Delhi

StateCommission

A/466/2015

BAJAJ ALLIANZ LIFE INSURANCE CO. LTD. - Complainant(s)

Versus

SATNAM KAUR - Opp.Party(s)

01 Sep 2017

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

                                                                    Date of Arguments: 14.08.17

          Date of Decision:      01.09.17

 

First Appeal No. 466/2015

In the matter of:

            Bajaj Allianz Life Insurance Co. Ltd.

            Bancassurance Department

            9^th Floor Pargai Towers

            Rajendra Place, New Delhi-110008.

            G-85, Ist Floor Main Vikas Marg,

           Preet Vihar, Delhi-110092.                                                         ………Appellants                                         

                                                                        VERSUS

1.   Satnam Kaur

W/o Late Shri Harminder Singh Banga

R/o WZ-260 Sant Garh Tilak Nagar

New Delhi-110018.                                                           …..Respondent No. 1

 

2.   Syndicate Bank

54 Mall Road

GTB Nagar Branch, New Delhi 110009                                    ….Respondent No. 2

Through Chief Manager                                      

                                                           

CORAM

Hon’ble Sh. O.P.Gupta, Member(Judicial)

Hon’ble Sh. Anil Srivastava, Member

1.Whether reporters of local newspaper be allowed to see the judgment?  Yes/No

2. To be referred to the reporter or not? Yes/No

  SHRI O.P.GUPTA, MEMBER(JUDICIAL)

 

JUDGEMENT

          Being aggrieved by order dated 20.08.15 passed by District Forum (Central)in CC No. 178/13 OP 1 has preferred the instant appeal.  The facts giving rise to filing of appeal were that husband of complainant/respondent No. 1 took loan of Rs. 3,50,000/- from respondent No. 2/OP No. 2 namely Syndicate Bank.  Respondent No. 2 insisted that he would buy insurance policy known as “House loan protected policy” for a period of 10 years from 2006 to 2016 on which one time premium of Rs. 22,000/- was payable.  He availed of housing loan of Rs. 3,72,000/- out of which Rs. 3,50,000/- was credited in the bank account of husband of complainant and Rs. 22,096/-  was paid to appellant directly by respondent No. 2 as insurance premium to cover the housing loan.  The husband of the complainant regularly paid installment of housing loan till his death on 16.10.2010.  Complainant approached the bank for release of title documents on which respondent No. 2 asked her to clear outstanding arrears in the loan account.  Complainant told housing loan was protected under the loan protection policy.  Respondent No. 2 assured her to take up the matter with appellant on 02.05.12.  Respondent No. 1 received a letter from respondent No. 2 stating that appellant has informed about the rejection of the loan protection policy on health grounds and payment of Rs. 22,096/- was sent to respondent no. 1 vide cheque No. 410201.  On seeking encashment details of said cheque appellant sent fresh cheque No. 29049 dated 21.01.12 which has been credited to the loan account.  Hence this complaint.

2.        Respondent No. 2 failed to file WS and was proceeded exparte.  Appellant filed WS stating that there was no cause of action in favour of respondent No. 1.  According to it the husband of the complainant was required to undergo medical examination from empanelled doctor of the company and he got himself medically examined from Dr. N.N.Jha of Apollo  Clinic, New Delhi . Medical report dated 28.12.06 confirmed adverse health condition.  So as per rules of the company, proposal on the life of husband of complainant was postponed and amount of Rs. 22,096/- was refunded vide cheque dated 29.10.06, letter dated 02.11.06 was sent to the proposer to that effect who never raised any objection with respect to refund of the proposal/deposited amount.  No valid contract of insurance was ever entered into.  The complaint was  hopelessly barred by limitation because refund was made on 02.11.06 and complaint was filed after expiry of seven and half years from said date.

3.        After going through the material on record the District Forum found that proposal on the life of husband of complainant was postponed but appellant failed to place on record letter dated 02.11.06 or cheque dated 29.10.06.  It failed to place on record any proof that said letter was actually dispatched to the proposer or was received by him.  Rather when the matter was taken by respondent no. 2 for 2012, appellant was issued fresh cheque dated 21.01.12.  The same makes it clear that respondent no, 2 was never informed of the rejection of proposal sourced through it.  There was no evidence on record that rejection of proposal was communicated to the proposer.

4.        Letter dated 06.09.12 written by respondent No. 2 to appellant incorporated that neither any information of rejection of proposal was given to bank or to the party since submission of proposal on 08.02/06.  Premium amount was kept by appellant.  The same makes it amply clear that respondent no. 2 was also informed orally about the rejection of proposal.

5.        The District Forum laid stress on the word “postponed’ used in WS of appellant.  It noticed that appellant had not rejected the proposal.  Hence it allowed the complaint and directed the respondent to release title documents kept as security against loan.  It directed  respondent No. 1 to pay Rs. 50,000/- as compensation for pain and agony , Rs. 10,000/- as cost of litigation.

6.        Respondent No. 1 has not filed any appeal against said order.  It is OP 1 alone who has filed the present appeal.

7.        We have gone through the material on record and heard the arguments.  The counsel for the appellant submitted that contract of insurance concludes only when party to whom an offer has been made accepts it unconditionally  and communicates his acceptance to the person making offer.   Receipts and retention of premium until after death of the proposer or mere preparation of policy documents  is not acceptance and does not give rise to contract.  In support of his submission he relied upon decision of Hon’ble Supreme Court in LIC of India vs. Raja Vasireddy Komalavalli  Kamba & Others AIR 1984 Supreme Court 1014.

8.        We have gone through the said judgement carefully and find that present case is worst than that.  Here no policy  document was prepared.

9.        Counsel for appellant also relied upon decision of National Commission in LIC of India vs, Smt. Mumtaz Begum 1992(2) CPR 715.  In that case the District Forum and State Commission directed insurance company to pay the insurance amount to nominee of life assured. In Revision the National Commission set aside the said orders holding that proposal was neither accepted prior to date of death of   proposer nor any policy was issued.

10.      Reliance has also been placed on another decision of National Commission in LIC of India vs. Ms. Bimla Routray (II) 1993 CPJ 146 in which it was held  that if proposer dies before acceptance of proposal, no concluded contract of insurance takes place. Present case is squarely covered by the said decision.

11.      In LIC of India vs. Smt. K. Aruna Kumari 1995 (3) CPR 62.  National Commission held that mere receipt and retention of premium until after the death of the applicant is not acceptance of contract.  Similar view has been taken by National Commission in Consumer Protection Association vs. Chairman, LIC of India III(1996) CPJ 178  where it was held that no contract existed as there has been no final acceptance of proposal nor any policy has been issued.

12.      In Vijay Laxmi Dhir vs. LIC , Original Petition No. 318/2001 decided on 27.02.04 National Commission dismissed the complaint holding that when medical deficiency was found in check up of the proposed,  no concluded contract took place despite the fact that LIC informed that proposal had been accepted  by the insurance company.  That was a case worst than the case in hand.

13.      As compared to it the counsel for respondent no. 1 could not cite any contrary decision.

14.      In view of the repeated decisions of National Commission and Hon’ble Supreme Court, the order of the District Forum can not be sustained.  Appeal is accepted, impugned order is set aside and complaint is dismissed.

            Copy of the order be sent to both the parties free of cost.

                        One copy of the order be sent to District Forum for information.

 

(ANIL SRIVASTAVA)                                                               (O.P.GUPTA)

MEMBER                                                                                 MEMBER(JUDICIAL)