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Smart Summary

Structured Summary of the Opinion — District Consumer Disputes Redressal Forum, Jalandhar (Complaint No.342/2017)

Factual and Procedural Background

This opinion concerns Complaint No.342 of 2017 filed before the District Consumer Disputes Redressal Forum, Jalandhar (Date of institution: 18.09.2017; Decision: 19.02.2020). The complainants are Tagore Hospital & Heart Care Centre Pvt. Ltd. and Dr. Ravi Seth. The opposite parties are The Oriental Insurance Co. Ltd. (OP No.1) and Ramesh Kumar (OP No.2). The complaint was filed under the Consumer Protection Act.

The complainants alleged that they were covered by comprehensive professional indemnity insurance policies issued by OP No.1 (policy details and sums insured and validity periods are set out in the record). A prior consumer complaint (No.507 of 2015) had been brought by Respondent/OP No.2 on 01.12.2015; the complainants and the insurer were served in that earlier proceeding. The complainants assert they informed the insurer and requested the insurer to take up the defence, relying on prior assurances that the insurer would arrange counsel or reimburse legal costs if it did not opt to defend. The insurer did not engage counsel. The complainants engaged counsel at a fee of Rs.22,000 and later paid an order (two cheques of Rs.5,00,000 each) to satisfy an order dated 15.06.2017 which required payment of Rs.10,00,000 to Respondent No.2. OP No.2 withdrew the amounts from the complainants' bank accounts on 04.08.2017.

The complainants sought indemnification from OP No.1 for the Rs.10,00,000 paid, reimbursement of legal fees (Rs.22,000) and fees for the present complaint (Rs.15,000), interest and Rs.50,000 as token compensation for harassment. OP No.1 appeared, filed a written reply contesting maintainability and jurisdiction and claiming the insurer has the prerogative to process and verify claims as per policy terms; OP No.2 did not appear and was proceeded against ex parte. Evidence was adduced by both sides (affidavits and documents), and the Forum heard counsel and reviewed written submissions.

Legal Issues Presented

  1. Whether the instant complaint was premature and therefore not maintainable because the complainants had not first submitted an insurance claim and completed the formalities required by the insurer.
  2. Whether this Forum had jurisdiction to adjudicate the matter in summary proceedings, given the insurer's contention that there were complicated questions of law and fact and that the insurer had a contractual prerogative to process and verify the claim under the policy terms.

Arguments of the Parties

Complainants' Arguments

  • The complainants alleged they held comprehensive professional indemnity insurance policies with OP No.1 covering the relevant event(s) and that OP No.1 had assurance obligations: to arrange counsel for defence or reimburse legal costs if it did not opt to defend.
  • They stated that they informed OP No.1 in writing about the earlier consumer complaint and requested OP No.1 to take up the defence; OP No.1 did not engage counsel.
  • On OP No.1's inaction, the complainants engaged counsel at a fee of Rs.22,000 and later satisfied an adverse Forum order by paying Rs.10,00,000 (two cheques of Rs.5,00,000) to OP No.2; OP No.2 withdrew the amounts.
  • They claimed OP No.1's failure to respond to correspondence and a legal notice dated 22.08.2017 constituted deficiency of service and caused harassment and inconvenience; they sought indemnity for the Rs.10,00,000, reimbursement of legal fees, additional costs for pursuing the present complaint, interest, and Rs.50,000 as token compensation.
  • The complainants referenced a prior Forum decision (Gurmeet Singh vs. Tagore Hospital dated 13.07.2015) as a similar situation in which the office made payment out of the Forum in indemnification after deposit by an insured party.

