Haryana

StateCommission

CC/605/2017

GOKAL CHAND - Complainant(s)

Versus

AXIS BANK - Opp.Party(s)

ARJUN GROVER

14 May 2019

ORDER

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

HARYANA PANCHKULA

                  

                                                Complaint  No.605 of  2017

Date of the Institution:25.09.2017

Date of Decision: 14.05.2019

 

1.      Sh.Gokal Chand (deceased) through is legal representatives (L.Rs.):-

i)        Mrs.Prem Vati, w/o Sh. Late Sh.Gokal Chand.

ii)       Sh.Deepak Bhardwaj, s/o Sh. Late Sh.Gokal Chand

iii)      Miss. Sonam Bhardwaj, d/o Sh. Late Sh.Gokal Chand,

All residents of H.No. 1716, Ist Floor, DLF, Phase-4,Gurgaon, Haryana 122002.

iv)      Mrs. Jyoti Bhardwaj, w/o Sh. Sh.Harsh Bhardwaj, d/o Sh. Late Sh.Gokal Chand, presently residing at Unit-6/504 Church Street North Paramatta, NSW-2151, Australia.

2.      Mrs. Prem Vati w/o Sh. Lt. Sh.Gokal Chand, R/o H.No. 1716 1^st Floor, DLF, Phase-4, Gurgaon, Haryana 122002.

                                                                   .….Complainants

Versus

 

1.      Axis Bank Limited, Vipul Square, 7^th Floor,Sushant Lok-1,Gurgaon, Haryana-122002, through its Branch Manager.

2.      Max Life Insurance Corporation Limited, Head office 11 & 12^th Floor, DLF square, Jacaranda Marg, DLF City, Gurgaon, Haryana-122002, through its Managing Director.

…..Opposite Parties

 

CORAM:    Mr.Ram Singh Chaudhary, Judicial Member

                   Mrs.Manjula, Member

 

 

Present:-    Mr.Arjun Grover, Advocate for complainant.

Mr.Nitin Grover, Advocate counsel for opposite party No.1.

Mr.Rajneesh Malhotra, Advocate for the opposite party No.2.

 

O R D E R

RAM SINGH CHAUDHARY, JUDICIAL MEMBER:

 

          The brief facts of the case are that the complainant-Gokal Chand obtained housing loan  of Rs.70,99,172/- from the opposite party No.1, which was got insured with O.P.No.2.  On 25.07.2017 the loan was sanctioned and disbursed to them.  On 25.07.2017, the insurance premium of Rs.6,24,172/- was deducted from O.P.No.1. The installments of Rs.82,577/- was to be repaid in 132 monthly installments.   On 27.07.2017 the sale deed registered for plot No.274 situated in the residential colony known as Sector 28 UE,Gurugram Haryana.  On 30.07.2017, the O.P.No.1 called the complainant No.1 for doing certain tests, which was done.  The complainant No.1 requested the O.P.No.1 to provide the insurance policy.  Unfortunately, on 08.08.2017 the complainant No.1 died due to cardiac arrest. Legal heirs intimated the bank as well as insurance company on 15.08.2017 about the demise of Gokal Chand (deceased life assured) due to cardiac arrest.  On 17.08.2017 after almost two weeks from the demise of her husband, the complainant No.2 received a purported and ante-dated letter from O.P.No.2 bearing a date on it i.e. 03.08.2017 through Blue Dart Courier having remarks on it that the proposal stands postponed till 6 months. The letter was posted on 16.08.2017 and received by the complainant on 17.08.2017.  The O.P.No.1 has credited the amount of Rs.6,24,172/- in the loan account without consent from the complainant No.2 and the policy stands declined as the premium was returned.  Thus there was deficiency in service on the part of the O.Ps.

