Madras High Court
Rajeswari vs The Branch Manager on 28 December, 2023
Author: S.Srimathy
Bench: S.Srimathy
W.P.(MD).No.20049 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 20.12.2023
PRONOUNCED ON : 28.12.2023
CORAM
THE HONOURABLE MRS.JUSTICE S.SRIMATHY
W.P.(MD).No.20049 of 2021 and
W.M.P.(MD)No.16754 of 2021
Rajeswari ... Petitioner
Vs.
1.The Branch Manager,
Shri Ram Life Insurance Company
Limited, Muthupettai,
Pattukkottai Taluk,
Thanjavur District.
2.The General Manager,
Shri Ram Life Insurance Company
Limited, No.42, Thalayari Street,
Pattukkottai Taluk,
Thanjavur District.
3.The General Manager,
Shri Ram Life Insurance Company
Limited, No.23, Pudukkottai Road,
Sethurama Pillai Colony,
Kallukuli, Trichy.
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W.P.(MD).No.20049 of 2021
4.The Manager,
The Officer in Charge Group Insurance Department,
Shri Ram Life Insurance Company Limited,
Plot no.31 and 32,
Ramky Selenium Financial District,
Gachi Bowli, Hyderabad.
5.Shri Ram General Insurance,
2nd Floor, Mookambika Complex,
No.4, Lady Desika Road,
Mylapore, Chennai-600 004.
6.Insurance Regularity and Department
Authority of India,
3rd Floor, Paris Ram Bhavan,
Basheer Bagh, Hyderabad-500 004.
7.Insurance Ombudsman State of Tamilnadu
and Puducherry,
Chennai-600 018.
8.The Manager of Shriram City Finance Limited,
Muthupettai Branch,
Thiruthuraipoondi Taluk,
Tiruvarur District. ... Respondents
(R8 is suo motu impleaded vide Court order,
dated 24.07.2023, in W.P.(MD)No.20049 of 2021)
PRAYER : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Mandamus, to direct the respondents Nos.
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W.P.(MD).No.20049 of 2021
1, 2, 4 to pay the petitioner the amounts payable under the Life Insurance
Policy of her husband Late.Azhagiri in certificate of Insurance No.
004800031644275 and amount payable under General Insurance Policy taken
by the petitioner's husband on his coconut business and prawn farm business
concerns.
For Petitioner : Mr.N.Balakrishnan
For R1 to 4 : Mr.A.Sivasubramanian
For R5 : Mr.N.Shyllappa Kalyan
For R6 : Mr.S.Anwar Sameem
For R7 : Mr.B.Prasanna Vinoth
For R8 : Mr.J.Barathan
*****
ORDER
This writ petition is filed for issuance of a writ of Mandamus, to
direct the respondents Nos.1, 2, 4 to pay the petitioner the amounts payable
under the Life Insurance Policy of her husband Late.Azhagiri in certificate of
Insurance No.004800031644275 and amount payable under General Insurance
Policy taken by the petitioner's husband on his coconut business and prawn
farm business concerns.
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2. The brief facts are that the petitioner's husband Late.Azhagiri
applied to the 1st respondent for loan amount of Rs.20 Lakhs/- for his coconut
wholesale and prawn farm/culture business and the same was sanctioned after
executing registered simple mortgage deed dated 25.09.2018 and the loan
agreement No.MTPE2TF1809290004, dated 29.09.2018. The said amount was
disbursed thorough cheque dated 29.09.2018 to the tune of Rs.19,13,300/- after
deducting the balance amount towards the following charges.
1.Rs.6000 towards SGIC,
2.Rs.14,000 towards SLIC,
3.Rs.47,200 towards processing fee and GST at the rate 2.35%,
4.Rs.19,200 towards upfront deduction,
5.Rs.300 towards stamp charges.
