Delhi

North East

CC/11/2013

Smt. Savita - Complainant(s)

Versus

The Manager, Kotak Mahindra Bank - Opp.Party(s)

08 Dec 2022

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 11/13

 

In the matter of:

 

	Smt. Savita W/o Lt. Sh. Sanjay Singh R/o D-238, Block-D, Partap Nagar Village Saboli, Delhi-110093	Complainant
	Versus
	The Manager Kotak Mahindra Life Insurance Company Ltd., 1st Floor, Situated at 33, Community Centre, New Friends Colony, New Delhi-110065	Opposite Party

 

DATE OF INSTITUTION:       JUDGMENT RESERVED ON:                           DATE OF ORDER:

11.01.2013 22.08.2022 08.12.2022

 

 

CORAM:                                                                                        

Surinder Kumar Sharma, President

Anil Kumar Bamba, Member

 

 

ORDER

    Anil Kumar Bamba, Member

The Complainant has filed the present complaint under Section 12 of the Consumer protection Act, 1986.

Case of the Complainant

1. The case of the Complainant as revealed from the record is that on 4^th August 2011, Sh. Sidhharth Singh, an agent of the Opposite Party had come to the residence of the Complainant along with his another colleague/agent namely Sh. Vikas and had insured the deceased Sh. Sanjay Singh, husband of  Complainant vide ID No. 54625768 of the Policy Holder, Policy No. 02347457 under the “KOTAK TERM PLAN” (Term Assurance Plan), UIM-107N005V04, for Rs. 12,00,000/- being the premium amount of RS. 2,298/- and Premium instalment being Rs. 2,535/-. On the same day i.e. 04.08.2011, the above said agent had also obtained the signatures of the above named deceased husband of the Complainant on the blank Insurance Papers/Forms. Then Husband of the complainant had met with an accident on the 05.08.2011 and in this regard an FIR bearing No. 403/11 of 2011 was registered under section 279/304-A of I.P.C by the police of P.S Civil Lines, Distt. Gurgaon, Haryana against the offending vehicle. On 05.08.2011 the physical condition of the deceased policy holder was very serious and deceased holder was admitted in the hospital and ultimately husband of the Complainant had expired in the said hospital on 07.08.2011. On the next day, the Complainant had informed the agent Sh. Vikas and also to the office of the Opposite Party regarding the accident of the husband of the Complainant. Then the Complainant and her family members visited several times to the office of the Opposite Party but it came into the knowledge that the Opposite Party had committed fraud in making the mention of the date of the insurance of the deceased husband of the Complainant. The Complainant is the nominee and legal heir/wife of the deceased Insurance Policy Holder. The first premium against the policy had been paid on the 04.08.2011 and receipt issued by the Opposite Party was in the pocket of the Complainant’s husband at the time of the accident.  A legal notice dated 29.09.2011 was issued to the Opposite Party but the Opposite Party did not give any reply.  The Complainant had claimed against the policy before the insurance company but the company has clearly refused to make the claim against the policy. The Complainant has prayed to direct the Opposite Party to make the payment of the above insurance policy as per their insurance policy.

Case of the Opposite Party

2. The Opposite Party contested the case and filed its written statement.  It is submitted by the Opposite Party that the Opposite Party received a Proposal form from Sanjay Singh seeking insurance policy on his life. After that on the basis of the information and declaration made in the above proposal form and after receipt of all the requisite documents and details, the proposal of the deceased LA was sent to the concerned department for further processing viz, underwriting/documentation etc. Thereafter, the Opposite Party issued policy bearing no. 02347457 in the name of deceased applicant on 09.08.2011. Thereafter, the policy and policy document were dispatched at the given address to the proposer. On 07.12.2011 the Opposite Party received a death claim under the above policy informing therein that the applicant died on 07.08.2011. After that the receipt of the death claim, it was clearly made out by the Opposite Party that the deceased applicant died before the date on which the Opposite Party accepted the proposal for conversion into the Policy and also before the Opposite Party communicated its acceptance to the proposal for insurance. The Life Assured, on whose life the Policy was sought to be issued, was not in existence at the time of acceptance of the proposal form and issuance of the policy. Accordingly, the claim was rejected as there was not concluded contract of insurance. At this juncture, it is most respectfully submitted that under no circumstances, the Opposite Party is liable to pay any benefit under the policy to the Complainant. It is submitted that a contract of insurance does not come into existence merely by signing the proposal form or by retention of the proposal deposit and in fact there are occasions where proposals are rejected after due consideration. Further, it is germane to mention that the contract of insurance is based on the principle of utmost good faith. Hence, the insurer can provide Life Cover to a person whom is alive and not for the one who died prior to the issuance. This intention of our company is very clearly evidenced by the proposal deposit receipt issued by the Opposite Party to the Proposer. The relevant clause of the note provided in the proposal deposit receipt read as under:

