State Consumer Disputes Redressal Commission
Ashu Markan & Anr. vs Life Insurance Corporation Of India & ... on 16 December, 2010
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SCO NO.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No. 119 of 2005.
Date of Institution: 20.01.2005.
Date of Decision: 16.12.2010.
1. Ashu Markan, aged about 27 years, c/o Sh. Vinod Dhawan, House
No.1156/2, Des Raj Street, Patiala.
2. Master Sparash, aged 5 years, through his next friend, his mother-
Ashu Markan.
.....Appellant.
Versus
1. Life Insurance Corporation of India, Chhoti Baradari, Patiala,
through its Branch/Senior Branch Manager.
2. Smt. Krishana Kumari w/o Sh. Om Parkash Markan, r/o H.No.129,
IG Housing Board Colony, Kalka, District Panchkula.
.....Respondents.
First Appeal against the order dated
06.12.2004 passed by the District
Consumer Disputes Redressal
Forum, Patiala.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Baldev Singh Sekhon, Member.
Present:-
For the appellants : Sh. R.K. Shukla, Advocate.
For respondent no.1 : Sh. Deepak Arora, Advocate.
For respondent no.2 : Sh. Manbir Singh, Advocate.
INDERJIT KAUSHIK, PRESIDING MEMBER:-
Smt. Ashu Markan, and another appellants/complainants (In short "the appellants") have filed this appeal against the order dated 06.12.2004 passed by the learned District Consumer Disputes Redressal Forum, Patiala (in short "the District Forum").
2. Facts giving rise to the present appeal are that the appellants filed a complaint u/s 11 to 14 of the Consumer Protection Act (in short, "the Act"), pleading that appellant no.1 is widow of deceased Sh. Navin Kumar Markan, who was her husband and he got himself insured against Anmol Jeevan Insurance with Sikandrabad branch of respondent First Appeal No.119 of 2005 2 no.1 for Rs.10.00 lacs w.e.f. 01.04.2003 for 20 years. The proposal form was filled and the husband of appellant no.1 was got medically examined on 03.05.2003 and the agent's report was prepared on 06.05.2003. The proposal form was prepared on 12.05.2003 and late husband of appellant no.1 paid Rs.3540/- as premium on 24.04.2003 and the appellant is the nominee. After completing the formalities, the branch manager assured that the policy will be sent by post as the proposal is in order.
3. Unfortunately, Sh. Navin Kumar Markan died in a road accident on 12.08.2003 and the appellant informed the respondent on 11.09.2003 and completed all the formalities as well as submitted the post-mortem report, death certificate etc.
4. On 19.09.2003, branch office Sikandrabad refused to pay the claim on the ground that the insured had died before CBC and ESR tests which were to be conducted in the presence of branch/assistant branch manager and the claim is not payable. On 22.09.2003, the respondent no.1 sent a letter along with cheque dated 19.09.2003 for Rs.3540/- as premium refund which were deposited by the deceased with respondent no.1 on 24.04.2003.
5. On 27.09.2003, the appellant returned the cheque of Rs.3540/- to respondent no.1 and requested to pay the claim but again on 11.10.2003, respondent no.1 sent a fresh cheque for Rs.3540/- dated 11.10.2003 and in the said letter, mentioned that Sh. Navin Kumar Markan died before preparing CBC and ESR reports in the presence of the branch/assistant branch manager and respondent no.1 wrote letters on 12.07.2003, 06.08.2003 and 20.08.2003, but the insured never received any such letter. The medical examination was conduced on 03.05.2002 and the branch manager assured that the proposal form is in order and the policy will be sent by post.
6. On 23.10.2003, the appellant requested the chairman of respondent no.1 at Bombay to reconsider her case sympathetically and First Appeal No.119 of 2005 3 the copies were sent to other officers including the branch office Sikandrabad along with said cheque, but the appellant has not received any reply till date.
7. Respondent no.1 kept the premium amount with it from 24.04.2003 and after intimation of death on 11.09.2003, respondent no.1 returned the premium which is a cruel joke with a widow lady and her four years old son and is unfair trade practice on the part of the respondent. Till the intimation of death, respondent no.1 did not refuse the proposal and call for any formalities and due to deficiency in service on the part of respondent no.1, the appellants suffered a lot of harassment and mental agony. It was prayed that respondent no.1 be directed to pay a sum of Rs.20.00 lacs which includes the claim amount, bonus, accidental benefits, interest, harassment and costs etc.