As per the direction of the 1st respondent the petitioner's husband has taken Life
Insurance policy for the assured amount of Rs.20 Lakhs/- with the second
respondent which is a sister concern and single premium of Rs.14,000/- was
deducted by the first respondent on the date of sanctioning of loan. Subsequent
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to the said insurance, the petitioner's husband died due to heart attack on
27.12.2018 which was informed to the first respondent who had visited the
petitioner's house and directed the petitioner to apply for death certificate and
legal heir certificate so that the petitioner might claim death benefit from the
first respondent. As per the directions, the petitioner had applied in the month
of April 2019 then a Surveyor namely Christopher enquired the death and
directed to produce death certificate, legal heir certificate, Aadhar card,
passport and assured to disburse the benefit. Again, the respondents deputed
two persons namely Karunanidhi from Kanchipuram and Ramakrishnan from
Vijayawada and enquired about the petitioner's husband's death.
3. The petitioner submitted that the proposal form and policy bond
of the petitioner's deceased husband were not furnished for ten months from the
date of death of the petitioner's husband but received a letter dated 30.07.2019
from Group Insurance Department, Hyderabad, where it was found that the
claim forms A, B and C were attached to the said letter. The petitioner after
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filling the forms sent the forms on 01.08.2019 through registered post
requesting to send the original policy bond and the proposal form. In
consequence to the same, the officer in charge has sent a letter dated
20.08.2019 and directed to send the filled forms A, B and C without furnishing
the original policy form and policy bond. Then the officer in charge has sent an
email stating that sum assured amount is Rs.11,35,718/- for the entire cover and
therefore, this will be the death benefit. The petitioner replied vide email on
30.08.2019 requesting to send the original form and original policy bond,
thereafter, the petitioner through message dated 30.08.2019 claimed Rs.20
Lakhs/- as a sum assured and the petitioner received the email message dated
31.08.2019 to contact the phone number. However, without sending the
proposal form and policy bond the respondents had directed to contact only the
office of the insurance company. Again, the petitioner sent an email message
dated 12.09.2019 claiming original proposal form and original policy bond.
However, the respondents have replied that the same cannot be shared to the
petitioner and but, directed the petitioner to send the passport of the petitioner's
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husband and the claim form B through email dated 12.09.2019, the officer in
charge has stated that he has sent a certificate of insurance instead of sending
the original proposal form and the policy bond. The officer in charge informed
that the petitioner may approach any forum for the grievance. Again on
30.09.2019, the petitioner was directed to send the filled-up claim forms A, B
and C along with other documents. On 04.10.2019, the petitioner had received
a reply notice through an Advocate of the first respondent stating the petitioner
had received SLIC bond and they are ready to give the death benefits and he
has also stated that the petitioner has refused to sign the claim forms, which is
ill-conceived. The petitioner has not received any such policy bond so far. The
officer in charge has issued the certificate of insurance only on 26.10.2019 and
as per the life insurance policy the petitioner is entitled to Rs.20 lakhs/- as a
sum assured. The certificate of insurance claimed by the officer-in-charge
appears to be a created one in order to wriggle out the responsibilities to pay
the assured amount. The fourth respondent studiously avoided direct reply and
sent email message asking to contact a person by giving land line number.
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Since the respondents had not issued the benefit and the bond, the petitioner
preferred a complaint to the sixth respondent wherein the sixth respondent has
passed an order dated 05.03.2020 wherein the petitioner was directed to move a
fresh application to concerned forum to ventilate the grievance. Hence, the
petitioner submitted a claim application to the second respondent on
24.12.2020 through a registered post but the first respondent did not take any
steps. But subsequently it was Covid-19 period, hence, the papers were not
moved. Hence, the petitioner issued a legal notice dated 23.12.2020 for which
the third respondent replied on 05.02.2021 wherein it is stated that the
petitioner's deceased husband has taken General Insurance Policy and Life
Insurance Policy wherein it is claimed that Shriram Life Insurance Company
Limited and Shriram City Union Finance Limited are two separate corporate
entities. The contention of the petitioner is that the same is legally not correct
but on the contrary the Shriram Insurance Companies are connected with one
another. In order to wriggle out the responsibilities of the insurance companies,
the respondents claim that they are different entities.
