The division bench of Justice K.M. Joseph and Justice Hrishikesh Roy of the Apex court in the case of Gokal Chand Thr LRs Vs Axis Bank Ltd. & Anr expounds that in a situation where a premium is accepted, the pre-condition of medical examination stands waived.
In such circumstances, a concluded contract governs the parties and when such a claim is repudiated, the same was held to be a case of deficiency of service in a concluded insurance contract.
BRIEF FACTS
The factual matrix of the case is that Gokal Chand faced the medical test as a pre-condition for securing the home loan and although, he died of cardiac arrest soon. Thereafter, when the insurance claim was made respondent no. 2 refused to settle the account. Then, the consumer complaint was filed by the appellants before the State Consumer Disputes Redressal Commission, Haryana. However, the consumer complaint was dismissed with the observation that there was no privity of contract between the insurer and the insured.
The learned counsel appearing on behalf of the appellant submitted that the death of the insured Gokal Chand was intimated on 16.8.2017 with a request to process the insurance claim, however, instead of acting on the information furnished by the appellants, a letter was served on the appellant with the information that the proposal for insurance cover for Gokal Chand is postponed by six months. The reason disclosed for the postponement was “Treadmill Test Finding.” It was also submitted that both courts have to fail to take into consideration that the insurance company retained the premium for some time after the death of the insured 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. It was also contended by the counsel that if the medical or the treadmill test is normal then there is no point to either postponing or rejecting the insurance policy when the payable premium was ascertained and debited by the bank to the insurance company.
The learned counsel appearing on behalf of the insurance company contended 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.
COURT’S OBSERVATION
The hon’ble court held that when a medical examination is compulsory before acceptance of the premium, it would be logical to say that premium acceptance was based on medical examination, and in a situation where the premium is accepted, the pre-condition of medical examination stands waived. In such circumstances, a concluded contract governs the parties and when such a claim is repudiated, the same was held to be a case of deficiency of service in a concluded insurance contract. The hon’ble apex court is of the view that this amounts to a clear case of deficiency of service and non-bonafide conduct by respondent no.2.
CASE NAME- Gokal Chand Thr LRs Vs Axis Bank Ltd. & Anr
CITATION- CIVIL APPEAL NO._ OF 2022
(Arising out of SLP (C) No. 14140 OF 2020)
CORUM- Justice K.M. Joseph and Justice Hrishikesh Roy
DATE- 15.12.22
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