IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA CWP No. 8 of 2007 Reserved on : 2nd July, 2008 Date of Decision: 22nd July, 2008 Smt. Dev Dassi Petitioner Versus United India Insurance Co. and another Respondents Coram The Hon’ble Mr. Justice Jagdish Bhalla, Chief Justice The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? Yes. For the petitioner: Mr.Vinay Kuthiala, Advocate. For the respondents: Mr.Ashwani K. Sharma, Advocate, for respondent No.1. Mr.R.K.Bawa, Advocate General, with Mr.J.D.Verma, Deputy Advocate General, for respondents No.2 and 3. Per Sanjay Karol, J. Petitioner herein has assailed the order dated 6.2.2006 passed by the Divisional Manager, Divisional Office, United India Insurance Company Limited, Shimla repudiating her claim under the Indexed Group Personal Accident Insurance Scheme jointly floated by respondent No.1 – United India Insurance Company and respondent No.2 – State of Himachal Pradesh. The following facts are undisputed. Whether the reporters of Local Papers are allowed to see the Judgment? 2 Vide order dated 30.12.2004 (Annexure P-1) the State of Himachal Pradesh, revived the “Indexed Group Personal Accident Insurance Scheme” (hereinafter referred to as the Scheme) to be implemented through United India Insurance Company Limited (hereinafter referred to as the Insurance Company), with effect from 1.1.2005 upto 31.12.2005. The Scheme, compulsory in nature, was made applicable to all of its employees regular, adhoc, part-time, contractual and daily waged of Government departments, Boards, Corporations, Universities and autonomous bodies. The premium per employee was fixed at Rs.91 per annum and the sum insured was Rs.2 lacs. As per the Scheme, the State Government was to make an advance payment of Rs.1,36,50,000/- on account of premium for approximately 1,50,000 employees. Scope of cover and specimen of claim intimation letter and claim form formed part of the Scheme as Annexure A, I and II. The petitioner’s husband late Shri Beli Ram, was employed as a Peon, in the office of the District Food and Supplies Controller, Shimla and his premium for the coverage under the Scheme evidently stood paid by the State. Unfortunately on 5.6.2005, Shri Beli Ram (hereinafter referred to as an employee) was found dead and FIR No.166 of 2005 under Sections 302 and 201, IPC was registered with the Police Station, Sadar, Shimla. The petitioner herein, being the wife of the deceased employee lodged the Claim Intimation Letter and Claim Form with the Insurance Company for compensation. The same, however, was repudiated by the Insurance Company on the ground that the employee was found to be under 3 the influence of liquor and since the alcoholic contents were found to be 345 mg., therefore, in view of exception clause 5(b) of the policy the rejection of the claim was justifiable. The petitioner, 45 years of age, having two young and unmarried daughters to look after was left with no option but to file the present writ petition. However, taking a sympathetic view of the matter and to enable her to tide over the crisis respondent No.2-State gave her a contractual appointment at a salary of Rs.2620/- per month, initially for a period of one year, which was extended for another year. The Insurance Company has admitted that the Scheme (Annexure P-1) being compulsory in nature was revived by the Government, but, however, has clarified “that the Insurer had not assumed liability for the payment of amount on the basis of Scheme (Annexure P-1), rather the same was subject to terms and conditions of policy which governed the contract of insurance inter se the parties.” On merits, it is the case of Insurer that since the post-mortem report of the employee showed liquor contents, therefore, the provisions of condition 5(b) of the policy stood violated, thus excluding the coverage under the policy. The petitioner has placed on record copy of judgment dated 8.3.2007 passed by the Additional Sessions Judge, Shimla, HP in Sessions Trial No. 18-S/7 of 2005, titled as State of H.P. vs. Suresh Kumar, from which it is clear that the employee was murdered. Mr. Vinay Kuthiala, learned counsel appearing for the petitioner has submitted that the petitioner claim was squarely covered under the Scheme and the Insurance policy (Annexure RA) dated 3.5.2007 is inapplicable having been issued subsequent to the date of death of the 4 employee; without prejudice and in the alternative, it is argued that the policy was never circulated or contents thereof made known to any employee and, therefore, the terms and conditions stipulated therein cannot be said to be applicable to the employee; that the exclusion clause would be applicable only and only if the consumption of alcohol or liquor had a direct nexus with the death of the employee. Learned Advocate General supported the petitioner and has submitted that the claim ought to have been adjudged in accordance with the Scheme, Annexure P-1. Per contra, Mr. Sharma, learned counsel appearing for the Insurance Company has argued that the contract governing the parties are the terms and conditions contained in the Insurance Policy and not the Scheme which is not binding on the Company. In view of the conflict between the Scheme and the terms of the policy, the policy is to prevail. We have heard the learned counsel for the parties. From the judgment dated 8.8.2007 passed by the learned Additional Sessions Judge, Shimla, it is evident that while deciding Sessions trial No.18-S/7 of 2005 and convicting the accused guilty of an offence committed under Sections 302 and 201, IPC, the Court has relied upon the following circumstances, which stand proved on record:- “1. On 4.6.2005 in the evening/night all the three accused were together and were also heard talking about their quarrel with deceased. 