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4. The petitioner submitted that the first respondent has given a
certificate of insurance in a Member Policy No.MN181024031644275 as per
the said certificate, the period covers from 29.09.2018 to 28.09.2022 and the
petitioner's husband died on 27.12.2018, subsequent to the commencement
date. The petitioner submitted at least the petitioner is entitled to the cover
amount of Rs.11,35,718/- even though the petitioner may not be entitled to Rs.
20 Lakhs/- which is the assured amount. Apart from the above life insurance
policy, the petitioner's husband has insured his business of coconut and prawn
farm business for an amount of Rs.40 Lakhs/- towards standard fire and special
perils policy schedule in Policy No.421010/11/19/026436, dated 11.10.2018 for
a period of one year from 01.10.2018 to 30.09.2019 for which a single premium
of Rs.6000/- was already levied by the first respondent. During the said period,
the outbreak of Gaja cyclone annihilated the entire coconut and prawn business
and the damage caused was brought to the knowledge of the first respondent
and the respondent official visited and surveyed the damage and has estimated
the damage to the tune of Rs.36 Lakhs/- and it was informed that the insured
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amount of Rs.40 lakhs would be given at the earliest. While that being so, in
the month of October 2019, the Manager of Shriram City Finance Limited,
Muthupettai Branch of Thiruthuraipoondi Taluk of Tiruvarur District came and
got signature from the petitioner stating the aforesaid insured amount of Rs.40
Lakhs/- would be disbursed. But only a part of Rs.7,16,263/- was credited on
26.11.2019 to the bank of Shriram City Union Finance Limited. It is pertinent
to note that the said amount was straight away credited to the account of
Shriram City Union Finance Limited without giving the aforesaid amount to the
petitioner directly. Considering, the overreaching aspect, the first respondent is
liable to pay Rs.20 Lakhs/- for the Life Insurance Policy much less he is liable
to pay Rs.11,35,718/- as a “cover amount” as per the certificate of Insurance
schedule claimed by him as the Insurance Policy bond. And the fourth and fifth
respondents are liable to pay the remaining amount of Rs.32,83,737/- out of the
insurance amount Rs.40 Lakhs/- towards damages caused by Gaja cyclone.
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5. As per the direction of the first respondent the petitioner had
applied to get death certificate and legal heir certificate, but due to outbreak of
Covid-19 the processing was delayed. On 25.05.2019 the surveyor namely
Christopher from Chennai came and enquired about the death, received the
Death Certificate, Legal Heir Certificate, Aadhar Card and Passport assuring to
arrange for early disbursal of amounts. Due to Gaja cyclone the business was
shattered, due to death of the petitioner's husband's the life was shattered and
the petitioner is financially crippled struggling to meet both the ends meet and
is suffering with two college going daughters. Hence, the petitioner at a last
resort submitted the forms on 04.07.2019, but the petitioner's attempt was
miserably failed and the petitioner filed a complaint to the 7th respondent and he
directed to file fresh representation. Hence, she filed fresh representation on
02.12.2020. Thereafter, due to Covid-19, the petitioner could not process the
same. Again, the petitioner filed a fresh application on 23.12.2020 and
24.12.2020 to the first respondent. After receiving the aforesaid the 3rd
respondent replied vide letter dated 05.02.2021 wherein it is admitted that the
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petitioner's husband had taken an insurance policy from Shriram General
Insurance Company and another insurance policy from Shriram Life Insurance
Company. It is also claimed that the petitioner's husband was not in India at the
time of joining Group Insurance Scheme and hence, he could not have signed
the declaration of Good Health Form. But the same is self-contradictory
because having admitted the aforesaid policy signed by the deceased husband,
when the loan agreement has also been signed by him and the loan amount of
Rs.19,13,300/- has been received by the petitioner's husband on 29.09.2018, the
4th respondent now say that the petitioner's husband was not in India on the date
of Life Insurance and General Insurance Policy. However, no action was taken
on the petitioner’s fresh application. The contention of the petitioner is that
when the 4th respondent had accepted that the petitioner’s deceased husband
availed loan amount as per Agreement No.MTPE2TF1809290004, dated
29.09.2018, cheque was received on 29.09.2018, then the 4th respondent is
estopped from saying that the petitioner’s deceased husband was not in India on
the date of the aforesaid policies. It is also submitted that in the arbitration
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proceedings initiated by the Head Officer of the 1st respondent in TF No.
