The Supreme Court has very recently decided an important question of law that death due to malaria inflicted by mosquito bite is not an accident which will have a wide repercussion on accident claims handling by insurance companies.
In Civil Appeal No 2614 of 2019, The Branch Manager, National Insurance Co. Ltd. v Mousumi Bhattacharjee & Ors, decided on 26.03.2019, the sole and lone question before the Apex Court was whether a death due to malaria occasioned by a mosquito bite in Mozambique, constituted a death due to accident.
The present Special Leave Petition No. 4297 of 2017 arose out of an Order of National Consumer Disputes Redressal Commission dismissing an appeal filed by the Respondent co. in a consumer case in which State Commission had dismissed an appeal against a District Forum’s Order allowing the claim in favor of the Petitioners terming death caused by malaria induced by mosquito bite is accident.
The brief facts of this case is that Mr. Debashis Bhattacharjee, the spouse of the first respondent and the father of the second respondent applied for a housing loan for an amount of Rs. 13.15 lacs from the Bank of Baroda on 16 June 2011. The loan was sanctioned and was repayable in 113 monthly installments, each of Rs. 19,105/-. Incidental to the loan, he availed of the facility of an insurance scheme called “National Insurance Home Loan Suraksha Bima”. On 25 August 2011, a policy was issued to cover the loan amount of Rs. 13.15 lacs with a term of 20 years commencing on 25 August 2011. A single premium was paid against the policy. The policy was a non-life insurance product intended to provide insurance security to a person who obtains a loan for constructing, purchasing or repairing a residential house, flat or apartment. Section I of the policy insured the house against fire and allied perils, including earthquakes. Section II insured the borrower against personal accidents.
The insured was working as a Manager of a Tea Estate in Assam. He thereafter took up employment in 2012 as a Manager of a Tea Factory at Cha-De-Magoma, District Gurue, Province-Zambezia, Republic of Mozambique. During his stay in Mozambique, the insured was admitted to the hospital on 14 November 2012. He was diagnosed with encephalitis malaria and died on 22 November 2012 due to multi-organ failure. His death certificate issued by the Republic of Mozambique spelt out the conditions and causes of death thus:
“VII. Conditions and causes of death
56. Causes of the Death WRITE ONE DIAGNOSIS PER LINE
Direct cause a) Multi organ failure
Intermediary cause b)Encephalitis Malaria
Basic Cause c) Pnasituria – Malaria.”
The heirs of the deceased filed a complaint under the Consumer Protection Act 1986 before the District Consumer Disputes Redressal Forum, North 24 PGS, Barasat alleging that the insurer had committed a deficiency of service in not settling the claim under the insurance cover. In the written statement filed by the appellant, it set up the plea that Section II of the policy insured the borrower of the loan against personal accident. Death due to malaria caused by a mosquito bite was, in the submission of the insurer, a result of an infection or disease and was not an accidental death under the terms of the insurance policy.
Section II of the policy is reproduced below:
“Section II:
1. Death due to accident.
2. Accidental loss of two limbs, two eyes or one limb and one eye.
3. Permanent total disablement or injuries other than that named above.”
The exclusions from Section II were:
1. Loss of one limb or one eye
2. Any accidental injury or loss not mentioned under
Section-II above
3. Cumulative Bonus
4. Education Fund
5. Cost of transportation of the dead body
6. Persons below the age of 18 years at the time of disbursement of loan, and above 60 years at the end of
repayment period
7. People having Hysteria
8. Death or accidental resulting from intentional self injury, suicide or attempted suicide
9. Death or injury from accident while under the influence of intoxicating liquor or drug
10. Death or injury from accident caused by insanity or venereal disease
11. Death or injury from accident arising or resulting from the insured committing any breach of law with criminal intent
12. War or war like operations
13. Lionising radiations or contamination by radioactivity
14. Loss by delay, loss of market or any other consequential or indirect loss or damage
15. Default in repayment of installments and or loan due to any reason whatsoever except due to the occurrence of
insured peril.”
Distinction between ‘accident’ and ‘disease’:
The Court after citing various judgments of US, UK and Canada and going through the popular dictionaries’ meaning of the word “accident” observed:
“In order to constitute an accident, the event must be in the nature of an occurrence which is unnatural, unforeseen or unexpected. The present case concerns death caused due to a disease being contracted. Section II of the insurance policy covers death caused by accident. Death or injury from accident caused by insanity or venereal disease has been specifically excluded and not covered under the policy. The issue is whether death caused by any other disease not specifically excluded under the policy, is be covered.”
