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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Prem Narain, Member
SAVITA DEVI AND ANOTHER - Appellant
Vs.
I.D.B.I. FEDERAL LIFE INSURANCE COMPANY LIMITED AND ANOTHER - Respondent
Revision Petition No. 1386 of 2016
Decided On : 10-04-2019
Gurmail Singh, Adv.
The main legal point established in the judgment is that the contract of insurance is complete only when the proposal is accepted and acceptance communicated to the proposer, as highlighted by the provisions of Section 64VB of the Insurance Act, 1938.
Headnote:
Insurance - Insurance Act, 1938 - Section 64VB - Summary of Acts and Sections: Section 64VB of the Insurance Act, 1938 - The court discussed the provisions of Section 64VB of the Insurance Act, 1938, which prohibits any Insurance Company to assume risk prior to the date of receipt of premium amount. The court highlighted that the contract of insurance is complete only when the proposal is accepted and acceptance communicated to the proposer. The court also referred to the decision in Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba, (1984) 2 SCC 719, which emphasized that the mere receipt and retention of premiums until after the death of the applicant does not give rise to a contract, and acceptance must be signified by some act or acts agreed on by the parties or from which the law raises a presumption of acceptance.
Fact of the Case:
The son and daughter-in-law of the petitioners were contacted by an agent of the respondent Insurance Company for insurance. The daughter-in-law's insurance claim was not released after her death, leading to a consumer complaint.
Finding of the Court:
The court found that the contract of insurance was not complete as the proposal was pending for acceptance with the respondents, and the Insurance Company was waiting for a reply regarding the proof of income of the daughter-in-law. The court dismissed the revision petition, stating that there was no illegality, material irregularity, or jurisdictional error in the State Commission's order.
Issues: The main issue was the liability of the Insurance Company to pay the insurance claim for the daughter-in-law's policy after her death.
Ratio Decidendi: The court emphasized that the contract of insurance is complete only when the proposal is accepted and acceptance communicated to the proposer. It highlighted the provisions of Section 64VB of the Insurance Act, 1938, which prohibits any Insurance Company to assume risk prior to the date of receipt of premium amount.
Final Decision: The revision petition was dismissed by the court.
JUDGMENT/ORDER :
Prem Narain, Presiding Member - This revision petition has been filed by Savita Devi & anr. against the order dated 08.03.2016 of the State Consumer Disputes Redressal Commission, Haryana, (in short 'the State Commission') passed in First Appeal No.101 of 2015.
2. Brief facts of the case are that the son of the petitioners Sh. Deepak Kumar Gautam as well as their daughter-in-law namely Smt. Cheema Devi were contacted by an agent of the respondent Insurance Company and both of them in order to get themselves insured, agreeing to take IDBI Federal Term Insurance Protection Plan executed proposal form and other relevant papers. On 07.01.2011, the proposal form of Smt. Cheema Devi bearing No.107024497 was filed up and handed over to the concerned agent on the same day and along with the said form a cheque bearing No.009243 dated 07.01.2011 amounting to Rs.4, 360/- was also issued out of the account of Mr. Deepak Kumar Gautam i.e. husband of Cheema Devi on account of the premium to be paid for the policy. On 12.01.2011, the said cheque was enchased by the respondent. The respondent also issued an acknowledgement/receipt on 12.01.2011 itself confirming the amount of premium as well as the other relevant details qua the policy of Smt. Cheema Devi. On 27.01.2011, unfortunately, son and daughter in law of the petitioners died in an accident near Kurukshtera. On 08.03.2011, the claim qua the son of the petitioners was released by the Insurance Company but the claim of daughter- in -law namely, Smt. Cheema Devi was not released. Surprisingly, to the shock of the petitioners, they received an envelope, which contained a cheque amount to Rs.4360/- along with a written letter stating therein that "We have not received the documents requested by us to facilitate the processing of your proposal within stipulated time, but we have been constrained to refund your application, further it was mentioned that as a consequence of that we have processed a refund of initial premium paid by you".
3. Consequently, the petitioner filed a consumer complaint being No.34/12. The complaint was resisted by the opposite party by filing the written statement. The District Consumer Disputes Redressal Forum, Kaithal, (in short 'the District Forum') vide order dated 11.12.2014 dismissed the complaint.
4. The petitioners/complainants then preferred an appeal before the State Commission, however, the appeal was also dismissed vide order dated 08.03.2016 passed by the State Commission.
5. Hence the present revision.
6. The notice was issued to the respondents/opposite parties. However, inspite of service of notice, respondents did not appear, hence they were proceeded ex-parte vide order 31.05.2018 of this Commission. Accordingly, learned counsel for the petitioners was heard.
7. Learned counsel for the petitioners mentioned the facts as narrated above. The learned counsel stated that as per Section 64VB of the Insurance Act, 1938, the Insurance Company has to assume the risk from the date of receipt of premium. The cheque of the premium was encashed on 12.01.2011 and receipt was also issued by the respondent. Accordingly, the risk would be deemed to be assumed from 12.01.2011. The wife of the son of the petitioners died in the accident on 27.01.2011 during the currency of the assumption of risk by the Insurance Company. Hence, the Insurance Company is liable to pay the insurance claim.
8. I have given a thoughtful consideration to the arguments advanced by the learned counsel for the petitioners and have examined the material on record. In the present matter, both the fora below have given concurrent finding and the scope under the revision petition is quite limited as held by the Hon'ble Supreme Court in Mrs. Rubi (Chandra) Dutta vs. United India Insurance Company, (2011) 3 Scale 654, wherein the following has been observed:-
"Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under whic