1. The receipt is subject to realization of cheque.
2. The amount collected herein is an interest free deposit to be adjusted towards the first premium payable on the life insurance policy.
3. Life Insurance cover shall not be provided until the proposal has been examined, accepted and the life insurance policy have been issued by Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
4. Life Insurance Cover shall commence from the date indicated on the life insurance policy.

3. It is further stated that the Life Assured passed away on 07.08.2011 before his proposal converted into a policy and therefore, there was not concluded contract and hence no Life Cover provided to the Life Assured as he died during the processing stage itself. It is submitted that the Opposite Party received the proposal form dated 06.08.2011 and not 04.08.2011 along with the first premium deposit on 06.08.2011. Further, the same was processed for consideration for issuance of the Policy and the same was finally issued on 09.08.2011. In this regard, it is pertinent to reiterate that mere signing the proposal form and depositing the premium amount does not entitle the Complainant, the indefeasible right to claim for the death benefits. The Opposite Party humble states and submits that there was no contract of insurance subsisting as on the date of death of the deceased applicant. It is submitted that the branch of Opposite Party at Gurgaon received the death intimation form on 02.12.2011 which was sent to head office and the same was received by HO on 12.12.2011. It is submitted that the Opposite Party at the outset had evaluated that the no death benefit is payable under the subject Policy since no contract exists at the time of death of the LA. Further, the contract was unconcluded as on the date and time of the deceased applicant hence the Complainant would not acquire the status of a  nominee as envisaged under the provisions of section 39 of the Insurance Act, 1938 and nor would she be considered a beneficiary. Hence the Opposite Party vide its repudiation letter dated 13.12.2011 has repudiated the claim and refunded the premium amount. It is submitted that the premium was paid in cash on 06.08.2011 and the proposal deposit receipt was issued on the said date itself i.e. 06.08.2011 and the same is evident from the mere perusal of the proposal deposit receipt attached along with the present reply.
4. It is a settled principle of Law that mere receipt of the proposal & collection of the premium amount do not signify that there was acceptance of proposal. It has been held by the Hon’ble Supreme Court in LIC V/s Raja Vasireddy Komalavalli Kamba AIR 1984 SC 1014 that mere receipt and retention of premium until after the death of the applicant/proposer or the mere preparation of the Policy documents is not acceptance. It is held that acceptance must be signified by some act or acts agreed on by the parties. In insurance contracts, silence does not constitute consent and no binding contract arises until the person to whom an offer is made says or does something to signify acceptance. Similar views was taken by Hon’ble National Commission in case cited as LIC of India v/s Mrs. Bimla Routrey II(1993)CPJ 146(NC). Wherein the facts were that the Proposer had made proposal to corporation and paid premium on 11.03.1987. The proposal papers were submitted on 14.03.1987, on 19.03.1987, proposal was accepted and the Policy was issued covering risk form 27.03.1987. However, during that period on 15.03.1987, the proposer had died. It was held by the Hon’ble National Commission that there was no concluded contract of insurance and for that reason the Life Insurance Corporation was held not liable to pay any insurable benefits to the claimant.
5. In case LIC of India and Another Smt. K. Aruna Kumari, III (2005) CPJ 80 (NC), it was held by the Honb’le National Consumer Commission that “where a proposer dies before the acceptance of the proposal by LIC, there is not concluded contract of insurance and thus a non-payment of the amount does not amount to deficiency of services.” Hence, based on the supra settled position of law, the case in hand is squaely covered by the above cited authoritative pronouncements. Under the instant case, the Opposite Party received the proposal on 06.08.2011 and the same was only issued on 09.08.2011. However, the Life Assured died on 07.08.2011. Thus, no concluded contract has come into existence between the deceased LA and the Opposite Party. Hence, the question of paying death benefit does not arise out of the contract which was not in existence at the time of death of the deceased applicant. The Complainant has no locus standi to file this complaint since there was not concluded contract of insurance on the date of death of the deceased applicant of the life insurance policy and as such the complainant does not fall under the purview of the definition of consumer as has been contemplated under the provisions of the Consumer Protection Act. It is further important to note that as contemplated under the provisions 2(1) (b) I, 2(1)(d) of the Consumer Protection Act, 1986, the word Complainant, complaint and Consumer has been defined as :

2. Complainant meant-

1. A consumer; or

3. Complaint means any allegation in writing made by a complainant that......
4. Consumer means any person who,-

(i)

(ii) (Hires or avails of) any services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services………..

