State Consumer Disputes Redressal Commission
The Branch Postmaster Vannaram And ... vs Diddigam Anjaiah S/O.Rajaiah Ramadugu ... on 13 November, 2009
FA BEFORE THE ADDITIONAL BENCH OF A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. FA.No.760/2007 AGAINST C.D.No.838/1998 DISTRICT FORUM, KARIMNAGAR Between: 1. The Branch Postmaster, Vannaram. 2. The Postmaster General, Hyderabad. Appellants/ Opp.parties. And 1. Diddigam Anjaiah S/o.Rajaiah age 43 years, Kokkerakunta (V) Post:Vannaram Ramadugu Mandal. 2. Diddigam Vijaya Laxmi W/o.late D.Anjaiah Age 33 years, R/o.Bommakal Karimnagar. 3. Diddigam Shivasai (minor, rep. by his step Mother and next friend, D.Vijayalaxmi (Added as per order in IA 69/05) Respondents/ Complainants Counsel for the Appellants: Mr.V.Vinod Kumar Counsel for the Respondents:M/s.T.Rajesam QUORUM: SMT.M.SHREESHA, MEMBER
& SRI K.SATYANAND, MEMBER FRIDAY, THE THIRTEENTH DAY OF NOVEMBER, TWO THOUSAND NINE (Typed to the dictation of Sri K.Satyanand,Honble Member) *** This is an appeal filed by the opposite parties before the District Forum assailing the order that went against them.
The facts of the case as culled out from the pleadings and the other material on record are briefly as follows:
Originally the complaint was filed by the husband of the insured, who died before her proposal for insurance was accepted by the postal authorities. During the pendency of the complaint, unfortunately the said husband nominee also died, so the second wife of the deceased complainant and his minor daughter through his deceased wife came to be added as complainant Nos.2 and 3. The first wife of the deceased first complainant by name D.Satyavathi applied for postal life insurance by submitting her proposal form the original of which came to be filed by the appellants as Ex.B14. As could be seen from Ex.B14, the proposal sought a policy of Rs.50,000/- but the said figure was found scored out and in its place the figure Rs.25,000/- came to be substituted both in numerals as also letters.
The said proposal form is dated 13-3-1997. It was counter signed by way of attestation by a Civil Surgeon. The form was filled in by the Branch Post Master of Vannaram BO.
Along with the proposal form, admittedly she paid an amount of Rs.128/- towards premium as per Ex.A3 issued by no other than the very branch Post Master, Vannaram. It is also dated 13-3-1997. Subsequently on 14-4-1997 the said insurance applicant D.Satyavathi died as per the death certificate, Ex.A4. Thereafter the deceased first complainant being her husband submitted a claim for the insurance amount quantified at Rs.50,000/-, on the strength of the copies of the premium receipt as also the death certificate. He claimed to have addressed several letters to the respondents to get the matter settled but in vain. Subsequently on 6-3-1998 he received a letter from the respondent at Hyderabad sanctioning the refund of Rs.128/- paid towards first premium without assigning any reasons whatsoever for invalidating the policy by which perhaps he means the rejection of the proposal. Some time later as could be seen from Ex.A1, a letter dated 22-9-1997 was received from the opposite parties setting out details of acceptance of the policy with effect from 31-3-1997. The said Ex.A1 is bilingual. As a matter of fact, Ex.B11 filed by the opposite parties and Ex.A1 are one and the same. While Ex.A1 did not contain even the initial of the issuing authority, Ex.B11 did contain initial as also a scribbling suggesting that it was the office copy of the respondents. It is conspicuous to note that in both these documents which embody the same matter and both of which are bilingual, the dates set out in the telugu portion were found rounded off by way of correction to substitute 30-6-1997 in the place of 31-3-1997 and 6 of 97 in the place of 3 of 97. Ex.B11 too is dated 22-9-1997. The complainant filed Ex.A2 envelope addressed to the deceased insured and the date stamp of the post office on the same is 21-9-1999. It is marked as Ex.A2. The opposite parties issued a memo dated 16-4-1998 ordering the refund of RPLI of Rs.128/- to Smt.D.Satyavathi describing the said amount as refund of premiums recovery effected from the final claim. This document is not marked on behalf of the complainant but its equivalent filed by the opposite party is marked as Ex.B1. This Ex.B1 appears to be in answer to the claim of the nominee of the deceased. The complainants ultimately insisted upon getting the full amount of Rs.50,000/- for which the insurance proposal was sent by the deceased according to their version.