8. In the reply filed on behalf of respondent no.1, the preliminary objections were taken that proposal form dated 24.04.2003 for seeking an insurance in the sum of Rs.10.00 lacs under Table & Term 153-20 w.e.f. 01.04.2003, accompanied by the deposit of an amount of Rs.3540/-deposited on 24.04.2003, was received by the Sikandrabad branch of the LIC of India along with medial examiner's confidential report dated 03.05.2003 on 07.05.2003 from Sh. Navin Kumar Markan. As the case was for insurance in the sum of Rs.10.00 lacs, it could be accepted only by the Divisional Office, Aligarh. As such, the case was referred to the Divisional Office, Aligarh vide letter dated 24.06.2003 and the Divisional Office was required to expedite the decision on the proposal which directed the branch manager to call for the reports of fresh CBC and ESR tests to be got conduced in the presence of branch manager or assistant branch manager from another pathologist. Accordingly, the branch manager, LIC of India, Sikandrabad vide letter dated 12.07.2003, required the proposer Sh. Navin Kumar Markan to submit fresh reports of CBC and ESR reports, but the said reports were not submitted. He was First Appeal No.119 of 2005 4 again asked to submit these reports vide letters dated 06.08.2003, 20.08.2003, but no reports were submitted and vide letter dated 01.09.2003, the agent with code no.607340 orally informed the branch manager, Sikandrabad of LIC of India that Sh. Navin Kumar Markan died in an accident. He also informed the said fact orally on 21.08.2003. Thereafter, as the proposal for life insurance of Sh. Navin Kumar Markan had not been accepted due to non-submission of fresh CBC and ESR reports from some other pathologist and no contract of insurance was concluded between the parties, the concerned branch manager, LIC of India, Sikandrabad returned the said amount of Rs.3540/- to the appellant vide cheque no.294670 dated 19.09.2003 along with letter dated 19.09.2003. There was no delay in returning the amount of deposit towards the proposal of un-concluded contract of insurance deposited by her late husband, but the appellant returned the said cheque to the branch manager, LIC, Sikandrabad vide her letter dated 27.09.2003 with remarks that "the same was not acceptable to her", by describing the same as, "a lapse on your part", because "you had not taken any action till the date 12.08.2003 of my husband (Navin Kumar Markan)'s death", and she asked for full claim against the un-concluded contract of insurance which was never accepted till the date of proposal on 12.08.2003. Again a detailed letter dated 11.11.2003 was written to the appellant, clarifying that reports of CBC and ESR tests from another pathologist, were not submitted by Sh. Navin Kumar Markan inspite of letters dated 12.07.2003, 06.08.2003 and 20.08.2003 sent to him and as such, the proposal could not be accepted nor any policy could be/or was issued and no claim is payable. The complaint dated 23.10.2003 was also sent to the chairman of the LIC of India at Bombay with copies of the said cheque dated 11.10.2003 for Rs.3540/-. Even the fee given to the doctor, who had conducted the medical examination of her late husband and the proposal cancellation charges were not deducted from this amount, as a matter of First Appeal No.119 of 2005 5 sympathy towards the appellant and the complaint is not maintainable. The Act provides for summary proceedings and the disputed questions of law and facts cannot be adjudicated upon in summary proceedings. The civil court is competent to decide the complicated questions and the complaint is liable to be dismissed. On merits, similar pleas were repeated and in further objections, it was pleaded that the complaint is false and frivolous to the knowledge of the appellant and respondent no.1 has been dragged into unnecessary litigation and prayed that the complaint be dismissed with compensatory costs of Rs.20,000/-.
9. In the reply filed on behalf of respondent no.2, legal objections were taken that Sh. Navin Kumar Markan got himself insured from the Life Insurance Corporation under Anmol Jeevan Policy for Rs.10.00 lacs. The said claim has been illegally denied by the Life Insurance Corporation of India and the answering respondent has already filed a complaint. Sh. Navin Kumar Markan left behind three legal heirs i.e.
(i) Smt. Ashu Markan (wife); (ii) Master Sparash Markan, aged 5 years (son); and (iii) Smt. Krishna Kumari (mother). The complaint is pending before the District Consumer Disputes Redressal Forum, Panchkula and the claim is payable to the said legal heirs. On merits, the pleas taken by the appellant were admitted and it was prayed that the complaint be decided accordingly.