2.      Notice being issued, opposite party No.1 separately contested the claim with the averments that answering respondent was neither into the business of insurance nor the insurance facility was availed by the complainants from the answering opposite party.  It was denied that a sum of Rs.6,24,1`72/- received from the opposite party No.2 towards the refund of the insurance premium was credited by the answering opposite party unilaterally. The O.P.No.2 has already declined the policy. The complainants had no financial liability towards the answering opposite party.  Preliminary objections about the maintainability of complaint, accruing case of action, no privity of contract, mis-joinder of parties etc. were also raised and requested to dismiss the complaint.

3.      Opposite party No.2 separately contested the claim with the averments that answering respondent  has no role in granting any loan to the deceased. It was specifically denied that answering OP had obtained any blank signed documents from the deceased and the complainant No.2 for issuing the insurance policy.  O.P.No.2 received the proposal form on 20.07.2017 from deceased life assured. The complainant No.1 deposited proposal deposit to the tune of Rs.6,24,172/- on 25.07.2017.  In the proposal form, the complainant No.1 stated that he was not suffering from any disease as asked in the health declaration form.  there was mismatch between the medical tests and the health declaration form filled by the deceased and the proposal form has been postponed for six months. The proposal deposit of Rs.6,24,172/- was refunded on 17.08.2017 in Axis Bank and intimation was  sent to Sh.Gokal Chand vide letter dated 31.08.2017.  On the date of death of DLA, there was no policy in existence and neither any communication of the life insurance contract made to Sh.Gokal Chand.  It was a case of unconcluded contract and there no amount was payable to the complainants by the answering respondent.  Thus there was no deficiency in service on the part of the O.Ps.

4.      When the complaint was posted for recording evidence of the parties, the counsel for the complainants in his evidence has tendered the affidavit of Smt. Premwati as Ex.CA vide which she has reiterated all the averments taken in the complaint and further tendered the documents Ex.C-1 to Ex.C-8 and closed his evidence.

5.      On the other hand in order to rebut the evidence led on behalf of the complainants, the learned counsel for the O.P.No.1 had also tendered the affidavit Ex.RA that of Mr. Titwik Banerjee, authorized representative of O.P.No.1as Ex.R-1/A and also tendered documents Ex.R-1/1 to R-1/2 and closed his evidence.  O.P.No.2 had also tendered the affidavit of Mr. Sumit Jain, Manager as Ex.RA and affidavit of Mr. Abhay Talwar (claims) as Ex.RB alongwith documents Ex.R-1 to Ex.R-4 and closed his evidence.

6.      The arguments have been advanced by Mr.Arjun Grover, the learned counsel for the complainant as well as Mr.Nitin Grover, the learned counsel for the opposite party No.1 and Mr.Rajneesh Malhotra, Advocate for the respondent No.2.  With their kind assistance the entire records as well as whatever the evidence had been led during the prosecution of the complaint had also been properly perused and examined.

7.                Having heard the counsel for the parties, it is important to make reference here that a housing loan was raised by Gokal Chand complainant No.1 since deceased, the total sum of Rs.70,99,172/- and this amount was also to be insured with the opposite party No.2. The housing loan was raised by Gokal Chand since deceased from O.P.No.1.  For the purpose of insuring loan amount, the premium amount of Sh.Gokal Chand since deceased was also debited, but, O.P.No.2  to its wisdom wanted to get the insured medically examined to rule out any serious medical ailment.  On 30.07.2017 as per the medical record available on the judicial record, he was medically examined, the reports was obtained.  It is also out of place make a reference here that though the loan  account was debited, but, since  question of privity of the contract is involved and the question arises when the policy has not been issued.  A privity of contract comes into existence between the insured and the insurer.  As per the settled proposition of law that the offer  becomes complete and a contract between the two parties comes to the conclusion once the acceptance   is conveyed.   In the present case, there is offer only by way of debiting the amount of the deceased, but, since the offer has not been accepted, the contract does not come into picture or the contract between the two parties is not concluded and the similar proposition has been laid down by Hon’ble Apex Court of the land in a celebrated authority reported as  in Civil appeal No.2216 of 2018 titled as D.Srinivas Vs. SBI Life Insurance Co. Ltd. and ors decided on 16.02.2018, though a conflicting view has also been taken and similar is the position of another authority reported as LIC Vs. Raja Vasireddy Komalavalli Kamba and others 1984 AIR (SC) 1014 and it has also been observed that the judgement only laid down the flexible formula for the court to see as to whether there was a clear indication of acceptance of the insurance.  It is to be noted that the impugned majority order merely cites the aforesaid judgement, without appreciating the circumstances which give rise to a very clear presumption of acceptance of the policy by the insurer in this case at hand.  The insurance contract being a contract of utmost good faith, is a two-way door.  The standards of conduct as expected under the utmost good faith obligation should be met by either party to such contract and any exceptional circumstances acceptance of the premium waived the condition precedent for medical examination.

