State Consumer Disputes Redressal Commission
Sbi Life Insurance Co.Ltd., vs Shrimati Kavita Sharma & Others on 4 December, 2013
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR(C.G.)
Appeal No.FA/12/598
Instituted on : 23.10.2012
SBI Life Insurance Co. Ltd.,
Branch Manager, Branch Korba,
K.G.N. Complex, Power House Road,
Korba, District Korba (C.G.) ... Appellant.
Vs.
(1) Shrimati Kavita Sharma,
W/o Vijay Sharma.
(2) Vivek Sharma,
Both R/o : Dainik Savad Sadhna,
Swarnim Bhawan, Tilak Marg, T.P. Nagar,
Korba Thana, District Korba (C.G)
(3) Union Bank of India, Branch Manager,
Branch Korba, T.P. Nagar,
Korba, Thana District Korba (C.G.) ... Respondents.
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE MISS HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES: -
Shri Narendra Mishra, for appellant.
Shri R.N. Rathore, for respondent Nos.1 & 2.
Shri Ashok Dubey, for respondent No.3.
ORDER
Dated : 04/12/2013 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. This appeal is directed against the order dated 25.09.2012, passed by District Consumer Disputes Redressal Forum, Korba (C.G.) (henceforce called "District Forum" for short) in Complaint Case No.06/2011, whereby the complaint filed by the complainants / respondent nos. 1 & //2 // 2, has been allowed and OPs / appellant & respondent no.3 were directed to accept the insurance policy and to pay the insurance benefits to the complainants as per terms and conditions of the insurance policy. O.P.No.1 / respondent no. 3 Bank has further been directed to pay a sum of Rs.2,000/- as compensation for mental agony and Rs.1,000/- as cost of litigation to the complainants / respondent nos.1 & 2.
2. From the record of the District Forum, it appears that the complainants filed consumer complaint under Section 12 of the Consumer Protection Act, 1986, for seeking direction of payment of compensation against the OPs/respondents, on the ground that a housing loan was taken by both the complainants, as well as husband of complainant no.1/ respondent no.1, Vijay Sharma from the O.P.No.1 / respondent No.3 Bank and it was agreed between the parties that in case of death of any borrower, the amount of loan will be recovered from the sum assured under the S.B.I. Life Super Security Group Insurance Scheme. Premium of that insurance policy was also deducted from bank account of the complainant no.1 / respondent no.1 as well as Vijay Sharma through O.P.No.1 / respondent No.3 Bank and they were under the impression that O.P.No.1/respondent No.3 Bank had purchased the insurance policy for their benefits. Vijay Sharma died on 22.07.2008 but when statement of loan account, was sent by O.P.No.1 / respondent No.3 Bank to the complainants/respondent nos.1 & 2, then it revealed that the Bank had not collected any amount from the Insurance //3 // Company and when further informations were sought in this regard, then it was found that the Bank had not obtained insurance policy regarding which the amount of premium was collected by it from account of the complainants/respondent nos.1 & 2. Thus, the O.P.No.1/respondent No.3 Bank and O.P.No.2/appellant Insurance Company have committed deficiency in service, and, therefore, the complaint was filed before the District Forum, for seeking compensation on account of such deficiency and for release of the complainants/respondent nos.1 & 2 from the liability of making any amount against the housing loan and also for seeking direction to refund the amount, which has been collected by the Bank after the death of Vijay Sharma.
3. In their separate written version, both the OPs / appellant & respondent No.3 refuted the allegations levelled against them by the complainants.
4. After having considered the material placed before it by all the parties, learned District Forum allowed the complaint filed by the complainants / respondent nos.1 & 2and directed the OPs / appellant & respondent no.3 to accept the insurance policy and to pay the insurance benefits to the complainants as per terms and conditions. O.P.No.1/respondent no.3 was further directed to pay a sum of Rs.2,000/- as compensation for mental agony and Rs.1,000/- as cost of litigation to the complainants.