6. In view of the provisions mentioned hereinabove it is amply clear that any complaint before a Consumer Forum can only be filed by the consumer or by his/her legal heir or representative, in case of death of the consumer, as specifically defined under the Act. Since the contract was not concluded as on the date of death of the deceased applicant hence neither the deceased applicant can be construed as a Consumer nor his alleged wife can be called a legal heir or representative as contemplated under the Act. Hence, the Complainant is not entitled to claim any relief under the Consumer Protection Act before this Hon’ble Forum.

Evidence of the Parties

7. The Complainant in support of his case filed his affidavit wherein he has supported the assertions made in the complaint. To support its case Opposite Party has filed affidavit of Sh. Shakil Ahmad, Senior Manager-Legal Kotak Mahindra Old Mutual Life Insurance Ltd. Having its office at Vinay Bhavya Complex, 159-A, C S T Road, Kalina, Santacruz (East), Mumbaai-400 098. In his affidavit, he has supported his case as mentioned in the written statement.

Arguments & Conclusion

8. We have heard the Counsel for the Complainant and Opposite Party. We have also perused the file and written arguments filed by the parties. The case of the Complainant is that an agent of the Opposite Party contacted the husband of the Complainant on 04.08.2011 for sale of the policy under the “Kotak Term Insurance Plan” for Rs. 12,00,000/- for premium amount of Rs. 2,298/- and premium installment for R. 2,535/-. On the same day, said agent also obtained signature of the deceased husband of the Complainant on the blank insurance paper/form. Husband of the Complainant met with an accident on 05.08.2011 and expired on 07.08.2011. The Complainant informed the agent of the Opposite Party about the accident and death of the husband of the Complainant. The Complainant filed her claim to the Opposite Party which was denied. The case of the Opposite Party is that the Opposite Party received a proposal from the deceased husband of the Complainant for seeking insurance policy for his life. On the basis of information and declaration made in the above proposal form and after receipt of all requisite documents and details Opposite Party issued Policy bearing No. 02347457 in the name of deceased applicant on 09.08.2011. Thereafter, the policy and policy document were dispatched at the given address to the Proposal.  On 07.12.2011, Opposite Party received a death claim under the above policy informing therein that the applicant died on 07.08.2011. After the receipt of the death claim, it was clearly made out by the Opposite Party that the deceased applicant died before the date on which Opposite Party accepted the proposal for conversion into the policy and also before the Opposite Party communicated its acceptance to the proposal for the insurance. It is further submitted by the Opposite Party that the Life Assured, on whose life the policy was sought to be issued, was not in existence at the time of acceptance of the Proposal form and issuance of the policy. Accordingly, the claim was rejected as there was no concluded contract of insurance. It is further submitted by the Opposite Party that the contract of insurance  does not come into existence merely by signing the proposal form or by retention of the proposal deposit and in fact there are occasions where proposals are rejected after due consideration. The relevant clause of the note provided in the proposal deposit receipt read as under:

1. The receipt is subject to realization of cheque.
2. The amount collected herein is an interest free deposit to be adjusted towards the first premium payable on the life insurance policy.
3. Life Insurance cover shall not be provided until the proposal has been examined, accepted and the life insurance policy have been issued by Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
4. Life Insurance Cover shall commence from the date indicated on the life insurance policy.

