This appeal has been filed by the appellant Capt. Anil Kumar Dewan against the order dated 26.04.2016 of the State Consumer Disputes Redressal Commission, Delhi, (in short ‘the State Commission’), passed in Complaint Case No.93/2003.
2. Brief facts of the case are that the appellant/complainant is a Pilot. He insured himself under the policy issued by the opposite parties which was effective from 22.02.2000 to 21.02.2001. The complainant became Permanent Medically Unfit (PMU) to fly the aircraft since 15.11.2000. The complainant filed claim under the policy before the opposite parties, however, the same was repudiated vide opposite parties letter dated 12.06.2002. The complainant then filed a consumer complaint before the State Commission bearing No.93/2003. The complaint was resisted by the opposite parties on the ground that the complainant had not given correct information against question No.8 in the proposal form. It was asked in the question whether the licence was cancelled or suspended any time and the complainant had given reply as ‘none’. The Insurance Company pleaded that the licence of the complainant was suspended for three weeks. The State Commission after considering the submissions of both the parties dismissed the complaint vide its order dated 26.04.2016. Hence, the present appeal.
3. Heard the learned counsel for the parties and perused the record. Learned counsel for the appellant stated that Insurance Company has repudiated the claim mainly on two grounds. The first is that the appellant/complainant has not given correct information in respect of Question No.8 in the proposal forum. This question reads as under:-
'Give full details of previous suspensions cancellations of Licences. If none, write ‘None’ ………… None'
4. Learned counsel for the appellant stated that ‘none’ answer was given against this question. Learned counsel explained that the Insurance Company has not filed any evidence to substantiate their claim that the licence was ever suspended f
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or three weeks. The fact is that the complainant had taken leave from 14.08.1999 to 31.08.1999. However, his licence was not suspended during this period. During this period, he had developed some high blood pressure and therefore, he did not have the privilege of flying an aircraft during this period due to medical advice. However, it does not mean that his licence was suspended during this period. To support his claim learned counsel referred to certificate dated 04.09.2002 issued by Capt. N.V.S. Chandhoke, wherein the following has been mentioned:-
'In this context, it is clarified that during the period a pilot is declared as temporary medically unit, the pilot cannot exercise the privileges of his licence and during this period the licence is not suspended or cancelled on this account.'
5. Apart from the above certificate, learned counsel also stated that if the licence is suspended, there should have been some endorsement on the licence. However, there is no such endorsement on the licence and copy of the same has been filed. There was no proceeding against the complainant and there can be no suspension of the licence without any proceeding or any order from the competent authority. No such order has been produced by the Insurance Company. Complainant has stated on oath that his licence was never suspended. The State Commission has given a finding that during the period the Pilot did not enjoy privileges of his licence, it is equivalent to the suspension of the licence because the effect of both these things is the same that the Pilot cannot fly the aircraft. Clearly, this is an erroneous finding by the State Commission because the word ‘suspension of the licence’ has a definite meaning and this meaning has to be derived from the relevant rules. Under the rules, the complainant’s licence was never suspended. When the word ‘suspension of the licence’ is used in the policy, namely, ‘Loss of Licence Insurance’ it is to be understood in the context of the relevant Rules and Provisions of the Air craft Act and Rules. No general meaning to the word ‘suspension’ can be assigned in the policy. It cannot mean 'no usage of right' without any proper order. Moreover, the position has been clarified by the Indian Airlines vide certificate dated 04.09.2002. Thus, no ambiguity remains in this regard that the complainant was never suspended and not using the privileges of the licence for two weeks would not amount to suspension of the licence.
6. Coming to the second point on which the Insurance Company has raised objection for approving claim under the policy relates to the fact that the complainant has received a sum of Rs.30,00,000/- as compensation for loss of licence from employer Indian Airlines under their in-house policy. It was alleged by the opposite party Insurance Company that there was an insurance taken by Indian Airlines from Oriental Insurance Company for loss of licence of the Pilots. The Air India has clarified the position vide their certificate dated 01.04.2016 wherein the following has been clarified:-
'This is to certify that as per the Board Memorandum of e/w Indian Airlines, the Board in its 174th Meeting dated 23.03.1983 decided to evolve a new scheme of Loss of Licence Compensation-Pilot which is a self Insurance scheme to be paid from internal sources. It was also decided therein to discontinue the earlier Loss of Licence coverage through the Oriental Fire & General insurance Company. Capt. A.K.Dewan was declared PMU and was paid Loss of Licence Compensation vide memo No HFD-9/46-B/340 dated 12.12.2000.