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5. Shri Narendra Mishra, learned counsel for the appellant / O.P.No.2 argued that learned District Forum failed to observe that the deceased Vijay Sharma was mere a prospective purchaser of the insurance cover, there is no relationship of consumer and service provider, at any point of time, between the deceased Vijay Sharma or the complainants and the appellant / O.P.No.2, S.B.I. Life Insurance Company, as per the provisions of the Consumer Protection Act, 1986. The appellant / O.P.No.2 has not received any proposal from Late Vijay Sharma along with relevant documents and the appellant. / O.P.No.2 had never granted any insurance cover to him and he was never issued certificate of insurance. He further argued that learned District Forum has erred in holding that amount of premium has been credited to the bank account on 01.02.2010. The proposer was advised to give proof regarding date of his birth and same was not produced by Late Vijay Sharma or the complainants/respondent nos.1 & 2, therefore the deceased was never insured with the appellant/O.P.No.2. The order of the District Forum suffers from illegality and irregularity and is not sustainable in eye of law and hence the appeal of the appellant / O.P.No.2 be allowed and impugned order passed by the learned District Forum, be set aside.
6. Shri R.N. Rathore, learned counsel for respondent Nos.1 & 2/complainants argued that Late Vijay Sharma obtained loan from Union Bank of India (respondent No.3/O.P.No.1) for construction of house. The complainants/respondent nos.1 & 2 and Late Vijay Sharma, //5 // were insured by the appellant /O.P.No.2 Insurance Company under S.B.I. Life Super Suraksha Group Life Insurance Scheme and the respondent no.3 /O.P. No.1 Bank deducted amount of premium Rs.1,26,252/- from the account of Late Shri Vijay Sharma on behalf of the appellant/O.P.No.2 and thus the respondent no.3/O.P.No.1 acted as an agent of the appellant /O.P.No.2 Insurance Company, therefore, the appellant / O.P.No.2 Insurance Company is also liable for the act of its agent / respondent no.3/O.P.No.1 Bank. There is a contract between the appellant/O.P.no.2 and Late Vijay Sharma and respondent no.3 /O.P.No.1 Bank collected the amount of premium on behalf of the appellant/O.P.No.2, therefore, respondent no.3/O.P.No.1 Bank is an agent of the appellant / O.P.No.1 Insurance Company under Section 182 of the Indian Contract Act, 1872. He further argued that the impugned order passed by the learned District Forum is a well reasoned order and does not call for any interference by this Commission. He placed reliance on judgment of Hon'ble Supreme Court in the case of Delhi Electric Supply Undertaking v. Basanti Devi, AIR 2000 Supreme Court
43.
7. Shri Ashok Dubey, learned counsel for the respondent No.3/O.P.No.1, supported the arguments advanced by Shri Narendra Mishra, learned counsel for the appellant/O.P.No.2.
8. We have heard learned counsel for the parties and have also perused the record of the District Forum.
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9. Sections 3, 182, 183, 184, 185 and 186 of The Indian Contract Act, 1872 are as follows :-
"Section 3. Communication, acceptance and revocation of proposals :-
The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it. Section 182. "Agent" and ""principal" defined :-
An "agent" is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".
Section 183. Who may employ agent :-
Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent.
Section 184. Who may be an agent :-
As between the principal and third persons, any person may become an agent but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained.
Section. 185. Consideration not necessary :-
No consideration is necessary to create an agency.
//7 // Section 186. Agent's authority may be expressed or implied :-
The authority of an agent may be expressed or implied."
10. Hon'ble National Commission in the case of Anand Kumar Kejariwal v. LIC of India & Anr., II (2011) CPJ 249 (NC), has observed in paragraph No.9 as under :-
"9. We have considered the averments made by the Counsel for both parties as well as the evidence on record. So far as suppression of age by the insureee is concerned, it is a fact that even the Respondent/Insurance Company does not consider it suppression of a "material fact" because there is a clear policy guideline that in such cases there is no need to cancel the policy and the matter can be resolved by taking a higher premium as penalty from the insuree. This fact has also been fairly conceded by the State Commission in its order. So far as suppression of information regarding the status of her husband's policy is concerned, the District Forum which is a Court of fact finding has on the basis of credible evidence concluded that there was no wilful suppression of information by the insuree and the insurance form had in fact been filled by the agent, one K.C. Singh, of the Respondent / Insurance Company. There is also no evidence that the insuree was aware that the two policies of her husband had lapsed. In view of this fact and because of two years had expired from the date on which the policy was effected, as per provisions of Section 45 of the Insurance Company Act, 1938, the policy could not be questioned on grounds of mis-statement."
