State Consumer Disputes Redressal Commission
Radhika Saini W/O Lat. Arun Saini vs Life Ins. Co. Ltd. on 12 January, 2017
Daily Order BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1 COMPLAINT CASE NO: 125 /2015 Radhika Saini w/o Late Arun Saini, 207, Santosh Sagar Colony, Brahmpuri Road, Jaipur. Vs. Life Insurance Corporation of Indi, Subhash Nagar Shopping Centre, Subhash nagar, Jaipur. Date of Order 12.01.2017 Before: Hon'ble Mrs. Justice Nisha Gupta- President Hon'ble Mrs. Sunita Ranka -Member
Mr.Gopal Shastri counsel for the complainants Mr.Vizzy Agarwal counsel for the non-applicant BY THE STATE COMMISSION ( PER HON'BLE MRS. JUSTICE NISHA GUPTA,PRESIDENT):
The complaint has been filed on 14.10.2015 with the 2 contention that deceased husband of the complainant filled a proposal form on 8.8.2014 for the sum proposed for Rs. 25 lakhs. In July 2014 he was examined by Dr. Kamal Jain and found fit. A cheque dated 8.8.2014 for an amount of Rs. 10,169/- was accepted by the non-applicant as premium for the policy. On 14.8.2014 it was credited to the account of the non-applicant. On 19.9.2014 the husband of the present complainant died which was informed to the insurance company and claim was filed which was rejected on the ground that proposal was incomplete and hence, no liability is accrues.
The contention of the non-applicant is that complainant has not disclosed true facts before this Commission. Prior to the proposal form dated 8.8.2014 the deceased has submitted proposal form no. 1439 on 4.7.2014, the sum proposed for Rs.50 lakhs which was declined by the non-applicant on 23.7.2014 as income was inadequate for the proposal. Again proposal form no. 3695 was presented by the deceased on 12.8.2014 with the non-applicant and the proposal deposit receipt no. 1281066 Ex. OP 3 was issued and it has also been admitted that amount was credited in the account of the non-applicant on 14.8.2014. The further contention of the non-applicant is that when proposal was received by the non-3
applicant on 12.8.2014 it was not possible for them to medical examine the deceased in July 2014 and the contention is false one. The further contention of the non-applicant is that money was accepted as advance money and for which the proposal deposit receipt was issued and it cannot be termed as premium for the policy as till death date the proposal was not accepted and as per agents manual the agents are authorized to accept the advance money equal to first premium and as per manual for account department a deposit memorandum was issued which has been submitted as Ex. OP 3. After receipt of the proposal no. 3695 it was considered by the authorities and on 27.8.2014 some requirements were found necessary which was communicated to the proposer on 18.9.2014. On 29.9.2014 a physician report dated 20.9.2014 was submitted and on the same date the application signed by the proposer was also submitted requesting change in the name of nominee. Ophthalmic report dated 12.9.2014 signed by the proposer was also submitted. On 1.10.2014 the counter offer was communicated to the proposer that the policy could be issued only for sum assured of Rs. 18 lakhs and this counter proposal was communicated to the proposer on 4.10.2014 vide Ex. OP 12. Thereafter on 30.10.2014 non-applicant was informed that proposer has died on 19.9.2014 and claim has been filed which 4 was repudiated as there was no concluded contract between the parties.
Both the parties have entered into evidence. Heard the counsel for the parties and perused the record of the case.
As per Ex.OP 1 it is more than clear that earlier proposal form no. 1439 was submitted which was declined by the non-applicant on 23.7.2014. Thereafter Ex. OP 2 proposal was submitted with sum proposed of Rs. 25 lakhs and a proposal deposit receipt Ex. OP 3 was issued on 12.8.2014 as per manual of account. Agents are authorized to accept advance money equal to first premium as per agents manual. Manual for accounts Ex. OP 4 and agents manual Ex. OP 5 were also submitted. Ex. OP 6 reveals that on 25.8.2014 the matter was considered and some requirements were found lacking, decision was taken on 27.8.2014 which was communicated to the proposer vide Ex. OP 7. Thereafter Ex. OP 8 physician report was submitted which contains the date of 20.9.2014 whereas the admitted case of the complainant is that her husband died on 19.9.2014. Hence, the physician report in itself is suspicious document. On 29.9.2014 a letter signed by the deceased was also submitted for change of nominee whereas as 5 noted earlier deceased was died on 19.9.2014. Hence, both these documents are suspicious and carries no weight. Ex. OP 10 Ophthalmic report was also submitted containing the date of 12.9.2014 which is also suspicious as the ophthalmic report was called for from the deceased vide letter dated 18.9.2014. Hence, there was no occasion for the deceased to have this report on 12.9.2014. As the non-applicants were not informed about the death of the deceased, they again re-considered the proposal and decision was taken on 1.10.2014 that the proposal could be accepted only for Rs. 18 lakhs and it was informed to the complainant vide Ex. OP 12 on 4.10.2014. Thereafter the complainant submitted application which was received by the non-applicant on 30.10.2014.
