Gokal Chand had faced a medical test on 30.7.2017 as a pre-condition for securing the home loan and although, he died of cardiac arrest soon thereafter on 8.8.2017, the respondent No 2 refused to settle the loan account when the insurance claim was made. Consequently, a Consumer Complaint was filed by the appellants before the State Consumer Disputes Redressal Commission, Haryana (for short “State Commission”).
Also Read: https://newslaw.in/case-type/civil/courts-analysis-on-bona-fide-requirement-in-eviction-petitions/
According to the appellants, both Forums failed to consider the fact that the insurance company retained the insurance premium for some time after the death of the insured on 8.8.2017 and returned the same only after the appellant, on 16.8.2017, visited the bank for giving information about the death of the insured. This was immediately informed by telephone by the bank to the insurance company and to the insurance company in the late evening of 16.8.2017 (date of death intimation), posted an ante-dated letter (bearing the date as 3.8.2017 on it) which was received by the appellant on 17.8.2017. Suman Bagga, learned counsel on the other hand submits that the proposal was postponed by six months, and eventually the policy was declined and the insurance company refunded the premium sum to the bank with intimation to the appellant and therefore no concluded life insurance policy existed in this case.
The applicant’s declaration in Loan Letter (Annexure P-1) authorizing bank to disburse premium to the insurance company became effective only when all the formalities as required by insurance company were satisfied. The satisfaction of the insurance company’s necessary requirements was a condition precedent, for disbursal of the premium, as is clear from the following: – “Opting for the loan amount along with life/property insurance in the loan downsize letter shall be considered as the written intent of the customer to avail the insurance. The above would suggest that the insurance company hurriedly dispatched the ante dated letter, purporting to postpone the proposal, only after getting information about the death of Gokal Chand on 16.8.2017.
Thereafter only on 17.8.2017, the premium amount was unilaterally returned by the respondent
No 2 to the loan account, followed by the communication dated 31.8.2017 purporting to decline the insurance policy for the housing loan, sanctioned by the bank. Moreover, the decision by the insurance company declining the policy by unilaterally refunding the insurance premium in the given circumstances, would suggest that the respondent No 2 were deficient in rendering services to the appellant.
Also Read: https://newslaw.in/case-type/criminal/analysis-of-evidence-and-courts-ruling/
Srinivas vs SBI Life Insurance Company Limited and Others, and it was clarified that while there is no quarrel with the proposition laid in Raja Vasireddy Komalavalli Kamba ( supra ), the former only laid down a flexible formula for the court to see as to whether there was a clear indication of acceptance of insurance.
The latter was a case where a housing loan was obtained by the complainant, his wife, and his son as joint borrowers and thereafter, Rs.
It is clear from the above that the proposer was willing to join the life insurance coverage from the respondent Insurance Company subject to his undertaking medical examination and for his willingness he authorised the bank to debit his account for payment of the premium. Therefore, by the very fact that they accepted the premium waived the condition precedent of medical examination. From the aforesaid circumstances we can easily conclude that the policy was accepted by the insurer.
Also Read: https://newslaw.in/case-type/civil/validity-of-tamil-nadu-land-acquisition-acts/
When the loan amount was sanctioned, the premium amount was kept aside and was credited to the insurance Company and the insured was subjected to a medical test which showed normal health status. Moreover, when the death information was conveyed to the respondents, most surprisingly, that was the trigger that led to the insurance company to issue a back dated letter deferring the insurance process, which was followed by refund of the premium a few days later, and then the repudiation after that. The respondent No.2 is accordingly directed to process the complainant’s insurance claim and remit the payable sum.
Case Title: GOKAL CHAND (DECEASED) THR. LRS Vs. AXIS BANK LTD. (2022 INSC 1287)
Case Number: C.A. No.-009237-009237 / 2022
