State Consumer Disputes Redressal Commission
Baburam Jain vs Hdfc Standard Life Insurance on 19 January, 2010
APPEAL NO: 2170/2008 Baburam Jain s/o Sh.Pawan Kumar Jain r/o 87, Gopal Bari, Jaipur. Complainant-appellant Vs. 1. H.D.F.C. Standard Life Insurance Co. Ltd. Regd.office- Ramon House, H.T.Parekh Marg, 169, Backbay Reclamation, Mumbai-400020 Through its Managing Director. 2. H.D.F.C. Standard Life Insurance Co. Ltd. Ist Floor, Land Mark, Plot no. S-16A, Mahaveer Marg, C-Scheme, Jaipur through its Br.Manager. Opposite party-respondent Date of judgment 19.1.2010 Before: Mr.Justice Sunil Kumar Garg-President Mrs.Vimla Sethia-Member Mr.Dinesh Kala counsel for the appellant Mr.Ram Kalyan Sharma counsel for the respondents JUDGMENT
BY THE STATE COMMISSION (PER HON.MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT) 2 This appeal has been filed by the complainant appellant against order dated 14.11.08 passed by the District Forum, Jaipur camp Jaipur in complaint no. 10/2008 ( 549/2006 Second ) by which the complaint of the complainant appellant was dismissed.
2. It arises in the following circumstances-
That the complainant appellant had filed a complaint before the District Forum, Jaipur IInd on 19.5.06 inter alia stating that his son Akhil Kumar , now deceased had taken HDFC Unit Linked Endowment policy from the respondents for a sum of Rs.1 lac bearing policy no.10062188 on 14.8.04 for twenty years and a sum of Rs.2500/- was paid by the deceased as first premium on 14.8.04 through cheque dated 13.8.04 to the office of the respondents . It was further stated in the complaint that the premium was to be paid in four quarterly instalments in a year and second instalment of the year 2004 was paid by the deceased on 5.11.04 and premiums of the year 2005 were paid by the deceased on 14.2.05, 20.5.05 and on 11.8.05 but unfortunately on 17.8.05 the deceased was found dead in his office and a Mug FIR bearing no. 13/05 was registered under section 174 CRPC with the Police Station Vidhayakpuri, Jaipur and the police after investigation had submitted a report to SDM Jaipur Ist on 25.6.06. It was further stated in the complaint that postmortem of the body of the deceased was got 3 conducted on 17.8.05 and after the death of the deceased claim was preferred by the complainant appellant being the father and nominee of the deceased before the office of the respondents but that claim was repudiated by the respondents through letter dated March 1,2006 in the following manner-
" This has reference to your claim dated Sept.01,2006 for the benefit under the above policy-
We would like to bring your attention to the following-
1. Mr.Akhil Kumar Jain had submitted a proposal dated Aug.14,1004 to the company for purchase of HDFC Unit Linked Endowment under policy no. 10062188 for sum assured of Rs.1,00,000/-.
2. Through the papers revalued by us it is seen that the death of the life assured was due to suicide.
3. As per section 9 in our Standard Policy Provision- we shall not be liable to pay any benefit indicated in your policy schedule if the death of the life assured is caused directly or indirectly by suicide within one year of the date 4 of commencement or the date of issue of the policy or date of reinstatement of policy, whichever is later.
The present policy was issued on August 20,2004. Since the death of the life assured due to suicide has taken place within period of one year from the date of issue, we regret that no benefit are payable under the policy."
Thereafter the present complaint was filed by the complainant.
A reply was filed by the respondents on 17.11.06 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 1.3.06. Apart from that it was stated in the reply that no doubt the proposal form of the policy was filled in up by the deceased on 14.8.04 and the amount of the first premium i.e. Rs.2500/- was deposited by the deceased through cheque dated 13.8.04 but no policy was issued by the respondents on 14.8.04 and since the proposal of the deceased was accepted by the respondents on 20.8.04, therefore, the policy in question had come into force w.e.f. 20.8.04.
It was further stated in the reply that since the deceased had committed suicide on 17.8.05 meaning thereby within one year of the issuance of the policy, 5 therefore, claim was rightly repudiated by the respondents and further reliance has been placed on clause 19 (i) of the standard policy provisions and it was prayed that complaint of the complainant be dismissed .
After hearing the parties, the District Forum, Jaipur camp Jaipur through impugned order dated 14.11.08 had dismissed the complaint inter alia holding that since the policy in question had come into force w.e.f. 20.8.04 and since the deceased had committed suicide on 17.8.05, therefore, as per clause 19 (i) of the policy in question claim of the complainant was rightly repudiated by the respondents.
Aggrieved from the said order dated 14.11.08 passed by the District Forum, Jaipur camp Jaipur this appeal has been filed by the complainant appellant.