11. Looking to the facts and record of the District Forum, it appears that the appellant granted insurance coverage to individuals through individual assurances and to groups of individuals through Group Life Insurance Schemes. The learned District Forum in paragraph no.14 has mentioned that on the basis of documents filed in the case, it is clear that //8 // O.P.No.1 / respondent No.3 Bank made an arrangement in case of death of the borrower for securing the recovery of loan amount that the persons, who have obtained loan from the O.P.No.1/respondent no.3 Bank is required to become member of S.B.I. Life Super Suraksha Group Life Insurance Scheme of O.P.No.2 / appellant Insurance Company and in for this purpose O.P.No.1/respondent no.3 Bank withdraws the amount of premium from the account of the concerning borrower and sent it to the O.P.No.2 for getting him insured. In this regard, there is a tie-up between O.P.No.1 / respondent No.3 Bank and O.P.No.2/appellant Insurance Company. The complainants / respondent nos.1 & 2 have obtained loan of Rs.9,65,000/- from branch office, Korba of O.P.No.1/respondent no.3 Bank on 27.10.2005. In the meantime, on 22.07.2008 Vijay Sharma died due to heart attack. The death certificate of Vijay Sharma is also enclosed. In the instant case, it is not disputed that under the S.B.I. Life Super Suraksha Group Life Insurance Scheme for transmitting the amount of premium Rs.1,26,252/- to the O.P.No.2/appellant Insurance Company, the O.P.No.1/respondent no.3 Bank debited the said amount in the loan account of the complainants/respondent nos.1 & 2. Though O.P. No.2/appellant Insurance Company argued that O.P.No.2/appellant Insurance Company has returned back the proposal form along with D.D. to the proposer through O.P.no.1/respondent no.3 Bank because along with proposal form, the proposer has not submitted his birth certificate, but after perusal of the complaint, we find that there was no //9 // column in the proposal form regarding date of birth of the proposer. Therefore, in our opinion if the birth certificate was required for acceptance of the insurance policy, then information in this regard could be given by the OPs/ appellant & respondent no.3 to the complainants/respondent nos.1 & 2 and the same was also required to be mentioned in proposal form of insurance. As three was a tie-up between the OPs/appellant & respondent no.3, therefore, in case amount is deducted from the account of the customer for the insurance, then it is presumed that the policy has been accepted and the borrower is eligible for getting benefit of the policy, but in the present case from the perusal of the statement of account dated 18.02.2010 produced by the OPs/appellant & respondent no.3, it is clear that OPs/appellant & respondent no.3 have deducted the amount of premium from the account of complainants/respondent nos.1 & 2 and on account of death of Vijay Kumar on 22.07.2008, the amount of premium was adjusted in the account of the complainants/respondent nos.1 & 2 on 01.02.2010 and thus OPs/appellant & respondent no.3 refused to give benefit of the insurance to the complainant, which in our view comes in the category of deficiency in service.
12. Hon'ble Supreme Court in the case of Basanti Devi (supra) has held that "premium was deducted by the employer and transmitted to L.I.C. and no communication from the LIC to the employee that employer was not its agent, therefore, the employer is ostensible //10 // authority to collect premium on behalf of L.I.C." In the instant case, Late Vijay Sharma applied for home loan and premium was deduced from account of the complainants / respondent nos.1 & 2 and Late Vijay Sharma by O.P.No.1/respondent no.3 on behalf of O.P.No.2/appellant and complainants / respondent nos.1 & 2 and Vijay Sharma were insured under S.B.I. Life Super Suraksha Group Life Insurance Scheme by the appellant / O.P.No.2 Insurance Company.
