1. The present Appeal has been filed against the Order dated 18.08.2015 passed by the State Consumer Disputes Redressal Commission Rajasthan, Jaipur (hereinafter to be referred to as “State Commission”), whereby the Complaint filed by Bhanwari Devi, (hereinafter referred to as the Complainant) against the Birla Sunlife Insurance Company Ltd. (hereinafter referred to as the Appellant Insurance Company) was allowed and the Complainant was directed to submit a formal claim form and complete the necessary formalities with the Appellant Insurance Company.

 

2. Brief facts of the case as narrated in the Complaint are that under the influence and allurement made by an agent of the Appellant Insurance Company, the Complainant’s husband accepted the offer of the Appellant Insurance Company for obtaining a Life Insurance Policy and paid a premium of ₹4,200/- by Cheque No. 778858 dated 16.07.2012 against the Premium Receipt No. 26432909 dated 16.07.2012.  In the Policy, in addition to life insurance cover of ₹24 lakh, medi-claim facility of ₹1 lakh was also covered.  On 26.07.2012, the Complainant’s husband received a letter from Appellant Insurance Company mentioning therein the Application No. A4708593 and Policy No. 005674530 but the Policy was not received.  When the Complainant’s husband informed the Appellant Insurance Company for non-receiving of the Policy, he was assured that the Policy would be issued very soon.  On 16.09.2012 unfortunately the Complainant’s husband died.  The Complainant and her son approached the Appellant Insurance Company alongwith death certificate of her husband for claiming life assured amount of ₹24,00,000/-.  The Appellant Insurance Company assured the Complainant that the payment of the claim will be made very soon.  Despite repeated requests, the Appellant Insurance Company failed to make the payment of the life assured amount to the Complainant.  Alleging Deficiency in Service and Unfair Trade Practice on the part of the Appellant Insurance Company, the Respondent/Complainant filed a Consumer Complaint before the State Commission seeking following reliefs:-

(a) That under the aforesaid insurance policy, the Insurance amount of ₹24,00,000/- alongwith 18% p.a. interest, may please be given to the Complainant from the Opposite Parties.

 

(b) That due to the negligence/careless act of the Opposite Parties and deficiency in service on their part, the Complainant suffered mental, physical and economic loss and in lieu of that, a compensation of ₹2,50,000/- may please be given to the Complainant from the Opposite Parties.

 

(c) That the Complainant had to spend her precious time in making several rounds/visits to the office of the Opposite Parties and in lieu of that, a compensation of ₹25,000/- may please be given to the Complainant from the Opposite Parties.

 

(d) That ₹51,000/- for complaint expenses and Counsel fee may please be given to the Complainant from Opposite Parties.

 

(e) Any other relief which this Hon’ble Commission may deem fit and proper may also be passed in favour of the Complainant.”

 

3. The Appellant Insurance Company contested the Complaint before the State Commission and submitted that no formal contract had been concluded between the parties as the proposal of the Policy had been rejected by them and the premium amount received from the Proposer had been returned to the Proposer by cheque on 10.09.2012 but it was returned back undelivered. However, the premium amount was refunded to the proposer through NEFT on 21.05.2014.  It was further submitted that as soon as the proposal is received, it is feeded into the computer and the system generates a policy number even the proposal is still pending.  Therefore, on the basis on the policy number the proposer does not get any right for claim.  

 

4. After hearing both the Parties and perusal of material on record, the State Commission allowed the Consumer Complaint in above terms by observing as under:-

“We are of the opinion that the Company cannot allot any policy number unless the proposal has been accepted and in this case the policy number was allotted to the deceased. The policy cover was not dispatched to the deceased till September 2012 when they came to know about the death of the deceased, they withheld the policy in view of the large claim amount and then refunded the premium on 10.9.2014 through direct ECS. The Company has not come out with records of rejecting the proposal at their end. No official record has been produced, for this the Company was given enough opportunity to prove that contract was not concluded. Even accepting that temporary policy number was allotted then computer record of cancellation i.e. non- acceptance of proposal could be produced by the Company.

 

The learned counsel for the company has also submitted that there has been no formal claim lodged with the company. Hence, no claim can be processed. We while accepting the Complaint direct the complainant to submit a formal claim form and complete the necessary formalities.”

