National Consumer Disputes Redressal
Bajaj Allainz Life Insurance Company ... vs Smt. Pallaviben Mayurbhai on 13 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2623 OF 2012 (Against the Order dated 10/05/2012 in Appeal No. 298/2011 of the State Commission Gujarat) 1. BAJAJ ALLAINZ LIFE INSURANCE COMPANY LTD. West Hub,2nd floor, Bajaj Westfield, IT Burning,Vimannagar, Nagpur Road Pune - 411 014 Maharastra 2. Bajaj Allianz Life Insurence Co Ltd Branch Office, Dr Yagnik Road Rajkot Gujarat ...........Petitioner(s) Versus 1. SMT. PALLAVIBEN MAYURBHAI Add - Vaishalinagar Ashapura Krupa,Raiya Road Rajkot Gujarat ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HON'BLE MRS. REKHA GUPTA, MEMBER For the Petitioner : MR. PANKUL NAGPAL For the Respondent : NEMO Dated : 13 Oct 2015 ORDER JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER
1. This revision is directed against the order of the State Commission Rajasthan dated 10.05.2012 whereby the appeal preferred by the petitioner against the order of the District Forum Rajkot was dismissed and the petitioner was directed to pay to the respondent complainant a sum of Rs.5.00 lakhs with 9% interest thereon from the date of filing of complaint till realisation of amount.
2. Briefly stated facts culled out from the record are that Shri Mayur Bhai Suresh Chandra Joshi ( since expired), husband of the complainant procured a life insurance policy from the opposite party insurance company under the scheme ' Bajaj Allianz Invest Gain Gold Plan". The policy was valid for 12 years and it extended minimum death benefit of Rs.5.00 lakhs. For obtaining the insurance policy, late husband of the respondent complainant submitted duly filled proposal form alongwith amount of premium of Rs.24090/- through agent of the insurance company. On the scrutiny of the proposal form, taking note of the fact that insured was over weight, the petitioner company called upon him to pay additional premium of Rs.1373/- in cash or through cheque if he wanted the insurance policy. Husband of the complainant accepted the above said counter offer and gave a cheque of Rs.1373/- for additional premium to the insurance company. On the receipt of said cheque, the petitioner insurance company issued insurance policy in the name of Late Shri Mayurbhai Suresh Chandra Joshi on 09.02.2010. The cheque of additional premium was, however, dishonoured and was returned to insurance company vide bank memo dated 09.02.2010 with the remark "Alteration require drawer's authentication at date". The insured unfortunately died on 18.02.2010. The respondent complainant being nominee and legal heir of the deceased insured submitted insurance claim. The claim, however, was repudiated by the insurance company on the ground that due to dishonour of cheque for additional premium, the insurance contract had come to an end. Being aggrieved by the repudiation, the complainant raised a consumer dispute in the District Forum Rajkot.
3. The petitioner opposite party in its written statement justified the repudiation of insurance contract on the ground that the contract was void being without consideration. It was pleaded by the petitioner that the dishonoured cheque of additional premium was received by the insurance company on 15.02.2010. The intimation of the dishonour of cheque was sent to the insured vide letter dated 17.02.2010 but the deficit in the insurance premium was not made good. The petitioner thus took the plea that as the insured had failed to pay the additional consideration amount for insurance, the insurance policy lapsed and the insurance contract was null and void. For that reason, the insurance company was justified in repudiating the claim.
4. Learned District Forum on consideration of the pleadings of the parties and the evidence found that by repudiating the insurance claim, the petitioner has committed deficiency in service. The District Forum accordingly allowed the complaint and directed the opposite party to pay to the complainant a sum of Rs.5.00 lakhs with 9% interest w.e.f. 27.03.2010 within a month from the date of order. It was clarified that if the order was not complied with within one month, the award amount shall carry 10% interest.
5. Being aggrieved of the order of the District Forum, the petitioner preferred an appeal. The State commission vide impugned order while concurring with the order of the District Forum, dismissed the appeal and ordered as noted above.
6. Learned Mr. Pankul Nagpal, Advocate for the respondent has contended that impugned order of the foras below are based upon incorrect appreciation of facts. It is contended that both the foras below have failed to appreciate that the cheque of the insured for additional premium of Rs.1373/- was dishonoured. Therefore, insurance company was justified in repudiating the claim on the ground that full consideration amount for insurance contract was not paid by the insured. Expanding on the argument, learned counsel for the petitioner has taken us through the record and submitted that on analysis of the proposal form, it was found that perhaps insured was overweight. Therfore, insurance company vide letter dated 06.02.2010 called upon the insured to pay additional premium of Rs.1373/- if he wanted to have the insurance policy. In response to said counter offer, insured issued a cheque of Rs.1373/- which cheque on presentation was dishonoured and returned with the endorsement "Alteration require drawer's authentication at date". It is contended that merely because the insurance policy was issued in anticipation of encashment of cheque for additional premium ,it cannot be said that a valid insurance contract came into force because the policy was issued subject to encashment of cheque. Learned counsel has thus summed up that insurance policy being without consideration, the insurance company was justified in repudiating the claim.
