This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 28.01.2011, passed by the Karnataka State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in Appeal No. 3158/2010, “M/s Shriram Life Insurance Co. Ltd. vs. B.M. Pompapathy” vide which, while dismissing the appeal, the order dated 25.06.2010, passed by the District Forum, Bellary in consumer complaint No. 79/2008, allowing the said complaint, was upheld. 

2.       The brief facts of the case are that the complainant B.M. Pompapathy is the elder brother of one Kumari B.M. Gayathri, for whom a policy, “Sree Raksha” Insurance Policy was obtained from the petitioner insurance company for a sum assured of ₹3 lakh by paying a premium of ₹18,765/-.  The complainant is the nominee under the said policy as per which, the OP insurance company is liable to pay double the insured amount in the event of death of the insured.  The admitted facts are that the payment of ₹18,765/- was made vide cheque No. 988302, drawn on HDFC Bank and the same was submitted on 29.04.2006, alongwith the proposal form, although the said cheque was dated 06.05.2006.  The case of the complainant is that the insured Kumari B.M. Gayathri died on 27.05.2006, which was within one month of the presentation of the cheque to the insurance company.  However, the case of the insurance company is that at the time of payment of premium amount, the deceased was asked to undergo medical check-up which was necessary for the acceptance of the proposal for issuance of the policy.  The said medical check-up was done on 25.05.2006.  Based on the information given in the proposal form and the medical check-up, the insurance company issued the policy with date of commencement as 28.05.2006, although the insured had already died on 27.05.2006.  As per the insurance company, the factum of the death of the insured was not within their knowledge when the policy was issued.  When the claim was submitted to the insurance company, the same was repudiated on the ground that the insured had already died, when the policy was issued and hence, the claim was not payable.  The consumer complaint in question was then filed, seeking directions to the insurance company to pay the claim as per the terms and conditions of the policy alongwith bonus and 16% interest and also a sum of ₹1 lakh as compensation for mental harassment.

3.       In their reply to the consumer complaint, the insurance company stated that the factum of death on 27.05.2006 was not in their knowledge when the policy was issued.  Further as per the investigation carried out by them, the deceased was having serious health problems before applying for the policy and she had tried to obtain the same, just to take the advantage of the policy benefits.  In fact, she was not in a position to move freely from her bed for the past 2–3 years and had also been treated at Government Hospital Bellary.  For her failure to disclose about the pre-existing health problems, the contract was void, unenforceable and not legally binding.

4.       The District Forum after considering the averments made by the parties, held the OP Insurance Company liable to pay a sum of ₹6 lakh to the complainant alongwith interest @6% p.a. from the date of complaint, i.e., 24.05.2008 till realisation.  The District Forum observed that the insurance company should have processed the proposal and issued the policy within a period of 15 days of the proposal, and for their failure to do so, they were liable to pay the said sum.  Being aggrieved against the order of the District Forum, the Insurance Company challenged the same by way of appeal before the State Commission and the said appeal having been dismissed vide impugned order, the insurance company is before this Commission by way of the present revision petition.  The State Commission also observed that the insurance company should have issued the policy within 15 days of the receipt of the proposal.

5.       During hearing before me, the Ld. Counsel for the petitioner stated that there was no concluded contract between the insured and the petitioner, because the insured had already died, when the policy is stated to have been issued.  The Ld. Counsel stated that after submission of the proposal form, the Insurance Company had asked the proposer to give documents regarding her medical condition and the said medical report was submitted on 25.05.2006, a copy of which had been placed on record.  The insured died just within 2 days of the submission of medical documents, i.e., 27.05.2006, as she was suffering from some illness at the time of making the proposal.  The Ld. Counsel further stated that Kumari B.M. Gayathri was a minor at the time of submitting the proposal form, but still, she signed the said proposal form.  The contract, even if entered between the parties is nullity in the eyes of law, because the proposer was a minor.  The Ld. Counsel argued that since the factum of death had not been disclosed to the insurance company, the contract between the parties was void abinitio.  Further, in the death-cum-inquiry report made by the Insurance Company, it has been brought out that she was not in a position to even move from her bed for the past 2–3 years and that she had been treated in Bellary Government Hospital at OPD, 15 days before her death.  The Ld. Counsel argued that the Ld. Consumer Fora below had drawn a wrong conclusion that the insurance company was bound to issue the policy within 15 days of the proposal.

