The Branch
Manager, National Insurance Co. Ltd. vs
Smt. Mousumi Bhattacharjee & Ors
Civil Appeal No 2614 of
2019
SLP(C) No. 4297 of 2017
Facts:
The appeal before the
Hon’ble Supreme Court filed by the National Insurance Co. Ltd. known as the
Appellant challenging the insurance claim award given in favor of Smt. Mousumi
Bhattacharjee known as the Respondent. The issue before the hon’ble court was a
very interesting question pertaining to insurance laws, whether the bite of a
mosquito resulting in malaria and ultimately untimely death of the first
respondent while working in Mozambique would amount to “accident” as described
in the insurance policy thus making the appellant liable to pay the claim.
Debashis Bhattacharjee,
husband of the first respondent and father of the second respondent applied for
a home loan from Bank of Baroda worth Rs. 13.15 Lakhs on 16th June 2011.
Subsequently, the loan was sanctioned and was to be repaid to the bank in 113
monthly installments, each of Rs. 19,105 (Nineteen thousand one hundred five
only). The respondent keeping in mind the loan amount bought an insurance
scheme covering the loan called, “National Insurance Home Loan Suraksha Bima”.
On 25th August 2011 the policy was duly issued to cover the hundred
percent loan amount with a policy term of twenty years commencing from the date
of policy issued, one single premium was paid against the policy. The policy
was a non-life insurance product designed to give insurance protection to a
person who takes out a loan to build, buy, or restore a home, flat, or
apartment.
Section I of the policy
insured the house against fire and allied perils including earthquake. Section II
insured the borrower against personal accidents. The respondent was employed as
a Tea Estate Manager in Assam. In 2012, he began working as a Tea Factory
Manager in Cha-De-Magoma, District Gurue, Province-Zambezia, Republic of
Mozambique. The respondent was admitted to the hospital on November 14, 2012,
while in Mozambique. He was diagnosed with encephalitis malaria and died of
multi-organ failure on November 22, 2012. The deceased's heirs filed a
complaint with the District Consumer Disputes Redressal Forum 3, North 24 PGS,
Barasat under the Consumer Protection Act
1986[1],
claiming that the insurer had failed to settle the claim as they believed that
the section II “personal accidents” covered the respondent’s death. The
appellant made the argument in its written statement that Section II of the
policy covered the loan borrower against personal injury. According to the
insurer, death from malaria induced by a mosquito bite was the consequence of
an illness or sickness, not an accidental death under the provisions of the
insurance policy. The District Forum granted the claim and ordered the insurer
to pay all outstanding EMIs on the loan to the Bank of Baroda in a decision
dated February 28, 2014. The appellant filed a statutory appeal with the State
Commission. The State Commission, in an order dated February 2, 2016, upheld
the District Forum's decision, ruling that a "sudden death due to mosquito
bite in a foreign location" constituted an accident, rather than a natural
death. The National Commission in its order further upheld the judgment of the
previous commission and held:
“The term “accident”
has not been defined in the policy which the deceased had taken and therefore
contextual dictionary meaning of the said term has to be taken for the purpose
of 3 “District Forum” 4 “the “West Bengal State Commission” deciding whether the death of the deceased
was due to an accident or not. An accident is something that happens
unexpectedly and is not planned in advance. It is defined as
(i) as unpleasant
event, especially in a vehicle, that happens unexpectedly and causes injury or
damage, (ii) something that happens unexpectedly and is not planned in advance,
in the Oxford Advanced Learner’s Dictionary”
Issue Raised:
Whether the death by
the mosquito bite can be counted as an “accident” and the insurance claim can
be awarded to the respondents.
Contention:
Appellant strongly
contended that the meaning of “accident” does not cover mosquito bite, moreover
Ms. Madhavi Divan, learned Additional Solicitor General argued that clause 3(A)
of the insurance terms required the insured to notify the insurer immediately
of any change in business or employment however the respondent failed to notify
the insurer that he had taken a position in Mozambique, which was a major
infringement of the policy condition. Furthermore, Malaria is a regular occurrence in tropical
areas, notably in Mozambique; the respondent's death was thus not accidental,
as the term 'accident' implies an unnatural, unanticipated, or unexpected
event. It is commonly understood that the term "accident" excludes sickness
and other natural causes.
Rationale:
The Hon’ble Supreme
Court in the case very strictly examined the meaning and context of the word
“accident” and whether a disease can be called an accident. The court mentioned
many international as well as previous judgements passed by the hon’ble court. One
such judgment being Union of India v
Sunil Kumar Ghosh[2],
in which the court held that, an accident is an unanticipated occurrence or
incident that startles one when it occurs but does not startle one when it does
not occur. An accident occurs when something unexpected happens, rather than
when something expected happens. In a similar case Regional Director, ESI Corporation v Francis De Costa[3]
the expression “accident” was defined as the popular and ordinary sense of
the word ‘accident’ means the mishap or an untoward happening not expected and
designed to have an occurrence is an accident.
