The key legal principle established was that the insurance cover could not commence without the acceptance of the application form by the insurance company, and the insurance company was liable to refund the entire amount of Rs. 90,000/- received under two cheques from the deceased father of the appellant.

ORDER :

1. Leave granted.

2. This appeal takes exception to the judgment and order dated 26.10.2017 in Revision Petition No. 546 of 2017, whereby the National Consumer Disputes Redressal Commission, New Delhi (‘the National Commission’) has disapproved the orders passed by the District Consumer Disputes Redressal Forum, Sikar (‘the District Forum’) and the State Consumer Disputes Redressal Commission Rajasthan, Jaipur (‘the State Commission’) in relation to the insurance claim of the appellant on the death of his father. While rejecting the complaint case filed by the appellant, the National Commission has, however, directed the respondent insurance company to refund the premium amount of Rs. 45,000/- together with interest @9% p.a.

3. A short conspectus of relevant facts leading to the present appeal is that the appellant filed the complaint case leading to this appeal essentially with submissions that his late father had taken an insurance policy of Rs. 10,00,000/- after completing all the requisite formalities. The appellant submitted that his father made payment of an amount of Rs. 90,000/- through cheque dated 05.04.2012; and the respondent insurance company issued policy No. 005515236 covering the event of untimely death. The appellant further submitted that he made an insurance claim under the said policy when his father met with his untimely death on 25.04.2012 due to a vehicular accident but, the respondent company failed to honour the claim.

4. The reasons for rejection of insurance claim made by the appellant were stated by the respondent insurance company in its letter dated 25.03.2013 in the following words:-

“This is with reference to your concern registered with us for the Birla Sun Life Insurance Plan Policy No. 005515236.

We wish to inform you that we had received the Application No. A46115297 for Policy Number 005515236, however the same rejected by the underwriting in the initial stage due to medical reasons and the initial premium of Rs.45,000/-was processed through cheque number 482353 and the same was dispatched to your registered address on April 25, 2012; but the same was received undelivered to Head Office….”

5. The District Forum, in its order dated 14.09.2016, accepted the claim of the appellant while rejecting the submissions of the insurance company that the policy was rejected by underwriters for medical reasons and the premium amount was returned; and held that when the policy was issued after completion of all the formalities and the cheque towards amount of premium was encashed, rejection of policy on medical reasons was not proper in law. The District Forum noticed that in the proposal form, the insurance amount was Rs. 4,10,175/- and hence, allowed this amount to the appellant together with interest @9% p.a. from the date of submission of complaint, in case payment was not made within one month from the date of the order. The complainant was further awarded general damages and expenses to the tune of Rs. 10,000/-.

6. Being aggrieved by the order so passed by the District Forum, the respondent insurance company approached the State Commission in appeal. The State Commission, by its order dated 08.11.2016, dismissed the appeal and endorsed the decision of the District Forum while observing, inter alia, as under: -

“The appellant has mainly stated that on 25-04-2012 the premium of complainant was returned which was delivered to him. But before Commission letter dated 23-05-2013 was submitted in which it is stated that the cheque which was returned on 25-04-2012, was not delivered to complainant and was returned in Head Office. In this manner the appellant has wrongly stated the fact before District Forum and on this basis the appeal deserves to be dismissed. Beside this no letter of returning the cheque dated 25-04-2012 was submitted before the lower District Forum nor before this Commission.

On the contrary the complainant has clearly stated that he has submitted proposal form and was issued with Po