7. In support of his contention, learned counsel for the petitioner has relied upon the judgment of Co-ordinate Bench of this Commission in revision petition No.2398/2007 titled Pushpita Sohi vs. Oriental Insurance Co. Ltd. & Anr.
8. The arguments of learned counsel for the petitioner at the first blush seems to be attractive but not acceptable when considered in the context of the facts of this facts. It is admitted case of the parties that the late insured applied for a life insurance policy for Rs.5 Lakhs and alongwith his application form he paid ordinarily applicable premium of Rs.24,094/-. Since the insured was found to be overweight he was sked to deposit additional premium of Rs.1373/-. The insured admittedly issued cheque for the sum of Rs.1373/- in favour of the insurance company and the insurance company after receiving the cheque issued the insurance policy. Unfortunately, the bank dishonoured the cheque on account of alteration in respect of the date and referred the cheque back to the insurance company for getting drawer's authentication at the date. The dishonoured cheque admittedly was received back by the insurance company on 15.2.2010 and intimation regarding the cheque was sent to the insured calling upon him to make good the deficiency in the insurance premium vide letter dated 17.2.2010. The insured, however, died on 18.2.2010 before receipt of the letter dated 17.2.2010 sent by the insurance company. From the aforesaid sequence of events it is clear that the insured all through had intention to pay the premium and in fact he had paid substantial part of the insurance premium i.e. Rs.24,900/-.
9 It is pertinent to note that revised offer was sent to the insured vide letter dated 06.02.2010 which reads as under:
"Dear Sir/Madam, Subject: Counter Offer on your proposal No.0148042007 We thank you for applying to Bajaj Allianz Life Insurance Company for a Life Insurance Policy. We have received the proposal and all other relevant reports/documents to access the risk. On going through the same, we desire to place counter offer against the proposal. The terms of acceptance need to be modified on account of Life Assured is Overweight As Per Proposal Revised Offer Product Invest Gain-Gold Invest Gain-Gold Sum Assured 250000.0 250000.0 Premium Paying Term 12 12 Benefit Term
12. 12 Premium 23845.0 25203.0 Ser Tax+Edu Cess+High Edu.
245.6 259.59 Proposal Deposit Collected 24090 24090 Net Payable/Excess Paid(-) 1372.58 1372.59 Additional Premium : 1357.5 We have received a deposit of Rs.24090/-. We request you to remit balance of Rs.1372.59 by cash or by cheque in our nearest customer care center. This offer is valid for 15 days from the date of issue of this letter subject to the information given in the proposal form remains unchanged.
Please return the letter duly signed, thereby accepting the Counter Offer.
We eagerly wait to cover the risk on your life and continue a life long association with you.
Yours faithfully, For Bajaj Allianz Life Insurance Co. Ltd.
Branch Office: BRANCH OFFICE-RAJKOT Branch Telephone No.: 0282450316"
10. On reading of the above, it is clear that vide letter dated 06.02.2010, the petitioner was called upon to pay the additional premium and the offer given was for 15 days. Undisputedly, before the expiry of said 15 days, insured died. Therefore, it cannot be said that insurance policy issued on 09.02.2010 was without consideration particularly when the insured had already paid major portion of the insurance premium and the policy was issued in his favour on 09.02.2010 and 15 days period w.e.f. 06.02.2010 had not expired. Therefore, it cannot be said that this is a case of lack of consideration particularly when the insured had intention to pay the balance premium.
11. Section 64-VB of the Insurance Act, 1938 reads as under:
No risk to be assumed unless premium is received in advance -
(1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer. Explanation.--Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.
(3) XXXXXXXXX (4) XXXXXXXXX (5) XXXXXXXXX"
12. On reading of the above, it is clear that risk of the insured commences on the receipt of premium and even in case where the payment of premium is guaranteed to be paid by the insured. Clause (2) provides that the risk may be assumed not earlier than the date on which the premium has been paid in cash or by the cheque to the insurer. In the instant case, admittedly the cheque for the balance premium was issued by the deceased insured on 06.02.2010 and on receipt of the cheque the policy was issued by the insurance company on 09.02.2010 covering the risk w.e.f. 08.02.2010. Thus, the issue of the policy was well within the framework of Section 64-VB Clause 1 & 2.
13. In view of the discussion above, we do not find merit in the contention of the petitioner. It is pertinent to note that insurance claim filed by the respondent was repudiated on sole ground that the insurance contract was not complete and the claim was not pursued or investigated by the insurance company. Taking note of this situation, we partly allow the revision petition and modify the order of the foras below and direct that complainant on receipt of copy of this order shall pay the balance premium within four weeks and on the receipt of the balance premium, the insurance company shall process the insurance claim and settle the same within three months. Revision Petition is disposed of accordingly.
......................J AJIT BHARIHOKE PRESIDING MEMBER ...................... REKHA GUPTA MEMBER