BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
C.C.No.65 of 2009
Between:
Smt.Suriti Sarala, W/o.late Suriti Ramulu,
Aged 36 years, Occupation:Household,
R/o.H.No.3-27, Suritigeri, Marikal Village of
Dhanwada mandal, Mahaboobnagar District. ..Complainant
And
S.B.I. Life Insurance Company Ltd.,
Mumbai, rep. by its Branch Manager,
Hyderabad Agency, 6th floor, United India
Towers, Opp:Police Commissioner Building,
Basheerbagh, Hyderabad. ..Opp.party.
Counsel for the Complainant: Mr.M.Ramgopal Reddy
Counsel for the Opposite party: Mr.G.Anand Kumar.
QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT
AND
SMT.M.SHREESHA, MEMBER
.
TUESDAY, THE THIRTY FIRST DAY OF AUGUST,
TWO THOUSAND TEN
( Typed to the dicatation of Smt.M.Shreesha, Hon’ble Member)
***
The brief facts as stated in the complaint are that the complainant’s husband submitted an application dated 10-2-2008 to the opposite party for life insurance for an amount of Rs.10,10,000/- with accident benefit rider for Rs.10,10,000/-. The insurance premium is payable in yearly instalments at the rate of Rs.1,01,000/- for a period of 10 years and the sum assured opted is (20/2) x 1,01,000/- which is equal to Rs.10,10,000/- and the accident benefit rider was for Rs.10,10,000/- and the total insurance was for Rs.20,20,000/-. Accordingly the complainant’s husband paid the premium of Rs.1,01,000/- by way of cheque bearing No.073571 dated. 11-2-2008 and nominated the complainant as the nominee. The complainant’s husband had undergone the medical tests required by the opposite party and submitted the medical report. Thereupon the opposite party issued Policy No.24043641203. On 12-3-2008 when the complainant husband came to Mahaboobnagar, he was murdered by one Srinivas Goud and others due to rivalry, opposite to Asian Lodge, near Avanthi hotel, Mahaboobnagar at 10.00 p.m. It is the case of the complainant that death by murder is also accidental and hence the opposite party is liable to pay her Rs.20,20,000/-. She alleged that she submitted the claim petition along with all relevant papers including death certificate but the opposite party did not settle the claim of the complainant and pay her any amount. The complainant submitted that she requested the opposite party as well as its agent to pay the policy amount but they did not respond. It is her case that the act of the opposite party by receiving the premium and not paying the policy amount and denying the payment of risk coverage amounts to unfair trade practice and constitutes deficiency in service. It is the further case of the complainant that the opposite party did not send the policy bond to the insured. The complainant submitted that earlier she filed a complaint C.C.No.117/2008 before the District Forum, Mahaboobnagar claiming an amount of Rs.20,00,000/- and at the time of arguments, the Forum advised the complainant to approach the proper forum and hence the complainant filed a memo stating that the complaint may be dismissed as not pressed subject to filing the complaint before proper forum and accordingly the complaint C.C.No.117/2008 was dismissed as not pressed. Hence the complaint for a direction to the opposite party to pay an amount of Rs.20,20,000/- towards double risk coverage of policy No.2404361203 together with costs of the proceedings and damages.