Colinvaux’s n Law of Insurance elucidates on the ambit of the expression ‘accident’:
“Accident excludes disease. It follows from the above principle that a disease cannot be classified as an accident. Although disease proximately caused by an accident, in the absence of any exclusion for disease will be covered by a personal accident policy, it is well established that the word “accident does not include disease and other natural causes, and implies that intervention of some cause which is brought into operation by chance and which can be described as fortuitous.” (emphasis supplied)
The Court distinguished the accident from disease by citing A W Baker Welford’s The Law Relating to Accident Insurance, where it was stated:
“The word “accident” involves the idea of something fortuitous and unexpected, as opposed to something proceeding from natural causes; and injury caused by accident is to be regarded as the antithesis to bodily infirmity caused by disease in the ordinary course of events.” (emphasis supplied)
Cambridge dictionary also defines the word ‘disease’ as an antithesis to accident:
(an) illness of people, animals, plants, etc., caused by infection or a failure of health rather than by an accident.
The treatises and dictionary meaning extracted above construe accidents and diseases as distinct concepts. Baker Welford regards ‘accident’ as a term which does not include disease in the ordinary course of events. Colinvaux acknowledges that a disease caused as a proximate cause of an accident will be covered by a policy for personal accident, in the absence of an exclusion.
Dominant View: Disease not Accident:
There is a fine distinction between the occurrence of a disease which may be considered as an accident and a disease which occurs in the ‘natural course of events’.
As the law of insurance has developed, there has been a nuanced understanding of the distinction between an accident and a disease which is contracted in the natural course of human events in determining whether a policy of accident insurance would cover a disease. At one end of the spectrum is the theory that an accident postulates a mishap or an untoward happening, something which is unexpected and unforeseen. This understanding of what is an accident indicates that something which arises in the natural course of things is not an accident. This is the basis for holding that a disease may not fall for classification as an accident, when it is caused by a bodily infirmity or a condition. A person who suffers from flu or a viral fever cannot say that it is an accident: the flu was transmitted in the natural course of things. To be bitten by a mosquito and be imbued with a malarial parasite does involve an element of chance. But the disease which is caused as a result of the insect bite in the natural course of events cannot be regarded as an accident particularly, when the disease is caused in an area which is malaria prone.
Finally the Court held that in the present case the insured was based in Mozambique. According to the World Health Organization’s World Malaria Report 2018, Mozambique, with a population of 29.6 million people, accounts for 5% of cases of malaria globally. It is also on record that one out of three people in Mozambique is afflicted with malaria. In light of these statistics, the illness of encephalitis malaria through a mosquito bite cannot be considered as an accident. It was neither unexpected nor unforeseen.
Effect of NCDRC Ruling:
Earlier welcoming the decision of the National Consumer Disputes Redressal Commission in the same case in January 2017, Dr Narsing Reddy, then president of Telangana IMA, said, “The case of malarial death was considered on the ground that it was something that happened unexpectedly to the patient. As a mosquito bite can’t be predicted, it is to be seen as an accident. No one expects a bite to happen; and when there’s accident coverage, the insurance claim of the victim or his family can’t be rejected.”
After the ruling the Indian Medical Association has asked the insurance regulatory authority to cover deaths relating to dengue, malaria and chikungunia under accident policies and many insurance companies have come up with the policies covering death caused by these diseases after the National Commission ruling.
The National Commission upholding both the judgments of lower courts observed that the policy did not define the term “accident” and relied upon the definition of ‘accident’ given in the Oxford dictionary, wherein it is defined as “An Accident is something that happens unexpectedly and not planned in advance and causes injury”.
“It is difficult for us to accept that the death due to a mosquito bite would not be a death due to an accident,” Justice V K Jain said.
Another veteran consumer activist Shirish Deshpande welcoming the decision, however, had already sounded a note of caution. “The commission has equated the mosquito bite with dog bite and snake bite. But malaria is endemic in nature. The judgment needs to be tested finally by the Supreme Court as it may open the floodgates for such claims.”
Conclusion:
The Apex Court decision though has far reaching consequences in dealing with accidental claims and will certainly open the floodgates of accidental claims litigations but its applicability seems to be restricted as Court has heavily relied on the statistics on malaria prevalent in Mozambique while reaching to the conclusion that malaria inflicted by mosquito bite is not an accident. It is also not in dispute in this case that malaria is not in the exclusion list. Hence, the ruling cannot be taken as laying down a thumb rule that all such cases are not covered as ‘accident’. Its applicability in a given case has to be tested in the background of disease’s spread and rate of incidence in that area in a given case and other attaining circumstances including policy wordings esp. coverage and exclusions. The discussion and inferences drawn on distinction between ‘disease’ and ‘accident’ has shed some light on the complex issues of ‘accident’ and “disease’, and when a disease induced by a disease becomes an accident.