049/2020 dated 05.11.2020 before the sole arbitrator Mr.Muthukrishnan has not
stated anything with respect to non-availability of the deceased husband on the
date of aforesaid policies.
6. It is further submitted that when the petitioner is contenting the
arbitration proceedings and also the petitioner’s petition seeking payment of
Life Insurance amount of Rs.20 lakhs or coverage amount of Rs.11,35,718/ was
pending, the 1st respondent had sent a notice dated 14.02.2020 claiming
21,02,525/-, then claims Rs.35,28,799 in the arbitration proceedings, then in
I.A.No.2/2021 connected to ACP No.49/2020, the 1st respondent claims Rs.
22,92,221/- which is miscalculation and the petitioner is not liable to pay.
Further the petitioner submitted that the respondents 1 to 4 are sister concerns
interrelated with one another. The petitioner is financially crippled and
devastated due to death of her husband and adverse impact of Gaja cyclone. At
this juncture, the respondents 1 to 4 are trying to bring the house for sale for
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realizing the loan. The petitioner has stood as guarantor to the said loan. At the
same time, the respondents did not realize the responsibility to pay Rs.20
Lakhs/- for the life of the petitioner’s husband and Rs.40 Lakhs/- for the
business insurance. If those amounts are paid, then the petitioner would not be
liable to pay any amount which the respondents are claiming under loan. If the
respondents had settled the insurance claim, the same would be used for paying
the loan claim of the respondents, but the respondents are not responding to the
insurance claim. Hence, the petitioner issued a notice to the arbitrator on
13.01.2021 through an Advocate stating the aforesaid facts and also sent a
notice to the arbitrator on 04.02.2021 stating that he cannot try more than three
cases to the claimant within a year. The petitioner claims that the only
residential house which belongs to them was offered as security of loan but the
first respondent threatens to sell the residential house. Hence, the petitioner is
before this Court.
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7. The General Manager representing the respondents 1 to 5 had
filed counter affidavit stating the respondents are doing business of providing
life insurance. Further submitted that the present the writ petition is not
maintainable for non-joinder of necessary parties and also the writ petition is
premature. The petitioner has not made the Shriram City Union Finance
Limited as party to the proceedings with whom the petitioner's husband had
applied for loan and mortgaged the property. The Shriram City Union Finance
Limited (SCUF) and the Shriram Life Insurance Company are companies
incorporated under Companies Act. Though they are sister concerns and they
are separate legal entities doing different business. The Shriram General
Insurance Company Limited (SGIC) is also incorporated as a separate entity
doing general insurance business. The petitioner’s husband had become a
member of Group Policy held by Shriram City Union Finance Limited under
the master policy, wherein the risk cover commenced from 29.09.2019 to
28.09.2022 for a cover amount of Rs.11,35,718/- with a single premium amount
of Rs.11,864/-. On receipt of the death claim, the respondents have conducted
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regular enquiry and have discovered that the Deceased Life Assured was not in
India at the time of joining the Group Insurance Scheme, hence, he could not
have signed the Declaration of Good Health Form. Hence in order to ascertain
the true facts, the Company had addressed a letter to the petitioner (nominee)
which the petitioner had received on 10.10.2019, wherein copies of Certificate
of Insurance, Member Enrolment cum Declaration Form and the Borrower's
Declaration was enclosed and directed the petitioner to submit requisite
documents along with the passport of the deceased. While the matter was
pending, the respondents have sent the Declaration of Good Health Form, PAN
card, ITR of the deceased person for forensic testing wherein the respondents
have got proof that the Declaration of Good Health Form was not signed by the
deceased. The claim is only pending due to non-submission of claim forms and
additional documents such as passport of the deceased. Earlier, the petitioner
has approached the Insurance Ombudsman and suffered an order on
05.03.2020, wherein the petitioner was directed to comply with the claim
requirement called by the Insurance Company. The petitioner instead of
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furnishing required documents filed the present writ petition which is a
premature and also amounts to forum shopping. The insurance company neither
allowed the claim nor repudiated the claim and the same is pending for want of
documents, hence the present writ petition is premature. The petitioner has not
even furnished the copies before this Court as well. These respondents have
issued Life Insurance Policy which is a Group Life Protector Plan SP as against
the loan obtained by the deceased person and since the deceased obtained loan
from Shriram City Union Finance who is a proper and necessary party to the
present proceedings. Clause 3 of the policy speaks of payment of death benefits
and the same is extracted hereunder:
"Clause No.3: PAYMENT OF DEATH BENEFITS: The claim payment
shall be made in the name of the nominee/beneficiary/legal heir even if
the claim cheque is sent to the group policy holder for administrative
convenience. The nominee will be paid with an amount left after
deducting the loan outstanding of the member to be made towards the
group policyholder".