The contention of the complainant is that as proposal was submitted before the non-applicant on 8.8.2014 as per Rule 4 (6) of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002 it was the duty of the non-applicant to process the same with speed and efficiency and decision should be communicated within a reasonable period not exceeding 15 days from the receipt of proposal by the insurer.6
There could not be any quarrel about the above provision but here in the present case facts reveals that on 8.8.2014 proposal from was filled which was presented to the non-applicant on 12.8.2014. It was discussed and decision was taken on 27.8.2014. Hence, in stipulated time decision was taken. It is true that communication was done later i.e. on 18.9.2014 but the counsel for the non-applicant has rightly relied upon 1984 AIR 1014 Life Insurance Corporation of India Vs. Raja Vasireddy Komallavalli Kamba where the apex court has held as under:
"Though in certain human relationship 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. Mere delay in giving an answer cannot be construed as an acceptance, as, prima facie, acceptance must be communicated to the offer or the general rule is that the 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. Whether the final acceptance is that of the assured or insurers however, depend simply on the way in which 7 negotiations for an insurance have progressed.
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. Acceptance must be signified by some acts or acts agreed on by the parties or from which the law raised a presumption of acceptance."
Further reliance has been placed on I (2009 ) CPJ 18 (NC) Elsa Tony Vs. LIC of India, II (2010) CPJ 231 (NC) LIC of India Vs. Gita Sharma, and II (2004) CPJ 305 (Tamilnadu State Commission) K.R.Viswanathan Vs. LIC of India.
Hence, in view of the above pronouncements it could be held that mere delay in giving the answer cannot be construed as acceptance and here in the present case the non-applicants are not guilty of any significant delay as they have continuously considering the case of the proposer. On 18.9.2014 vide Ex. OP 7 the proposer was informed and thereafter on 1.10.2014 his case was again re-considered for sum assured of Rs. 18 lakhs but the bonafides of the complainant are question marked as till 30.10.2014 she has not informed the insurance company about the death of her 8 husband and as considered earlier Ex. OP 8, 9 and 10 were presented before the non-applicant after the expiry of her husband and even Ex. OP 8 and 9 were prepared after his death.
The contention of the complainant is that once premium has been received by the insurance company and they gave impression that the issuance of policy is under consideration, they cannot reject the claim and reliance has been placed on III (2014) CPJ 248 (NC) Oriental Insurance Co. Vs. Irawati & ors. Where money was kept with the insurance company for inordinate period whereas in the present case as considered earlier the insurance company was active and was considering the proposal. Further reliance has been placed on I (2013) CPJ 155 (NC) ICICI Prudential Life Insurance Vs. Bimal Kanta where before the death of the insured the policy was commenced which is not the case here. Further reliance has been placed on 2015 (4) CPR 680 (NC) Bajaj Allianz Insurance Co. Vs. Smt.Pallaviben where the insurance policy was issued on 9.2.2010 covering the risk w.e.f. 8.2.2010 and the insured died on 18.2.2010 which is not the case here. Further reliance has been placed on III (2015) CPJ 677 (NC) Postmaster Post office Branch Vs. Shambhu Nath Seth where premium was accepted and retained for more than three years 9 but here in the present case the money which has been deposited with the non-applicant was not premium but only proposal deposit receipt and decision on the case was under consideration. Further reliance has been placed on IV (2012) CPJ 841 (NC) LIC of India Vs. Kaushilya where LIC has honoured the policy in part which is not the case here.
Hence, in view of the above there was no concluded contract between the parties. The offer has never been accepted by the non-applicant rather counter offer was communicated and before acceptance of the above the person dies. In view of the above the non-applicant has not committed any deficiency in service and complaint is liable to be rejected.
(Sunita Ranka) (Nisha Gupta) Member President nm