KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No.643/2016

JUDGEMENT DATED: 23.02.2024

(Against the Order in C.C.No.212/2014 of CDRF, Kollam)

PRESENT:

APPELLANT:

(by Adv. Narayan R.)

Vs.

RESPONDENTS:

JUDGEMENT

SRI. AJITH KUMAR D. : JUDICIAL MEMBER

          This is an appeal filed by the complainant in C.C.No.212/2014 on the file of the Consumer Disputes Redressal Forum, Kollam (the District Forum for short) against the order passed against him. 

2.       The complaint was dismissed by the District Forum as per the order dated 23.08.2016. The averments contained in the complaint in brief are as follows:

The complainant is a registered pharmacist who was a member of the Kerala State Pharmacy Council, a statutory body functioning under the Kerala State Health Department.  The 1^st opposite party is the United India Insurance Company who had launched a special insurance policy for the family members of the 2^nd opposite party in the name and style as “Kerala State Pharmacy Council Arogya Suraksha”.  The scheme was intended for the insurance coverage of the complainant and his spouse for the health, critical care and personal accident with an insurance coverage of Rs.2,00,000/-(Rupees Two Lakhs only). 

3.       The complainant had submitted application for the policy to the 1^st opposite party through the 2^nd opposite party.  As per the instruction of the 1^st opposite party the complainant had presented a cheque dated 05.07.2004 for an amount of Rs.4,025/-(Rupees Four Thousand and Twenty Five only) to be drawn from the account of the complainant with the Kolechery Branch of Federal Bank.  On 11.04.2017 the cheque was encashed by the 1st opposite party.  So the contract of Mediclaim policy had come into existence.  The opposite parties were delaying the matter by raising excuses.

4.       In the meantime, on 09.10.2014 the complainant was admitted in MOSC Medical College Hospital, Kolechery and he had undergone treatment for Angina.  He had spent an amount of Rs.2,50,000/-(Rupees Two Lakh Fifty Thousand only) towards the treatment and medical expenses.  After getting discharged from the hospital on 21.10.2014, a request was placed for the issuance of policy document and a claim form for enabling him to apply for the sum insured.  But the 1^st opposite party neither issued the policy nor disbursed the amount.  The 1^st opposite party was dutybound to issue a policy document. There is deficiency in service on the part of the 1^st opposite party.  Hence, the complainant would seek for a direction to the 1^st opposite party to issue the policy document as per Kerala State Pharmacy Council Arogya Suraksha and a claim Form for the petitioner within the time frame stipulated by the District Forum.  The complainant is entitled to get Rs.2,00,000/-(Rupees Two Lakhs only) as compensation along with interest @12% and Rs.10,000/-(Rupees Ten Thousand only) as costs. 

5.       The opposite parties entered appearance and filed separate versions.  The 1^st opposite party contended that the complaint was not maintainable either in law or on facts.  It is true that the complainant being a member of the 2^nd opposite party had submitted an application for issuing a policy through the 2^nd opposite party under the special health insurance scheme.  The above scheme was constituted purely on the basis of Memorandum of Understanding (MOU) dated 04.07.2013 between the opposite parties.  The 1^st opposite party had offered to launch the scheme as a group insurance with a view to issue maximum policies covering the members of the 2^nd opposite party.  There is a specific clause in the scheme that the premium amount of minimum five thousand policies are to be remitted to the 1^st opposite party.  The 2^nd opposite party had agreed to act as a coordinator by collecting maximum application forms from its members not below five thousand and to remit the premium for the policies through a single cheque or D.D.  The cheque of the applicant was encashed by the opposite party on 11.07.2014. The 1^st opposite party was unable to issue the group policy since the required target of applications was not achieved on that day.  The option available to the 1^st opposite party was to wait further to get more applications from the members of the 2^nd opposite party with a view to achieve the target.  However, the 1^st opposite party had decided to take a liberal view to issue a group mediclaim policy after receiving 338 applications.  The complainant was also included as the beneficiary out of 338 applications and the above policy began to run from 22.11.2014 to 21.11.2015.  The original of the policy document was directly served on the 2^nd opposite party along with the copies to be served to the respective beneficiaries.  The applications and premiums were collected and forwarded by the Pharmacy Council from its members.  The complainant’s treatment was from 09.10.2014 to 11.10.2014 which is prior to the commencement of the policy.  So the 1^st opposite party had no liability to pay the medical expenses or compensation and hence sought for dismissal of the complaint.

