The court established that the OP's lack of diligence and carelessness in handling the insurance policy constituted a deficiency in service, leading to a favorable decision for the complainant.

ORDER

Mr. J.M. Malik, (P.M) - M/s. Whirlpool of India Ltd., the complainant, registered under the Companies Act, 1956, obtained Insurance Policy from Max New York Insurance Co. Ltd., the OP. The proposal form was filed as Annexure C-2. Under Clause 4 of the proposal form, relating to coverage structure, Base Plan B, Formula Linked it was indicated as "Three times the annual cost to the company (CTC) of each employee". The OP submitted its quotation dated 10.04.2003, copy of which has been placed on record as Annexure C-3. The said condition was for a total sum of Rs. 114,21,84,157/- which amount represents "three times of the actual cost to the company of each of the insured employees". The OP sent a letter dated 22.04.2003, placed on record as Annexure C-4, runs as follows :-

"Subject to the receipt of final census data and processing of the same, we confirm coverage to your employees up to the Free Cover Limit (FCL) of Rs. 35 lakhs or actual coverage amount, whichever is lower, under policy mentioned above from 22.04.2003 and in accordance with our Quotation No. 03DEL0224-2 and your proposal form No. 100188 dated 22.04.2003".

2. The complainants paid a sum of Rs. 21,88,425/- towards insurance premiums. Copy of the premium deposit receipt dated 25.04.2003 has been placed on record as Annexure C-5. The insurance policy with insurance premium paid for full CTC sum insured of Rs. 114,21,84,157/- commenced from 22.04.2003. The Rules for this Group Term Insurance Scheme, framed by the OP were signed by the complainants. Copy of the Rules has been placed on record as Annexure C-6 (Colly). According to Clause 5, the evidence of insurability was to be provided by the complainants, as and when required by the OP, in writing, but before the insurance or increase in sum insured (where applicable) is effected under the policy. However, OP did not require any such evidence, in writing before the insurance commenced, on 22.04.2003. According to Clause 5, if a satisfactory evidence was not furnished to the OP, the insurance or increase in insurance sum was not to be effected in respect of such employees and this was to be promptly informed by the OP to the complainants, in writing. The OP collected insurance premium on full sum insured based on three times the CTC for each of the employees insured. The OP exhibited a total lack of diligence and started handling the matter carelessly and with indifference inasmuch as they did not attempt to collect the required information in respect of the insured employees promptly. The OP, through their letter dated 29.05.2003 required one such employee, Sh. V.K. Chandrasekaran, to undergo the medical examination on 09.06.2003, and not earlier, through their own affiliated medical centre, namely, Max Healthcare. Copy of letter dated 29.05.2003 has been placed on record as Annexure C-7. Sh. V.K. Chandrasekaran appeared for medical test on 09.06.2003, including two tests, namely, PPBS and Hba1c. These medical examination reports were supposed to be submitted by the Max Healthcare to the OP for their perusal and for doing the needful. Those reports were not handed over to the OP.

3. Vide another letter dated 21.08.2003, Sh. V.K. Chandrasekaran was asked to undergo two more tests, namely PPBS and Hba 1 c which had already been undergone by the complainant on 09.06.2003. Copy of the letter dated 21.08.2003 has been placed on record as Annexure C-8.

4. Unfortunately, on 06.09.2003, Sh. K.V. Chandrasekaran, the insured passed away. OP was informed of the same. However, it is submitted that OP issued the insurance policy on 07.10.2003, i.e., much later than the date of death of the insured. The insurance policy contains the sum insured, i.e. Rs. 35.00 lakhs only against the name of the said employee. It is contended that the OP ought to have got the medical tests conducted on or before 22.04.2003 when the policy had commenced with three times of annual CTC sum insured. Again, the OP should have promptly considered