This claim came to be resisted by the appellants/opposite parties by filing a counter in which they chiefly contended that the insurant expired on 14-4-1997 even before the proposal was accepted by the Chief Post Master General and as such there was no insurance policy in favour of the insured. According to them if the proposer dies before the acceptance of the proposal, the department shall not take any responsibility. They claimed to have informed the insurant on 16-4-1998 about the said fact and also ordered the refund of the amount initially paid by late Satyavathi. In this over simplified counter, the appellants did not explain not only Ex.B11 the equivalent of Ex.A1 but also the material alterations therein changing the date of acceptance from 31-3-1997 to 30-6-1997 and likewise changing the other date March, 1997 as June, 1997 presumably meant to identify the month to which the premium related. The opposite parties also relied upon the premium pass book wherein also the crucial dates have come to be altered. But for the corrections which do not appear to have been authenticated either in Ex.B10, B11 or A1, the real date of acceptance of the policy proposal appeared categorically to be with effect from 31-3-1997 by which date the insured was very much alive.
In order to substantiate their theory in repudiation of the very policy, the opposite parties filed an affidavit of one M.Lakshminarayana, wherein also the effect of Exs.A1, B11 and B10 and the unauthenticated material alternations therein were not adverted to. However, realizing the inadequacy of the evidence especially explanatory of the various contradictions and material alterations, they filed one more affidavit captioned as additional affidavit of Mr.M.Lakshminarayana where the opposite parties proceeded to articulate their version setting out the circumstances which according to them justify the rejection of the proposal and their action to return the premium amount. It is their case that the proposer paid an amount of Rs.125/- for insurance of Rs.50,000/- on 13-3-1997 but the proposer died on 14-4-1997. The nominee filed the claim in the month of December, 1997. They denied the assertion made by the complainants that the policy was accepted on 31-3-1997. They also denied the fact that it was corrected by the opposite parties as 30-6-1997 only to cause loss to the complainants. On the other hand, they maintained that they were entitled to take three months to process each case as per the guidelines and it was not possible at all to signify their acceptance within one month. Therefore, obviously the date of acceptance as being 31-3-1997 was incorrect. According to them it was fixed at 30-6-1997. It is also their case that due to pressure of work, the proposal was attended to in the month of September, 1997 and it was accepted with effect from 30-6-1997 and that too only for Rs.25,000/-. They also offered cryptic explanation as to why they fixed the date of acceptance as 30-6-1997 saying that if the policy were accepted with effect from 31-3-1997, the total instalments to be paid by the policy holder would exceed six instalments in which case, the policy will have to be treated as lapsed since the policy was processed at the regional office in the month of September, 1997 only.
Alternatively if the policy is accepted with the date of issue of acceptance i.e. from the month of September, 1997, it will adversely effect the proposer in payment of premium as there would be hike in the rate of premium to 69.50ps. applicable to any date after 1-7-1997.
Thus the opposite parties claimed to have fixed the date of acceptance with effect from 30-7-1997. It is also their case that the wrong date 31-3-1997 had crept in due to the mistake committed in feeding the data into the computer. The opposite party insisted that in as much as the insured died before the acceptance marked to come into effect from 30-6-1997, there was absolutely no scope to pay any insurance amount under a non existent contract and what all could be done was only to refund the premium paid and accordingly the same was sought to be refunded. As regards reducing the insurance amount, the opposite parties proceeded to explain that it was a case of no proof of age, as in such cases the maximum insurance coverage cannot be more than Rs.25,000/- as per rules, therefore, it was so fixed. The opposite parties again have taken a curious plea that even that acceptance letter was dispatched to the insurant by mistake in September, 1997.