10. Parties led evidence in support of their respective contentions by way of affidavits and documents.
11. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that even by not replying the proposal for about three months when the case was under process, the silence would not bring an insurance contract into being so as to make the insurance company liable to pay the policy amount. Repudiation of the claim does not amount to unfair trade practice or deficiency in service, and dismissed First Appeal No.119 of 2005 6 the complaint, with liberty to approach respondent no.1 for the payment of Rs.3540/-.
12. Aggrieved by the impugned order dated 06.12.2004 the appellants ha come up in appeal.
13. We have gone through the pleadings of the parties, perused the record of the learned District Forum as well as heard the arguments of the learned counsel for the parties.
14. It was contended on behalf of the appellants that Sh. Navin Kumar Markan filled the proposal form and got himself insured for Rs.10.00 lacs w.e.f. 01.04.2003 for 20 years. The medical examination was conducted on 03.05.2005 and the agent's report was prepared on 06.05.2003. The husband of appellant no.1 paid Rs.3540/- as premium on 24.04.2003 and it was assured that the policy will be issued later on and it will be sent through post. The letters dated 12.07.2003, 06.08.2003 and 20.08.2003 allegedly written by respondent no.1 to the husband of appellant no.1, were never received nor any communication was made and the contract stood concluded. It was further argued that as per Insurance Regulatory Development Authority, under head Proposal for Insurance in Sub Clause-6, the proposal has to be processed within a reasonable period not exceeding 15 days from receipt of the proposal by the insurer. The said regulations have been relied upon in case reported as "LIC of India & Anr. Vs Jyoti Shikha", 2010 (2) Consumer Law Today-72(Rajasthan Consumer Commission). The insured was medically examined before the filling of the proposal form and at that time, nothing was pointed out regarding the CBC and ESR tests and on receipt of the information regarding death of the husband of appellant no.1, the claim has been repudiated on the flimsy grounds. The policy was to start from 01.04.2003, as is clear from the proposal review slip Ex.R6. Learned counsel for the appellants has also relied upon the following case laws:- First Appeal No.119 of 2005 7
(i) "Trimex International FZE Limited, Dubai Vs Vedanta Aluminium Limited India", 2010(1) RCR (Civil)-887(SC);
(ii) "Express Resorts & Hotels Limited Vs Oriental Insurance Company Limited & Others", 2005(2)CLT-231(NC);
(iii) "Hundi Lal Jain Cold Storage & Ice Factory Private Limited Vs Oriental Insurance Company Limited", S.C. & National Commission Consumer Law Cases (1996-2005)-415(NC).
15. On behalf of respondent no.1, it was argued that the District Forum at Patiala had no jurisdiction because the proposal dated 24.04.2003 was submitted in the office of Manager, Sikandrabad Branch of the LIC of India and as the insurance amount was Rs.10.00 lacs, it was sent to the Divisional Office, Aligarh, who was competent to accept the proposal. The Divisional Office, Aligarh asked the branch manager, Sikandrabad to call for fresh reports of CBC and ESR tests and the proposal was not, at all, accepted and the complaint should have been filed within the jurisdiction of Divisional Office, Aligarh. It was further contended that the proposal was never accepted and the said reports of CBC and ESR tests were not supplied and respondent no.1 wrote letters Ex.R8 to Ex.R10 on 12.07.2003, 06.08.2003 and 20.08.2003 respectively and before the contract could be concluded, husband of appellant no.1 Sh. Navin Kumar Markan died. Mere payment of the premium is not sufficient to prove that the contract was concluded. No cover note was issued and the authorities relied upon by the learned counsel for the appellants, are not applicable.
16. On behalf of respondent no.2, it was argued that the proposal form was made on 01.04.2003 and the premium was deposited on 24.04.2003. The medical examination and the tests were carried out on 03.05.2003 and thereafter, there is no proof or any circumstance to show that the said proposal was not accepted and after the death of Sh. Navin Kumar Markan, all the documents have been fabricated just to deprive the appellants and respondent no.2, the claim amount.