OP No.1 (The Oriental Insurance Co. Ltd.) — Arguments

  • OP No.1 contested maintainability, asserting that the complaint was premature because the complainants had not followed the procedure of submitting an insurance claim and completing required formalities before approaching the Forum.
  • It argued that the Forum lacked jurisdiction to adjudicate complicated questions of law and fact in summary proceedings and that the matter involved the insurer's prerogative to process and verify claims in accordance with the policy terms.
  • OP No.1 denied various allegations on merits and maintained that the complaint was filed primarily to drag the insurer into unnecessary litigation; it sought dismissal with costs.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Judgment of this Forum dated 21.06.2017 (referenced in the record) As described in the opinion: the earlier judgment granted a liberty to OPs No.1 to 3 to directly claim insurance amount from the insurer (Oriental Insurance Company) if they considered it appropriate; it did not grant liberty to file a straightway complaint without following prescribed procedures. The Court reviewed this judgment and interpreted it to mean that complainants must first submit an insurance claim along with required documents and fulfill formalities; because the complainants had not done so, the present complaint was held to be premature and therefore dismissed.
Gurmeet Singh Vs. Tagore Hospital (dated 13.07.2015) — decision of the Forum Described in the opinion as a prior instance where the office made payment out of the Forum in indemnification of the amount after deposit by the judgment-debtor insured. The complainants relied on this earlier decision to argue that indemnification should follow in the present case. The Court noted the existence of that decision but observed that OP No.1 did not act in the same way in the present matter; the Court did not apply that prior decision to decide the present complaint on merits because it dismissed the complaint as premature.

Court's Reasoning and Analysis

The Forum first considered OP No.1's preliminary objection that the complaint was premature. The Court examined the prior judgment of this Forum dated 21.06.2017 cited in the record and interpreted that judgment as granting a conditional liberty: the parties may directly claim insurance amounts from the insurer only after following the mandated procedure — i.e., submitting an insurance claim with the necessary documents and fulfilling formalities required by the insurer.

The Court found, on the available record, that the complainants had not submitted any insurance claim to OP No.1 nor fulfilled the formalities demanded by the policy or insurer prior to instituting the present complaint. In light of that finding and the interpretation of the earlier judgment, the Court concluded that the present complaint was filed prematurely.

Because the complaint was dismissed on the ground of prematurity, the Court did not proceed to decide substantive or factual controversies between the parties (including the insurer's alleged failure to engage counsel or to indemnify). The Court nonetheless granted the complainants a limited procedural liberty to pursue the insurance claim process with OP No.1.

Holding and Implications

Holding: The Forum DISMISSED the instant complaint as premature and DISPOSED OF the matter with the following operative directions.

  • The complainants were given liberty to file the insurance claim with OP No.1 within 30 days from the date of receipt of the copy of this order and to submit the required documents and fulfill formalities so that OP No.1 may process the claim.
  • If, after completion of that process, the complainants are not satisfied with OP No.1's settlement of the claim, they have liberty to file a fresh complaint before the Forum.

Direct consequences: The present complaint is dismissed for prematurity; the Forum did not adjudicate the substantive merits or award indemnity or damages. The opinion does not discuss broader legal implications beyond the procedural direction; no new precedent is authoritatively established by this decision on the substantive issues, as the matter was not decided on merits.

Administrative directions: Copies of the order were to be supplied to the parties free of cost and the file indexed and consigned to the record room. The order is dated 19.02.2020 and signed by Karnail Singh (President) and Jyotsna (Member).

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    Tagore Hospital and Heart Care Centre Pvt. Ltd. v. The Oriental Insurance Co. Ltd.

    BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, JALANDHAR. Complaint No.342 of 2017 Date of Instt. 18.09.2017 Date of Decision:19.02.2020

    1. Tagore Hospital & Heart Care Centre Pvt. Ltd., Banda Bahadur Nagar Mahavir Marg, Jalandhar.

    2. Dr. Ravi Seth, M. S. Tagore Hospital & Heart Care Centre Pvt. Ltd., Banda Bahadur Nagar Mahavir Marg, Jalandhar ..........Complainants Versus

    1. The Oriental Insurance Co. Ltd., Divisional Office, 32, G. T. Road, Jalandhar through its Senior Divisional Manager.

    2. Ramesh Kumar S/o Sh. Lal Chand, 77/1, Green Model Town, Jalandhar. ... Opposite Parties Complaint Under the Consumer Protection Act. Before: Sh. Karnail Singh (President) Smt. Jyotsna (Member) Present: Sh. Arvind Arora, Adv. Counsel for the Complainants. Sh. Brijesh Bakshi, Adv. Counsel for the OP No.1. OP No.2 exparte. Order Karnail Singh (President)