This certificate is issued on the request of Capt Dewan for his onward submission to the concerned authority.'
7. Apart from the above certificate from the Air India, the opposite party Insurance Company has also issued letter dated 06.08.2001 to the complainant wherein the following has been stated:-
'This has reference to your fax dated 05.04.2001 on the above stated loss of licence claim. From your fax, we understand that Indian Airlines had taken loss of licence policy from M/s. Oriental Insurance Co., however, as of now this has been made into a in-house scheme so that the airlines does not have to pay premium to insurance co. Hence it can be inferred that when you had taken loss of licence insurance from our NOIDA Divisional Office, Indian Airlines did not have any other loss of Licence policy from any other Insurance co. and the payment of Rs.30 lakhs for Loss of licence, which you have received from Indian Airlines, was through their in-house Scheme. (Photocopy of letter written to Director (Personnel), Indian Airlines dated 17.07.2001 is enclosed herewith).
We request you to kindly furnish necessary documents regarding the same or you may furnish confirmation from Indian Airlines in this regard.'
8. It was argued by the learned counsel that on the basis of the certificate issued on 01.04.2016 by the Air India and letter of respondent Insurance Company dated 06.08.2001, the amount of Rs.30,00,000/- paid to the complainant was under the in-house scheme run by Air India/ Indian Airlines. This scheme was not run by any Insurance Company. Hence, Clause 11 of the policy does not become operative in the present matter. Hence, the claim under the Insurance Policy issued by the opposite parties is payable.
9. On the other hand learned counsel for the Insurance Company stated that the claim has been repudiated on the ground of misrepresentation and submission of wrong information against Question No.8 in the proposal form. The complainant has denied the suspension of his licence whereas the fact is that licence was suspended for three weeks in the year 1999. Had the complainant given this information, the insurer may not have issued the policy or may have issued at a higher premium. Concealment of relevant information has made the policy void and therefore, no claim becomes payable. In the legal notice dated 01.03.2003 given by the complainant, the complainant has himself admitted the following:-
'The disorder revealed in medical examination of August 1999 was not the cause of permanent disability in November 2000. Furthermore the results of the said medical examination did not result in invalidity of our client’s licence nor was Rule 42 (2) & (3) attracted. As already submitted, it is presumed that every medical examination need not be satisfactory and notwithstanding its revealing some disorder law does not impute any disability or incapacity to the person examined so as to deny him compensation. Moreover there is no obligation on an insured to declare every occasional disturbance particularly when law itself does not treat it as one serious enough [apparent in Rule 39 C read with Rule 42 (2) & (3)] as to impute invalidity of licence.'
10. Learned counsel for the respondents further stated that the complainant himself in his letter dated 03.07.2001 addressed to the Regional Manager, united India Insurance Co. Ltd. has admitted the following:-
'As for temporarily taken off flying duties for about three weeks in August, 99 due to tension and fatigue, it is a routine practise for A.F. CME to take a pilot off flying when they feel the stress is showing tension and fatigue. He is advised rest for three weeks or more and it may be checked and confirmed that every month a few pilots have to compulsorily take rest which does not in any way indicate any disease. No treatment or medicine was subscribed for me and after adequate rest I was subsequently declared fit to fly and resumed normal flying duties in September, 1999, on the basis of which, this insurance cover was given.'
11. Learned counsel for the respondent Insurance Company further stated that as per Clause 11 of the Policy the complainant cannot get the compensation under insurance from two sources. The complainant has already received Rs.30,00,000/- from the Indian Airlines under their Insurance Scheme and therefore, he is not entitled to claim under this policy.
12. Learned counsel for the Insurance Company further stated that when the complainant has been declared as PMU and his licence was suspended for three weeks on medical ground, clearly he had given wrong information in the proposal form about his health. Thus, the complainant has resorted to suppression of material information in respect of his health in the proposal form. On this ground also, the Insurance claim is not payable.
