High Court

form dated 05.01.2003, which was accepted and first premium receipt was issued with Policy No.213679292 with date of commencement dated 06.01.2003 for a term of 34 years with annual premium of Rs.10,000/- payable till January-2036. It is stated that the date of vesting of the annuity was 06.01.2037 and the notional cash option was Rs.487110/- . It is stated that vide letter dated 02.09.2003, the father of the policy holder and the respondent herein, informed about the unfortunate demise of the policy holder 'Dishant Tyagi' on account of a road accident and also in the said communication demanded that he be provided the form as well as, the policy bond, which according to him, was never issued. The said communication is on record as Annexure No. 8. The petitioner, by means of a communication dated

29.01.2003 sent a letter enclosing therewith an amount of Rs.10,000/-, which was the amount of premium that was paid prior to the death of the policy holder.

4. Subsequently, vide communication dated 24.09.2004, the petitioner informed the respondent that a cheque of Rs.10,000/- has already been paid and no further amount is to be paid at the instance of the petitioner. Subsequently, it also bears from the record that interest of Rs.125/- was paid vide letter dated 17.12.2005. Aggrieved against the action of the petitioner in not paying the death benefits in terms of the policy, the respondent approached insurance ombudsman raising complaints. The said 3 complaint came to be rejected vide order dated

28.05.2008. Dissatisfied with the manner in which, the claim was not being granted by the petitioner, the respondent approached and filed a consumer claim complaint being Complaint No. 30 of 2010. In the said complaint, all the facts were narrated and request was made for grant of benefits flowing from the insurance policy.

5. The petitioner put in appearance and filed his reply, to which, an application was also filed. It also bears from the record that ultimately, the policy bond as well as the other documents were supplied to the respondent in the year

2008. The State Commission by means of a detailed order, considered the submission of both the parties rejected the contention of the petitioner herein, which were two fold. Firstly, that the complaint filed by the respondent before the Consumer Court beyond the prescribed period of limitation as well as the second contention that no amount was payable in terms of the policy issued, based upon reliance on the circulars issued by the petitioner. Both the said objections came to be rejected. Firstly, on the ground that the policy bond itself was made available in the year 2008 and secondly that the insurance ombudsman on the basis of grievance redressal mechanism has taken a decision against the respondent in the year 2008, thus a cause of action accrued in favour of the respondent for approaching the State Consumer Disputes Redressal Forum in the year 2008 and not as 4 pleaded by the petitioner that the cause of action would arise at the time of death. With regard to the second contention, the State Commission perused the benefits as were flowing from Policy No. 147-34 proceeded to award an amount of Rs.2175351/- along with an award of Rs.10,000/- for legal expenses.

6. Aggrieved against the said, the petitioner approached the National Consumer Disputes Redressal Forum by preferring an appeal. The said appeal came to be dismissed by means of the impugned judgement dated

08.04.2024. Both the contentions of the petitioner with regard to limitation as well as with regard to the quantum of payment were repelled by the National Commission. The findings as were recorded by the State Commission were affirmed. The National Commission also noticed that on the one hand in the receipt issued to the respondent, the proposal form as well as in the policy bond, Table No. 147 has been mentioned and in the receipt death benefits were also mentioned.

7. The contention of the petitioner that the appellant did not have the proposal form of Table No. 147 and instead thereof form which was prescribed for Table No. 122 was got filled as, the said forms were out of print and was not available. The said contention was repelled. The National Commission also noticed that the LIC prepared the policy bond on 07.07.2003 but did not dispatch for 58 days when the death intimation was sent vide letter dated 02.09.2003. The National Commission also noticed the averment 5 contained in the first premium receipt no. 0075733 issued on 25.01.2003, which indicate the date of risk that was

06.01.2003 and the date of commencement of policy, which was also 06.01.2003. In front of sum assured, plan 147-34 was transcribed. The Court noticed that deliberate manipulation was done by the petitioner in the receipt as, the phrase date of risk obtained from the date of commencement. Noticing the said conduct of the petitioner, the appeal came to be dismissed. Aggrieved against the said two orders, the present petition has been filed under Article 227 in view of the judgment of the Hon'ble Supreme Court in the case of Universal Sompo General Insurance Company Limited Versus Suresh Chand Jain and another, (2024) 9 Supreme Court Cases

8. The counsel for the petitioner reiterated the said submissions as were reiterated before both the authority. Reliance is placed upon the prescription contained in Section 24-A of the Consumer Act, 1986 (which has now been repealed by the Consumer Protection Act, 2019), in which there is prescription that the State Commission shall not admit a complaint unless satisfied within two year from the date on which the cause of action arisen. In the light of the said, it is argued that the complaint could not have been entertained and this fact has also been overlooked by the National Commission. The contention merits rejection in as much as, the cause of action, it is 6 well established, it is ‘bundle of fact’ and not a particular incident.

