State Consumer Disputes Redressal Commission
Smt. Susheela Sahu vs Br. Manager, State Bank Of India. on 17 September, 2021
M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PLOT NO. 76, ARERA HILLS, BHOPAL (M.P.)
FA No. 537 /2010.
Smt. Sushila Sahoo,
W/o Late Shri Lalchandra Sahoo,
R/o Housing Board Colony,
Datia (M.P.). ..... Appellant
VERSUS
1. Branch Manager,
State Bank of India,
Main Branch, Anand Talkies Road,
Datia (M.P.).
2. Manager,
S.B.I. Life Insurance Co.,
133, Business Centre, 2nd Floor,
Zone - I, M.P. Nagar, Bhopal
(M.P.). .... Respondents.
BEFORE:
HON'BLE SHRI JUSTICE SHANTANU S. KEMKAR, PRESIDENT
HON'BLE SHRI S. S. BANSAL, MEMBER
COUNSEL APPEARING FOR THE PARTIES :
Shri Amit Tiwari, learned counsel for the appellant.
Shri Girish Sharma, learned counsel for the respondent no.1.
Shri Vikas Rai, learned counsel for the respondent no.2.
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ORDER
(Passed on 17 / 9 / 2021) The following order of the Commission was delivered by Shantanu S. Kemkar, J :
Challenging the order dated 20.1.2010 passed by the District Consumer Disputes Redressal Commission, Datia (for short the 'District Commission') in CC No.121/2009 whereby the District Commission has dismissed the complaint filed by the appellant / complainant, the complainant has filed this appeal under Section 15 of the Consumer Protection Act, 1986 (for short the "Act of 1986").
2. Shortly stated, on 16.7.2009 husband of appellant, who was having his account with the first respondent / State Bank of India, Branch Datia (for short the "SBI") had applied for an insurance policy under the 'ULIP Life Insurance Scheme' with the second respondent / SBI Life Insurance Company (for short the "Insurance Company") and paid premium of Rs.50,000/- with the proposal form which was forwarded by the SBI to Insurance Company on 18.7.2009. However, on 28.7.2009 the appellant's husband died. On 31.7.2009 a letter was issued by the Insurance Company in the name of appellant's husband that in the absence of alternate address proof the proposal form cannot be accepted. Thereafter on 14.8.2009 the demand draft issued by the appellant's husband was returned to -3- his brother Rakesh Sahoo by the Insurance Company on the ground that since before the proposal could be accepted the proposer had died and as such there was no concluded contract, the amount is being returned.
3. On the basis of the proposal form and the premium amount being sent by the SBI to the Insurance Company the appellant being wife of the deceased approached to the Insurance Company seeking benefits of the SBI Life Smart ULIP Scheme. As the Insurance Company did not pay any heed to the request of the appellant, she had filed the complaint before the District Commission alleging deficiency in service. The District Commission after considering the pleadings and the evidence led by the parties held that as there was no concluded contract before the death of the appellant's husband the Insurance Company cannot be held liable to pay the benefits of the said Insurance Policy which never came into existence. Feeling aggrieved by the said order the appellant has filed this appeal.
4. The appellant and respondent no.2 have filed additional documents. The same are taken on record and are also considered.
5. The question which is arising in this appeal is whether there was any concluded contract between the proposer and the Insurance Company before the death of the proposer.
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6. Admittedly, the demand draft for the premium amount was sent by the appellant's husband through SBI to the Insurance Company on 18.7.2009. The appellant's husband died on 28.7.2009. On 31.7.2009 the Insurance Company sent a letter to the appellant's husband that in the absence of alternate address proof the proposal form cannot be accepted and on 14.8.2009 the demand draft about the insurance premium was returned to the brother of the proposer. Thus, it is clear that neither the proposal form was accepted nor the demand draft for the premium amount was ever encashed.
7. Learned counsel for the appellant has contended that the appellant's husband having sent the proposal form along with the demand draft the non-acceptance of the proposal on the part of the Insurance Company on the ground that the alternate address proof has not been given, is an attempt to evade the payment of the benefits arising out of the insurance cover. He placed reliance on the order passed by the National Commission in the case of ICICI Prudential Life Insurance Company Ltd. versus Bimal Kanta Kharab, I (2013) CPJ 155 (NC).
8. On the other hand learned counsel appearing for the respondent placing reliance on judgements of passed by the Supreme Court in case of Life Insurance Corporation of India versus Raja Vasireddy Komalavalli Kamba & Anr., AIR 1984 SC1014 and the National Commission in the case of
- 5- LIC of India versus Mrs. Bimala Routray, II (1993) CPJ 146 (NC) has argued that a contract of insurance cannot be said to be concluded because neither the offer was accepted nor it was communicated to the person making the offer. He also placed reliance on the condition of the proposal form, Ex.R-1 signed by the appellant's husband making following declaration :-
"I understand that the contract will be governed by the provisions of the Indian Insurance Act 1936, and prevailing laws in India and that the same will not commence until written acceptance of this proposal is issued by the Company as per terms and conditions in the contract of assurance."
9. We have considered the rival contentions and perused the condition mentioned in the proposal form, Ex. R-1 as extracted above.
10. The Supreme Court in the case of Life Insurance Corporation of India versus Raja Vasireddy Komalavalli Kamba, (supra) has clearly laid down that a contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer. The Supreme Court further observed that though in certain human relationships silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. (emphasis supplied). It has
- 6- also further been observed by the Supreme Court that mere delay in giving an answer cannot be construed as an acceptance, as prima facie, acceptance must be communicated to the offeror. The Supreme Court also further held that similarly 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.
11. This view has been followed by the National Consumer Disputes Redressal Commission in LIC of India versus Mrs. Bimala Routray, (supra). The National Commission has held as under :-
"6. The Hon'ble Supreme Court in its decision reported as 'Life Insurance Corporation of India v. Raja Vasi Reddy Komalavalli Kamba and others' (1984) 3 SCR 350 have laid down while deciding the question as to when an Insurance Policy becomes effective that
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".......A mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy documents is not acceptance. Acceptance must be signified by some act or acts agreed on by the parties after which the law raises a presumption of acceptance."
12. The National Commission in LIC of India versus Mrs. Bimala Routray, (supra) also observed that where a proposer dies before the acceptance of the proposal there is no concluded contract of insurance.
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13. This Commission in the case of Life Insurance Corporation of India versus Ms. Krishna Bai ( First Appeal No.2441/2009) decided on 28th March, 2011 after considering the law laid down by the Supreme Court in the case of Life Insurance Corporation of India versus Raja Vasireddy Komalavalli Kamba, (supra) had held that contract of insurance can be said to be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer.
14. The reliance of the learned counsel for the appellant on the order passed by the National Commission in the case of ICICI Prudential Life Insurance Company Ltd. versus Bimal Kanta Kharab, I (2013) CPJ 155 (NC) is of no avail as in the said case the cheque was already encashed by the Insurance Company and life cover had already commenced from the date prior to the date of death, whereas in the present case as observed neither the proposal form was accepted nor the demand draft for the premium amount was encashed before the death of the proposer.
15. Thus, having regard to the aforesaid facts and the legal position in our considered view mere sending of the proposal form with the demand draft of the premium amount, cannot be treated as a concluded contract when neither the proposal was accepted nor the demand draft was encashed before the death of the appellant's husband.
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16. As a result, we find no infirmity in the impugned order. The appeal fails and is hereby dismissed.
(Justice Shantanu S. Kemkar) (S. S. Bansal)
PRESIDENT MEMBER
Phadke