First Appeal No.119 of 2005 8
17. We have considered the respective contentions made by the learned counsel for the parties.
18. The pertinent question which is to be decided in the appeal, is whether the insurance contract was concluded between the parties or not? Ex.C2 is the proposal form which was filled by deceased Sh. Navin Kumar Markan on 07.05.2003 and Ex.C3 is the CBC/ESR report. Ex.C4 is the medical examination report and Ex.C6 and Ex.C7 are the proposal deposit receipts. These receipts were issued by the branch office of the Life Insurance Corporation of India, Sikandrabad, falling under the Aligarh Division. As the insurance amount was of Rs.10.00 lacs, it was sent to the Divisional Office at Aligarh for approval and vide Ex.C8 dated 24.06.2003, the information was sought about the proposal of Rs.10.00 lacs which was sent on 14.05.2003 to Divisional Head Quarter, Aligarh and the noting on this letter shows that fresh CBC/ESR was sought in the presence of the branch manager. Respondent no.1 insurance company has placed on file, proposal review slip Ex.R6 dated 12.05.2003 and on the back of it, there is a noting for fresh CBC/ESR by another pathologist in the presence of assistant branch manager and it is dated 14.06.2003. Respondent no.1 has also placed on file, copy of letter dated 12.07.2003 Ex.R8 vide which, it was written to the LIC branch at Sikandrabad, with a copy to Sh. Navin Kumar Markan, for submitting the CBC/ESR report from some other pathologist in the presence of the branch manager. The other letters written to the same effect are Ex.R9 and Ex.R10 dated 06.08.2003 and 20.08.2003, but Sh. Navin Kumar Markan died on 12.08.2003 and the intimation was given to respondent no.1 insurance company. The mere sending of the proposal form which was not accepted nor any policy was issued, does not give any right to the appellants to claim the insured amount. The regulation relied upon by learned counsel for the appellants above mentioned, is not applicable because in this case, the requisite information was sought from deceased Navin Kumar Markan immediately First Appeal No.119 of 2005 9 and it cannot be said that there was silence on the part of respondent no.1 or no communication was made. Likewise, the authority of the Hon'ble Supreme Court in case Trimex International FZE Limited, Dubai Vs Vedanta Aluminium Limited India (supra) is also not applicable to the facts and circumstances of the present case. In the present case, the requisite test reports were not supplied. Similarly, the authority of the Hon'ble National Commission in Express Resorts & Hotels Limited Vs Oriental Insurance Company Limited & Others (supra) is also not applicable because in this case, the contract itself has not concluded and the proposal was never accepted. Likewise, the authority LIC of India & Anr. Vs Jyoti Shikha (supra) is also not applicable because the communication was going on between the parties for supplying the requisite documents. In case Hundi Lal Jain Cold Storage & Ice Factory Private Limited Vs Oriental Insurance Company Limited (supra), the cover note was issued but the policy was not supplied and non-supply of the policy to the insured, was held to be deficiency in service. This authority again is not applicable because in the case in hand, no cover note was supplied as the contract was not concluded. The argument of the learned counsel for the appellants that the deceased or the appellants never received any letter from the respondent insurance company about supplying the tests reports of CBC/ESR, is not tenable because all other communications made including the cheque returned and again sent back to the appellants vide different letters as relied upon by the appellants, were received by the appellants at the same address. Even otherwise, it was for the deceased to enquire or communicate as to why the policy had not been issued if the said letters were not received. Mere filling of the proposal form and the proposal deposit receipts are not sufficient to presume that the contract was concluded because in this particular case, the Sikandrabad branch of the respondent insurance company was not competent to issue the cover note or the policy, as the amount was of Rs.10.00 lacs and for approval of First Appeal No.119 of 2005 10 the same, the same was sent to the Aligarh Division of the respondent insurance company and the Aligarh Division of the LIC sought for those two test reports which were never supplied. As such, it has been rightly observed by the learned District Forum that there was no concluded contract between the parties and the claim of the appellants was rightly repudiated. The impugned order under appeal passed by the District Forum, is legal and valid and there is no ground to interfere in the same.
19. In view of above discussion, the appeal being without any merit, is dismissed and the impugned order dated 06.12.2004 under appeal, is affirmed and upheld. No order as to costs.
20. The arguments in this appeal were heard on 13.12.2010 and the order was reserved. Now the order be communicated to the parties.
21. The appeal could not be decided within the stipulated timeframe due to heavy pendency of Court cases.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member December 16 , 2010.
(Gurmeet Singh)