Opposite party filed counter denying the allegations made in the complaint and stated that there was no subsisting contract between it and the insured as on the date of death. It submitted that the date of death was 12-3-2008 which was prior to the commencement of the risk which is 19-3-2008 and thus the complainant has no locus and does not fall within the definition of ‘complainant’ as defined in Section2(1)(b) of Consumer Protection Act, 1986 and prayed to dismiss the complaint in limini. It submitted that mere deposit of amount towards premium along with the proposal does not automatically result into policy and submitted that depending on the sum assured, age, specific reports would be called for and after it is fully satisfied about the insurability of the life to be insured, the proposal is converted into a policy and the risk cover begins from the date of such conversion. Till such time the amount lying in the proposal deposit remains as it is and it cannot be deemed to be premium till the decision to accept the risk under the proposal is taken. It submitted that there were some medical requirements which were not submitted during the life time of the proposer, the proposal remained as unconcluded contract and as such there was no subsisting contract as on the date of the death of the proposed and the complainant cannot maintain any claim. The proposal for insurance from the proponent is in the nature of invitation to offer from the insurer about the proposed terms and conditions of the life insurance cover which the life insurer proposed to undertake. The insurer will undertake the proposal and assess the risk and decides the terms and conditions on which the risk can be accepted and the premium to be charged after satisfying themselves that the insurance cover can be granted. The premium conveyed to the proponent along with the terms and conditions will constitute the offer in the strictest sense and the acceptance by the proponent by way of remitting the premium will conclude the contract. Till such time there is no binding contract between the insurer and the proponent. In the instant case there were medical requirements which were not submitted by the life proposed during his life time and thus the contract remained unconcluded and therefore the complaint is not maintainable. The deposit of an approximate amount of premium along with the proposal by the proponent is only a standard practice to avoid unnecessary correspondence and delay and till such time the proposal is accepted and the deposit is adjusted as premium by the insurer, the nature of proposal submitted by the proponent for an insurance cover will remain to be an invitation to the offer only. In the instant case the deposit was not adjusted towards the premium and the amount in deposit continued to be so because the proposal was not accepted pending requirements and therefore the complaint is not maintainable and there was no deficiency in service.
Opposite party submitted that the deceased had applied for Unit plus II Regular policy vide proposal No.246151453 dated 10-2-2008 with a proposal deposit of Rs.1,01,000/-. A requirement for medicals was raised vide letter dated 14-2-2008 and the medical examination was conducted on 12-3-2008 and the deceased was reported to have died on 12-3-2008 i.e. on the same day when the medicals were conducted and the same have not been submitted to the opposite party during the life time of the proposer and were dispatched on 14-3-2008 after the death of the deceased and the opposite party received the same on 17-3-2008. Having been unaware of the death of the proposer, the said proposal was accepted with a date of commencement as 19-3-2008. Opposite party submitted that it is clear form the above that there was no concluded contract between the opposite party and Mr.Ramulu on the date of death. Opposite party submitted that the complainant alleged the date of proposal as the date of commencement of the policy and it submitted that in the proposal form, under Question No.12, Declaration, it has been stated that ‘I understand that the contract will be governed by the provisions of the Indian Insurance Act, 1938, and prevailing laws in India and that the same will not commence until a written acceptance of this proposal is issued by the company on the normal terms and conditions contained in the contract of assurance. It is event that the life to be assured himself had agreed to the condition that contract of insurance will not come into force till a written acceptance is communicated to him and no communication of acceptance was sent during the life time of the proposer and thus the contract remained unconcluded. Opposite party relied on several decisions of Hon’ble Supreme Court in Civil Appeal No.2197/1970 in LIC of India v. Rajavasireddy & others (AIR 1984 SC 1014) wherein it was held that a contract concludes only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making offer. Similarly the mere receipts and retention of premium until after the death of the applicant or mere preparation of the policy document is not acceptance and does not give rise to contract and many other decision and submitted that there was no concluded contract. Opposite party further craved the leave of this Commission to allow the opposite party to refund the initial deposit of Rs.1,01,000/- along with the proposal to the complainant. It also denied the other allegations made in the complaint and prayed to dismiss the complaint with costs.
The complainant filed her affidavit reiterating the facts stated in the complaint and relied on Exs.A1 to A26 whereas the opposite party on the other hand filed the affidavit of one V.Srinivas S/o.late V.M.Somayajulu, authorized representative of the opposite party and relied on Exs.B1 to B5.
