Smt.G.Vasanthakumari, President
Complainant’s case is that complainant no.1 is the wife and complainants 2 to 5 are the minor children of diseased Kuruvila Mathew and since complainants 2 to 5 are minors, they are being represented by their mother and legal guardian first complainant, that Late.Kuruvila Mathew was the sole proprietor of a business firm namely Mithun Traders at Kottarakkara, that during his lifetime he had availed a loan of Rs.10 lakhs through the cash credit Account.No.57275 that was maintained by him with SBT, Kottarakkara branch and the loan amount was insured with SBI Life Insurance Company Limited under the Scheme SWADHAN bancassurance, that he remitted the first premium of Rs.3291/- on 09.08.04, that he died in a car accident on 11.10.2004, that the policy certificate was not issued to him till the time of his death, that on 20.10.2004 the first complainant wrote a letter to the second opposite party requesting to take necessary steps to settle the claim at the earliest and to credit the same to the cash credit account, that the first complainant was expecting a positive result as the bank authorities whom she met had told her that the SBI Life Insurance Company is planning to hand over the insured amount to the complainants at a public meeting to be held at Kottarakkara with a view to attract some publicity in the matter, but to her great disappointment first complainant got a letter dated:28.12.2004 from the second opposite party directing to remit the entire balance outstanding to the cash credit Account.No.57275 amounting to Rs.9,85,767.32 with interest, that in response to the above letter the first complainant again wrote a letter to second opposite party requesting to settle the dues after realizing the amount from the SBI Life Insurance Scheme but she got a letter from second opposite party dated:25.01.2005 along with a copy of the letter from SBI Life Insurance Company’s Bangalore office refuting
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the claim on the ground that he had not complied with the mandatory requirement of undergoing medical examination prior to his death inspite of repeated requests, that on 14.03.2005 first complainant sent another letter to opposite party 1 to provide any relief to the complainants since at the time of the death of her husband and thereafter there is a valid contract of insurance is in force and the terms and conditions are binding on the insurer, that her husband had complied with all the requirements including which are specified in Para.7 (Medical and other details of the proposer) and valid contract was therefore in force and the opposite parties are liable to pay Rs.10 lakhs with interest at the rate of 18 per cent per annum from 11.10.04 and Rs.1 lakh as compensation.
Opposite parties filed separate versions raising more or less the similar contentions. After admitting the availing of a cash credit limit of Rs.10 lakhs by the deceased from the Kottarakkara branch of SBT and the fact that the loan amount was insured with SBI Life Insurance Company Limited under the Scheme SWADHAN bancassurance and the remittance of first premium of Rs.3291/- on 09.08.2004 and that he died on 11.10.2004 it is contented that opposite party 2 is only an agent of SBI Life products, that the policy was taken through Smt.Sheeba Glory certified insurance facilitator, who is an employee of second opposite party, that on receipt of the proposal form opposite party 2 had intimated Late.Kuruvila to undergo medical checkup for the issuance of the policy but he failed to undergo medical checkup despite repeated requests and policy was not issued, that the first premium debited from his account had since been returned, that the policy did not get ripened due to latches on the part of the deceased, that there is a delay of 31days in filing the complaint and no petition filed to condone the delay, that the complaint filed before the
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Insurance Ombudsman, Kochi for the same purpose also dismissed, that there is no deficiency in service on the part of the opposite parties and the complaint is to be dismissed.
The points for consideration are :
1. Whether the complaint is maintainable or not?
2. Whether there is any deficiency in service on the part of the opposite parties?
3. Reliefs and costs?
For the complainants DW1 was examined and marked Exts.P1 to P7. For the opposite parties DW1 and DW2 were examined and marked Exts.D1 to D3.
The points :-
Through IA 100/2007, the second opposite party challenged the maintainability of this complaint before this Forum alleging that the complaint is barred by resjudicata as the matter has already been conclusively decided by the Banking Ombudsman, that the Banking Ombudsman has found that there is no deficiency in service, that there is delay of 31 days for filing the complaint and that no separate petition has been filed for condonation of delay which is mandatory and that there is no sufficient reason for condoning delay in filing the complaint and after hearing both sides the IA dismissed vide order dated:11.12.2007 against which no appeal preferred and that became final and conclusive.
