This C.C. is coming on before us for final hearing in the presence of Sri G.Seshagiri Rao, Advocate for the complainants and of Sri G.Sita Rama Rao, Advocate for opposite parties; upon perusing the material papers on record; upon hearing the arguments and having stood over for consideration this forum passed the following:
ORDER
(Per Sri R. Kiran Kumar, Member)
This complaint is filed u/s.12-A of Consumer Protection Act, 1986. The averments made in the complaint are that the complainant No.1 is the wife and the complainant No.2 is the son, of the deceased, Vundeti Sreenu and they are resident of Suvarnapuram village, Mudigonda Mandal, Khammam District. On 24-3-2009, Vundeti Sreenu has obtained Reliance Super Automatic Investment Plan (Regular) policy from the opposite party No.1, paid Rs.5,000/- towards first half year installment premium vide receipt No.WC0003782113 and the date of commencement of policy from 25-3-2009. As per the terms and conditions of the policy, in case of death of policy holder, the company will be paid Higher of Sum Assured or Total Fund Value i.e. Rs.1,00,000/- to the nominee. On 25-3-2009 in the evening hours, the life assured died due to severe heart attack, the same was opined by the local doctor. After the death of the life assured, on 13-11-2009 the complainant No.1 submitted claim form with the opposite party No.1. On 13-1-2010 the complainant No.1 received a letter from opposite party No.2 with reference to the settlement of the claim under policy No.14158170 and mentioned therein that ‘we acknowledge the receipt of documents/ records provided by you and wish to inform you that we have accepted the claim under policy No.14158170 and processed as per the ticked item below and sending the cheque for Rs.5,000/- to you as a full and final settlement of claim’. The complainant further submitted that on one part the opposite parties are accepting the claim of the complainant under the policy No. 14158170 and another part they sent the cheque only for Rs.5,000/- as full and final settlement of claim instead of Rs.1,00,000/-. On that on 2-2-2010 the complainants got issued legal notice to the opposite party No.2 for payment of policy amount within 15 days from the date of receipt of the notice. The same was served to the opposite party No.2. But they failed to give any reply and also failed to pay the amount. Therefore, the complainants have no other option except to file the present complaint before the Forum for redressal.
To support their contention, the following documents were filed and marked as Exs.A.1 to A.6.
Ex.A.1 - Cash receipt issued by the opposite party No.1,
dt.24-3-2009.
Ex.A.2 - Photocopy of policy issued by opposite party No.3,
dt.25-3-2009
Ex.A.3 - Death certificate issued by Panchayat Secretary,
Suvarnapuram village, dt.28-3-2009
Ex.A.4 - Photocopy of claim form submitted by complainant,
dt.13-11-2009
Ex.A.5 - Settlement of claim issued by opposite party No.2,
dt.30-1-2010.
Ex.A.6 - office copy of legal notice, dt.2-2-2010 along with
postal acknowledgment.
On receipt of the notice, the opposite parties appeared through their counsel and filed counter. In the counter the opposite parties submitted that the deceased proposer had filled up the application form on 24-3-2009 and the said policy bearing No.14158170 was issued in the name of the deceased proposer with the Risk Commencement Date as 25-3-2009. However, it is pertinent to mention that as reported the proposer had expired on the very same day i.e. 25-3-2009 at 7-00 a.m. in the morning i.e. before the issuance/ risk commencement of the policy. Hence, the said policy contract was an unconcluded one as the proposer expired before the risk commencement date. To support their contention, the opposite parties company, submitted the following citations, the cases in between LIC of India Vs. Prasanna Devaraj (1995) 82 Comp Cas 611 616 (Kerala), in between LIC Vs. Raj Vasireddy Komalavalli Kamba reported in AIR 1984 SC 1014, wherein the Hon’ble Supreme Court had laid down that ‘ the general rule is that the contract of insurance will be concluded only when party to whom the offer has been made accepts it unconditionally and communicates his acceptance to the person making offer. Whether the final acceptance is that of assured of insurers. It was held that mere receipt or retention of the premium does not give rise to a contract”.
To support their contention, the opposite parties filed the following documents. The same were marked as Exs.B.1 to B.3.
Ex.B.1 - Photo copy of letter addressed by the complainant to
the opposite party company.
Ex.B.2 - Photo copy of the cheque bearing No.218592,
dt.13-1-2010.
Ex.B.3 - Photocopy of the letter, dt.13-1-2010.
On behalf of the opposite parties, written arguments filed. Heard the oral arguments on behalf of the complainant.
Upon perusing the material papers on record, now the points that arose for consideration are,
1) Whether the complainants are entitled for the
claim amount covered under the policy?
2) To what relief?
