Life Insurance Corporation of India vs YADRAM SINHA

THIS appeal under Section 15 of the Consumer Protection Act, 1986 is directed against the order of the District Consumer Disputes Redressal Forum, Dhamtari (hereinafter called District Forum for short) in Complaint Case No. 10/2003, awarding a sum of Rs. 80,000/- in favour of the complainant/respondent.

UNDISPUTED relevant facts stated in brief are that the complainant Yadram Sinha is the father of the deceased Ramprakash Sinha. It is also not in dispute that the deceased Ramprakash Sinha in order to obtain insurance policy on his life submitted proposal form dated 25.2.2000 and deposited with the appellants a sum of Rs. 202/- as the first quarterly premium. The appellants had accepted the premium as well as the proposal form. It is also not in dispute that the deceased Ramprakash Sinha unfortunately met with an accident and died on 22.6.2000. The complainant/respondent is the nominee under the said policy, and is entitled to receive the amount payable under the same. The complainant, the father of the deceased Ramprakash Sinha, averred that the proposal form was filled by Ramprakah Sinha for obtaining ''Bima Kiran'' life insurance policy under table III and the policy was to cover the risk for a period of 30 years. Quarterly premium of Rs. 202/- was payable for the said policy. The deceased however died on account of motor accident on 22.6.2000. Therefore, the complainant lodged claim for payment of the assured sum under the policy. However, the claim was repudiated by the appellants/insurer by their letter dated 9.10.2001. The complainant/respondent again approached the appellant No. 3 for reconsideration of the matter. However, the respondent No. 3 also did not accept the prayer for payment of the amount under the policy, on the ground that all the formalities for obtaining policy were not completed.

The opposite parties/appellants resisted the complaint. According to them, the deceased did not complete the formalities for obtaining insurance policy and his proposal form was not accompanied with necessary documents as per rules and that Form No. 680 was subsequently filled up by the complainant on 24.6.2000, while the death of deceased had already taken place on 22.6.2000. The above fact of death was, however, suppressed by the complainant. It was also averred that there was interpolation in the proposal form, and initially it was mentioned in the said proposal form that policy under table III - 28 was being sought, while the same was subsequently corrected showing it to be under table III-30. On account of above change by the complainant, the policy document was issued which covered the risk from 28.6.2000 i.e. after the death of the deceased Ramprakash. It was, therefore, averred that there was no contract of insurance between the deceased and the appellants, hence the complainant was not entitled to get the claim under the said policy.

THE learned District Forum did not accept the contentions of the insurer raised by the appellant/insurer as above. It was held that there was deficiency in service on the part of the appellants in not rejecting the proposal form and in not paying the amount under the policy. The learned Counsel for the parties reiterated their stand in the District Forum. The learned Counsel for the appellants submitted that the deceased had not completed all the formalities for obtaining the insurance cover and as there was interpolation in the proposal form, hence the appellants were justified in repudiating the claim of the complainant. It was, therefore, contended that the learned District Forum erred in awarding the assured amount in favour of the complainant/respondent.

AS noticed above it is not in dispute that the deceased Ramprakash-the son of the complainant/respondent-had filled up the proposal form dated 25.2.2000 for obtaining life insurance policy. The proposal form is on the record of the District Forum which indicates that he filled the proposal form to obtain the policy under table-III for a period of 30 years. It is also not in dispute that Rs. 202/- was paid towards the first quarterly premium which was accepted by the appellants. Undisputably the deceased died on 22.6.2000 on account of motor accident. The averments and contentions of the appellants are that the policy document was not issued to the deceased as he had not completed all the formalities. It, however, appears from the written version of the opposite parties/appellants that it has not been specified therein as to what were the formalities which were not completed by the deceased. Moreover, there is no material on record to indicate that the appellants intimated the deceased till his death about the alleged shortcoming in the proposal form and asked him to complete the formalities. It is clear that the deceased was alive for about 4 months after filling of the proposal form and after paying the Ist premium which was duly accepted by the appellants, as noticed above. The appellants were under an obligation to intimate the deceased regarding non-compliance of the formalities if any, while submitting his proposal form for obtaining the life insurance policy. However, they did not do so, for a long period of 4 months, till his death. It may also be noticed that the appellants have averred that formalities were not completed and documents were not submitted by the deceased. However, as noticed above they have not specified as to what other formalities were to be completed and what documents were required to be submitted by the deceased along with his proposal form. Therefore vague assertion of the appellants as above would not render any assistance to the appellants'' defence that the formalities were not completed by the deceased. As mentioned above, even if such formalities were not completed there is no reason as to why the appellants should have remained silent for a period of 4 months without taking any action. Thus, the appellants have definitely committed deficiency in service, as has been rightly held by the learned District Forum.

IT may also be noticed that the appellants/insurers accepted the premium amount without any objection after the proposal form was submitted by the deceased. In the circumstances, the repudiation of the complainant''s claim was not justified. The contention of the learned Counsel for the appellants as above cannot be accepted, in the foregoing circumstances.

IT was also submitted that there was interpolation in the proposal form and initially policy to be obtained as proposed by the deceased was under Table III-28, which was interpolated and it was made Table III-30. However, no specific allegation has been made as to who was responsible for the above interpolation. IT is clear that after the proposal form was filled up and submitted and the premium paid by the deceased, the said proposal form must have been in the custody of the appellant/insurer. In the circumstances, the complainant could not have normally made interpolation in the said document. Therefore, in the absence of any material to hold that the complainant interpolated the proposal form, the averments and contentions as above cannot be accepted. In the foregoing circumstances it is clear that the appellants/insurers had accepted the proposal form and retained the premium for about 4 months without raising any objection regarding non-completion of formalities by the deceased. Hence, the contract of insurance in the circumstances would be deemed to have been completed, since the proposal form and premium was accepted by the appellants/insurers. The complainant/nominee was, therefore, entitled to get the claim under the policy. The learned District Forum has rightly concluded so. The finding as above is affirmed.

There is no substance in this appeal which is accordingly dismissed. The appellant shall bear its own cost and shall pay that of the respondent which is quantified at Rs. 500/- (Rs. five hundred only). Appeal dismissed.