BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 1374/2007 against C.C. 117/2004, Dist. Forum, Eluru
Between:
Vallepalli Subhashini
W/o. Yugandhra Sheshagiri Rao
R/o. Ghantavarigudem
Nallazerla (M), Eluru Dist. *** Appellant/
. Complainant
And
1) The Branch Manager
L.I.C. of India
Tadepalligudem
W.G. Dist.
2) The Divisional Manager
L.I.C. of India
Denavaipeta, Rajahmundry. *** Respondents/
OPs
F.A. 1393/2007 against C.C. 118/2004, Dist. Forum, Eluru
Between:
Vallepalli Subhashini
W/o. Yugandhra Sheshagiri Rao
R/o. Ghantavarigudem
Nallazerla (M), Eluru Dist. *** Appellant/
. Complainant
And
1) The Branch Manager
L.I.C. of India
Tadepalligudem
W.G. Dist.
2) The Divisional Manager
L.I.C. of India
Denavaipeta, Rajahmundry. *** Respondents/
OPs
Counsel for the Appellant: Mr. V.G.S. Rao
Counsel for the Respondent: Mr.G.Venogopal Rao
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT. M. SHREESHA, MEMBER
MONDAY, THIS THE THIRTYFIRST DAY OF MAY TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President.)
***
1) These two appeals are preferred by the unsuccessful complainant against the order of the Dist. Forum in dismissing the complaint filed by her claiming the amounts covered under the insurance contracts.
2) Since both these appeals arise against common order pertaining to the same parties the appeals are also disposed of by a common order.
3) The case of the complainant in brief is that she is the wife of late Yugandhara Seshagiri Rao. He subscribed for two insurance policies one for Rs. 1 lakh and another for Rs. 5 lakhs and paid Rs. 1,209/- and Rs. 6,000/- respectively towards premia on 7.5.2003. Though he made several demands directing the insurance company to issue policies but in vain. While so, on 25.8.2003 he died due to snake bite while going to his fields. He was taken to the hospital at Bhimavaram however, he was declared dead by the doctor. Panchanama was conducted by the elders who opined that the death was due to snake bite. Thereupon she intimated the fact to the insurance company and asked them to send necessary papers and pay insurance amounts. Finally a legal notice was issued for which the insurance company gave reply alleging that there is no insurance contract between them as the policies were not issued 1) for non-payment of sufficient premium amounts and 2) that he died due to AIDS. Thereupon she filed C.C. No. 117/2004 claiming Rs. 10 lakhs together with interest, compensation and costs, and C.C. No. 118/2004 claiming Rs. 2 lakhs together with interest, compensation and costs.
4) The insurance company resisted the case. However, it admitted that late Yugandhara Seshagiri Rao sent two proposals. Since the amount exceeded the limit of first branch office it was sent to Divisional Office which in turn directed the proposer to furnish among other things, proof of date of birth, balance to be paid under the policy proposal through letters and simultaneously addressed a letter to Headmaster, Z.P. High School, Dubacherla to send the proof of age and date of birth of the applicant. Later they came to know that Seshagiri Rao was suffering from AIDS which he had suppressed in the proposals. Though the complainant got the Panchanama conducted did not take any steps to get the dead body sent for post-mortem examination to identify the cause of death. Even the doctor who issued the certificate did not report to the police. Since there was no insurance contract there was no deficiency in service on its part in not settling the claims, and prayed for dismissal of the complaints with costs.
5) The complainant in proof of her case filed her affidavit evidence and examined PW2 Dr. G.V.K. Sudhakar, Civil Assistant Surgeon who issued the death certificate Ex. A14 and got Exs. A1 to A17 marked. The insurance company fled the affidavit evidence of its Manager and got Exs. B1 to B4 marked.
6) The Dist. Forum after considering the evidence placed on record and importantly relying a decision of Supreme Court reported in AIR 1984 SC 1014 opined that when contract of insurance is not concluded the question of paying the amounts would not arise. It also opined that regulations of Insurance Regulatory & Development Authority (Protection of Policyholders Interest) Regulations, 2002 (herein after called ‘regulations’) would not make the insurance company to pay amount in such contingencies. Accordingly, the complaints were dismissed with costs of Rs. 1,000/- each.