8.                As per the later reference of the judgement, once the premium is accepted, it amounts waiving of the medial examination.  Contrary to it, as per the facts and circumstances of the case, keeping in view the heavy amount involved for the purpose of insurance, it was a precedent condition for the insurance company first to get the insured medically examined and then to decide as to whether the offer is to be accepted or not.  For the sake of repetition, the premium has been debited and stands paid, but, medically record was subjected to scrutiny and was under investigation and on this account the policy could not be issued. In the meanwhile, Gokal Chand had expired, but, no such intimation was given by the family members to the insurance company.  The proposal form submitted by Gokal Chand since deceased is Ex.R-1, whereas the medical examination form is Ex.R-2, the intimation given to Sh.Gokal Chand since deceased vide letter EX.R-3 dated 03.08.2017, it was informed that the decision to accept the proposal has been deferred or postponed till six months on the ground of fully investigation or to be investigated thoroughly.  Once the offer has been declined by the insurance company on account of the fact that it requires a period of six months to examine the fully investigation of the complainant including medical record, in that eventuality, the loan amount would not be deemed to be insured and by writing a separate letter Ex.R-4  dated 31.08.2017,  again the intimation was given to Gokal Chand since deceased, the amount of Rs.6,24,172/- which was debited in his account has been refunded by O.P.No.1.

9.                This is the situation that the offer has not been accepted and the contract had not come into existence and the policy has not been issued, it would be deemed that the acceptance is complete only when the communication is taken place or conveyed to the other party.  Obviously, in the present case, since the insurance policy has not been issued, it is obvious that the communication, if any, though has not been taken place and it was separately writing a letter that the case has to be examined for six months and then only the decision will be taken. The only inference, in such circumstances, can be taken that for accepting the offer, it has been postponed for six months and then only to decide as to whether the offer is to be accepted or not  and if the offer was accepted and the policy was issued, in that eventuality, the privity of contract could have been concluded and the claim could have been justified to be made by the legal representative of the deceased Gokal Chand. Similar is the proposition laid down by Hon’ble Supreme Court  in LIC Vs. Raja Vasireddy (supra), the mere receipt and retention of premium is not acceptance. Resultantly, the conclusion to be drawn by this Commission is that the privity of contract has not come into existence, which could render any assistance to the present complainants for the purpose of seeking the claim of the loan amount on account of the sudden demise of Gokal Chand (since deceased) and is a natural corollary, the contention raised on behalf of the complainants that the premium had been paid and once the premium had been paid the contract had come into existence is of no consequence and does not support the case of the complainants as the insurance company was well within its legal rights to examine the individual  case and it is only on getting the satisfaction that it is a fit case for the purpose of insurable interest converted upon Gokal Chand and since no insurable interest is accrued in favour of Gokal Chand (since deceased) the complaint finds no favour from this Commission and resultantly, the complaint stands dismissed.

 

May  14th, 2019                    Manjula                                  Ram Singh Chaudhary                                                        Member                                  Judicial Member                                                                   Addl.Bench                            Addl.Bench               

S.K.