BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PATIALA.

                                                Complaint No.CC/10/ 33 of 11.1.2010 

                                                Decided on:          22.9.2011

Pardeep Kumar Gupta son of Prem  Sagar, resident of Ban Bazar, Patiala, Nominee.

                                                                             -----------Complainant

                                      Versus

1.                 Tata Life Insurance Company Limited, Unit 302, Building No.4, Infinity IT Park, Film City Road, Dindoshi Malab East Mumbai 400097 registered and Corporate Office 6^th Floor, Peninsula Tower, Peninsula Corporate Park, Ganatrao Kadam Marg, Lower Prel West Mumbai-4000013.

2.                 Branch Manager Tata Life Insurance CompanyLtd., 2^nd Floor,

               SCO 18,Leela Bhawan, Patiala.

                                                                             ----------Opposite parties.

                                      Complaint under Section 12 of the

                                      Consumer Protection Act.

                                      QUORUM

                                      Sh.D.R.Arora, President

                                      Smt.Neelam Gupta, Member

Present:

For the complainant:     Sh.S.L.Bajaj, Advocate

For opposite parties:     Sh.Amrinder Singh, Advocate

                                         ORDER

D.R.ARORA, PRESIDENT

          One Ashutosh Gupta had purchased the insurance policy no.C-124029255 on 23.1.2009 from the ops having deposited the premium of Rs.5508/-. The complainant Pardeep Kumar was declared as the nominee by the insured.

2.       Ashutosh Gupta died on 5.2.2009 at the age of 32. The complainant obtained the death certificate from the competent authority in respect of the insured. The complainant had written 2-3 letters to the ops in respect of his claim under the policy. He also wrote registered letter dated 18.9.2009 to the ops having sent the relevant documents alongwith the same. No reply was given to the same by the ops.

3.       Describing the act of the ops in having not disbursed the claim of the complainant by way of making the payment of Rs.19lacs under the insurance policy as an unfair trade practice and the same also having caused harassment and mental agony to the complainant, he approached this Forum through the present complaint brought under Section 12 of the Consumer Protection Act,1986 (for short the Act) for a direction to the ops to make the payment of Rs.19lacs with interest @18% per annum from the date of the policy.

4.       On notice, the ops appeared and filed their written version having raised certain preliminary objections, interalia, that the Forum lacks jurisdiction to entertain and try the complaint as the dispute involved in the complaint is of civil nature and the same requires determination with the help of the evidence; that the complainant is estopped in filing the complaint by his act and conduct; that  the complainant has got no locus standai / cause of action to file the complaint. As regards the facts of the complaint, it is averred by the ops that the complainant is not a consumer of the ops because no insurance policy was issued in the name of deceased Ashutosh Gupta. The deceased had applied for a policy, under which it was mandatory that he should under go medical examination before the issuance of the policy. Ashutosh Gupta had never turned up for his medical examination before the doctor on the date fixed i.e. 4.2.2009.Since the deceased had not turned up for his medical examination, no policy was issued. The deceased had only  filled up the proposal form and paid the premium. Mere payment of the premium does not warrants the issuance of the policy. No contract of insurance had come into being between the deceased and the ops. The ops had sent a medical test request form letter dated 29.1.2009 for the medical examination of the Ashutosh Gupta. It is denied if any policy No.C-124029255 had been issued in the name of the deceased Ashutosh Gupta.

5.       It is further averred that the premium receipt contained a disclaimer that, “ acceptance of deposit does not constitute risk commencement. Risk commencement starts after the acceptance of the risk by the company”. The premium amount of Rs.5708/- was refunded vide cheque no.556165 to the complainant vide letter dated 7.7.2009.On these grounds the ops denied the entitlement of the complainant to claim the insurance amount of Rs.19lacs and ultimately, it was prayed to dismiss the complaint.

6.       In support of his complaint, the complainant produced in evidence,Ex.C1/A his sworn affidavit alongwith documents, Exs.C1 to C8 and the evidence of the complainant was closed by the order of the Forum.

7.       On the other hand, on behalf of the ops, their learned counsel produced in evidence, Ex.R12 the sworn affidavit of Bhavya Bharti, Branch Operation Incharge of op no.2 alongwith documents,Exs.R1 to R11 and closed their evidence.

8.       The parties filed the written arguments. We have examined the same, heard the learned counsel for the parties and gone through the evidence on record.