2. Blood stains were found on the floor of accused’s room and also on some articles lying in the room. 3. Floor of the accused’s room appeared to have been washed to wipe off blood stains. 5 4. The piece of cloth stated by accused to have been used for washing floor contained traces of blood. 5. Trail of blood stains was found from accused’s quarter up to the place where dead body was lying. 6. Sim-card belong to the deceased was found lying near the dead body. 7. Blood was found on the accused’s finger and the ring. 8. Weapon of offence was recovered at the instance of accused. 9. Plea of alibi taken by accused is false.” It is, thus evident that the employee stood murdered and the death was not as a result of intoxication of liquor. For the purpose of adjudication of the matter and for proper appreciation of the terms the relevant clauses of Annexure A of the Scheme (Annexure P-1) and the policy (Annexure RA) are reproduced as under:- Annexure A of Scheme “UNITED INDIA INSURANCE CO.LTD. TIMBER HOUSE CART ROAD, SHIMLA-171001 Scope of cover of Group Personal Accident Policy for Employees of state of Himachal Pradesh. a) IF ACCIDENTAL INJURY SHALL WITHIN 12 (TWELVE) CALENDER MONTHS OF ITS OCCURRENCE BE THE SOLE AND DIRECT CAUSE OF THE DEATH OF THE INSURED PERSON THE CAPITAL SUM INSURED OF RS.2,00,000/- STATED IN THE SCHEDULE HERETO SHALL BE APPLICABLE TO SUCH INSURED PERSON. b) IF SUCH INJURY SHALL WITHIN 12 (TWELVE) CALENDER MONTHS OF ITS OCCURRENCE BE THE SOLE AND/OR DIRECT CAUSE OF THE TOTAL AND IRRECOVERABLE LOSS OF.” The relevant clause of Insurance Policy Annexure RA is as under: “EXCEPTION 6 PROVIDED ALWAYS THAT: The Company shall not be liable under this policy for: 1 to 4…………………………………………………….. 5. Payment of compensation in respect of Death, Injury or Disablement of the Insured person (a) from intentional self-injury suicide or attempted suicide, (b) whilst under the influence of intoxicating liquor or drugs, (c) whilst engaging in aviation or whilst mounting into, dismounting from or travelling in any aircraft other than as a passenger (fare paying or otherwise) in any duly licenced standard type of aircraft anywhere in the world (d) directly or indirectly caused by veneral disease or insanity, (e) arising or resulting from the Insured committing any breach of the law with criminal intent.” Annexure ‘A’ is very clear. Neither the Scheme nor the said Annexure stipulates any exceptions to the Scheme. In fact it does not even refer to any of the terms and conditions of Insurance Policy as is stated to be in Annexure RA. In the present case, the Government had floated a special Scheme containing special terms and conditions and thus in our view the employees cannot be said to be governed by any of the standard terms and conditions, contained in standard printed format, which are usually applicable to regular customers under normal conditions. It was a special scheme, compulsory in nature, made applicable by the State Government to all of its employees and for which the Insurance Company had availed the benefit of having received premium in advance of a sum of Rs.1,36,50,000/-. It is not the case of the Insurance Company or that of the State that the terms and conditions (Annexure RA) were circulated to the employees or the employees had any means of having learnt thereof. The employee had died within the insured period. It is not a case of suicide nor 7 a case where the employee, under the “influence of intoxicating liquor” had sustained injuries by fall and had died due to the same. As per the post- mortem report the alcoholic contents were only 345 mg. Unfortunately, he was murdered by his neighbours, two of whom were juveniles. No act resulting into death, is attributable to the employee. Natural meaning is to be given to the intention of the parties and the contents of agreement. If there is any ambiguity or a term is capable of two possible interpretations, one beneficial to the insured should be accepted as it would be consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. [United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644; United India Insurance Co. Ltd. Vs. Pushpalaya Printers, (2004) 3 SCC 694]. The Apex Court has reiterated this principal in Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd., (2006) 12 SCC 673, and has held that the insurer being a State within the meaning of Article 12 of the Constitution of India is expected to act fairly and reasonably and cannot be permitted to inequitably deny the claim of insured by raising a false plea. The purport and object must be given full effect and in a case of ambiguity the construction of an insurance policy should be made in favour of the insured and not the insurer. While construing a contract of insurance, the reason for entering thereinto and the risks sought to be covered must be considered on its own terms. A Constitutional Bench of the Apex Court in General Assurance Society Ltd. Vs. Chandmull Jain, AIR 1966 SC 1644 has held as under:- 8 “in a contract of insurance there is requirement of uberrima fides i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem, that is, against the company in case of ambiguity or doubt.” Further in United India