3. In this appeal, the main contention of the learned counsel for the appellant complainant is that the policy in question was taken by the deceased on 14.8.04 and in all the relevant papers issued by the respondents, the date of commencement of the policy was mentioned as 14.8.04 and if the deceased had died on 17.8.05, his death was after expiry of one year and thus the case of the respondents that policy was issued on 20.8.04 could not be found acceptable and the respondents could not get the benefit of clause 19 (i) of the policy in question and hence, repudiation of claim of the 6 complainant appellant by the respondents was wholly illegal and arbitrary and in view of this the findings of the District Forum dismissing the complaint of the complainant appellant could not be sustained as they suffer from basic infirmity, illegality and perversity and it was prayed that appeal be allowed.
4. On the other hand, the learned counsel appearing for the respondents has supported the impugned order of the District Forum.
5. We have heard the learned counsel for the appellant as well as for the respondents and have gone through the entire materials available on record.
6. There is no dispute on the point that the proposal form marked Anx. R-1 was filled in up by the deceased on 14.8.04 and the policy was for a sum of Rs. 1 lac known as HDFC Unit Linked Endowment Plan and the term of the policy was 20 years and a sum of Rs.2500/- was paid by the deceased as first premium of the policy in question through cheque dated 13.8.04.
7. On file there is Anx. R-2 at page 27 which reveals that the policy number was 10062188 and date of commencement of policy was 14th August 2004 and the instalment premium was Rs.2500/-.
8. Further on file at page 28 of Anx. R-2 in column 7 Schedule of investment options, effective date of the policy mentioned is 14th August 2004 and even in column Schedule of charges the effective date is mentioned as 14th August 2004.
9. Further on file at page 29 of Anx. R-2 there is a nomination schedule in which the effective date is mentioned as 14th August 2004 but that Anx. R-2 was issued by the respondents on 20th August 2004 and the same was signed at Mumbai.
10. Further on file at page 43 there is a Exclusion clause 19 (i) which reads as follows-
" We shall not be liable to pay any benefit indicated in your Policy Schedule if the death the life assured is caused directly or indirectly by suicide within one year of the date of commencement or the date of issue or date of reinstatement of the policy, whichever is later."
11. Further on file at page 45 there is a First Premium Receipt ( Original ) which was issued by the respondents on 17.8.2004 in which it was specifically mentioned that the policy in question had come into force with effect from 14th August 2004 .
12. On file there is Anx. R-12 which is a report submitted by the SHO, Vidhayakpuri to the SDM Jaipur city on 25.6.06 inter alia stating that after investigation the police had come to 8 the conclusion that the deceased had committed suicide on 17.8.05.
13. Thus, in the facts and circumstances just narrated above, the question for consideration is whether the findings recorded by the District Forum by which complaint of the complainant appellant was dismissed could be sustained or not and whether the repudiation of the claim of the complainant appellant by the respondents was justified or not and whether the policy in question had come into force w.e.f. 14.8.04 or 20.8.04.
14. Before proceeding further it may be stated here that the death of the deceased which had taken place on 17.8.05 would be classified as suicidal death as for that a report of the SHO Vidhayakpuri, Jaipur dated 25.6.06 addressed to SDM Jaipur Anx. R-12 may be referred to in which it was mentioned that the police after investigation had come to the conclusion that the deceased had committed suicide on 17.8.05 and thus, from the report of the police, the fact that the deceased had committed suicide stands proved and for the above reasons, the findings recorded by the District Forum on point of suicide are liable to be confirmed one and thus it is held that the deceased had committed suicide on 17.8.05.
On Effective date
15. It may be stated here that in this case a bare perusal of Anx. R-1 reveals that the proposal form was filled in up by the deceased on 14.8.04 and the policy was for a sum of Rs. 1 lac known as HDFC Unit Linked Endowment Plan and the term 9 of the policy was 20 years and a sum of Rs.2500/- was paid by the deceased as first premium of the policy in question through cheque dated 13.8.04 and the same was accepted by the respondents through letter dated 17.8.04 at page 45 on the file which clearly reveals that the receipt of first premium was issued by the respondents on 17.8.04 in which it was also stated that the policy had come into force with effect from 14th August 2004.
16. A bare perusal of Anx. R-2 at page 27 reveals that the policy number was 10062188 and date of commencement of policy was 14th August 2004 and not only this at page 28 in the column Schedule of investment options, effective date of the policy mentioned is 14th August 2004 and further in column Schedule of charges the effective date is mentioned as 14th August 2004 and even in the nomination schedule the effective date is mentioned as 14th August 2004 though the same was signed at Mumbai on 20th August 2004.
17. It may be stated here that the word " effective date " has been defined in Black dictionary 7th edition 1999 in the following manner-
" The date on which a statute, contract, insurance policy, or other such instrument becomes enforceable or otherwise takes effect, which sometimes differs from the date on which it was enacted or signed."
18. Thus, a bare perusal of the above definition means that 10 the effective date means the date on which the insurance policy commences or in other words the date on which a contract becomes effective or in other words the date on which a derivative contract is put into effect.