13. On the basis of above admission in the legal notice as well as letter of complainant himself, it was asserted that his licence was suspended for three weeks in 1999. He was not able to fly aircraft. Even if the wording of suspension has not been used, it does not mean that the licence was not suspended. Suspension of flying would only mean restriction on flying. As the Question No. 8 in the proposal form is not in reference to any Act or Rules, it is to be interpreted as suspension for the use of the licence for flying. Thus, the State Commission has rightly appreciated the facts and the law on the point in dismissing the present complaint. No interference is required by this Commission in the appeal filed by the complainant.
14. I have given a thoughtful consideration to the arguments advanced by the learned counsel for both the parties and have examined the material on record. The claim of the appellant has been rejected by the Insurance Company mainly on two grounds. The first ground relates to Clause 11 of the policy, which states that if the claim from any other Insurance Company is received, then the claim under the policy will not be payable. This matter has already been clarified by the appellant that the amount paid by Indian Airlines/Air India amounting to Rs.30,00,000/- has not been paid by any Insurance Company, but it has been paid under in-house scheme of Air India/Indian Airlines. Even the Insurance Company has earlier accepted this vide its letter dated 06.8.2001, wherein it has been accepted by the Insurance Company that the payment of Rs.30,00,000/- was made from in-house scheme of the Indian Airlines/Air India. However, the insured was directed to submit the necessary documents in this regard. The Air India has already clarified vide its certificate dated 01.4.2016 that as per the Board Memorandum of e/w Indian Airlines, the Board in its 174th Meeting dated 23.03.1983 decided to evolve a new scheme of Loss of Licence Compensation-Pilot which is a self Insurance scheme to be paid from internal sources and it was also decided therein to discontinue the earlier Loss of Licence coverage through the Oriental Fire & General insurance Company. Thus, this certificate has confirmed the fact that earlier scheme, which was run by Oriental Fire & General insurance Company was discontinued long back and the amount of Rs.30,00,000/- has been paid to the appellant from in-house scheme of Air India/Indian Airlines. Thus, now no controversy remains in respect of payment of Rs.30,00,000/- from Air India/Indian Airlines that payment of this amount would not invoke Clause 11 of the policy.
15. The second point is relating to the fact that the appellant was not allowed to use his licence for three weeks on medical ground and the argument of the Insurance Company is that it would amount to suspension of the licence, whereas this information was not provided in the proposal form. There was a specific question relating to the fact whether the pilot licence was ever cancelled or suspended. The answer has been given 'none'. The State Commission has accepted the argument of the Insurance Company that as the complainant would be barred from enjoying his licence for flying for a period of three weeks in 1999, it would amount to suspension of the pilot licence. When the policy is issued for loss of licence insurance and the licence is in respect of flying, the question relating to cancellation or suspension of such licence would only be related to the relevant rules under which the pilot licence can be issued, suspended or cancelled. The general meaning of suspension relating to 'non-use' or 'non-operational' cannot be assigned in relation to this particular question in the proposal form which seeks information about cancellation or suspension of the licence. It has been the case of the complainant that suspension of his licence could only be done by competent authority under The Aircraft Act, 1934 and relevant Rules and no such order has been passed by the competent authority. Rule 19 (2A) of The Aircraft Rules, 1937 states the following:-
'19. Cancellation, suspension or endorsement of licences, certificates, [authorisation and approval] :
2A. Where the licensing authority is satisfied, after giving him an opportunity of being herd, that any person has contravened or failed to comply with these rules or any direction issued under rule 133A, it may, for reasons to be recorded in writing, suspend or cancel or vary any particulars entered in any licence, certificate, authorization or approval granted by it, and may require the holder of the licence, certificate, authorization or approval to surrender the same for cancellation, suspension endorsement or variation.'
16. From the above Rule position, it is brought out that for suspension of the licence, the competent authority has to issue notice and has to provide an opportunity of being heard and finally an endorsement to this effect has to be made on the licence. However, in the present case, no evidence is available for any of these things. Clearly, there is no endorsement of suspension on the pilot licence.
