IMPORTANT POINT
When the pre-condition of medical examination of the insured before accepting the premium is not adhered to, it may be inferred to have been waived.

JUDGMENT :

S. ABDUL NAZEER, J.

1. Leave granted.

2. In this appeal, the appellant has questioned the legality and correctness of the order dated 03.02.2017 in First Appeal No.560/2012, passed by the National Consumer Disputes Redressal Commission, New Delhi (for short ‘the National Commission’) whereby the National Commission has allowed the appeal filed by the first respondent herein and rejected the complaint of the appellant.

3. Brief facts necessary for disposal of this appeal are that the appellant along with his wife, Smt. D. Suguna and son Mr. D. Venugopal obtained housing loan of Rs.30,00,000/-(Rupees thirty lacs) in the month of September, 2008 from the respondent Nos. 2 and 3 for construction of a house in Hyderabad. On 29.09.2008, a sum of Rs.78,150/-(Rupees seventy eight thousand one hundred fifty) was debited from their loan account towards SBI Life Insurance Cover under Group Insurance Scheme for home loan borrowers, through master policy holder i.e. State Bank of Hyderabad, covering the Life of Mr. D. Venugopal, who was one of the joint loanees. The proposal form dated 29.09.2008 was accompanied by good health declaration by the insured. D. Venugopal expired on 17.12.2009 due to a massive heart attack. Consequently, the said life insurance obtained in his name came into force, obligating the insurer, the first respondent herein, to pay the outstanding amount in their loan account. The appellant approached the insurer and the bank informing them about the demise of D. Venugopal and requested them to settle the insurance claim and to discharge the outstanding loan amount in their house loan account. Since the insurer did not accede to his request, he filed a consumer complaint before the State Commission.

4. The insurer contested the complaint mainly on the ground that the proposal for the policy was not accepted as the insured did not present himself for medical examination in spite of repeated requests made by the insurer. It was asserted that the amount of premium of Rs.78,150/-was refunded by cheque dated 10.12.2008 to the State Bank of Hyderabad. Thus, the insurer pleaded no deficiency in service and denied its liability in connection with the payment to the insured.

5. The State Commission allowed the complaint by its order dated 16.07.2012. However, the National Commission, by majority, allowed the appeal and dismissed the complaint filed by the appellant.

6. Learned counsel for the appellant submits that the insurance policy was taken in the name of D. Venugopal in terms of the Insurance Scheme. The proposal was sent along with the premium of Rs.78,150/-on 29.9.2008. Admittedly, the insurance company has received the premium on 13.10.2008. D. Venugopal died on 17.12.2009. This was intimated to the State Bank of Hyderabad on 3.4.2010. Thereafter, several letters were sent to the bank for discharge of the loan amount in terms of the insurance policy. The deceased D. Venugopal was never called for medical examination. It was only on 18.1.2011 the insurance company had called for medical examination for coverage of life insurance of the deceased and, therefore, the policy could not be completed pending examination and that the proposal was returned. It is clear that there was presumption of acceptance of the proposal in favour of the deceased as the proposal form along with good health declaration form was accepted by the bank and sent to the insurance company and the premium was debited by the bank from his loan account. Neither the appellant nor the deceased were intimated by the respondents to appear for medical examination. They did not receive any intimation from the respondents that the policy has not been issued even though he continued to remain alive for more than 1 year 3 months. The premium was refunded only after the appellant insisted for clearance of dues vide cheque dated 23.2.2011, nearly 2½ years after the death of the insured. In this view of the matter, the majority view of the National Commission