Haryana

StateCommission

A/101/2015

SAVITA DEVI AND ANOTHER - Complainant(s)

Versus

I.D.B.I.FEDERAL IFE INSURANCE CO.LTD. - Opp.Party(s)

MANVINDER DALAL

08 Mar 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

                                                          First Appeal No: 101 of 2015

          Date of Institution:28.01.2015

                   Date of Decision :08.03.2016

 

 

1.      Smt. Savita Devi wife of Suresh Kumar Gautam;

2.      Sh. Suresh Kumar Gautam son of late Sh. Ram Gopal Gautam;

 

          Both residents of House No.962/20, Gali No.8, Near Railway Line, Amargarh Colony, Kaithal, District Kaithal.

Appellants-Complainants

Versus

1.     IDBI Federal Life Insurance Company Limited, Registered Office: 1^st Floor, Tradeview, Oasis Complex, Kamala City, P.B. Marg, Lower Parel (W), Mumbai -400013, Maharashtra through its Managing Director. 

2.     IDBI Federal Life Insurance Company Limited, Kaithal through its Branch Manager.

                                      Respondents-Opposite Parties

 

 

 

 

 

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Argued by:          Shri Manvinder Dalal, Advocate for the

                             complainants  

Shri R.S. Dhull, Advocate for the respondents

 

                                                   O R D E R

 

NAWAB SINGH J.

 

Smt. Savita Devi and Suresh Kumar Gautam-complainants have challenged the correctness and legality of the order dated December 11^th, 2014, passed by District Consumer Disputes Redressal Forum, Kaithal (for short ‘District Forum’) whereby complaint filed by them was dismissed.

2.      Deepak Kumar and Smt. Cheema Devi @ Semma Devi, husband and wife (both deceased) son and daughter-in-law of complainants submitted a proposal for insurance on own life for Rs.19,00,000/- each to IDBI Federal Life Insurance Company Limited (for short ‘Insurance Company’).  On January 27^th, 2011, Deepak Kumar and Smt. Cheema Devi @ Semma Devi died in an accident.  The Insurance Company satisfied the claim qua deceased Deepak Kumar and did not settle the claim of deceased Smt. Cheema Devi @ Semma Devi. 

3.      Complainants filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum.

4.      The Insurance Company in its reply pleaded that there was no effective and binding contract between them and late Smt. Cheema Devi @ Semma Devi. The Insurance Company did not accept the proposal made by late Cheema Devi. 

5.      It is an admitted fact that insurance policy was not issued in favour of Smt. Cheema Devi @ Semma Devi deceased because she did not submit the requisite documents, that is, income proof and questionnaire.  This being the factual position, a question arises as to whether in the event of not issuing the insurance policy, the Insurance Company was liable to pay the sum proposed, that is, Rs.19.00 lacs on the demise of Smt. Cheema Devi @ Semma Devi to her nominee, that is, the complainants or not? 

6.      On January 14^th, 2011, Insurance Company received an application No.107024497 dated 07.01.2011 for IDBI Federal Termsurance Protection Plan duly signed and submitted by late Deepak Gautam and Smt. Cheema Devi @ Semma Devi whereby they proposed for a life cover on Mrs. Cheema Devi @ Semma Devi for a sum of Rs.19.00 lacs.  The premium of Rs.4,360/- was paid by late Deepak Gautam to the Insurance Company through cheque.  The premium acknowledgement receipt dated January 12^th, 2011 was issued by the Insurance Company mentioned that “this receipt is only an acknowledgment of the deposit amount and the issuance of the policy and acceptance of the risk is subject to completion of underwriting and medical, wherever applicable”.  In the proposal, late Smt. Cheema Devi @ Semma Devi mentioned her occupation “business” and annual income Rs.1,00,000/-. The Insurance Company vide letter dated January 17^th, 2011 written to late Deepak Gautam and Smt. Cheema Devi @ Semma Devi requested them to provide duly filled in financial questionnaire with respect to Smt. Cheema Devi @ Semma Devi -person to be insured as it has not been submitted and her income proof as per acceptable income proof list of the person to be insured.  Thereafter, several reminders were issued by the Insurance Company to late Deepak Gautam but he failed to provide the aforesaid information. On March 03^rd, 2011, the Insurance Company rejected the application form of late Smt. Cheema Devi @ Semma Devi and returned the premium deposit of Rs.4,360/-.  

7.      In Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba and others, (1984) 2 SCC 719, Hon’ble Supreme Court considered the issue of whether a binding contract could be taken as arising by mere receipt and retention of the premium.  It was held that the liability would arise only if the policy had been underwritten and the expression “underwrite” signified to accept liability. So long as acceptance had not been communicated, mere receipt and retention of premium could not result in a concluded contract. The significance of acceptance alone was taken to conclude a contract to fasten liability.

8.      Hon’ble National Commission in Kona Mohan Rao Versus M/s New India Assurance Ltd. 2015 (2) CPR 393 (NC), held that mere acceptance of premium does not prove acceptance of proposal.

9.      In view of the factual and legal position, the proposition that emerges is that acceptance of a proposal for life must be made before the death of the proposer takes place and that acceptance must be signified in writing.  Here in the case in hand the proposal for life was never accepted by the Insurance Company and as such the Insurance Company was not liable to pay the amount insured. 

10.    For the reasons recorded supra, the order passed by the District Forum was perfectly right and requires no interference.  The appeal is therefore dismissed.

 

 

Announced 08.03.2016

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

UK