    1. This complaint has been filed by the complainants, wherein alleged that the complainants stood insured by the respondent No.1 for Rs.25,00,000/- to one event by policy No.233100/48/2015/128 valid from 01.04.2014 to 30.03.2015 on a premium of Rs.1,24,637/- and the complainant No.2, vide Policy No.23310848/2014/3150 valid from 01.02.2014 to 31.01.2015 for Rs.20,00,000/-.

    2. That the respondent No.2 brought a consumer complaint on 01.12.2015 (No.507 of 2015) and the complainant received the summons from this Forum in respect of the same. The respondent No.1 being the insurer was also served by the Forum. The complainants from their side also informed in writing the respondent No.1 about coming of the complaint and requested the respondent No.1 to engage the defence of the case since at the time of booking professional indemnity insurance, the company had assured that it would arrange the counsel in case of any event like to give rise to a liability and the company would have the option to take up the defence. It was also declared by the insurance company that in case, the insurance company did not opt to take up the defence, the complainant may engage its own lawyer and legal cost and expenses incurred in defence of the case shall be met by the insurance company. On failure of the respondent No.1 in engaging a lawyer on behalf of the complainants, the complainants were left with no option except engaging their own lawyer on a fee of Rs.22,000/-, to which the respondent No.1 was informed. The position was that the respondent No.1 neither engaged the lawyer for the complainants, nor disputed in engaging a lawyer by the complainants, so taking up one thing with the other, it was concluded that the consent of the respondent No.1 was there, so the complainants paid the said fee, moreover, did so, after making out from the legal circles that any advocate would be charging this fee in the minimum in such type of cases. It is said that the respondent insurance company also undeniably pays this much amount of fees to its counsels.

    3. That the case went into trial in the presence of the parties. On 15.06.2017, the Forum passed the order against the complainants and allowed Rs.10,00,000/- to the respondent No.2 to be paid to the complainant within 30 days from the date of receipt of the copy of order failing which the said amount to be paid with interest @ 9% from the date of filing complaint till realization. The complainants were comprehensively insured with the respondent No.1, therefore, called upon in writing the insurance company vide letter dated 25.07.2017 to satisfy the order of the Forum to deposit the amount in the Forum by 28 July, 2017 to avoid the circuitous action i.e. once theth claimants depositing and then going in for the proceedings for recovery from the respondent No.1, the cost and expenses of which incidentally were to fall on the respondent No.1. The respondent No.1 did not respond to the above call, so on account of its silence to pay the amount to the complainant in the Forum, the complainants resolved to satisfy and satisfied the order of the Forum on 28.07.2017 through two cheques each of Rs.5,00,000/-. Before so satisfying, the respondent No.1 was informed on and the copies of the cheques were sent to the respondent No.1 in proof of the payments. Respondent No.2 presented the cheques to his bankers and received the amount from the accounts of the complainants on 04.08.2017. On withdrawal of the amount by the respondent No.2 from the bank accounts of the complainants, the respondent No.1 was called upon to indemnify the complainants lest the complainants should be made to pay further a fee of Rs.15,000/- to the lawyer for presenting and prosecuting the complaint. The respondent No.1 is willful in its approach, in the sense that in the similar situation the office had decided to make payment out of the Forum in indemnification of the amount after depositing the amount by the JD insured in the Forum i.e. Gurmeet Singh Vs. Tagore Hospital on 13.07.2015, but in the present case, the same kind of decision has not come home to the respondent No.1.

    4. That the respondent No.1 is a nationalized insurance company performing the functions normally expected by the state authorities, but have unfortunately not the basic considerations of replying the correspondence of the complainants including the legal notice dated 22.08.2017, which is gross deficiency that has caused harassment, mental tension and inconvenience to the complainants which though cannot be compensated in numerical terms, however claim Rs.50,000/- as token redemption and accordingly, the instant complaint filed with the prayer that the complaint of the complainant may be accepted and OPs be directed to pay Rs.10,00,000/- with interest @ 9% per annum from 04.08.2017 till realization alongwith Rs.22,000/- of the fees as paid to the lawyer in the main case and Rs.15,000/- for the present complaint besides Rs.50,000/- towards the harassment, inconvenience and mental tension caused to the complainant.