13. According to the appellant / O.P.No.2 the proposer was advised to give the proof of date of birth and as the same was not produced hence, the proposal for insurance was not even sent to the appellant for processing the same as per the insurance underwriting norms along with proposal form and as appellant / O.P.no.1 Insurance Company has not accepted the premium, therefore, the respondent no.3/ O.P.No.1 Bank had not acted as it's agent, hence the appellant / O.P.No.2 is not liable for payment of any compensation to the respondent nos.1 & 2 /complainants. The above contention of the appellant/O.P.No.2, is not acceptable.
14. Appellant/O.P.No.2 has averred in the written version that the appellant had not accepted the amount of premium and it has returned back the amount of premium to respondent no.3 / Bank immediately on the ground that no document was filed relating to the age of Late Vijay Sharma. On perusal of record, we find that appellant / O.P.No.2 has not filed any document to show or indicate that on which date the //11 // appellant / O.P.No.2 has returned the amount of premium to the respondent no.3. From the perusal of statement of account, it is clear that on 15.12.2005, a sum of Rs.1,26,252/- towards premium was collected.
15. In its reply, respondent no.3/O.P.No.1 Bank averred that it had transmitted the amount of premium to the appellant, it has been also stated by the respondent no.3/O.P.No.1 Bank that appellant has returned back the amount of premium Rs.1,26,252/- to it, which has been adjusted in the account of the respondent nos.1 & 2/complainants but respondent No.3/O.P.No.1 Bank has not stated that on which date the appellant has returned back the amount of premium. From the written version of the respondent no.3/O.P.No.1, it is apparent that respondent no.3/O.P.No.1 Bank has informed the respondent nos.1 & 2 / complainants on 12.09.2009, whereas Vijay Sharma has died on 22.07.2008. Thus, it is clear that the intimation was sent by the respondent no.3 / O.P.No.2 Bank to the respondent nos.1 & 2/complainants after period of one year of the date of death of Shri Vijay Sharma that the appellant / Insurance Company had not accepted the amount of premium.
16. If proposal form of the proposer submitted before the appellant / Insurance Company was incomplete and the appellant / Insurance Company has immediately returned the proposal form to the respondent no.3/O.P.No.1 Bank, then it's entry would be there in the document //12 // which was sent by the respondent no.3/O.P.No.1 Bank or it is mentioned in the dispatch register of the appellant / Insurance company. It would also be mentioned that in which date and by which mode the amount of premium was returned back to the respondent no.3/ O.P.No.1 Bank. The appellant / Insurance Company has not produced any documents in this regard. In these circumstances, it is presumed that respondent no.3/O.P.No.2 Bank has collected the amount of premium on behalf of the appellant / O.P.No.2 as its agent and transmitted the same to the appellant/O.P.No.2. It is not proved that the appellant/O.P.No.2 has intimated the respondent nos.1 & 2 / complainants or Vijay Sharma to produce document. It is also not proved that appellant / O.P.No.2 sent information to the respondent nos.1 & 2 / complainants or Vijay Sharma regarding returning back the amount of premium to the respondent no.3/ O.P.No.1 Bank.
17. From the perusal of the procedure, which has been mentioned in the appeal memo, it is clear that respondent no.3/O.P.No.1 Bank was collecting the amount of premium from the customers and transmitted the same to the appellant. Thus, the respondent no.3/ O.P.No.1 Bank had worked as an agent of appellant/Insurance Company, therefore, as per provisions of The Indian Contract Act, 1872 for the act of respondent no.3/O.P.No.1 Bank, the appellant / Insurance Company is also liable and the appellant / O.P.No.3 is also equivalently responsible for the deficiency in service committed by the respondent no.3/O.P.No.1 Bank.
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18. In view of aforesaid discussions, we find that learned District Forum, has passed the impugned order after due consideration of the material on record before it and there is no illegality or irregularity in the impugned order. The impugned order does not call for any interference by this Commission. Accordingly the impugned order passed by the District Forum, is hereby affirmed and appeal is liable to be and is hereby dismissed. No order as to the cost of this appeal.
(Justice R.S. Sharma) (Ms. Heena Thakkar)
President Member
/12/2013 /12/2013