Ex.A1 is copy of proposal form dated 10-2-2008. Ex.A2 is copy of cheque dated 11-2-2008 for Rs.1,01,000/-. Ex.A3 is copy of BSNL telephone Bill. Ex.A4 is copy of Pan card. Ex.A5 is copy of savings Account of Sangameshwara Grameena Bank of deceased. Ex.A6 is copy of savings Bank Pass Book of Andhra Pradesh Grameena Vikas Bank of complainant. Ex.A7 is copy of table issued by the opposite party showing the maturity value. Ex.A8 is the original proposal deposit receipt issued by opposite party. Ex.A9 is copy of the letter dated 14-2-2008 addressed by opposite party to the deceased. Ex.A10 is copy of death certificate issued by Mahaboobnagar Municipality. Ex.A11 is copy of death certificate issued by VRO, Marikal. Ex.A12 is copy of FIR. Ex.A13 is copy of postmortem examination. Ex.A14 is copy of inquest report. Ex.A15 is copy of the claim of complainant dated 2-6-2008. Ex.A16 is original courier dated 2-6-2008. Ex.A17 is copy of claim petition submitted by complainant dated 9-7-2008. Ex.A18 are copies of two courier receipts. Ex.A19 is copy of claim petition submitted by complainant dated 2-8-2008. Ex.A20 are copies of three courier receipts. Ex.A21 is certified order copy of Dist. Forum, Mahaboobnagar in CC 117/2008 dated 30-1-2009. Ex.A22 is copy of renewal premium intimation by opposite party. Ex.A23 is copy of transaction cum unit statement issued by opposite party. Ex.A24 is copy of statement of account dated 22-7-2009. Ex.A25 is copy of policy. Ex.A26 is copy of policy lapse intimation letter.
Ex.B1 is copy of the policy document. Ex.B2 is the copy of requirement letter dated 14-2-2008. Ex.B3 is the copy of medical reports. Ex.B4 is the copy of covering sheet of medical reports. Ex.B5 is the copy of proposal dated 10-2-2008.
The brief point that falls for consideration is whether there is any deficiency of service on behalf of the opposite party and if the complainant is entitled for the relief sought for in the complaint?
It is not in dispute that the complainant vide Ex.A1 proposal dated 10-2-2008 has paid the premium amount of Rs.1,01,000/- to the opposite party for SBI Life-Unit Plus II plan. It is also not in dispute that the opposite party vide Ex.A9 dated 14-2-2008 acknowledged receipt of the premium and submitted that they require a medical examination report and that their representative will contact him and take his appointment schedule and that for information regarding medical tests, he should contact M/s. Health India within 15 days from 14-2-2008. On 12-3-2008 the complainant’s husband Suriti Ramulu was murdered at about 10.00 p.m. This is evidenced under Ex.A10 and A11 which are the copies of the death certificate. Ex.A12 and A13 are the FIR and post mortem reports which evidence the cause of death. The complainant thereafter vide Ex.A15, A17 and A19 communicated to the insurance company on 2-6-2008, 9-7-2008 and 2-8-2008 respectively claiming the assured amount and submitting the copies of the death certificate, FIR, inquest, PME etc.,
It is the case of the opposite party that vide Ex.B2 they have requested the complainant’s husband to go in for medical examination and submit the results. Ex.B3 is the medical examination form which is dated 12-3-2008 that is the same date on which the complainant’s husband was murdered. Ex.B4 shows the appointment date as 12-3-2008.
We are of the considered view that vide Ex.B2, the opposite party had clearly stated that the medical tests should be attended to within 15 days from the date of this letter i.e. 14-2-2008 and the life assured should take an appointment with M/s. Health India at his convenience, whereas, Ex.B3 evidences that it was only after almost a month that the complainant’s husband took an appointment with the health examiner and on the same day as per FIR Ex.A12, the life assured was murdered at around 10.00 p.m. and hence we hold that the complainant’s husband did not undertake the medical tests within 15 days from 14-2-2008 and as seen from the record there is no willful delay on behalf of the opposite party in medically examining the proposer.
The learned counsel for the complainant relied on Ex.A22 in which there is a policy number given to the complainant’s husband and he contended that having given the policy number and the medical reports having been taken by the insurance company, the insurance company has also given the details of payment of premium for the future instalments and that their policy lapsed due to non payment of premium on 19-3-2009 therefore it can be concluded that the policy was issued and was in force. A careful perusal of Ex.A22 shows that the date of commencement is 19-3-2008 whereas the complainant’s husband was murdered on 12-3-2008 itself. Merely because there is a routine letter from the insurance company that the due date is 19-3-2009, it cannot be construed that the policy was issued and in force. The counsel for the complainant relied on the decision of Rajasthan State Consumer Commission reported in 2010 CJ 215 in which the Rajasthan State Commission held that
‘the proposal has to be processed by the insurance company with speed and
efficiency not exceeding 15 days and that there was a delay in accepting the proposal.