7) Aggrieved by the said decision, the complainant preferred these two appeals contending that the Dist. Forum did not appreciate either the facts or law in correct perspective. It had failed to appreciate the regulations of IRDA. Failure on the part of insurance company to process the proposals within 15 days amounts to acceptance and therefore she was entitled to the amounts. The dismissal of earlier complaint would in no way bar from claiming the amounts, more so when revision petition is pending before the Hon’ble National Commission in 4052/2006. The evidence of PW2 ought to have been accepted. The Dist. Forum ought not to have relied the evidence of RW6 Dr. T. Jayaprakash Reddy in the earlier cases, and therefore prayed that the appeals be allowed, consequently the complaints.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9) Before going into the facts it is important to note that the deceased Sheshagiri Rao had taken two policies on the same day i.e., on 7.5.2003 one for Rs. 1 lakh and another for Rs. 5 lakhs and paid proposal deposit of Rs. 1,209/- and Rs. 6,000/- respectively keeping the complainant his wife as nominee. He had taken another policy in the same month of May, 2003 for a sum of Rs. 10 lakhs, paid premium of Rs. 18,200/- on 31.5.2003 which according to the insurance company without mentioning the other two earlier policies. The third claim was repudiated on 8.9.2004 on the ground of suppression of particulars of previous policies and the treatment for AIDS. Against this repudiation she filed C.D. No. 69/2004 before the Dist. Forum, Krishna at Machilipatnam. The Dist. Forum after considering the evidence placed on record dismissed the said complaint against which the complainant filed F.A. 298/2006 before this commission. It was dismissed at the stage of admission on 30.6.2006. Revision is preferred against the said order and the same is pending before the National Commission.
10) Coming to the claims made in these appeals, earlier the Dist. Forum on the basis of very same evidence dismissed the complaints against which F.A. 1305/2004 and F.A. 1306/2004 were filed. This commission set-aside the order of the Dist. Forum and remanded the matter to consider the case in the light of clause 4.6 of the IRDA regulations.
11) The Dist. Forum again by its order Dt. 29.6.2007 dismissed the complaints against which these two appeals are preferred.
12) It is an undisputed fact that the deceased Seshagiri Rao paid first premium of Rs. 1,209/- and Rs. 6,000/- for issuance of two policies one for Rs. 1 lakh and the other for Rs. 5 lakhs on 7.5.2003. The deceased died on 25.8.2003. While the complainant asserts that he died of snake bite, the insurance company alleges that he died of AIDS. In the light of fact that the policies were not issued besides the ground that he had suppressed his ailment, the insurance company repudiated these claims. It may be stated herein that, earlier on the very same issue the very complainant filed an identical claim in C.D. 69/2004 before the Dist. Forum, Krishna at Machilipatnam wherein the insurance company examined as many as RWs 1 to 9 and depositions of doctors who treated the deceased marked as Exs. B7 & B8 in the present complaints. The evidence shows that he was suffering from AIDS. Earlier orders of the Dist. Forum and this Commission are marked as Exs. B5 & B6. Without going into the legalities as to the application of Section 11 of CPC and more so in the light of the fact that the matter is pending before the National Commission by way of revision, we do not intend to give any credence to the evidence let in by both parties in the earlier complaint. The fact remains that the claim of the complainant for one of the policies was rejected on the ground that he was suffering from AIDS and the same was suppressed.
13) Coming to the evidence on hand the deposits or premia were made on 7.5.2003. Till his death on 25.8.2003 proposals were not accepted by the insurance company. The insurance company pleads that when they sought for confirmation of date of birth not only from the proposer but also from the Headmaster, Z.P. High School, Dubacherla they did not receive as such they did not process. Yet another ground was that he had to pay some more amounts towards premia.
14) Since there was delay in processing the policy, the learned counsel for the complainant contended that regulation 4.6 of IRDA mandates insurance company to process the proposals within a reasonable period not exceeding 15 days and when the insurance company could not process within 15 days, it would be deemed that the proposal has been accepted. To appreciate the said contention, we excerpt the regulation 4.6 which reads as follows :
“Proposals shall be processed by the insured with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposals by the insurer.”