6.       The Ld. Counsel for the respondent, however, stated that the in so far as the insured being minor is concerned, the insurance company had raised the issue at the time of filing the revision petition only.  In their written statement filed before the District Forum, they had never taken the plea about her age.  The Ld. Counsel further stated that even a minor was entitled to get an insurance policy as per relevant rules/regulations.  Further, if the insurance company took the plea that the insured was suffering from some pre-existing disease, it was for them to prove the same.  The medical report given by the medical examiner of the insurance company had stated that she was in good condition of health.

7.       I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

8.       The main issue for consideration in the present case is whether the insurance company was liable to pay the sum insured and benefits under the policy to the deceased, although the proposer had already died, when the policy was issued.  It has not been denied anywhere that the medical examination of the proposer was carried out on 25.05.2006.  It is also not denied that while submitting the proposal form on 29.04.2006, a post-dated cheque for the premium, carrying the date 06.05.2006 had been given.  It is also clear that the policy is dated 31.05.2016, whereas the date of commencement has been stated to be 28.05.2006, while the deceased had already died on 27.05.2006.  The contention of the petitioner that there was no concluded contract between the parties, and that the proposal got extinguished on the death of the proposer, is not without reasonable basis.  It was the duty of her elder brother to duly inform the insurance company about the death of the insured.  A simple submission of the proposal form or the medical report, does not mean that the policy had come into existence, and a contract had been made between the proposer and the insurance company. 

9.       The consumer fora below, in their concurrent findings, have taken the plea that it was the duty of the insurance company to have processed the proposal, and issued the policy within 15 days from the date of filing the proposal form.  Both the State Commission and the District Forum concluded that there was deficiency in service on the part of the insurance company in not doing so.  However, the view taken by the consumer fora below is erroneous in the eyes of law, because as per the admitted facts on record, the proposal when submitted, was not complete, as a post-dated cheque had been attached with the same and moreover, the medical examination was done only on 25.05.2006.  It is a matter of common prudence that unless a complete proposal alongwith the required documents is presented before an insurance company, they are not duty bound to issue a policy, based on such incomplete proposal.  In the present case, the insurance company issued the policy on 31.05.2006, indicating the date of commencement as 28.05.2006, which was only a few days after the submission of the medical report.  The insurance company is not deficient in service in any manner, in so far as the issuance of the Policy is concerned.  On the other hand, the factum of death of the insured on 27.05.2006 was never brought to their notice, in the absence of which, the contract of insurance cannot be stated to be a valid contract.  Further, as per the stand taken by the petitioner, the proposer was a minor on the date of submitting the proposal form.  Although this plea was not taken by the insurance company at the time of filing the reply to the complaint, but the age of the proposer is a matter of fact, and no denial has come from the side of the complainant on this score.  It is clear, therefore, that the proposal form could not have been signed by Kumari B.M. Gayathri, being a minor at that time.  The complainant should have ensured that the proposal form was submitted, after appointing some guardian for the said Kumari B.M. Gayathri.

10.       Based on the discussion above, it is clear that there was no concluded contract between the insurance company and the deceased, and that the proposal made to the insurance company got extinguished with the death of the proposer and hence, the insurance company cannot be held liable to make any payment under the policy to the complainant.  The order passed by the consumer fora below are, therefore, set aside as they are not in accordance with law.  This revision petition is allowed and the consumer complaint stands dismissed.  There shall be no order as to costs.