CHUKKAPALLI SURESH vs MET LIFE INDIA INSURANCE CO. LTD.

Chukkapalli Suresh, the complainant herein has filed the instant consumer complaint alleging that on being approached by representative of the opposite party he applied for Unit Link Life Insurance policy under the scheme "Met Smart Plus" vide application dated 28.3.2007. Alongwith the application the complainant paid a sum of Rs.6 lakhs as premium for insurance coverage of Rs.3 Crores. It is further the case of the complainant that before processing of the application the complainant was made to undergo the requisite medical examination on 27.3.2007. The opposite party instead of taking decision on the proposal of the complainant kept on sleeping over the matter for eleven months and thereafter sent a letter dated 10.3.2008 informing that the proposal has been rejected. It is further the case of the complainant that in the year 2010 the complainant was approached by a representative of the opposite party, namely, Ananth Singh for purchasing Met Life Unit Link Insurance Policy. Lured by the representation of the Auth. Representative Ananth Singh the complainant applied for two insurance policies, one for the insured sum of Rs.4 crores and other for insured sum of Rs.6 crores. Alongwith the application form the complainant paid the respective premiums of Rs.8 lakhs and Rs.12 lakhs. However, the opposite party vide letter dated 15.5.2010 informed that his application for issue of insurance policy could not be considered because of the adverse finding of the blood report of the complainant.

The complainant being aggrieved of the refusal of the proposal by the insurance company, approached IRDA. IRDA vide its order dated 5.1.2012 came to the conclusion that by not deciding the insurance proposal within the stipulated period the insurance company has committed deficiency in service and imposed penalty of Rs.2 lakhs under Section 102B of the Insurance Act, 1938 on the insurance company. According to the complainant, the opposite party has indulged in unfair trade practice. Hence, the complaint.

The opposite party in response to the complaint has taken a preliminary objection that the complaint itself is not maintainable because the complainant is not a consumer in view of the fact that no insurance contract came into force and that he has no locus standi to file the consumer complaint. On merits, it is alleged that the insurance proposals received from the complainant were considered and rejected within the reasonable time. It is also alleged that so far as insurance premium paid by the complainant is concerned, it has been refunded to the complainant with interest.

Both the parties have filed affidavit evidence in support of their respective claims. We have heard learned counsel for the parties and perused the record. So far as the claim of the complainant pertaining to the application seeking insurance policy is concerned, it is admitted case of the complainant that the opposite party vide its letter dated 10.3.2008 intimated him that his proposal has been rejected. That being the case, cause of action for raising of consumer dispute in respect of rejection of that claim arose on 10.3.2008. Section 24 (A) of the Consumer Protection Act, 1986 provides for two years limitation for filing of the consumer complaint from the date on which the cause of action arises. Instant complaint was filed on 11.5.2012 i.e. more than two years after expiry of two years period of limitation. Therefore, in our considered opinion so far as claim pertaining to application dated 28.3.2007 is concerned, it is barred by limitation and cannot be considered. It is pertinent to note that opposite party in its affidavit evidence has claimed that proposal form of the complainant qua the application dated 28.3.2007 was rejected expeditiously and the intimation regarding rejection of claim was sent by letter dated 2.6.2007 alongwith the cheque of Rs.6 lakhs towards the refund of the premium deposit. It is submitted that said letter was followed by another letter dated 14.6.2008 and 10.3.2008. Therefore, it cannot be said that the opposite party sat over the issue for 11 months till 10.3.2008. On perusal of the aforesaid letters which are Ext. OP-3, OP-4 & OP-5 we find merit in the contention of learned counsel for the opposite party. In this view of the matter also the plea of the complainant with regard to proposal form dated 28.3.2007 is liable to the rejected.

Coming to the other proposal forms, learned counsel for the complainant has contended that admittedly the first proposal form dated 28.3.2007 was rejected on medical ground. Therefore, the act of the opposite party to obtain two other applications for purchase of insurance policies worth Rs.4 crores and Rs.6 crores on 22.3.2010 and 30.3.2010 amounts to unfair trade practice because the opposite party was already aware that the complainant was not entitled to the insurance policies on medical ground. We do not find merit in this contention. Thousands of proposal forms are submitted with the insurance company at various offices during a month. The opposite party cannot keep track of rejection of previous insurance proposal on one ground or other. Admittedly, the first proposal form was rejected way back in June, 2007 or for that matter on 10.3.2008 on medical ground. The insurance agent is not expected to have knowledge of that fact when he obtains the proposal applications. Therefore the insurance company cannot be blamed. As a matter of fact this shows mala-fide on the part of the complainant who was aware that his earlier proposal was rejected on medical ground. Despite of having the knowledge that his earlier proposal was rejected on medical grounds, the complainant applied for insurance policies for Rs.4 crore and Rs.6 crore with a hope that if the insurance company failed to notice his medical condition, the opposite party may issue insurance policies. On this count alone, the claim of the complainant is liable to be dismissed.

Lastly, it may be noted that it is well settled that insurance policy is in the nature of contract and the contract comes into force on a proposal being submitted by the insured in the form of application. Thereafter, it is to be considered by the concerned authority i.e. underwriter and if proposal is accepted then only the insurance contract comes into force. In the instant case admittedly insurance policy was not issued. Therefore, there being no insurance contract in existence, the complainant cannot be termed as a consumer of the insurance company and he has no locus standi to fire the consumer complaint.

In our aforesaid view, we are supported by the judgment of Hon?ble Supreme Court in the matter of LIC vs. Raja Vasireddy Komallavalli 1984 AIR 1014 wherein Hon?ble Supreme Court has observed as under: "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 act or acts agreed on by the parties or from which the law raises a presumption of acceptance. See in this connection the statement of law in Corpus Juris Secundum, Vol. XLV page 986 wherein it has been stated as:-

"The mere receipt and retention of premiums until after the death of applicant does not give rise to a contract, although the circumstances may be such that approval could be inferred from retention of the premium. The mere execution of the policy is not an acceptance; an acceptance, to be complete, must be communicated to the offeror, either directly, or by some definite act, such as placing the contract in the mail. The test is not intention alone. When the application so requires, the acceptance must be evidenced by the signature of one of the company''s executive officers."

Though in certain human relationships 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 360the 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 offeror. 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, depends simply on the way in which negotiations for an insurance have progressed. See in this connection statement of law in MacGillivray& Parkington on Insurance Law, Seventh Edition page 94 paragraph 215.

Reference in this connection may be made to the Statement of law in Halsbury''s Laws of England 4th Edition in paragraph 399 at page 222."

In view of the discussion above, we do not find merit in the complaint. It is accordingly dismissed.