Insurance Co. Ltd. Vs. Great Eastern Shipping Co. Ltd., (2007) 7 SCC 101, the Apex Court has held that in case of interpretation of policy if two views are possible, then the one which favours the policy holder should be accepted as the same serves the purpose for which the policy is taken and would be in consonance with the object to be achieved for the lives assured and also the Courts, while interpreting the policy should keep in view the intention of the parties as well as the words used in the policy. If the intention of the parties subserves the expression used therein then the expression used in that context should be given its full and extended meaning. The Court took into consideration its earlier view reported in LIC of India v. Raj Kumar Rajgarhia, (1999) 3 SCC 465, reiterating that while construing the meaning of a particular word found in an agreement between the parties the intention of the parties to the document in question will have to be given necessary weightage and it is not possible to give a wider and liberal meaning merely because one of the parties to the said agreement is a public authority. Clause 5 is to be read in totality and Condition 5(b) by itself cannot be read in isolation as is sought to be read by the learned counsel for the Insurance Company. The exception clause is applicable if death, injury of disablement arises. (a) from intentional self-injury suicide or attempted suicide, (b) whilst under the influence of intoxicating liquor or drugs, 9 (c) whilst engaging in aviation or whilst mounting into, dismounting from or travelling in any aircraft other than as a passenger (fare paying or otherwise) in any duly licenced standard type of aircraft anywhere in the world (d) directly or indirectly caused by veneral disease or insanity, (e) arising or resulting from the Insured committing any breach of the law with criminal intent. It is noticeable that actions in exceptions in clauses (a) (c) and (e) are directly attributable to the insured. Clause (d) in fact clarifies that no compensation is to be paid if the death, injury or disablement of the insured occurs due to his direct or indirect cause of veneral disease or insanity. The policy framers are conscious and in juxtaposition clause (b) is absolutely silent about direct or indirect cause of liquor resulting in the death of the insured. “Whilst under the influence of intoxicating liquor” has to be construed so as to mean that the death has resulted as a direct consequence of intoxicating liquor taken by the employee. The conditions laid down in Clause 5 have to be read ejusdem generis and it is evident that the actions of the employee must be related to the cause of his death. In our view, there is no conflict between the scheme and the exception clause of the policy. Both have to be harmoniously construed and in any event keeping in view the ratio of law laid down by the Apex Court, it would be safe to conclude that intention of the parties to the agreement was that Annexure ‘A’ of the Scheme issued by the Insurance Company itself, specifying the scope of cover, is applicable and thus the claimant was 10 entitled to a compensation on the death of insured employee. In terms of Annexure ‘A’, “accidental injury” is “sole and direct cause of death of the insured person” and, therefore, the employee was entitled to “the capital sum insured of Rs. 2 lacs”. The interpretation as sought to be given by the learned counsel for the Insurance Company would result into absolute absurdity, hardship and rendering the object, purpose and terms of the policy to be redundant being contrary to the intention of the contract between the parties. The condition of exception as is sought to be interpreted by the Insurance Company does not have any nexus to the object of the Scheme. Had the employee died as a result of influence of liquor, the stand taken by the Insurance Company was perhaps acceptable but in the present case the facts are not so. That the employee had consumed liquor is not at all relevant because it is not related to the cause of his death. The petitioner with two unmarried young daughters was rendered absolutely helpless with no one to support her after the sudden and unexpected, tragic death of the employee. The Insurance Company being a beneficiary under the scheme and itself having issued and got circulated the Scope of cover of the policy, Annexure A, now cannot be permitted to turn around and deny the legitimate claim defeating the object and purpose of the Scheme. The Insurance Company is a State and ought to have acted in a fair and just manner. Their actions are absolutely arbitrary, unreasonable and unjustifiable. It ought to have come forward and accepted the claim as per the Scheme. While considering the Claim the Insurance Company has not even adverted to the Scheme and thus without applying its mind and by 11 adopting callous and indifferent attitude has repudiated the claim in a stereo typed manner. For the foregoing reasons, the present writ petition is allowed. Annexure P-7 order dated 6.2.2006 is set aside, quashed. Respondent No.1 Insurance Company is directed to pay the amount of compensation of insured sum to the family of the deceased employee as per Scheme Annexure P-1 alongwith interest @ 6% per annum from the date of lodging the claim forthwith and not later than eight weeks from today. The Insurance Company shall also pay costs amounting to Rs.25,000/- to the petitioner. (Jagdish Bhalla), C.J. 22nd July, 2008 (Sanjay Karol), J. (C)