This judgement is not applicable to the facts in the instant case as there was delay on behalf of the opposite party and in fact it was the complainant’s husband who got himself medically examined almost a month after communicating to him that he should be examined within 15 days as evidenced under Ex.B2.
We rely on the decision of the apex court in LIFE INSURANCE CORPORATION OF INDIA v. RAJA VASIREDDY KOMALLAVALLI KAMBA & ORS. 1984 AIR 1014 1984 SCR (3) 350 1984 SCC (2) 719 1984 SCALE (1) 561 ACT in which the apex court held that unless there is a concluded contract that the proposal has been accepted by the insurance company and a policy issued, the risk does not commence. Even in the instant case as per Ex.A22, the date of commencement is 19-3-2008 which is after 12-3-2008 i.e. the date on which the proposer was murdered. Therefore, there is no concluded contract as on date of death of the proponent and when the risk itself did not commence, we are of the considered view that the opposite party is not liable to pay the amount covered under the policy and there is no deficiency in service on their behalf in repudiating the claim. However, the insurance company is ready and willing to refund the initial premium of Rs.1,01,000/- as stated in their affidavit and we direct them to refund the same within four weeks from the date of receipt of this order.
Therefore this complaint fails and is accordingly dismissed. There shall be no order as to costs.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.31-8-2010
//APPENDIX OF EVIDENCE//
For complainant For Opp.party
Affidavit of smt.Suriti Sarala filed. Affidavit of Mr.V.Srinivas,
Authorized representative
Of opposite party filed.
Witnesses examined
For complainant For Opp.party
NIL NIL
Exhibits marked on behalf of complainant:
Ex.A1-Copy of proposal form dated 10-2-2008.
Ex.A2-Copy of cheque dated 11-2-2008 for Rs.1,01,000/-.
Ex.A3-Copy of BSNL telephone Bill.
Ex.A4-Copy of Pan card.
Ex.A5-Copy of savings Account of Sangameshwara Grameena Bank of
deceased.
Ex.A6-Copy of savings Bank Pass Book of Andhra Pradesh Grameena Vikas
Bank of complainant.
Ex.A7-Copy of table issued by the opp. party showing the maturity value. Ex.A8-Original proposal deposit receipt issued by opposite party.
Ex.A9-Copy of the letter dated 14-2-2008 addressed by opposite party to
the deceased.
Ex.A10-Copy of death certificate issued by Mahaboobnagar Municipality. Ex.A11-Copy of death certificate issued by VRO, Marikal.
Ex.A12-copy of FIR.
Ex.A13-Copy of postmortem examination.
Ex.A14-Copy of inquest report.
Ex.A15-Copy of the claim of complainant dated 2-6-2008.
Ex.A16-Original courier dated 2-6-2008.
Ex.A17-Copy of claim petition submitted by complainant dated 9-7-2008. Ex.A18-Copies of two courier receipts.
Ex.A19-Copy of claim petition submitted by complainant dated 2-8-2008. Ex.A20-Copies of three courier receipts.
Ex.A21-Certified order copy of Dist. Forum, Mahaboobnagar in CC 117/2008
dated 30-1-2009.
Ex.A22-Copy of renewal premium intimation by opposite party.
Ex.A23-Copy of transaction cum unit statement issued by opposite party. Ex.A24-Copy of statement of account dated 22-7-2009.
Ex.A25-Copy of policy.
Ex.A26-Copies of lapse intimation letter.
Exhibits marked on behalf of opp.party :
Ex.B1-Copy of the policy document.
Ex.B2-Copy of requirement letter dated 14-2-2008.
Ex.B3-Copy of medical reports.
Ex.B4-Copy of covering sheet of medical reports.
Ex.B5-Copy of proposal dated 10-2-2008.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.31-8-2010
L.R. copy marked/not to be marked