9. In the present case, admittedly the policy bond was issued to the respondent in the year 2008. Admittedly, the first redressal mechanism in the form of insurance ombudsman, did not agree with the respondent through an order passed in the year 2008, according to this Court, the cause of action would accrue from the date when the insurance ombudsman had passed the order against the respondent and the supply of bond in the year 2008 would itself be a cause of action.

10. Reliance is placed upon the judgment of the Supreme Court in the case of Kandimalla Raghavaiah and Co. Versus National Insurance Co. and another (2009) 7 SCC 768, which emphasis on para 17, which is as under:- "Section 24A of the Act bars any fora set up under the Act, from admitting a complaint, unless the complaint is filed within two years from the date of which the cause of action has arisen. The provision expressly casts a duty on the Commission, admitting a complaint, to dismiss a complaint complainant satisfies the District Forum, the State Commission or National Commission, as the case may be, that the complainant had sufficient cause for not filing the complaint within the period of two years from the date on which the cause of action had arisen. unless Recently, in State Bank of India Vs. B.S. Agricultural Industries (I)1, this Court, 7 while dealing with the same provision, has held: It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, `shall not admit a complaint' occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside."

11. Reliance on the aforesaid judgment cannot be accepted for the reasoning recorded in para 18 of the said judgment itself, wherein it has been described that the cause of action is a bundle of facts. 8

12. In the present case, the decision of the Ombudsman as well as, the time when the policy copy was provided, were a fresh cause of action and, the respondent filed a complaint within the time as prescribed before the Consumer Court and thus to that extent the submission of the counsel for the petitioner merits rejection and is accordingly rejected.