Accidental death is
covered by insurance policies. The coverage clearly excludes and does not cover
death or harm from an accident caused by insanity or venereal disease. The
question is whether death from any sickness not explicitly excluded by the
insurance will be covered. The issue whether a disease can be covered under the
ambit of the expression ‘accident’ has been analyzed in A W Baker Welford’s The Law Relating to Accident Insurance[4],
harm produced by accident is to be viewed as the antithesis to physical
infirmity caused by illness in the ordinary course of events, and injury
induced by accident is to be seen as the antithesis to bodily infirmity caused
by disease in the regular course of events.
In 1861, the Queen’s Bench Division 13[5]
in the UK was called upon to consider whether a sunstroke suffered by a person
while on board a ship in the course of performing his ordinary duties would
amount to an accident. Cockburn C.J. delivering the judgment of the court held
that it is difficult to define the term "accident," as used in this
policy, in such a way that a precise line can be drawn between injury or death
caused by accident and injury or death caused by natural causes, and that line
can be applied universally. The Court distinguished between a 'accident' and a
natural occurrence, concluding that death from sunstroke was not an accident.
In Co-operators Life Insurance Company vs Randolph Charles
Gibbens[6] The
Canadian supreme court was directed with a rather strange question of law. The
court was tasked on deciding whether the contracting
a rare complication of herpes that resulted in paralysis caused due to
engagement in unprotected sex would be covered under the definition of
‘accident’. While viruses and bacteria spread from person to person and
occasionally between species, either directly or indirectly. And someone would
not remark "I had an accident" if they became ill with influenza in "ordinary
people's English." "In the regular order of events," we catch
the flu.
In Steel vs Cammel,
Laird & Co[7]
the court headed by Cozens Hardy L.J. observed that such a disease which is
caused by a plausible foreseeable event cannot be termed as “accident”. The
court further held that injury by disease alone not accompanied by an accident
is expressly excluded.
The expression of “accidental death insurance” has been
very briefly discussed in P Ramanatha
Aiyar’s Advanced Law Lexicon[8].
Insurance that pays out in the case of death caused by an accident but not by
disease. Payment is provided to the insured's beneficiary in the case of death.
If the insured suffers bodily injury, the contract stipulates a payout.
In
evaluating whether a policy of accident insurance would cover a sickness, a
complex understanding of the distinction between an accident and a disease
contracted in the normal course of human events has arisen as the law of
insurance has evolved. The view that an accident presupposes a mishap or an
adverse occurrence, something unexpected and unforeseeable, is on one extreme
of the spectrum. This definition of an accident implies that something that
occurs in the normal sequence of events is not an accident. This is the premise
for arguing that when a sickness is caused by a biological ailment or
condition, it cannot be classified as an accident.
Final
Order:
The
Hon’ble Supreme Court after hearing the learned counsel from both sides decided
that no, a mosquito bite cannot be termed as an “accident” under the insurance
coverage policy and hence the respondents are not entitled to get any claim
from the insurance company.
Judgment:
The
Supreme Court impugned all the previous orders by the state & national
commission and held that the respondent is not entitled to claim the insurance.
However, during the course of hearing on being made aware that the appellant has
already paid the claim to the bank the hon’ble court exercising its
jurisdiction under article 142 of the Indian Constitution directed that no
recoveries shall be made from the respondents.
Defects
of law:
While the insurance
companies are ever ready to sell their insurance policy to more and more people
they often don’t want to give the necessary claim benefit when it comes to
actually claiming the policy. We everyday encounter such cases where the
insurance company while selling the policy to the consumer makes many claims
but once the policy is sold they often resort to “fine print” to free
themselves from the obligations arising from any mishaps. This is a serious
issue which the IRDA needs to look into extensively and clear out any
misconceptions which may be present in the insurance laws.
Inference:
Consumers from all over
India buy insurance policies to protect various of their liabilities and assets
of interest. While most of them don’t actually experience anything which might
trigger them to claim the insurance money, some of the cases like the one
discussed above result into conflict of ideas in the legal world. Such cases
cast light on the rarely discussed technicality of laws and how complex
something as simple as a mosquito bite can be in a legal sense.
With this judgment the
hon’ble court made the distinction between accident and disease with respect to
the insurance laws clear for further cases to come.
AUTHORED
BY:
VAIBHAV
BHARDWAJ, Ist Semester Law Student
Vivekananda
Institute of Professional Studies,
Guru
Gobind Singh Indraprastha University
[1] Consumer
Protection Act, 1986, No. 68, Acts of Parliament, 1986 (India).
[2] Union
of India v. Sunil Kumar Ghosh, 1984 AIR 1737, 1985 SCR (1) 555.
[3] Regional
Director, ESI Corporation v. Francis De Costa, 1992 SCR (3) 23, 1993 SCC Supl. (4) 100.
[4] A
W BAKER WELFORD, THE LAW RELATING TO ACCIDENT INSURANCE (London : Butterworth,
1923)
[5] Sinclair v. Maritime Passengers Assurance, 1861 3 E&E 478
[6] Co-operators
Life Insurance Company v. Randolph Charles Gibbens, 2009 SCC 59
[7] Steel
v. Cammel, Laird & Co, 1905, 2 K.B. 232
[8] P
RAMANATHA AIYAR ET. AL. , ADVANCED LAW LEXICON (LexisNexis; 2017th edition, 23 December
2016)
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