Evidently in the said regulations there is no provision incorporating the legal fiction to the effect that in case of non-adherence to the time stipulated it would be deemed that the proposal had been accepted. However, the effect of non-compliance of above said regulation is contained in Regulation 11(4) which reads as follows :
“Any breaches of the obligations cast on an insurer or insurance agent or insurance intermediary in terms of these regulations may enable the authority to initiate action against each or all of them, jointly or severally under the Act and/or the Insurance Regulatory & Development Act, 1999.”
It is obvious that non-compliance of regulation 4.6 would entail some kind of disciplinary action against the employees or agent but surely not a legal fiction in favour of the proposer automatically maturing his proposal into an accepted proposal and consequently an insurance contract.
15) The Supreme Court in LIC of India Vs. Raja Vasireddy Komalavalli Kamba & Ors. AIR 1984 SC 1014 opined that a contract of insurance will be concluded only when the party to whom an offer has been made accepts it, unconditionally and communicates his acceptance to the person making the offer. Admittedly the proposals of the deceased were not accepted. There was no insurance contract nor issuance of policies. When no policy was issued and still in the realm of process, it cannot be said that it was a concluded contract where the insurance company had to pay the amount. As rightly pointed out by the Dist. Forum if there is no insurance contract, there can be no nominee independently of such contract. Therefore complainant cannot be called as nominee. Equally she was not entitled to the amounts.
16) Even on facts the deposit receipts were issued on 7.5.2003. In the meantime the insurance company addressed a letter to the Head Master, Z.P. High School, Dubacherla where the deceased was working to issue date of birth certificate in the proforma Ex. B1 & B2. It was not furnished. For this the insurance company cannot be found fault with. Since no reply was received the proposal was kept pending. Therefore, there is no deficiency in service on the part of the insurance company in this regard in order to enable the complainant to claim the benefits of regulation 4.6. even assuming that such a provision would come to her rescue.
17) While the complainant alleges that the deceased died of snake bite confirmed by PW2 Dr. G.V.K. Sudhakar, Civil Assistant Surgeon, Araku Valley who after examining him issued the certificate to that effect followed by inquest by the elders of the village in Ex. A15, the insurance company questions the credibility of PW2’s evidence. When he knew full well that the deceased died of snake bite, an accidental death, he ought to have informed the same to the police or directed the complainant to report to the police. The complainant might have managed PW2 as well as the elders to certify to that effect.
18) The insurance company denies that the deceased died of snake bite and asserts that he died of AIDS. In order to prove the said fact it relied the order of the Dist. Forum as well as the appeal in earlier cases filed by her against the insurance company for the policy taken by the deceased wherein the insurance company examined RWs 1 to 9 besides Exs. B7 & B8 showing the medical history of the deceased who was treated for the AIDS by Dr. T. Jayaprakash Reddy of Tadepalligudem. The Dist. Forum as well as this Commission had accepted the evidence and opined that the deceased was suffering from AIDS. Evidently this fact was suppressed in the proposal forms. The Dist. Forum opined that “ when once the deceased was found to be suffering from AIDS was established and once the theory of the snake bite is found liable to be dismissed as false, it is not unreasonable to think that the AIDS could have been proximate cause of death. For want of reliable evidence of the complainant about the cause of death the enquiry into the nexus ceases to have any significance and the factum of deceased suppressing his diseases of AIDS acquires any amount of importance as a material fact. Thus the deceased was clearly guilty of suppressing a material fact in his proposal forms.”
19) Even assuming that the deceased died of snake bite, it cannot be ruled out that he was suffering from AIDS which he had undoubtedly suppressed while submitting his proposals. Even on that count she was not entitled to any amount which was confirmed in the C.Ds filed between the same parties. The Dist. Forum after exhaustively considering both on facts and law declined the reliefs claimed by the complainant. We are in full agreement with the view expressed by the Dist. Forum in this regard. There are no merits in the appeal.
20) In the result the appeals are dismissed. However, no costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 31. 05. 2010.
*pnr
“UP LOAD – O.K.”