13. In the present case, it is also essential to notice that in exercise of power conferred by clause (zc) of sub-section (2) of Section 114A of the Insurance Act read with Section 14 & 26 of the Insurance Regulatory and Development Authority Act, the Regulatory Authority has issued regulations known as Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests) Regulations, 2002. In terms of the said regulations, point of sale has been provided in regulation no. 3, which is as under: “3. Point of Sale Notwithstanding anything (1) mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with-profits) or non-participating The allowable (without-profits). rider or riders on the product shall he clearly spell out with regard to their scope of benefits and in no 9 case, the premium relatable to all the riders put together shall exceed. 30% of the premium of the main product. Explanation: The rider or riders attached to a life policy shall bear the mature and character of the man policy, viz. participating or non participating and accordingly the life insurer shall make provisions, etc., in its books. (2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest. (3) Where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately. (4) Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the trad of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract. (5) In the process of sale, the insurer or its agent or any intermediary 10 shall act according to the code of conduct prescribed by: (i) the Authority (ii) the Councils that have been established under section 64C of the Act and (iii) the recognized professional body or association of which the agent or intermediary of insurance intermediary is a member.” Similarly regulation 4 provides for the material to be contained in proposal for insurance, which is as under: “Proposal for insurance (1) Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured fee of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form. (2) Forms and documents used in the grant of cover may, depending upon the circumstances of each case, be made available language recognised under the Constitution of India. (3) In filling the form of proposal, the prospect is to be guided by the provisions of section 45 of the Act. seeking Any proposal 11 information for grant of life cover may prominently state therein the requirements of section 45 of the Act. record insurer shall (4) Where a proposal form is not used, information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover. the benefit (5) Wherever nomination is available to the proposer, in terms of the Act or the conditions of policy, the insurer shall draw the attention of the proposer to it and encourage the prospect to avail the facility. (6) Proposal shall be processed by the insurer with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposal by the insurer.” Similarly regulation 6, prescribes the matter to be stated in the Life Insurance Policy, which are as under:- 12 “Matters to be stated in life insurance policy .-(1) A life insurance policy shall clearly state- (a) the name of the plan governing the policy, its terms and conditions; (b) whether it is participating in profits or not; (c) the basis of participation in profits such as cash bonus, deferred bonus, simple or compound reversionary bonus; (d) the benefits payable and the contingencies upon which these are payable and the other terms and conditions of the insurance contract; (e) the details of the riders attaching to the main policy; (f) the date of commencement of risk and the date of maturity or date(s) on which the benefits are payable; (g) the premium payable, periodicity of payment, grace period allowed for payment of the premium, the date of the last instalment of premium, the implication of discontinuing the payment of an instalment(s) of premium and also the provisions of a guaranteed surrender value; (h) the age at entry and whether the same has been admitted; (I) the policy requirements for (a) conversion of the policy into paid up policy, (b) surrender, (c) non-forfeiture, and (d) revival of lapsed policies; (j) contingencies excluded from the scope of the cover, both in respect of the main policy and the riders; 13 (k) the provisions for nomination, assignment, and loans on security of the policy and a statement that the rate of interest payable on such loan amount shall be as prescribed by the insurer at the time of taking the loan; (l) any special clauses or conditions, such as, first pregnancy clause, suicide clause, etc.; and (m) the address of the insurer to which all communications in respect of the policy shall be sent; (n) the documents that are normally required to be submitted by a claimant in support of a claim under the policy. (2) While acting under regulation 6(1) in forwarding the policy to the insured, the insurer shall inform by the letter forwarding the policy that he has a period of 15 days from the date of receipt of the policy document to review the terms and conditions of the policy and where the insured disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection, when he shall be entitled to a refund of the premium paid, subject only to deduction of a proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges. (3) In respect of a unit linked policy, in addition to the deductions under sub- regulation (2) of this regulation, the insurer shall also be entitled to repurchase the unit at the price of the units on the date of cancellation. 14 (4) In respect of a cover, where premium charged is dependent on age, the insurer shall ensure that the age is admitted as far as possible before issuance of the policy document. In case where age has not been admitted by the time the policy is issued, the insurer shall make efforts to obtain proof of age and admit the same as soon as possible.” Similarly regulation 11 also casts certain obligations on the insurer and the insured, which are as under:- “General (1) The requirements of disclosure of "material information" regarding a proposal or policy apply, under these regulations, both to the insurer and the insured. (2) The policy-holder shall assist the insurer, if the latter so requires, in the prosecution of a proceeding or in the matter of recovery of claims which the insurer has against third parties. (3) The policy-holder shall furnish all information that is sought from him by the insurer and also any other insurer information which considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy. (4) Any breaches of the obligations cast on an insurer or insurance agent or insurance intermediary in terms of these regulations may enable the authority to initiate action against each or all of them, jointly or severally, under the Act and/or the 15 Insurance Development Authority Act, 1999.” Regulatory Interpreting the obligation casts by virtue of the protection of policy holders’ interest, the Supreme Court has dealt with the same in the case of M/S Texco Marketing Pvt. Ltd. Versus Tata AIG General Insurance Company Ltd. And others; (2023) 1 Supreme Court Cases 428 and the Hon’ble Supreme Court has also held as under:- Regulatory “21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Development Authority (Protection Policy Holder’s Interests, Regulation 2002) Act 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub-clause (iv) of Clause 3 mandates that if proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him understand. Similarly, Clause 4 enjoins a duty upon the insurer to 16 furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same.

42. Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of the IRDA Regulation, 2002. Any non-compliance on the part of the insurance companies would take to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder.” their right

14. In the present case, the petitioners have violated almost all the regulations for protection of the policy holders. Admittedly, the policy itself was supplied sometimes in the year 2008, the policy document on record does not disclose the stipulations contained in the policy and as are pleaded by the petitioners which are contradiction to the provisions of regulations 3, 6 and 11 of the regulation. Thus the contentions of the petitioner could not have been raised in view of the law as explained in the case of M/S Texco Marketing Pvt. Ltd (Supra) and quoted herein above. Thus, finding that no material could be placed, to exercise the jurisdiction vested in this 17 Court by virtue of Article 227 for interference in the two impugned orders and for all the reasons recorded above, the petition is liable to be dismissed and is accordingly dismissed. The amounts deposited before the State Consumer Dispute Redressal Commission, Lucknow, in terms of the order dated 31.05.2024 shall be paid on the respondent on his moving an application before the State Commission. Any amount falling shortfall after adjusting the deposits, would be recoverable by the respondent in accordance with law. Order Date :- 10.7.2025 Arun