6.       The case of the 2^nd opposite party is that they had introduced welfare schemes for the assistance of the families of the deceased pharmacists who die before attaining the age of fifty four years.  They had entered into a tie-up with the insurance company and formed a group insurance policy as “Arogya Suraksha Scheme”.  The 2^nd opposite party was only to collect the application forms with premium and forward the same to the insurance company.  The application form along with the cheque issued by the complainant were forwarded to the 1^st opposite party on 09.07.2014.  There was no laches on the part of the 2^nd opposite party.  The 2^nd opposite party would also seek for dismissal of the complaint.

7.       The District Forum had reached a conclusion that the complainant had no right or authority to make any request for an individual policy as the proposed scheme was intended as a group insurance policy.  There was no deficiency in service on the part of the 1^st opposite party and accordingly the complaint was dismissed. 

8.       In the memorandum of appeal the following contentions are raised:

The order of the District Forum is arbitrary, unjust and illegal.  The District Forum has failed to appreciate the facts in its correct perspective.  Appellant being a member of the 2^nd respondent was issued a group Mediclaim policy by the 1^st respondent and the premium amount paid was encashed by the 1^st respondent.  The District Forum had failed to consider clause 5 of the group insurance scheme that payment of premium and other terms of the policy agreement were complied with by the appellant.  The District Forum ought to have found that the contract under the policy was formed between the 1^st respondent with the appellant and any previous agreement with the respondents is substituted by way of new agreement in view of the novation under Section 62 of the Indian Contract Act.  The appellant would seek for setting aside the order of the District Commission.

9.       Notice was issued to the respondents.  But there was no representation on behalf of the respondents.  The records from the District Forum were called for and perused. 

          10.     Heard the counsel for the appellants.  Perused the records.

11.     Complainant had given evidence before the District Forum as PW1.  Exhibit D2 is the certified copy of the group insurance policy.  Exhibit D2 would show that the policy was issued on 22.11.2014.  As per Exhibit D2, 338 applicants were enrolled in the scheme as the beneficiaries.  The learned counsel for the appellant would submit that his party had submitted the application form along with the cheque pertaining to the insurance policy which was duly encashed by the 1st opposite party.  If the 1^st opposite party was not ready to issue an insurance policy in favour of the complainant it was obligatory on the part of the 1^st opposite party to inform the complainant regarding the hurdles in enrolling him as a member of the insurance scheme.  The learned counsel for the appellant would place a ruling of the Apex Court reported in Chairman, Life Insurance Corporation & Ors. Vs. Rajiv Kumar Bhaskar 2005 (6) SCC 188 to support his contention.  The learned counsel would submit that it was the legitimate expectation of an insured employee.  It was a case where the employer had defaulted payment of the premium.  Since the employer was an agent of LIC having an implied authority, the LIC could not make the employee liable for the consequences emanating from the default on the part of the employer.  The facts of the ruling are entirely different.  Exhibit D1 is the copy of the MOU between the opposite parties.  Clause 15 of the MOU clearly stipulates that the MOU shall come into effect only when the premium amount of minimum five thousand policies is remitted to the 1^st opposite party.  There was no privity of contract between the complainant and the 1^st opposite party.  The privity regarding the group insurance policy scheme was between the opposite parties 1 and 2.  Since the requisite number of applicants did not join the scheme, the policy did not come into effect.  The claim regarding an insurance policy could be allowed only after the commencement of the policy.  The Apex Court had declared in categorical terms that the policy issuance date would be the relevant date for all the purposes and the policy document would come in to effect on the date on which the policy was issued or the date of commencement mentioned in the policy.  Exhibit D2 would show that the policy had commenced only on 22.11.2014.  The complainant was also enrolled as a beneficiary with Sl.No.41 of Exhibit D2.  But his claim in respect of the treatment availed prior to the commencement of the policy was rightly disallowed.  The complainant cannot seek for an individual policy, since the policy was a group insurance policy announced with a stipulation of minimum members to be enrolled.  The complainant had no grievance against the 2^nd opposite party.  In fact, the 2^nd opposite party had committed a mistake in remitting the premium amount of the complainant alone which is contrary to the stipulations contained in the MOU.  As per the MOU, it is stipulated that the policy will commence on paying the premium amount of minimum five thousand policies being remitted to the 1^st opposite party.

12.     On going through the entire evidence on record, one cannot allege any deficiency in service on the part of the 1^st opposite party.  The expectation of the complainant was not legitimate as the minimum requirement for the issuance of a group insurance policy was not fulfilled.  The District Commission had elaborately considered the evidence on record and reached a conclusion that there was no deficiency in service and accordingly the complaint was dismissed.

13.     We find no error in the order passed by the District Commission as the District Commission had reached a correct conclusion by dismissing the complaint.  The appeal lacks merits and we hereby dismiss the appeal.  Parties shall bear their respective costs.

SL