Haryana

StateCommission

A/463/2015

MAX LIFE INSURANCE CO.LTD. - Complainant(s)

Versus

MOMAN RAM - Opp.Party(s)

RAJNEESH MALHOTRA

24 Nov 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :       463 of 2015

Date of Institution:       22.05.2015

Date of Decision :        24.11.2015

 

1.      Max Life Insurance Company Limited, G.T. Road, Panipat, through its Branch Manager (previously known as Max New York Life Insurance Company Limited).

 

2.      Managing Director/Assistant Manager (Claims), Max Life Insurance Company Limited, Operation Center, 90-A, Udyog Vihar, Sector 18, Gurgaon-122015, Haryana.

                                      Appellants/Opposite Parties

Versus

 

Moman Ram s/o Sh. Suraj Bhan, Resident of Village Brass, Tehsil Nissing, District Karnal, Haryana.

                                      Respondent/Complainant

 

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

                             Shri B.M. Bedi, Judicial Member.

                                                                                                                  

Argued by:                    Shri Rajneesh Malhotra, Advocate for appellants.

                             Shri Rajender Chhokar, Advocate for respondent. 

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

Max Life Insurance Company Limited and another-Opposite Parties, are in appeal against the order dated February 23^rd, 2015, passed by District Consumer Disputes Redressal Forum, Panipat (for short ‘the District Forum’) in Complaint No.97 of 2014.

2.      Pawan Kumar (since deceased)-son of Moman Ram-complainant/respondent, submitted ‘Proposal Form’ Annexure R/1 for obtaining Insurance Policy for Rs.9.00 lacs from Max Life Insurance Company Limited (for short the ‘Max Life Insurance’)-Opposite Parties-appellants, on November 13^th, 2013. He paid the premium instalment of Rs.20,365/- vide receipt Annexure C-1. However, before the Insurance Policy could be issued, the proposer Pawan Kumar died on November 16^th, 2013.  Claim being filed by the complainant with the Max Life Insurance, was repudiated on the ground that the proposer died before acceptance of the premium and issuing the policy and therefore there was no concluded contract between the parties.

3.      The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.

4.      The Max Life Insurance contested complaint by filing reply. It was stated that since the proposer died before the acceptance of the proposal and issuing the policy, therefore it was not a valid contract between the parties and Max Life Insurance was not liable to pay the amount assured to the complainant. However, the premium worth Rs.20,365/- was refunded to the complainant through cheque dated 02.12.2013 (Annexure C-3).  

5.      The District Forum accepted complaint and issued direction to the Max Life Insurance as under:-

“……..we hereby allow the present complaint with a direction to opposite parties to pay Rs.9,00,000/- to the complainant with interest @ 9% per annum from the date of filing the complaint till its realization. Cost of litigation quantified at Rs.2200/- is also allowed to be paid by opposite parties to the complainant.”

6.      Learned counsel for the appellants/opposite parties has argued that since the proposal was not accepted by the Max Life Insurance till the death of the proposer and no Insurance Policy was issued, therefore, no contract came into existence and consequently no liability arises.

7.      Rebutting the contention of appellants, learned counsel for the respondent/complainant has argued that since the premium was accepted and receipt Annexure C-1 was issued, therefore, it was a concluded contract and the Max Life Insurance is liable to pay the amount assured. In support, reliance was placed upon the authorities cited as Bajaj Allianz General Insurance Company Ltd. & Anr. Vs. Krishna Devi, 2015(3) CLT 540 (NC) and Pinki Devi vs. New India Assurance Co. Ltd., 2015(2) CLT 517 (NC).

8.      Having considered the rival contentions of the learned counsel for the parties, this Commission finds force in the plea raised on behalf of the appellants/ Max Life Insurance. There is nothing on the record to show that the premium was accepted and Insurance Policy was issued before the date of death of the proposer. Therefore, it was not a concluded contract between the parties. The judgments in the case of Krishna Devi and Pinki Devi (Supra) are not applicable because in the cited cases the regulations framed by Insurance Regulatory Development Authority (IRDA) regulations framed in 2003,   were taken into consideration whereby directions were issued to all the Insurance Companies to issue policies within 15 days from the date of receiving the premium. However, in the instant case the period of 15 days had not expired, as the premium was paid on 13.11.2013 and proposer died on 16.11.2013, that is, within three days.

9.      In Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba and others, (1984) 2 SCC 719, Hon’ble Supreme Court held as under:-

“Mere receipt and retention of premia after the death of the appellant or mere preparation of the policy document is not acceptance and, therefore, do not give rise to a contract. The general rule is that the 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 whether the final acceptance is that of the assured or insurers, however, depends on the ways in which negotiations for an insurance have progressed. Mere delay in giving an answer cannot be construed as an acceptance. Though in certain human relationship silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance.”

 

10.    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.

11.    Having taken into consideration the above factual and legal position, it is clear that acceptance of a proposal for Insurance must be made before the death of the proposer and that acceptance must be signified in writing. The facts of the instant case are fully covered by the authorities cited in Raja Vasireddy Komalavalli Kamba’s and Kona Mohan Rao’s cases (Supra). Thus, the Max Life Insurance was not liable to pay assured amount to the complainant.  The District Forum fell in error in allowing the complaint without appreciating the above stated legal position and the evidence available on the record. No deficiency in service, as alleged, was committed by the Max Life Insurance.

12.    In view of the above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

13.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 24.11.2015

(B.M. Bedi) Judicial Member

(Nawab Singh) President

CL