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Unless the petitioner furnishes the required information, the petitioner is not
entitled to the claim. Moreover, it is confirmed through the forensic report that
the signature in the Declaration of Good Health Form is not tallying with the
admitted signatures of the deceased. Hence, there is no contractual obligations
between the parties. When the insured claim is repudiated raising a serious
dispute, then the writ petition cannot be entertained and the respondents relied
on the judgment rendered by the Hon'ble Supreme Court in the case of Life
Insurance of India Vs. Asha Goel reported in AIR 2001 Supreme Court 549.
Moreover, the respondents are not carrying out constitutional function and
cannot be stated as State, hence, Article 226 cannot be invoked. The petitioner
had relied on a judgment for invoking Article 226 and the same can be
distinguished based on the facts. Moreover, the said judgment is rendered by
Single Judge and it is only persuasive and not binding precedent. The
respondents are doing business of providing Life Insurance Policy and not
doing business of issuing loans. Hence the petitioner applying for any loan with
the respondent company and the respondent sanctioning loan does not arise and
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the petitioner is confused. Except to the extent of issuing Life Insurance Policy
rest of the allegations are denied. Infact, the sum assured under the policy is Rs.
11,35,718/- for the single premium of Rs.11,864.63. Since the loan amount is
Rs.20/- lakhs, the petitioner cannot presume that the insurance claim is Rs.20/-
lakhs, when the insured amount is only for Rs.11,35,718/-. And for issuing the
same the petitioner is bound to submit the passport and other relevant
documents, but the petitioner had failed to submit the same. Hence, the
respondents 1 to 5 prayed to dismiss the writ petition.
8. The 6th respondent has filed counter affidavit stating the 6th
respondent is only a regulatory authority to protect the interest of holders of the
insurance policy. Further, it is submitted that the respondents 1 to 5 ought to
resolve the grievance by virtue of their mutual agreements and this respondent
only plays a facilitative role and discharges his duties in regulatory and
supervisory functions. It is further submitted that the insurer in the resolution
dated 11.3.2020 informed the petitioner that since they have not heard anything
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from the petitioner during the defined eight weeks time, they have closed the
complaint. There is no complaint registered against M/s.Shriram General
Insurance Company Limited from the petitioner. Hence, as per available
records there is no further role for 6th respondent and the 6th respondent prayed
to dismiss the writ petition as far as the 6th respondent is concerned.
9. Heard Mr.N.Balakrishnan, learned Counsel appearing for the
petitioner, Mr.A.Sivasubramanian, learned Counsel appearing for respondents
1 to 4, Mr.N.Shyllappa Kalyan, learned Counsel appearing for 5th respondent,
Mr.S.Anwar Sameem, learned Counsel appearing for 6th respondent,
Mr.B.Prasanna Vinoth, learned Counsel appearing for 7th respondent and
Mr.J.Barathan, learned Counsel appearing for 8th respondent and perused the
records.