form dated 05.01.2003, which was accepted and first premium receipt was issued with Policy No.213679292 with date of commencement dated 06.01.2003 for a term of 34 years with annual premium of Rs.10,000/- payable till January-2036. It is stated that the date of vesting of the annuity was 06.01.2037 and the notional cash option was Rs.487110/- . It is stated that vide letter dated 02.09.2003, the father of the policy holder and the respondent herein, informed about the unfortunate demise of the policy holder 'Dishant Tyagi' on account of a road accident and also in the said communication demanded that he be provided the form as well as, the policy bond, which according to him, was never issued. The said communication is on record as Annexure No. 8. The petitioner, by means of a communication dated

29.01.2003 sent a letter enclosing therewith an amount of Rs.10,000/-, which was the amount of premium that was paid prior to the death of the policy holder.

4. Subsequently, vide communication dated 24.09.2004, the petitioner informed the respondent that a cheque of Rs.10,000/- has already been paid and no further amount is to be paid at the instance of the petitioner. Subsequently, it also bears from the record that interest of Rs.125/- was paid vide letter dated 17.12.2005. Aggrieved against the action of the petitioner in not paying the death benefits in terms of the policy, the respondent approached insurance ombudsman raising complaints. The said 3 complaint came to be rejected vide order dated

28.05.2008. Dissatisfied with the manner in which, the claim was not being granted by the petitioner, the respondent approached and filed a consumer claim complaint being Complaint No. 30 of 2010. In the said complaint, all the facts were narrated and request was made for grant of benefits flowing from the insurance policy.

5. The petitioner put in appearance and filed his reply, to which, an application was also filed. It also bears from the record that ultimately, the policy bond as well as the other documents were supplied to the respondent in the year

2008. The State Commission by means of a detailed order, considered the submission of both the parties rejected the contention of the petitioner herein, which were two fold. Firstly, that the complaint filed by the respondent before the Consumer Court beyond the prescribed period of limitation as well as the second contention that no amount was payable in terms of the policy issued, based upon reliance on the circulars issued by the petitioner. Both the said objections came to be rejected. Firstly, on the ground that the policy bond itself was made available in the year 2008 and secondly that the insurance ombudsman on the basis of grievance redressal mechanism has taken a decision against the respondent in the year 2008, thus a cause of action accrued in favour of the respondent for approaching the State Consumer Disputes Redressal Forum in the year 2008 and not as 4 pleaded by the petitioner that the cause of action would arise at the time of death. With regard to the second contention, the State Commission perused the benefits as were flowing from Policy No. 147-34 proceeded to award an amount of Rs.2175351/- along with an award of Rs.10,000/- for legal expenses.

6. Aggrieved against the said, the petitioner approached the National Consumer Disputes Redressal Forum by preferring an appeal. The said appeal came to be dismissed by means of the impugned judgement dated

08.04.2024. Both the contentions of the petitioner with regard to limitation as well as with regard to the quantum of payment were repelled by the National Commission. The findings as were recorded by the State Commission were affirmed. The National Commission also noticed that on the one hand in the receipt issued to the respondent, the proposal form as well as in the policy bond, Table No. 147 has been mentioned and in the receipt death benefits were also mentioned.

7. The contention of the petitioner that the appellant did not have the proposal form of Table No. 147 and instead thereof form which was prescribed for Table No. 122 was got filled as, the said forms were out of print and was not available. The said contention was repelled. The National Commission also noticed that the LIC prepared the policy bond on 07.07.2003 but did not dispatch for 58 days when the death intimation was sent vide letter dated 02.09.2003. The National Commission also noticed the averment 5 contained in the first premium receipt no. 0075733 issued on 25.01.2003, which indicate the date of risk that was

06.01.2003 and the date of commencement of policy, which was also 06.01.2003. In front of sum assured, plan 147-34 was transcribed. The Court noticed that deliberate manipulation was done by the petitioner in the receipt as, the phrase date of risk obtained from the date of commencement. Noticing the said conduct of the petitioner, the appeal came to be dismissed. Aggrieved against the said two orders, the present petition has been filed under Article 227 in view of the judgment of the Hon'ble Supreme Court in the case of Universal Sompo General Insurance Company Limited Versus Suresh Chand Jain and another, (2024) 9 Supreme Court Cases

8. The counsel for the petitioner reiterated the said submissions as were reiterated before both the authority. Reliance is placed upon the prescription contained in Section 24-A of the Consumer Act, 1986 (which has now been repealed by the Consumer Protection Act, 2019), in which there is prescription that the State Commission shall not admit a complaint unless satisfied within two year from the date on which the cause of action arisen. In the light of the said, it is argued that the complaint could not have been entertained and this fact has also been overlooked by the National Commission. The contention merits rejection in as much as, the cause of action, it is 6 well established, it is ‘bundle of fact’ and not a particular incident.