They tried to show that they were neither negligent nor guilty of any deficiency.
In support of their case, the complainants got filed the affidavit of the second complainant and relied upon documents marked as Exs.A1 to A4. Apart from the affidavit and additional affidavit of Mr.M.Lakshminarayana, the opposite parties relied upon documents marked as Exs.B1 to B16.
On a consideration of the evidence adduced, the District Forum by its majority order, upheld the claim in toto and directed the opposite parties to pay Rs.50,000/- with interest etc. Aggrieved by the said order, the opposite parties filed the present appeal contending that the District Forum erred in passing an order merely on the basis of the averments of the complainant without considering the contention of the appellants. The District Forum erred in observing that there was ambiguity in the insurance contract when the acceptance of the proposal was clearly indicated as effective from 30-6-1997. The sum assured was Rs.25,000/-, the premium was Rs.67/- and the maturity age was 60 years.
The District Forum failed to see that it was a counter proposal from the appellants and by the time the proposal reached the proposer, she expired, presumably trying to drive at a conclusion that their counter proposal remained unaccepted by the proposer. The District Forum failed to see that the proposer died even before the acceptance came into effect from 30-6-1997 and as such there was no concluded contract. The District Forum failed to take note that the complainant No.1 in his affidavit admitted that the proposal was not accepted by the Post Master General even one month after the death of his wife. The District Forum overlooked the fundamental principle that a contract which was not concluded cannot be enforced.
Heard.
The points that arise for consideration are:
1) Whether there is a concluded contract of insurance in the instant case?
2) If so, what are the essential terms of the said contract?
3) Whether the charge of deficiency in service is established against the opposite parties?
4) Whether the relief granted by the District Forum deserves to be upheld in toto?
5) To what result?
Eventually the case turned out to be an insurance claim by the second wife of the husband of the deceased insured and the sole child of the insured and her husband. This aspect is highlighted as this fact has a direct bearing upon identifying the person who is entitled to the benefits of this litigation in the ultimate analysis if it comes to that. The claimants in this case sought to relief to an extent of an amount that was the subject matter of insurance proposal and it was admittedly Rs.50,000/-. As a matter of fact, there is a categorical admission on the part of the opposite parties especially in the affidavit filed on their behalf to the following effect. In para 4 of the additional affidavit of the deponent, M.Lakshminarayana, we find the following admission:
that it is a fact that the premium of Rs.125/- for insurance of Rs.50,000/- is paid on 13-3-1997..
In this connection, it is pertinent to point out that the opposite parties filed Ex.B14 as one of their documents. Ex.B14 is the proposal form. In the said proposal form, the figure Rs.50,000/- is found scored out and put as Rs.25,000/-. Similarly the letters fifty thousand too were found struck off and in that place twenty five thousand was found written. The power of the insurer to accept with terms at variance from what was proposed is one thing and the power of the insurer to tamper with the proposal form is another thing.
Even if the acceptance is at variance, it does not justify the insurer to tamper with the proposal form in this case Ex.B14 which came to be filed by the opposite parties from their own custody.
Be that as it may, the offer and acceptance are fundamental to the consummation of a contract. In the instant case, the proposal form constitutes the offer of the prospective insurant while the acceptance issued by the insurer obviously constitutes the acceptance. If there is any variance between the terms of the offer and the terms of the acceptance, the provisions of Contract Act will step in and clinch the issue. In the instant case, the proposal was for Rs.50,000/- and the date of proposal was 13-3-1997. The premium paid was Rs.128/-
as per Ex.A3. With these parameters, the proposal entered the arena of the prospective acceptor. It is for the acceptor to decide upon the acceptance. In the instant case, an acceptance was communicated by virtue of Ex.A1 equal to Ex.B11, but with terms which are obviously at variance with the proposal.