10. Since the respondents 1 to 5 have taken a specific stand that the
petitioner has not impleaded the Shriram City Finance Limited, this Court suo
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motu impleaded the Shriram City Finance Limited as 8th respondent, vide order,
dated 24.7.2023 and issued notice. Thereafter, the said company appeared
through Advocate and submitted that once a loan is disbursed, their role is
completed. As far as insurance is concerned it has to be decided by the
respondents 1 to 5 and the 8 th respondent has no role in the said allegations.
Hence this Court is of the considered opinion that the respondents 1 to 5 ought
to substantiate their case. Further the contention of the respondents 1 to 5 that
the petitioner has not impleaded necessary party no longer exists.
11. The next contention raised by the respondents 1 to 5 is that the
petitioner has not produced the passport, hence, the claim of the petitioner
could not be processed. Therefore, pending writ petition, in order to resolve the
issue, this Court directed the petitioner to produce the passport to the
respondents. Based on the direction the petitioner had produced the same.
Thereafter the respondents 1 to 4 filed had additional affidavit wherein it is
stated that the deceased was possessing two passports in his name and the
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details are as follows:
Passport Number Validity
M2198810 19/09/2014 to 18/09/2024
S0084892 26/02/2018 to 25/02/2028
After perusing the two passports, the respondents submitted that the deceased
was having two passports and it is not known why second passport was issued
when the earlier passport was valid until 18.09.2024. In other words, the first
passport was issued which is valid from 2014 to 2024 and the second passport
was issued which is valid from 2018 to 2028. This court is of the considered
opinion that the respondents 1 to 5 are not empowered to scrutinize why two
passports are issued. The appropriate authority is the passport issuing authority
who has to look into why two passports are issued, hence such plea of the
respondents 1 to 5 cannot be entertained. Moreover, at this juncture, after the
demise of the petitioner’s husband, the said plea cannot be entertained.
12. The next contention of the respondents 1 to 5 are that the
signatures of the deceased Azhagiri in KYC documents are not matching with
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the signature on the Declaration of Good Health Form, dated 29.09.2018. The
Declaration of Good Health Form is the basic document for obtaining the group
insurance from the borrowers. Since the signature differs, consequently there is
no existence of valid contract between the deceased and the company. Hence
the company is constrained to reject the claim vide claim rejection letter dated
22.09.2023 due to mismatch of signature of member life assured Azhagiri and
no claim is payable under Member Policy No. MN181024031644275 and the
respondents are not mandated under the contract to pay the amount. After
hearing this submission this Court has given its anxious consideration. The
respondents suspects that the said Azhagiri was not available in India and he
was in abroad at the time of executing the insurance documents, hence the
respondents sought passports to ascertain the fact whether the deceased was
available in India or was in abroad. This Court perused the records especially
the passports. On scrutiny of the passport entries, it is seen that the deceased
was travelling abroad in the year 2015, 2016, 2017 only. In the year 2018 and
2019 no entries are available. Hence in the years 2018 and 2019 the deceased
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was very much available in India and the respondents’ plea ought to be rejected.
13. When it was proved the deceased was very much available in
India during 2018 and 2019, the respondents are taking a plea that the signature
affixed in the Declaration of Good Health Form is not matching the other
admitted signatures in PAN card, passport and other KYC forms. It is seen
while affixing signature in the loan applications, the deceased had signed the
“Declaration of Good Health Form” also. In such circumstances, it is not
known on what basis the respondents are raising such a plea. When the other
signatures in the loan applications are acceptable to the respondents, the
signature affixed in “Declaration of Good Health Form” alone is not acceptable
to the respondents. Such a plea is absurd and therefore, this plea of the
respondents cannot be entertained.
14. The next contention of the respondents it that there is
discrepancy in the surname of the deceased Azhagiri. It is seen that the
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deceased Azhagiri is in the habit of writing RP Azhagiri. In the first passport
the surname is stated as “Pothiappan” whereas in the second passport it has
been stated as “Ramalingam Podhiyappan”. Therefore, the respondents are
doubting the passport of the deceased. When the deceased Azhagiri is referred
as “RP Azhagiri” the expansion of RP is Ramalingam Podhiyappan. Of course,
there is a spelling difference, while in first passport it is written as
“Pothiappan”, whereas in the second passport it is written as “Podhiyappan”.
