AI Structured Summary
Not yet generated for this judgment
Judgment
This revision petition has been filed by Savita Devi & anr. against the order dated 08.03.2016 of the State Consumer Disputes Redressal Commission, Haryana, (in short 'the State Commission') passed in First Appeal No.101 of 2015.
Brief facts of the case are that the son of the petitioners Sh. Deepak Kumar Gautam as well as their daughter-in-law namely Smt. Cheema Devi were contacted by an agent of the respondent Insurance Company and both of them in order to get themselves insured, agreeing to take IDBI Federal Term Insurance Protection Plan executed proposal form and other relevant papers. On 07.01.2011, the proposal form of Smt. Cheema Devi bearing No.107024497 was filed up and handed over to the concerned agent on the same day and along with the said form a cheque bearing No.009243 dated 07.01.2011 amounting to Rs.4,360/- was also issued out of the account of Mr. Deepak Kumar Gautam i.e. husband of Cheema Devi on account of the premium to be paid for the policy. On 12.01.2011, the said cheque was enchased by the respondent. The respondent also issued an acknowledgement/receipt on 12.01.2011 itself confirming the amount of premium as well as the other relevant details qua the policy of Smt. Cheema Devi. On 27.01.2011, unfortunately, son and daughter in law of the petitioners died in an accident near Kurukshtera. On 08.03.2011, the claim qua the son of the petitioners was released by the Insurance Company but the claim of daughter- in -law namely, Smt. Cheema Devi was not released. Surprisingly, to the shock of the petitioners, they received an envelope, which contained a cheque amount to Rs.4360/- along with a written letter stating therein that "We have not received the documents requested by us to facilitate the processing of your proposal within stipulated time, but we have been constrained to refund your application, further it was mentioned that as a consequence of that we have processed a refund of initial premium paid by you".
Consequently, the petitioner filed a consumer complaint being No.34/12. The complaint was resisted by the opposite party by filing the written statement. The District Consumer Disputes Redressal Forum, Kaithal, (in short 'the District Forum') vide order dated 11.12.2014 dismissed the complaint.
The petitioners/complainants then preferred an appeal before the State Commission, however, the appeal was also dismissed vide order dated 08.03.2016 passed by the State Commission.
Hence the present revision.
The notice was issued to the respondents/opposite parties. However, inspite of service of notice, respondents did not appear, hence they were proceeded ex-parte vide order 31.05.2018 of this Commission. Accordingly, learned counsel for the petitioners was heard.
Learned counsel for the petitioners mentioned the facts as narrated above. The learned counsel stated that as per Section 64VB of the Insurance Act, 1938, the Insurance Company has to assume the risk from the date of receipt of premium. The cheque of the premium was encashed on 12.01.2011 and receipt was also issued by the respondent. Accordingly, the risk would be deemed to be assumed from 12.01.2011. The wife of the son of the petitioners died in the accident on 27.01.2011 during the currency of the assumption of risk by the Insurance Company. Hence, the Insurance Company is liable to pay the insurance claim.
I have given a thoughtful consideration to the arguments advanced by the learned counsel for the petitioners and have examined the material on record. In the present matter, both the fora below have given concurrent finding and the scope under the revision petition is quite limited as held by the Hon'ble Supreme Court in Mrs. Rubi (Chandra) Dutta vs. United India Insurance Company, 2011 (3) Scale 654, wherein the following has been observed:-
"Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view that what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken, by setting aside the concurrent finding of two fora."
Clearly, the question of law can be raised in the revision petition against the concurrent finding of fact by the fora below. The question of law in the revision petition has been raised in respect of Section 64VB of the Insurance Act, 1938, which reads as under:-
"64 VB. 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) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money-order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent.
(4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collections excluding bank and postal holidays.
(5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories in insurance policies.
[(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.]"
From the bare reading of the above Section, it becomes clear that this Section prohibits any Insurance Company to assume risk prior to the date of receipt of premium amount. The converse is not necessarily true. This Section does not imply that an Insurance Company is bound to assume risk from the date of receipt of premium. In fact, policy is a contract and a contract is complete when the proposal is accepted and acceptance communicated to the proposer. This matter has been examined by the Hon'ble Supreme Court in detail in Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba, (1984) 2 SCC, 719, by observing the following:
"In fact, the issue involved in this case is no more res-integra in view of the binding decision of the Hon'ble Supreme Court in LIC of India vs. Raja Vasireddy Komalaralli Kamle & Ors., AIR 1984 SC 1014. In the aforesaid case, the deceased filled a proposal for insurance on 27.12.1960. This was followed by a medical examination on the same day. He issued two cheques in favour of the Corporation. The first cheque towards premium of Rs. 300/- was encashed by the Corporation. The second cheque was initially dishonoured, but later encashed on 11.01.1961. The deceased died on 12.01.1961. The widow of the deceased thereupon demanded the payment of Rs.15,000/- from the Corporation. The claim having been denied a Civil Suit was filed by her, against the Corporation. The Trial Court held that there was no concluded contract between the parties. Being aggrieved, the plaintiff approached the High Court, which ruled in her favour. The Corporation thereupon took the matter to the Hon'ble Supreme Court. Allowing the appeal filed by the Corporation, the Hon'ble Apex Court, inter-alia, held as under:-
The mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy documents 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. XLIV 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 offerer, 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 the person to whom an offer is made says or does something to signify his acceptance.
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."
From the above, it is clear that contract of insurance was not complete in the present case as well, because though the proposal was sent along with premium amount, the same was pending for acceptance with the respondents. In fact, the respondents have raised certain query and the letter was sent to the son of the petitioners on 17.01.2011. It is mentioned in the written statement of the respondents filed before the trial forum that on receipt of the proposal form for insurance of Mrs. Cheema Devi, it was found that her income was mentioned Rs.1,00,000/- p.a. which was not sufficient to sustain the insurance of Rs.19,00,000/- and accordingly the Insurance Company sent letter dated 17.01.2011 to the son of the complainants to submit the proof of income of Mrs. Cheema Devi. Thus, the Insurance Company was waiting for reply in this regard. It is the case of the complainants that this letter was written after the death of the complainant's son and daughter-in-law and even the receipt has been denied.
Based on the above discussion, I do not find any illegality, material irregularity or jurisdictional error in the order dated 08.03.2016 of the State Commission which calls for any interference from this Commission. Consequently, the revision petition No.1386 of 2016 is dismissed.