 

5. Feeling aggrieved by the Order dated 18.08.2015 passed by the State Commission, the Appellant Insurance Company has filed the present Appeal before this Commission.

 

6. Mr. Sanjay K. Chadha, learned Counsel appearing for the Appellant Insurance Company submitted that the Policy number is generated in the system of the Appellant Company for each and every application and the Policy is issued only once the proposal for insurance is accepted by their Underwriting Department but in the present case, the proposal for insurance of Life Assured was rejected by them as the income proof submitted by the Life Assured was found to be forged, therefore, there was no insurance contract was concluded between the Life Assured and the Appellant Insurance Company.  In the absence of which they are not liable to pay the sum insured.  They returned the premium by cheque on 10.09.2012 but it was returned back undelivered. However, the premium amount was again refunded to the proposer through NEFT on 21.05.2014.  He further submitted that the insurance is a subject matter of solicitation and mere submission of application does not entitle the proposer to claim any benefit under the policy before it gets accepted by the Insurance Company.  In support of his contentions, he relied upon a Judgment dated 27.03.1984 passed by the Hon’ble Supreme Court in “Life Insurance Corporation of India vs. Raja Vasireddy Komallavalli” [Reported in 1984 AIR 1014] and Order dated 26.10.2017 passed by this Commission in “Birla Sunlife Insurance Co. Ltd. vs. Mahendra Todi”.  He prayed that the Order dated 18.08.2015 passed by the State Commission be set aside and the Consumer Complaint filed by the Complainant be dismissed. 

 

7. Per contra, Sh. Ch. G.R. Nagar, learned Counsel for the Respondent, supported the Order passed by the State Commission as according to him the State Commission had passed a well-reasoned and justified Order, which is based on a correct and rightful appreciation of evidence and material available on record and does not call for any interference.  He relied upon a Judgment passed by the Hon’ble Supreme Court in “D. Srinivas vs. SBI Life Insurance Co. Ltd. & Ors.” [Civil Appeal No. 2216 of 2018 dated 16.02.2018].  

 

8. We have heard Mr. Sanjay K. Chadha, learned Counsel appearing for the Appellant Insurance Company, Mr. Ch. G.R. Nagar, learned Counsel appearing for the Respondent/Complainant, perused the material available on record and given a thoughtful consideration to the various pleas raised by them.

 

9. We have gone through the Insurance Premium Receipt dated 16.07.2012.  Clause 5 of the Receipt reads as under:

“For application under consideration, the insurance cover shall commence after the said application form for insurance has been examined and accepted by BSLI this shall be communicated separately to you. The prevailing NAV as on date of acceptance /commencement of risk will be applicable.”

 

10. From a bare perusal of the above Clause it is clear that the insurance cover could not have commenced without the application form having been accepted by the Appellant Insurance Company.  In the present case, from the record maintained by the Appellant Insurance Company, it is evident that the Proposal of the Insured was rejected ‘in view of financial not justified’.  Therefore, the Policy document was not issued by the Appellant Insurance Company to the Complainant.  Since the life of the deceased was never covered by the Appellant Insurance Company, the Appellant Insurance Company is not liable to pay the insured amount, which would have been payable in the event of the proposal being accepted.  

 

11. Similar view was taken by a Coordinate Bench of this Commission in ‘Birla Sunlife Insurance Company Ltd. vs. Mahendra Todi’ [RP No. 546 of 2017 dated 26.10.2017].  

 

12. The Hon’ble Supreme Court vide its Order dated 11.12.2021 in ‘Mahendra Todi vs. Birla Sunlife Insurance Company Ltd. [Civil Appeal No. 7638 of 2021 dated 11.12.2021] upheld the view taken by this Commission by observing as under:- 

‘...In any case, the proposals having not been accepted, the claim of the appellant could not have been countenanced. To this extent, the order passed by the National Commission calls for no interference.’

 

13. For the reasons stated hereinabove, the Appeal is allowed.  The Impugned Order dated 18.08.2015 passed by the State Commission is set aside and the Complaint is hereby dismissed.  Keeping in view the facts and circumstances of the case, there shall be no order as to costs.