9.   It is further stated by the Opposite Party that Life Assured passed away on 07.08.2011 before his proposal converted into a policy and therefore, there was no concluded contract and hence no Life Cover provided to the Life Assured as he died during the processing stage itself. It is submitted that the Opposite party received a proposal form dated 06.08.2011 and not 04.08.2011 along with first premium deposit on 06.08.2011. Further, the same was processed for consideration for insurance of the Policy and the same was finally issued on 09.08.2011. In this regard, it is pertinent to reiterate that the signing the proposal form and depositing the premium amount does not entitle the Complainant, the indefeasible right to claim for the death benefits. Since, contract was unconcluded as on the date and time of the deceased applicant hence the Complainant would not acquire the status of a nominee as envisaged under the provisions of section 39 of the Insurance Act, 1938 and nor would she be considered a beneficiary. Hence, the Opposite Party vide its repudiation letter dated 13.12.2011 has repudiated the claim and refunded the premium amount.
10. In support of his argument, Opposite Party bring to the notice of this Commission, the judgement of the Hon’ble Supreme Court in the case of LIC Vs. Raja Vasireddy Lomalavalli Kamba AIR 1984 SC 1014, in which it was held that mere receipt and retention of premium until after the death of the applicant/proposer or the mere preparation of the Policy document is not acceptance. It is also held that acceptance must be signified by some act or acts agreed on by the parties. In insurance contracts, silence does not constitute consent and no binding contract arises until the person to whom and offer is made says or does something to signify acceptance.  As per Opposite Party argument similar view was taken by the Hon’ble National Commission in case of LIC of India vs. Bimla Routrey II(1993) CPJ 146(NC), wherein the facts were that the Proposer had made proposal to the LIC and paid premium on 11.03.1987. The proposal papers were submitted on 14.03.1987, on 19.03.1987 proposal was accepted and the Policy was issued covering risk from 27.03.1987. However, during that period on 15.03.1987, the proposer had died. It was held by the Hon’ble National Commission that there was no concluded contract of insurance and for that reason the LIC was not liable to pay any insurable benefits to the claimant. Under the instant case, the Opposite Party received the proposal on 06.08.2011 and the same was only issued on 09.08.2011. However, the Life Assured died on 07.08.2011. Thus, no concluded contract has come into existence between the deceased Life Assured and the Opposite Party. Hence, the question of paying death benefit does not arise out of the contract which was not in existence at the time of death of the deceased Applicant. As per the Opposite Party, it is further important to note that as contemplated under the provisions 2(1) (b) I, 2(1)(d) of the Consumer Protection Act, 1986, the word Complainant, complaint and Consumer has been defined as :

5. Complainant meant-

2. A consumer; or

6. Complaint means any allegation in writing made by a complainant that......
7. Consumer means any person who,-

(i)

(ii) (Hires or avails of) any services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services………..

11.  In view of the provisions mentioned hereinabove it is amply clear that any complaint before a consumer forum can only be filed by the consumer or by his/her legal heir or representative, in case of death of the consumer, as specifically defined under the Act. Since the contract was not concluded as on the date of death of the deceased applicant hence neither the deceased applicant can be construed as a ‘Consumer’ nor his alleged wife can be called a ‘legal heir or representative’ as contemplated under the Act. Hence, the Complainant is not entitled to claim any relief under the Consumer Protection Act before this Hon’ble Forum.  
12. It is an admitted fact that the proposal was received on 06.08.2011 and policy document was issued on 09.08.2011. As per letter dated 09.08.2011 which is policy insurance form, date of commencement of policy mentioned as 06.08.2011 and husband of the Complainant died on 07.08.2011. It is clear from the fact that policy was commenced on 06.08.2011 i.e. before the death of the husband of the Complainant where Complainant was declared and mentioned as nominee under sections 39 of the Insurance Act 1938 on page 4 of Agreement and schedule and page 10 of the policy. So, there was clear acceptance of the proposal on the part of the Opposite Party before the death of the husband of the Complainant. It is also covered under clause 4 of the note provided in the proposal deposit receipt read as under:

1. ………………..
2. …………………
3. …………………...
4. Life Insurance Cover shall commence from the date indicated on the life insurance policy.

13.   So in our considered view with regards, judgement of the Hon’ble Supreme Court in LIC vs. Raja Vasireddy Lomalavalli Kamba AIR 1984 SC 1014 and Hon’ble National Commission in the case of LIC of India vs. Bimla Routrey II (1993) CPJ 146(NC) facts are entirely different in this case. As in the both cases proposer died before proposals of the policies were accepted. In the instant case, policy commencement date is before the death of the proposer.
14. In view of the above discussion, complaint is allowed. Opposite Party shall pay the insured amount of Rs. 12,00,000/- along with interest @ 6 % p.a. from the date of filing the complaint till recovery. The sum of Rs. 10,000/- already paid by the Opposite Party on account of entire PDR amount shall be deducted from the claim amount. The Opposite Party also pay an amount of Rs. 20,000/- on account on mental harassment and litigation charges along with interest @ 6 % p.a from the date of this order till recovery.
15.  Order announced on 08.12.2022.

Copy of this order be given to the parties free of cost

File be consigned to Record Room.

(Anil Kumar Bamba)           Member

(Surinder Kumar Sharma) President