IMPORTANT POINT
Right of Insurance Company to insure a person or to reject proposal is there.

ORDER

This appeal has been filed by the appellant M/s. ICICI Prudentail Life Insurance Co. Ltd. against the order dated 23.12.2014 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short ‘the State Commission’) passed in Complainant No.CC/11/334.

2. Brief facts of the case are that Vijay Vasant Salvi had taken a housing loan from respondent No.2. He also filled a proposal form on 24.06.2011 for obtaining insurance under Group Insurance Policy for home loanees from the appellant. Mr. Vijay Vasant Salvi expired on 29.07.2011 and by that time the proposal was not accepted and no policy was issued by the appellant. However, the insurance claim was filed by the nominee who is the complainant/respondent No.1 in the present case. The claim was repudiated vide letter dated 11.10.2011 on the ground that the proposer did not come forward for medical tests and therefore, the proposal was not accepted and no policy issued before his death.

3. Aggrieved by the repudiation of the claim, the complainant has filed consumer complaint bearing No.CC/11/334 before the State Commission. The complaint was resisted by the appellant by filing the written statement. The grounds taken in the repudiation letter were reiterated, however, the State Commission vide its order dated 23.12.2014 allowed the complaint as under:-

“1) Complaint is partly allowed.

2) Opponent no.1 is directed to settle the claim of Rs.26,43,038/- as claim payable under Home Assurance Policy and forward these proceeds to the opponent no.2 under intimation to the complainant. Opponent no.2 is directed to adjust these claim against the unpaid balance loan amount and issue No Dues Certificate to the complainant.

3) Both the opponents are directed to comply this order within 90 days from the date of this order. Failure shall result payment of Rs.1,000/- per day to the complainant till compliance.

4) Opponent no.1 is directed to pay an amount of Rs.1,00,000/- for mental agony and distress to the complainant.

5) Opponents shall bear their own costs and pay an amount of Rs.25,000/- as costs of litigation to the complainant.

6) Certified copies of this order be furnished to the parties.”

4. Hence the present appeal.

5. Heard the learned counsel for the parties and perused the record.

6. Learned counsel for the appellant stated that the proposal form was filled on 24.06.2011. On 25.06.2011, the appellant wrote to the proposer to get the medical tests, so that the policy could be issued. However, the proposer did not take any interest and never appeared for medical examination and therefore, no policy could be issued. In the meanwhile, proposer was admitted in the hospital on 25.7.2011 and finally expired on 29.07.2011 after undergoing heart surgery which is evident from the discharge summary given by the K.E.M. Hospital dated 29.7.2011. Learned counsel argued that due to non-availability of the medical record about the proposer, the proposal was not accepted by the Insurance Company, therefore, no policy was issued before the death of the proposer. Thus, there is no concluded contract between the insurer and the proposer and therefore, no liability arises on the part of the Insurance Company in the present case. It is true that there is no mention of the medical examination to be undertaken by the proposer in the proposal form, however the master policy taken by the respondent No.2 from appellant has the provision that Insurance Company can change the norms for examining the person who is to be insured and accordingly the medical examination of the proposer was required. In support of his argument, learned counsel referred to the following judgments:-

1. Elsa Tony Phillip Vs. LIC of India and Ors., I (2009) CPJ 18 (NC). It has been held that:-

“3. Admittedly, neither acceptance of the proposal was communicated nor policy was issued to Tony Phillip by the respondent- Insurance Company. Considering the ratio of the said decision of Supreme Court, mere encashment of cheque give