintaining all other terms and conditions in the earlier Insurance policy.

The complainant was declared temporary unfit on August 3, 2000 for a medical review and fresh opinion of neurophysician was sought but his licence was not cancelled or suspended.

Later, Janardanan appeared for a medical test at Air Force Central Medical Establishment on August 14, 2000 and was declared fit with endorsement "next review with review certificate from neurophysician after three months."

His licence was renewed from August 22, 2000 to August 13, 2001. Later, validity was corrected for the period August 22, 2000 to November 13, 2001, based on the medical report.

During February 17, 2000 to March 1, 2000, Janardanan was undergoing refresher course and other training procedures, as per DGCA requirements. In December 2000, he fell sick and was treated by Air India doctors and specialists and declared temporary unfit.

This was reported on February 6, 2001 in a letter to the insurance company by Air India Flight Engineers' Association, well within three months as per the stipulation clause of the policy.

Later, the complainant was declared medically unfit for a period of six months on February 8, 2001 and thereafter, declared permanently unfit by the authorities w.e.f. December 13, 2001, on the ground of "lacunar infarct syndrome and hypertension (on anti-communis-anis) and not due to psychosis psychoneurosis or epilepsy", as stipulated in the policy.

He was grounded and lost the duty to fly as the licence was not valid from December 13, 2001.

The policy cover was against loss of licence as a result of suffering any bodily injury or suffering any illness resulting at any point of time whether during or after the period of insurance (but not beyond the period of two years after the expiry of the insurance).

In the capacity causing permanent total disablement, compensation of 100 percent of the sum insured was payable except incapacitation due to "psychosis psychoneurosis or epilepsy" as provided in policy condition.

The Commission noted that the insurance company had miserably failed to establish theory of pre-existing disease.

Prior to subscribing the policy, a medical certificate issued by Air Force Central Medical Establishment dated May 19, 1999, with copy of the flying licence, was submitted together with proposal form which was assessed and underwritten. Thereafter policy was issued without any condition or rider.

"Had there been alleged pre-existing disease, flying licence of the complainant would not have been renewed from time to time after issue of policy which was subject to undergoing rigorous medical examination as per the protocol of the job," the Commission observed.

"The complaint has been filed in 2003 after repudiation of insurance claim. Policy claim was submitted in February 2002. Settlement offered by the opponent was not acceptable to the complainant and even the repudiation came to be issued on February 3, 2003 i.e. almost after a period of one year from the date of filing of the insurance claim," the Commission noted.

The complainant consistently followed for settlement of claim with the opponent himself and also through Indian Flight Engineers' Association. He deserves to be suitably compensated on account of inordinate delay and for the mental agony, together with the cost of litigation.