SIBA PRASAD DASS vs United India Insurance Co. Ltd.

THE appellant Dr. Siba Prasad Dass has filed an appeal against the order dated 21st April, 1990 of the State Commission, Orissa whereby the appellant''s claim under a Mediclaim Policy issued by the Respondent, the United India Insurance Co. Ltd., was rejected.

ACCORDING to the findings of the State Commission no valid contract of assurance under the mediclaim policy came into existence on 9th October, 1987 in as much as the consideration for that policy viz. the cheque for the amount of premium, was dishonoured by the Bank. The State Commission has further held that the Proposal of 8th October, 1987 made by the appellant for Mediclaim Policy was not available by being treated as a fresh proposal after correcting the date of Proposal from 8th October, 1987 to 21st October, 1987 for obtaining a fresh mediclaim Policy valid from or after the 21st October, 1987.

The appellant has assailed the order of the State Commission on the ground that a valid contract of insurance under Mediclaim Policy came into existence on 9th October, 1987 and that the policy cannot be treated as having been cancelled on the premium cheque being dishonored by the Bank, and that the Mediclaim Policy stood revived from the original day of Proposal viz., 8th October, 1987 when the respondent Insurance Co., accepted the payment of the premium in cash in lieu of the dishonoured cheque.

AFTER going through the record and taking into account the arguments of the parties, this Commission fully concurs with the finding of the State Commission that "Once a proposal was accepted and a policy was issued, the proposal merges with the policy. There is no scope to correct the same and treat it on a future date without the consent of the proposer who was at Bombay...." In other words the proposal on the basis of which a policy is issued which ultimately turns out to be invalid cannot be used again to issue a fresh policy. In fact, on going through Annexure II collectively copy of the Proposal for Mediclaim Policy filed by the appellant with his appeal under consideration, we find that the proposal is (or has been altered to) dated 21st October, 1987 and was to be effective from for a period of one year 21st October, 1987 to 20th October, 1988. In the proforma "Insured Person Details" about the existence or presence of any ailment, sickness or injury requiring medical treatment in the immediate future and details of the medical treatment and surgical operations undergone etc., the proposal submitted by the appellant here had stated "No" i.e., he had no knowledge of the existence or presence of any ailment etc., nor he had undergone any medical treatment or surgical operation. As seen from the appeal, on the 15th October, 1987 i.e. within a period of 7 days of his taking out the mediclaim policy (which did not become effective because the cheque for the premium was dishonoured), the appellant suffered from a heart attack necessitating triple coronary by-pass surgery in November, 1987. It is clear that the appellant had suffered a heart attack before 21st October, 1987 on which date he made the proposal for the second time for issue of mediclaim insurance policy. In other words, on the date of this proposal on 21st October, 1987, the facts regarding the state of his health etc., furnished in his proposal of 8th October, 1987 had undergone radical change, but were not disclosed to the insurer. The appellant, however, claims that on 21st October, 1987 the date of the second Proposal, the facts regarding the state of his health disclosed in the first Proposal of 8th October, 1987 be deemed to be good and sufficient. In other words, he maintains that while changing the date of Proposal from 8th October, 1987 to 21st October, 1987 he was not under any obligation to furnish the latest facts regarding the state of his health to the insurer, the proposer suffering a heart attack after the 8th October, 1987 and before the 21st October, 1987. According to him the original Mediclaim Policy of 9th October, 1987, which became ineffective due to the dishonoring the cheque for the premium, itself got revived on his paying the premium in cash on 21st October, 1987.

ON the face of it, we cannot accept the contention of the appellant. Evidently these facts appear to have weighed with the State Commission in coming to its findings against the appellant that there was no valid contract of insurance under the Mediclaim Policy. Thus the dispute raised by the appellant in this case is really regarding the existence or nonexistence of insurance liability and not of deficiency in service rendered or to be rendered by the insurer. We hold that the appellant has failed to establish that there was any deficiency in service on the part of the respondent Insurance Company and therefore no claim lies under the Consumer Protection Act. We, therefore, confirm the findings of the State Commission and dismiss the appeal. The appellant will pay a sum of Rs. 1,000/- to the respondent for having vexatiously and speculatively invoked the Consumer Protection Act both at the original as well as at the appellant level. Appeal dismissed.