In this situation, the provisions of Sec. 7(2) of the Contract Act, step in to sort out this dead-lock and bring about an offer and an acceptance that answer the description of the inputs that converge to bring about a valid contract.
Section 7(2) of the Indian Contract Act reads as follows:
7.Acceptance must be absolute.-In order to convert a proposal into a promise, the acceptance must (2) be expressed in Some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but if he fails to do so, he accepts the acceptance.
In the present case, it is amply evident that the offeror died before acceptance letter.
However, whether she died before the acceptance became operative or not is yet a different question. For the present passing over the said question to which we will presently revert, it is convenient to examine in other respects the validity or otherwise of the conclusion of the contract. Though an attempt is made in the appeal grounds to say that Ex.A1 equal to Ex.B11 cannot be characterized as acceptance and at the most it answers the description of a counter proposal, this line of argument is contrary to their own admissions. In places without number in the whole of record, we find the opposite parties themselves describing the said letter as acceptance. In the additional affidavit, the language definitely suggests that the opposite parties had been treating the said letter Ex.B11 as acceptance letter only. It is crystal clear from the words of the deponent himself, who while adverting to Ex.B11 stated as follows:
As such, the proposal was attended in the month of September, 1997 only and accepted it vide this office memo No. RPLI/R-AP/AR-EA-52791 dated 22-9-97 with effect from 30-6-1997 for Rs.25,000/-.
So it is futile to contend that the above said office memo which is marked as Ex.B11 was not acceptance but was on the other hand a counter proposal. The controversy as regards the effective date is yet another riddle which will be addressed presently as this is relevant in the adjudication of the far reaching contention taken by the opposite parties that the contract itself turned out to be a nullity as she died according to them before the effective date of their making by virtue of a device of correcting the dates in the document already prepared no doubt harnessing some grounds as the wrong date according to them having crept into the record by the contribution of a computer operator which will again be scrutinized as to its plausibility. If we pass over for a while, the aspects of effective date which in itself is controversial, there is absolutely no difficulty in arriving at a conclusion that there was a concluded contract eventually in terms of the acceptance letter, Ex.B11, in as much as the provisions of Sec. 7(2) of Contract Act pave the way for such a finding. The effective date from which the acceptance was to operate has acquired any amount of importance as it is decisive of the fate of the contract due to the death of the insured on 14-4-1997. It is the case of the opposite parties that the opposite parties took a decision on acceptance on 22 September, 1997 which accounts for a delay of six months after the proposal had come into being on 13-3-1997. Even according to the opposite parties, they were entitled to take three months to process the proposal. Contrary to their own version, they have taken more than six months to process the proposal. It is crystal clear from Ex.A1 as also Ex.B11 that the original effective date was 31-3-1997.
It is no doubt found rounded off only in the telugu portion of Ex.A1 and Ex.B11. The English portion of those two documents continued to reflect 31-3-1997 only as the effective date. The two corrections made in the telugu portion of each of these two documents is not authenticated by any person. Yet the deponent ventured to say that they corrected it as the original dates in print were wrongly incorporated by the computer operator. The computer operator is not at all examined. In a case like this, those alterations turn out to be very material. If there is a material alteration in a suit document, the party who seeks to rely upon such document has to prove to the hilt that such alteration was made by resorting to valid procedure. In the peculiar circumstances of this case, the valid procedure would be an order passed by the competent person ordering the said alternation and the proceedings thereof in the record. No such orders of amendment have been whispered as being in existence much less being produced here. A public document cannot be altered without due process of law much more so when it entails detriment to the subject. As a matter of fact the provisions of Section 4(1)(d) contained in Information Act read as follows:
4. Obligation of public Authorities:
(i) Every public authority shall-
(d) provide reasons for its administrative or quasi-judicial decisions to affected persons.