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In this case the husband of the first complainant who is none other than the father of minor complainants 2 to 5 had availed a loan of Rs.10 lakhs through the cash credit Account No.57275 that was maintained by him with SBT, Kottarakkara branch and the loan amount was insured with SBI Life Insurance Company Limited under the Scheme SWADHAN bancassurance by submitting Ext.P1 proposal and remitting the first premium of Rs.3291/- on 09.08.04. Unfortunately, he died in a car accident on 11.10.04. The claim was made with the second opposite party requesting to take necessary steps to settle the claim at the earliest and to credit the same to the cash credit account but the claim was not settled on the ground that the proposal of the deceased was not accepted since he had not complied with the mandatory requirement of undergoing medical examination prior to his death inspite of repeated requests. There is no dispute on the point that the death of the deceased occurred on 11.10.2004. Ext.P1 would show that the proposal for the policy was made on 09.08.04. Admittedly first premium of Rs.3291/- was also remitted on 09.08.04. The Learned Counsels appearing for opposite parties 1 and 2 argued that since the deceased had not complied with the mandatory requirement of undergoing medical examination prior to his death inspite of repeated requests the proposal not accepted and as such no contract was entered into between the deceased and the Life Insurance Company Limited. At this juncture it is to be noted that in Ext.P1 proposal there is no mention of any kind of medical examination. The insurance facilitator Smt.Sheeba Glori.J not examined before the forum who is the best witness to substantiate as to whether she has explained to the deceased at the time of making the proposal that he has to undergo medical checkup. In page 2 and 3 of Ext.P1 medical and other details of the proposer seen recorded. There is no whisper as to whether he has to undergo medical checkup. The Branch Manager of the SBT who was examined as DW1 has admitted before the forum that
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they have not issued any letter to the deceased calling upon him to appear for medical checkup. He has also admitted that in Ext.P1 it is stated by insurance facilitator that “I have verified that this form is filled completely in all respects and that all required documents are attached”. DW2, Assistant Manager of Health India Insurance Service Private Limited, also sworn before the forum that they are not maintaining any register showing the issuance of any letter to the deceased calling upon him to appear for medical check up and not issued any letter to him. For the alleged telecalling also there is no reliable evidence. He has also stated before the forum that they have no office anywhere. The evidence tendered by DWs 1 &2 creates doubt in the mind of the forum about the creation of Ext.D2 & D3. Those might have created for the purpose of repudiation of the claim of the complainants.
Relying on 1 (2010) CPJ 21, LIC of India and another V/s. Jyoti Shikha, Learned Counsel appearing for the complainant argued that the contract was concluded on 09.08.04 when the proposal was accepted and the 1st premium received and the accident occurred and the life assured died on 11.10.04 and as such the complainants are entitled to get the claim amount with interest, compensation and cost.
Ext.P1 proposal along with the acceptance of first premium on 09.08.04 indicates that the proposal have been accepted on 09.08.04. The authority under the Insurance Act has framed Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations 2002. The said Regulations provide that the proposal shall be processed by the insurer with the speed and efficiency and all decisions shall be communicated by it in writing within a reasonable period not exceeding 15 days from the
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receipt of the proposal by the insurer. Applying to the aforesaid guidelines it is apparent that there was delay in accepting the proposal dated: 09.08.2004. The proposal should have been processed, accepted or rejected and communication of the same should have been sent to the proposer within 15 days of the receipt of the proposal but the guidelines were not adhered to. This demonstrates deficiency in service on the part of the SBI Life Insurance Company Limited. Admittedly first premium also was accepted on 09.08.04. Even if the version of the opposite parties that the premium amount debited from the account of the deceased had since been returned, then also the SBI Life Insurance Company Limited is bound to make the payment because by acceptance of premium there is a concluded contract. It follows that there is deficiency in service on the part of the first opposite party.
In the result, the complaint is allowed directing the first opposite party to pay Rs.10 lakhs to the complainants. In the circumstances of the case there is no order as to compensation and cost. The order is to be complied with within 30 days from the date of the order, in default, it will carry interest at the rate of 9 % per annum from 13-03-2012 ie; the date of this order.
Dated this the 13th day of March 2012.
G.Vasanthakumari :Sd/-
Adv.Ravi Susha :Sd/-
R.Vijayakumar :Sd/-
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INDEX
List of witnesses for the complainant
PW1 - Mariyamma P Ebraham
List of documents for the complainant
P1 - Proposal Form
P2 - Letter dated 20/10/2004
P3 - Letter dated :28.12.2004 received from OP
P4 - Letter sent by the complainant
P5 - Letter from SBT dated: 25.01.2005
P6 - Letter dated: 23/12/04
P7 - Letter dated: 14/03/05 by the complainant
List of witness for the opposite party
DW1 - Babu Ponnachan
DW2 - P.C.Sinoj kumar
List of documents for the opposite party
D1 - Intimation letter
D2 - Details from Doctors Diagnostic & Research Centre
dated :05/10/2004
D3 - Details from Health India dated: 12.10.2004