9. In the present case, admittedly the policy bond was issued to the respondent in the year 2008. Admittedly, the first redressal mechanism in the form of insurance ombudsman, did not agree with the respondent through an order passed in the year 2008, according to this Court, the cause of action would accrue from the date when the insurance ombudsman had passed the order against the respondent and the supply of bond in the year 2008 would itself be a cause of action.

10. Reliance is placed upon the judgment of the Supreme Court in the case of Kandimalla Raghavaiah and Co. Versus National Insurance Co. and another (2009) 7 SCC 768, which emphasis on para 17, which is as under:- "Section 24A of the Act bars any fora set up under the Act, from admitting a complaint, unless the complaint is filed within two years from the date of which the cause of action has arisen. The provision expressly casts a duty on the Commission, admitting a complaint, to dismiss a complaint complainant satisfies the District Forum, the State Commission or National Commission, as the case may be, that the complainant had sufficient cause for not filing the complaint within the period of two years from the date on which the cause of action had arisen. unless Recently, in State Bank of India Vs. B.S. Agricultural Industries (I)1, this Court, 7 while dealing with the same provision, has held: It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, `shall not admit a complaint' occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside."

11. Reliance on the aforesaid judgment cannot be accepted for the reasoning recorded in para 18 of the said judgment itself, wherein it has been described that the cause of action is a bundle of facts. 8

12. In the present case, the decision of the Ombudsman as well as, the time when the policy copy was provided, were a fresh cause of action and, the respondent filed a complaint within the time as prescribed before the Consumer Court and thus to that extent the submission of the counsel for the petitioner merits rejection and is accordingly rejected.

