For the Appellant:          Mr. N.N. Karmakar, Mr. M. Rahman, Advocate

For the respondent:        Mr. D.D. Talukdar, Mr. P.D. Nair, Mr.G. Alam, Mr.A. Choudhury, Advocate

Date of Hearing:            12-09-2019

Date of Judgment:         20-09-2019

                  J U D G M E N T

BY DR. (MRS.) INDIRA SHAH, PRESIDENT,                                                

        The legality and validity of the judgment and order dated 16-05-2015 passed by the District Consumer Forum, Barpeta, in CPA No. 4 of 2009 has been challenged by the appellant.

2.     Husband of the complainant late Sentu Roy insured his life by entering into an agreement with the Insurance Company (respondent herein). Prior to obtaining the policy cover, he on 30-01-2008 gave a cheque for Rs. 17,762/- towards the first installment of the premium. On 12-03-2008, the respondent issued the first premium receipt to the effect that the premium of Rs. 17,762/- has been received and the proposal for insurance has been accepted with effect from 07-03-2008. The complainant was shown as nominee in the cover note. Unfortunately, on 25-03-2008, the insured died. The complainant on 12-09-2008, approached the Insurance Company but the claim of the insured was repudiated on the ground that the cheque issued by the insured was dishonoured on 12-03-2008 due to insufficiency of fund in the account of the drawer. Hence, the complainant filed the complaint.

3.     The insurer/opposite parties contested the claim by filing written statement alleging inter-alia that while accepting the cheque in respect of first premium, a receipt was issued stipulating two conditions viz ‘subject to realization of cheque’ and ‘acceptance of this deposit does not make Birla Sun Life Insurance Company Ltd. liable for acceptance of risk. Insurance cover shall commence after the application for issuance is examined and accepted by Birla Sun Life Insurance Company Ltd.  which shall be communicated separately to you’. Since the cheque issued by the insured was dishonoured, the opposite parties/respondents are no way liable to assume the risk of the life assured.

4.     Learned District Forum held that the respondent did not receive the premium. Section 64 VB provides that no insurer shall assume any risk unless premium is received by the insurer, there was no concluded contract between the life assured and the insurer/opposite parties. The complaint was accordingly dismissed.

5.     In this case the insured issued a cheque against the first premium on 30-01-2008 and the same was accepted by the insurer. Then after lapse of two and half months, the respondent on 12-03-2008 issued the first receipt and the same states that the proposal of the policy holder for insurance has been accepted and the amount of Rs. 17,762/- has been received on 07-03-2008. Its stipulates that “your application for life insurance has been accepted and we have adjusted the initial deposit amount towards first installment on 7-3-2008.  It also states “ the stamp duty of Rs. 148/- paid by demand draft vide receipt/challan No. 8367 dated 22-01-2008.

6.     The complainant through her advocate issued legal notice wherein she disputed the factum of dishonour of the cheque. Although the claim of the complainant was repudiated on the ground that the cheque was dishonoured by the Bank for insufficiency of funds on 12-03-2008, the respondent adduced no evidence either documentary or oral to prove that the cheque was dishonoured. No notice was exhibited to show that the insured was intimated that the cheque issued by him was dishonoured. As per the respondent, the cheque was dishonoured on 12-03-2008 and instead of issuing notice, the respondent vide their letter dted 12-03-2008 addressed to the insured, requested insured to read the Policy Details carefully.

7.     There is no dispute as regards the interpretation of provisions of Section 64 VB of the Insurance Act. But the burden lies on the insurer to prove that the cheque which was issued against the first premium, was dishonoured by the Bank and the insurer intimated the insured about the dishonour of the cheque.

8.     The District Forum decided the issues against the complainant/appellant on the basis of plea taken by the respondents in their written statement without any evidence on the part of the respondents to substantiate their plea.

9.     In view of the foregoing discussion, we are constrained to hold that the judgment and order passed by the District Forum is liable to be set-aside and accordingly is set-aside. The appeal is allowed. The respondent No. 1/insurer is directed to pay to the appellant the death claim amount in respect of the Policy No. 001441267 with interest @ 6% per annum with effect from the date of complaint petition till realization. The respondent shall also pay an amount of Rs. 10,000/-as cost of proceeding, failing which it shall also carry an interest at the rate of 6% per annum from the date of judgment till payment.

10.    Send down the original record along with a copy of this judgment to the District Forum.