17. Based on the above examination, I find that the interpretation of 'suspension' by the Insurance Company and by the State Commission is erroneous and is not supported by the relevant law. Insurance Company has not filed any notice issued to the complainant for suspension of his licence or any other document that there was some proceeding for suspension of his licence. Clearly, there is no endorsement of suspension on the pilot licence. Thus, the Rule 19 (2A) is not satisfied, therefore, it cannot be said that the licence of the complainant was suspended for three weeks when he was barred from enjoying the benefit for his licence for flying on medical ground.
18. Though the contention of the learned counsel for the Insurance Company that material information in respect of health of the complainant was suppressed in the proposal form has some force, but this reason for not accepting the claim has not been taken in the repudiation letter and therefore, in the light of the judgment of the Hon’ble Supreme Court in M/s. Galada Power and Telecommunication Ltd. Vs. United India Insurance Co. Ltd. & Anr., Civil Appeal Nos.8884-8900 of 2010, decided on July 28, 2016, the Insurance Company cannot raise this question at this stage. In this judgment, the Hon’ble Supreme Court has held the following:-
'12. The National Commission has relied upon Clause 5 and on that basis has rejected the claim by putting the blame on the complainant. The letter of repudiation dated 20th September, 1999, which we have reproduced hereinbefore, interestingly, does not whisper a single word with regard to delay or, in fact, does not refer at all to the duration clause. What has been stated in the letter of repudiation is that the claim lodged by the complainant does not fall under the purview of transit-loss because of the subsequent investigation report.
It is evincible, the insurer had taken cognizance of the communication made by the appellant and nominated a surveyor to verify the loss. Once the said exercise has been undertaken, we are disposed to think that the insurer could not have been allowed to take a stand that the claim is hit by the clause pertaining to duration. In the absence of any mention in the letter of repudiation and also from the conduct of the insurer in appointing a surveyor, it can safely be concluded that the insurer had waived the right which was in its favour under the duration clause.
In this regard, Mr. Mukherjee, learned senior counsel appearing for the appellant has commended us to a decision of High Court of Delhi in Krishna Wanti v. Life Insurance Corporation of India, wherein the High Court has taken note of the fact that if the letter of repudiation did not mention an aspect, the same could not be taken as a stand when the matter is decided. We approve the said view.'
19. Moreover, it is also seen that the issue of giving wrong information about his health in the proposal form has not been raised even in the written statement filed by the Insurance Company. The parties cannot go beyond their pleadings. From this point of view also, this issue cannot be considered at this stage in the light of decision in Sri Shivaji Balaram Haibatti Vs. Sri Avinash Maruthi Pawar, Civil Appeal No.19421 of 2017, decided on 20.11.2017 (SC) which records as under:-
'28. It is these issues, which were gone into by the two Courts and were concurrently decided by them against the respondent. These issues, in our opinion, should have been examined by the High Court with a view to find out as to whether these findings contain any legal error so as to call for any interference in second appeal. The High Court, however, did not undertake this exercise and rather affirmed these findings when it did not consider it proper to frame any substantial question of law. It is a settled principle of law that the parties to the suit cannot travel beyond the pleadings so also the Court cannot record any finding on the issues which are not part of pleadings. In other words, the Court has to record the findings only on the issues which are part of the pleadings on which parties are contesting the case. Any finding recorded on an issue de hors the pleadings is without jurisdiction. Such is the case here.'
20. Based on the above discussion, I find that the order of the State Commission is not sustainable in the eyes of law. Accordingly, order of the State Commission is set aside and the complaint is allowed and the opposite party Insurance Company is directed to pay insurance amount of Rs.27,00,000/- (rupees twenty seven lakhs only) to the complainant within a period of 45 days from the date of this order, failing which the interest @8% p.a. on this amount from the date of this order till actual payment shall be payable. In the facts and circumstances of the present case, I do not intend to order any interest on this amount for period prior to date of this order because in my opinion, complainant took this policy knowing that he was likely to be declared as PMU in near future and that the complaint is being allowed only today so the policy amount becomes admissible today. It has been kept in mind that there is no contract in the insurance policy for payment of interest.