    5. Notice of the complaint was given to the OPs, but despite service OP No.2 did not bother to appear and ultimately, OP No.2 was proceeded against exparte, whereas OP No.1 appeared through its counsel and filed a written reply, whereby contested the complaint by taking legal objections that the above noted complaint is not maintainable under the law against the respondent No.1 and liable to be dismissed with cost. It is further averred that the instant complaint has been filed qua OP No.1 just to drag the OP No.1 in the present unnecessary litigation, therefore, this complaint is liable to be dismissed with special cost and further alleged that there is a complicated question of law and facts involved in the matter and the same cannot be adjudicated in summary proceedings, therefore, this Forum has got no jurisdiction to try and decide the present complaint. It is further submitted that no cause of action accrued to the complainant to file the present complaint because the present complaint has been straightaway filed as prematurely and as such, the same is liable to be dismissed. It is further averred that even otherwise it is the prerogative and right of the respondent No.1 to process and verify the claim as per policy terms and conditions alongwith the prescribed requisites and valuable right conferred by agreement between the parties cannot be taken away by filing the instant complaint. On merits, it is admitted that a comprehensive insurance policy was obtained by the complainants, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.

    6. Replication not filed.

    7. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavits of the complainant Ex.CA and Ex.CB alongwith some documents Ex.C-1 to Ex.C-17 and closed the evidence.

    8. Similarly, counsel for the OP No.1 tendered into evidence affidavit Ex.OA alongwith some documents Ex.O-1 to Ex.O-3 and closed the evidence.

    9. We have heard the learned counsel for the respective parties and also gone through the written arguments submitted by counsel for the complainant as well as counsel for the OP No.1 and also glanced the case file very minutely.

    10. Before going through the main controversy between the parties, we like to take a preliminary objection of the OP No.1, wherein the OP No.1 alleged that the instant complaint has been filed by complainant straightway, which is premature and therefore, the same is liable to be dismissed. The complainant has erected the entire facts as envisaged in the complaint upon the judgment of this Forum dated 21.06.2017 and alleged that in view of that judgment, the instant complaint has been filed to seek direction to the OPs to make the payment, which has been paid by the complainant to OP No.2, who filed the previous complaint. We have gone through the judgment of this Forum and find that a liberty was given to OPs No.1 to 3 in that complaint (now complainants), if they consider an appropriate, then they can directly claim insurance amount from OP No.5 i.e. Oriental Insurance Company. No liberty was given in that judgment to file a straightway complaint, rather it is mandate for every party to follow the procedure and accordingly, the complainant has to file insurance claim alongwith required documents and also fulfill the formalities whatsoever desired by the insurance company, then insurance claim of the complainant will be considered by the OP i.e. Oriental Insurance Company, but admittedly, the instant complaint has been filed by the complainant directly without submitting any insurance claim with the insurance company and thus, we are fully agreed with the OP No.1 that the instant complaint is premature and therefore, the same is dismissed, but a liberty is given to the complainants to file the insurance claim with the OP No.1 within 30 days from the date of receipt of the copy of order and thereafter, the said claim will be settled by the OP No.1 Oriental Insurance Company on either side and there upon if the complainants will not be satisfied with that settlement, they have again liberty to file a fresh complaint, accordingly, with these observations, the instant complaint is disposed of. This complaint could not be decided within stipulated time frame due to rush of work.

    11. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room. Dated Jyotsna Karnail Singh 19.02.2020 Member President [ Karnail Singh] PRESIDENT [ Jyotsna] MEMBER

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    Comments

    Tagore Hospital and Heart Care Centre Pvt. Ltd. v. The Oriental Insurance Co. Ltd.
    (Feb 19, 2020)