13. In the present case, it is also essential to notice that in exercise of power conferred by clause (zc) of sub-section (2) of Section 114A of the Insurance Act read with Section 14 & 26 of the Insurance Regulatory and Development Authority Act, the Regulatory Authority has issued regulations known as Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests) Regulations, 2002. In terms of the said regulations, point of sale has been provided in regulation no. 3, which is as under: “3. Point of Sale Notwithstanding anything (1) mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with-profits) or non-participating The allowable (without-profits). rider or riders on the product shall he clearly spell out with regard to their scope of benefits and in no 9 case, the premium relatable to all the riders put together shall exceed. 30% of the premium of the main product. Explanation: The rider or riders attached to a life policy shall bear the mature and character of the man policy, viz. participating or non participating and accordingly the life insurer shall make provisions, etc., in its books. (2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest. (3) Where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately. (4) Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the trad of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract. (5) In the process of sale, the insurer or its agent or any intermediary 10 shall act according to the code of conduct prescribed by: (i) the Authority (ii) the Councils that have been established under section 64C of the Act and (iii) the recognized professional body or association of which the agent or intermediary of insurance intermediary is a member.” Similarly regulation 4 provides for the material to be contained in proposal for insurance, which is as under: “Proposal for insurance (1) Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured fee of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form. (2) Forms and documents used in the grant of cover may, depending upon the circumstances of each case, be made available language recognised under the Constitution of India. (3) In filling the form of proposal, the prospect is to be guided by the provisions of section 45 of the Act. seeking Any proposal 11 information for grant of life cover may prominently state therein the requirements of section 45 of the Act. record insurer shall (4) Where a proposal form is not used, information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover. the benefit (5) Wherever nomination is available to the proposer, in terms of the Act or the conditions of policy, the insurer shall draw the attention of the proposer to it and encourage the prospect to avail the facility. (6) Proposal shall be processed by the insurer with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposal by the insurer.” Similarly regulation 6, prescribes the matter to be stated in the Life Insurance Policy, which are as under:- 12 “Matters to be stated in life insurance policy .-(1) A life insurance policy shall clearly state- (a) the name of the plan governing the policy, its terms and conditions; (b) whether it is participating in profits or not; (c) the basis of participation in profits such as cash bonus, deferred bonus, simple or compound reversionary bonus; (d) the benefits payable and the contingencies upon which these are payable and the other terms and conditions of the insurance contract; (e) the details of the riders attaching to the main policy; (f) the date of commencement of risk and the date of maturity or date(s) on which the benefits are payable; (g) the premium payable, periodicity of payment, grace period allowed for payment of the premium, the date of the last instalment of premium, the implication of discontinuing the payment of an instalment(s) of premium and also the provisions of a guaranteed surrender value; (h) the age at entry and whether the same has been admitted; (I) the policy requirements for (a) conversion of the policy into paid up policy, (b) surrender, (c) non-forfeiture, and (d) revival of lapsed policies; (j) contingencies excluded from the scope of the cover, both in respect of the main policy and the riders; 13 (k) the provisions for nomination, assignment, and loans on security of the policy and a statement that the rate of interest payable on such loan amount shall be as prescribed by the insurer at the time of taking the loan; (l) any special clauses or conditions, such as, first pregnancy clause, suicide clause, etc.; and (m) the address of the insurer to which all communications in respect of the policy shall be sent; (n) the documents that are normally required to be submitted by a claimant in support of a claim under the policy. (2) While acting under regulation 6(1) in forwarding the policy to the insured, the insurer shall inform by the letter forwarding the policy that he has a period of 15 days from the date of receipt of the policy document to review the terms and conditions of the policy and where the insured disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection, when he shall be entitled to a refund of the premium paid, subject only to deduction of a proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges. (3) In respect of a unit linked policy, in addition to the deductions under sub- regulation (2) of this regulation, the insurer shall also be entitled to repurchase the unit at the price of the units on the date of cancellation. 14 (4) In respect of a cover, where premium charged is dependent on age, the insurer shall ensure that the age is admitted as far as possible before issuance of the policy document. In case where age has not been admitted by the time the policy is issued, the insurer shall make efforts to obtain proof of age and admit the same as soon as possible.” Similarly regulation 11 also casts certain obligations on the insurer and the insured, which are as under:- “General (1) The requirements of disclosure of "material information" regarding a proposal or policy apply, under these regulations, both to the insurer and the insured. (2) The policy-holder shall assist the insurer, if the latter so requires, in the prosecution of a proceeding or in the matter of recovery of claims which the insurer has against third parties. (3) The policy-holder shall furnish all information that is sought from him by the insurer and also any other insurer information which considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy. (4) Any breaches of the obligations cast on an insurer or insurance agent or insurance intermediary in terms of these regulations may enable the authority to initiate action against each or all of them, jointly or severally, under the Act and/or the 15 Insurance Development Authority Act, 1999.” Regulatory Interpreting the obligation casts by virtue of the protection of policy holders’ interest, the Supreme Court has dealt with the same in the case of M/S Texco Marketing Pvt. Ltd. Versus Tata AIG General Insurance Company Ltd. And others; (2023) 1 Supreme Court Cases 428 and the Hon’ble Supreme Court has also held as under:- Regulatory “21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Development Authority (Protection Policy Holder’s Interests, Regulation 2002) Act 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub-clause (iv) of Clause 3 mandates that if proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him understand. Similarly, Clause 4 enjoins a duty upon the insurer to 16 furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same.

42. Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of the IRDA Regulation, 2002. Any non-compliance on the part of the insurance companies would take to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder.” their right

14. In the present case, the petitioners have violated almost all the regulations for protection of the policy holders. Admittedly, the policy itself was supplied sometimes in the year 2008, the policy document on record does not disclose the stipulations contained in the policy and as are pleaded by the petitioners which are contradiction to the provisions of regulations 3, 6 and 11 of the regulation. Thus the contentions of the petitioner could not have been raised in view of the law as explained in the case of M/S Texco Marketing Pvt. Ltd (Supra) and quoted herein above. Thus, finding that no material could be placed, to exercise the jurisdiction vested in this 17 Court by virtue of Article 227 for interference in the two impugned orders and for all the reasons recorded above, the petition is liable to be dismissed and is accordingly dismissed. The amounts deposited before the State Consumer Dispute Redressal Commission, Lucknow, in terms of the order dated 31.05.2024 shall be paid on the respondent on his moving an application before the State Commission. Any amount falling shortfall after adjusting the deposits, would be recoverable by the respondent in accordance with law. Order Date :- 10.7.2025 Arun