It is incumbent upon the person who takes a decision affecting a third party to clearly set out reasons and those reasons have to be contemporaneously stated on the eve of such effectuation of the alteration. The opposite parties gave a clear go by to this and it is impermissible for any judicial forum to buy what ever they spontaneously say at a later date long after the event. This is exactly what they endeavoured do through their additional affidavit and these are the reasons that are very much harped upon by the counsel for the appellants to vindicate the alterations. We cannot accept this kind of vindication in the absence of material coeval with the alteration. So the altered effective date cannot be readily accepted as valid and binding on the insured. On the other hand, the original effective date that is 31-3-1997 has to be taken into consideration for the proper adjudication of the rights flowing thereof. When once the effective date is capable is being identified as 31-3-1997, the death would necessarily fall after the acceptance. This death subsequent to the conclusion of the contract would no way impact adversely against the enforceability of the contract. Thus we are firmly of the opinion that there is a valid contract of insurance, no doubt, for the insurance amount of Rs.25,0000/- but not Rs.50,000/- as the abridgment of the amount was effected not by virtue of any arbitrary exercise but by virtue of the force of law applicable to non standard age proof cases.
The opposite parties totally repudiated the claim taking the extreme position that the insurance contract even for Rs.25,000/- had never come into existence. But this is surely inconsistent with what the facts and especially their own record suggest. This reckless repudiation definitely answers the description of deficiency of service as after all the postal department in the matter of insurance activities, is a service provider and the insured or the beneficiaries of insurance would partake the character of consumer of such service.
Though the District Forum cannot be faulted for its finding as to the deficiency in service charged against the opposite parties, as it came to giving relief, the District Forum did not take into consideration the combined effect of the offer and acceptance resulting in the reduction of the insurance amount from Rs.50,000/- to Rs.25,000/- The District Forum could have validly given relief on the basis of insurance amount being Rs.25,000/- only. The complainants can legitimately claim only the insurance amount settled, ofcourse, apart from other concomitant reliefs if they otherwise deserve. In this view of the matter, the relief granted by the District Forum has to be modified. In other words, the relief granted cannot be upheld totally and the final relief will be recast presently.
Similarly the District Forum gave relief to all the complainants but only two complainants remained alive. They are the second wife of the husband of the insured and the child of the insured who are arrayed as complainants 2 and 3 respectively. By no stretch of imagination or under any law can the second complainant become the L.R of the insured though she may be the L.R of the first complainant. But the fact remains that the first complainant was only a nominee and in that view of the matter, the award, if any, given cannot be the estate of the nominee. The nominee merely acts on behalf of the real heirs and this is a settled position of law arising under Section 38 of the Insurance Act. Now that insured and the nominee also disappeared from the scene, it is necessary for the adjudicating body to identify the real heir and beneficiary for the estate of the insured. If the said test is applied, it is only the complainant No.3-child that would emerge as entitled to reap the benefits of this litigation. This aspect also calls for modifying the order of the District Forum.
For the reasons stated above, the appeal is partly allowed and the order of the District Forum is modified reducing the insurance amount to Rs.25,000/- and in terms thereof directing the opposite parties to pay to complainant No.3-child an amount of Rs.25,000/ with interest at 9% p.a. from 16-4-1997, the date of death of the insured till the date of payment along with costs of Rs.500/- imposed by the District Forum by depositing the total amount into the District Forum and upon such deposit, the District Forum shall invest the said total amount in any Nationalized bank in the name of minor, complainant No.3 for a period coterminous with the attainment of majority of the complainant No.3 to ultimately pay the amount to the said child after her minority.
In the result the appeal is disposed of accordingly but without costs in the circumstances of the case. Time for compliance of this order is six weeks from the date of receipt of this order.
Sd/-MEMBER.
Sd/-MEMBER.
JM Dt.13-11-2009