9.       It was submitted by Sh.Sham Lal Bajaj, the learned counsel for the complainant that the deceased Ashutosh Gupta had submitted the application form,Ex.C1 alongwith premium amount of Rs.5708/- and the ops had issued the initial premium receipt,Ex.C6 dated 23.1.2009 and therefore, the insured was entitled to the issuance of the insurance policy but before the same was received he had died on 5.2.2009, a fact mentioned in the notice,Ex.C2 dated 18.9.2009, the same having not been denied by the ops.

10.     On the other hand, it was submitted by Sh.Amrinder Singh, Advocate, the learned counsel for the ops that the mere issuance of the initial premium receipt,Ex.C6 dated 23.1.2009 for Rs.5708/- does not amount the  acceptance of the insurance proposal  especially when it is recorded in Ex.C6, “ acceptance of deposit does not constitute risk commencement. Risk commencement starts after acceptance of risk by the company”.

11.     Then it was submitted by the  learned counsel for the ops that the acceptance of the offer was dependant upon the medical examination of the deceased Ashutosh Gupta, who was sent,Ex.R5, medical test request form(MTRF) but as per the certificate, Ex.R6, issued by Dr.Amandeep Singh M.D (medicines) of Ajit Colony, Ashutosh Gupta had not turned up for his medical examination on February 04/2009 in respect of policy no.C-124029255  and only Mr.Pardeep Kumar had appeared. Therefore, it was submitted by the learned counsel for the ops that without the proposer Ashutosh Gupta having been subjected to medical examination, no acceptance of the offer could be made and therefore, no insurance policy was ever issued.

12.     It was further submitted by the learned counsel for the ops that the claim decision report,Ex.R9, was sent to the complainant having refunded the premium of Rs.5708/- vide cheque no.556165 dated 2.7.2009 vide letter,Ex.R10 dated 7.7.2009, the photo copy of Cheque being Ex.R11. The learned counsel for ops also placed reliance upon the citations Life Insurance Corporation of India Vs. Raja Vasireddy Kamba and others  1984 AIR(SC)1014: 1984(2)S.C.C.719:1984(3)SCR 350:1984(1)Scale 561 and Kamlesh Nanda Versus Sr.Divisional Manager, Life Insurance Corporation of India and others 2004(3)CLT 290 of the Hon’ble Uttar Pradesh State Consumer Disputes Redressal Commission, Lucknow.

13.     We have considered the submissions and are of the considered view that the proposal submitted by the deceased Ashutosh Gupta vide application,Ex.C1, was never accepted by the ops because the acceptance was subject to the medical examination of the late Ashutosh Gupta.The initial premium deposit receipt,Ex.C6, did not convey any acceptance of the risk rather it is described as initial premium deposit receipt. In the case of the citation Life Insurance Corporation of India Vs. Raja Vasireddy Kamba and others (supra) their learned Lordships of the Hon’ble Supreme Court observed,

“ When an insurance policy becomes effective is well settled by the authorities but before we note the said authorities, it may be stated that it is clear that the expression “underewrite”signifies ‘accept liability under’. The dictionary meaning also indicates that ( See in this connection The concise Oxford Dictionary Sixth Edition p.1267).It is true that normally the expression “underwrite” is used in Marine insurance but the expression used in Chapter III of the Financial powers of the Standing Order in this case specifically used the expression “underwriting and revivals” of policies in case of Life Insurance Corporation and stated that it was the Divisional Manager who was competent  to underwrite policy for Rs.50,000/- and above. The mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy document is not acceptance. Acceptance must be signified by some act or acts agreed on by the  parties or from which the law raises a presumption of acceptance. See in this connection the statement of law in Corpus Juris Secundum,Vol.XLIV 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 offerer, 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 officer.”

14.     In the light of the aforesaid discussion, it would appear that the deceased Ashutosh Gupta had merely submitted the application for getting him insured and the payment of the premium but the same was not accepted, which was subject to the medical examination of the proposor. The mere issuance of receipt and retention of premium  until after the death of the applicant or the mere preparation of the policy document is not acceptance. Acceptance must be signified by some act or acts agreed on by the  parties or from which the law raises a presumption of acceptance. It was categorically conveyed vide initial premium receipt,Ex.C6 that acceptance of deposit does not constitute risk commencement. Risk commencement starts after acceptance of risk by the company. The company never conveyed the acceptance of the risk to Ashutosh Gupta and therefore, we find that no contract had come into being the deceased Ashutosh Gupta and the ops. The ops were under an obligation to refund the amount of the premium and they have rightly already refunded the same to the complainant, a fact not controverter by the complainant in any way. Consequently, we do not find any merit in the complaint and the same is hereby dismissed.

Pronounced.

Dated:22.9.2011

                                                Neelam Gupta                  D.R.Arora

                                                Member                            President