19. Taking all these aspects into consideration and all the documents just mentioned above it could be easily said that the date of commencement of the policy was 14.8.04 and not 20.8.04.
Cover note and policy of insurance
20. It may be stated here that when the Insurance Company accepts premium and issues a certificate of insurance it becomes a concluded contract of insurance on the usual terms and conditions contained in the printed policies of the insurance company.
21. It may further be stated here that cover note itself is a contract of insurance though it is distinct from the contract comprised in the policy and from that point of view also in the present case since in all the documents the effective date of the policy mentioned was 14.8.04, therefore, for all purposes, this would be the effective date and further it would be treated the date on which the policy had come into force.
Exclusion clause 19 (i) of the policy which is quoted above
22. In this case the learned counsel for the respondents has 11 argued that as per exclusion clause 19 (i) of the policy, it is very much clear that if the death was caused by suicide within one year of the date of commencement of the policy or the date of issue or date of reinstatement of the policy but the effective date which would be later and since in this case policy in question was issued on 20.8.04, therefore, as per exclusion clause 19 (i) , the policy had come into force w.e.f. 20.8.04 and not w.e.f. 14.8.04.
23. In our considered opinion, this argument is not appreciable at all because of the following reason-
(i) That as stated above in all the papers just mentioned above the effective date of the policy mentioned was 14.8.04 and if in the exclusion clause 19 (i) the words " whichever is later " is mentioned, that would not be helpful to the respondents especially when in the nomination schedule at page 29 which is signed by the respondents on 20.8.04 the effective date is mentioned as 14th August 2004, therefore, for all purposes in the present case the effective date of the issuance of the policy would be 14.8.04 and not 20.8.04.
24. When this being the position if the policy in question had come into force w.e.f. 14.8.04 and if the suicidal death of the deceased had taken place on 17.8.05, the death of the deceased would be classified as suicidal death after expiry of one year of the issuance of the policy and thus, the 12 respondents could not get the benefit of exclusion clause 19 (i) of the policy in question on the ground that the death of the deceased had taken place within one year of the issuance of the policy.
25. It may furthr be stated here that the Hon'ble Supreme Court in a case of National Insurance Co. Ltd. Vs. Jikubhai Nathuji Dabhi reported in 1997 ACJ 351 (SC ) and in the case of J Kataivani Vs. K. Sivashankar reported in 2002 ACJ 613 (SC ) has held that the policy of insurance commences risk coverage only in terms of the policy of insurance and if certificate of insurance has not been issued later on, it would not make any difference if from other documents the effective date is coming forward and in the present case, in all the documents the date of commencement of the policy mentioned was 14.8.04, therefore, for all purposes in the present case the date of commencement of the policy would be 14.8.04 and not 20.8.04.
26. It may be stated here that for coming to the above conclusion reliance has been placed on the following cases of the Hon'ble Supreme Court
-
(i) Oriental Insurance Co. Ltd. Vs. Sunita Rathi and ors. ( 1998 ACJ 121 )
(ii) National Insurance Co. Ltd. Vs. Sobina Takai and ors. ( 2007 ACJ 2043 ) 13
(iii) Balbir Kaur and ors. Vs. New India Assurance Co. Ltd. & ors. ( 2009 ACJ 1848 )
(iv) Oriental Insurance Co. Ltd. Vs. Porselvi & ors. ( MANU / SC/ 0680/2009 )
27. In view of the above discussions, the law laid down by the Hon'ble Supreme Court in the case of Life Insurance Corporation of India & anr. Vs. Dharam Vir Anand ( 1998 ) CPJ 3 (SC ) on which reliance has been placed by the learned counsel for the respondents would not be helpful as the facts of the present case stand distinguished from the facts of this case.
28. For the reasons stated above, the respondents were not justified in repudiating the claim of the complainant appellant and the respondents have repudiated the claim of the complainant appellant without any basis and on wrong assumption and in an arbitrary manner and in view of this, the findings of the District Forum dismissing the complaint of the complainant appellant could not be sustained as they suffer from basic infirmity, illegality and perversity. Hence, this appeal deserves to be allowed and the impugned order is liable to be quashed and set aside and the appellant complainant is entitled to get claim amount of Rs.1 lac under the policy in question of the deceased alongwith interest @ 9% p.a. from the date of filing of the complaint i.e. 19.5.06 and further to get a sum of Rs.5000/- as cost of litigation.
14Accordingly, this appeal filed by the appellant complainant is allowed and the impugned order dated 14.11.08 passed by the District Forum,Jaipur camp Jaipur is quashed and set aside and the complaint of the complainant appellant stands allowed in the manner that the respondents are directed to pay to the complainant appellant a sum of Rs. 1 lac as claim amount under the policy in question of deceased alongwith interest @ 9% p.a. from the date of filing of the complaint i.e. 19.5.06 till the payment is made and respondents are further directed to pay a sum of Rs.5000/- as amount of costs to the complainant appellant.
(Vimla Sethia) (Justice Sunil Kumar Garg) Member President