Point No.1:
In this case the husband of the complainant No.1 had obtained Reliance Super Automatic Investment Plan (Regular) policy from the opposite party No.1, paid Rs.5,000/- towards first half year installment premium vide receipt No.WC0003782113 and the date of commencement of policy from 25-3-2009. The opposite party No.3 issued the policy bearing No.14158170 and the date of commencement of the policy is from 25-3-2009. As per the terms and conditions of the policy, in case of death of policy holder, the company will be paid Higher of Sum Assured or Total Fund Value i.e. Rs.1,00,000/- to the nominee. As per the complainants on 25-3-2009 in the evening hours, the husband of the complainant No.1 died due to heart attack. After the death of her husband, on 13-11-2009 she made a claim with the opposite parties, as in Ex.A.4. On 13-1-2010 the complainant No.1 received a letter from opposite parties, which is marked as Ex.B.3. After receiving the letter from the opposite party, the complainant No.1 got issued a legal notice, but the opposite parties failed to pay the amount, as such the complainant approached the Forum for redressal.
From the material available on record, we are observed that the husband of the complainant paid Rs.5,000/- towards first premium, half yearly installment, for such payment the opposite party No.3 had issued a policy bearing No.14158170, as in Ex.A.2. As per the complaint, the husband of the complainant No.1 died due to heart attack in the evening hours of 25-3-2009. The counsel for complainant in oral arguments vehemently argued that to escape from the liability, the company has relied on a fabricated document, which was marked as Ex.B.1. The opposite party company filed Ex.B.1 along with other documents. Ex.B.1 is the crucial document to prove the case of opposite parties. Except filing the documents, the opposite party kept silent to prove their contention. As per the complainant No.1, time of death is evening hours. As per the Ex.A.4, the complainant is an uneducated innocent women and she used to put thumb impression only. The opposite parties failed to prove their contention by producing any cogent evidence except filing the letter said to be given by the complainant.
The counsel for the opposite parties relied upon the judgment of the Hon’ble Supreme Court of India in a case in between LIC of India Vs. Raja Vasireddy Komalavalli Kamba and others (AIR 1984 SC 1014). In this case the observation made by the Supreme Court in paragraphs 13 and 14 of the Judgment, which reads as under:
The statement of law in Corpus Juris Secundum, Vol.XLV, page 986 wherein it has been stated as:”The mere receipt and retention of premiums until after the death of applicant does not give rise to a contract, although the circumstances may be such that approval could be inferred from retention of the premium. The mere execution of the policy is not an acceptance; an acceptance, to be complete, must be communicated to the offeror, either directly, or by some definite act, such as placing the contract in the mail. The test is not intention alone. When the application so requires, the acceptance must be evidenced by the signature of one of the company’s executive officers.”
And also in the above case, the Supreme Court held that till the issuance of the policy no binding contract comes into existence between the parties and the insurance company is not liable to pay the sum insured.
In the present case, the proposal form was received by the opposite party company on 24-03-2009 along with half yearly installment and the insurance policy already issued to the complainant. As such the case on which relied by the counsel for the opposite parties differs from the present case and in para No.13 of the above case it is also mentioned that “an acceptance to be complete must be communicated to the offeror, either directly or by some definite act, such as placing the contract in the mail. The test is not intention alone.” In view of this, we are of the opinion that the contract had concluded and come into existence between the parties.
In view of the aforesaid reasons, this point is answered accordingly in favour of the complainant.
Point No.2:- In the result, the complaint is allowed in part, directing the opposite parties to pay the policy amount with interest @9% p.a. along with all the benefits covered under the policy from the date of claim i.e. 13-11-2009 till the date of deposit and also directed to pay Rs.1,000/- towards costs of the litigation, on such deposit the complainant No.1 is entitled to Rs.50,000/- together with accrued interest on Rs.1,00,000/- and costs. The complainant No.2 is entitled for Rs.50,000/-. The said amount shall be kept in FDR in the name of Complainant No.2 until he attains the age of majority.
Dictated to the steno, transcribed by her, corrected and pronounced by us in the open forum, on this 23rd day of November 2010.
PRESIDENT MEMBER MEMBER
DISTRIC CONSUEMRS FORUM, KHAMMAM
APPENDIX OF EVIDENCE
Witnesses examined for complainant: None
Witnesses examined for opposite party: None
Exhibits marked for Complainant:
Ex.A.1 - Cash receipt issued by the opposite party No.1,
dt.24-3-2009.
Ex.A.2 - Photocopy of policy issued by opposite party No.3,
dt.25-3-2009
Ex.A.3 - Death certificate issued by Panchayat Secretary,
Suvarnapuram village, dt.28-3-2009
Ex.A.4 - Photocopy of claim form submitted by complainant,
dt.13-11-2009
Ex.A.5 - Settlement of claim issued by opposite party No.2,
dt.30-1-2010.
Ex.A.6 - office copy of legal notice, dt.2-2-2010 along with
postal acknowledgment
Exhibits marked for opposite parties:
Ex.B.1 - Photo copy of letter addressed by the complainant to
the opposite party company.
Ex.B.2 - Photo copy of the cheque bearing No.218592,
dt.13-1-2010.
Ex.B.3 - Photocopy of the letter, dt.13-1-2010
PRESIDENT MEMBER MEMBER
DISTRIC CONSUEMRS FORUM, KHAMMAM