This Court is at loss why such plea is raised after executing the loan
application, after execution of “Declaration of Good Health Form” etc. These
queries ought to have been raised at the time of execution of Master Policy No.
MN181024031644275 or prior to the execution of the Master Policy. Definitely
not at the time of when the nominee of the insurer is claiming to pay the insured
amount. Therefore, this Court is not inclined to entertain such pleas of the
respondents.
15. Interestingly, it is seen that the Shriram General Insurance
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Company Limited had admitted the claim and has disbursed an amount to the
tune of Rs.7,16,263/-, which is the claim for the said Rs.40/- lakhs General
Insurance due to Gaja Cyclone. In fact, both the insurances were executed
during the same period i.e. the Life Insurance was executed on 29.09.2018,
whereas the General Insurance was executed on 11.10.2018. The General
Insurance policy was acted upon and the said amount is paid by the Shriram
General Insurance Company. But the Shriram Life Insurance Company is
refusing to pay the insurance amount. In such circumstances, raising the plea
that there is discrepancy in the signature of “Declaration of Good Health Form”
and KYC is unacceptable and cannot be entertained. If the plea of the
respondents is accepted as far as Life Insurance is concerned, then the
petitioner would not be entitled to the insured amount under General Insurance
also. But the respondents are not contending that the petitioner is not entitled to
General Insurance. In fact, the respondents had disbursed Rs.7,16,263/- under
General Insurance for Gaja Cyclone. When the respondents had already
disbursed the General Insurance amount, then there is no legally valid reason to
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withhold the Life Insurance. Therefore, the respondents are liable to pay the
insurance amount of Rs.20 Lakhs/-.
16. From the above narration of facts, it is evident that the
insurance premium amount was received by the insurance company on
29.09.2018. The borrower had died on 27.12.2018. The policy was not rejected
until the death of the borrower till 27.12.2018. Rejection of policy must be
made within reasonable time as held in D. Srinivas Vs. SBI Life Insurance
Company Limited and others reported in (2018) 3 SCC 653 and the relevant
portion is extracted hereunder:
“11. 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
authorized the bank to debit his account for payment of the premium.
This clearly implies that medical examination was to take place prior to
the premium being debited from the bank account of the proposer. The
specific condition in the policy is that in case the loan amount exceeds
Rs.7.5 lacs the medical examination was compulsory. If the medical
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examination was compulsory for such cases it should have been done
along with filing of the proposal form before the payment of the
premium. If the proposal was not accepted for any reason the premium
would have been credited to the account of the proposer. The premium
has been refunded after 23.2.2011. From this, it is clear that the
insurance company had not rejected the proposal before 23.2.2011.
12. Our attention has been drawn to the case of LIC Vs. Raja Vasireddy
Komalavalli Kamba and others (1984) 2 SCC 719, wherein this Court
has clearly stated that the acceptance of an insurance contract may not
be completed by mere retention of the premium or preparation of the
policy document rather the acceptance must be signified by some act or
acts agreed on by the parties or from which the law raises a presumption
of acceptance.
13. Although we do not have any quarrel with the proposition laid
therein, it should be noted that aforesaid judgments only laid down a
flexible formula for the court to see as to whether there was clear
indication of acceptance of the insurance. It is to be noted that the
impugned majority order merely cites the aforesaid judgment, without
appreciating the circumstances which give rise to a very clear
presumption of acceptance of the policy by the insurer in this case at
hand. The insurance contract being a contract of utmost good faith, is a
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two-way door. The standards of conduct as expected under the utmost
good faith obligation should be met by either party to such contract.
14. From the aforesaid clause it may be seen that the condition
precedent for acceptance of the premium was the medical examination.
It would be logical for an underwriter to accept the premium based on
the medical examination and not otherwise. Therefore, by the very fact
that they accepted the premium waived the condition precedent of
medical examination.
15. It is an admitted fact that the premium was paid on 29.09.2008. That
it was only in 18.01.2011 that the respondent insurance company
informed the appellant that the policy was not accepted by them. We are
unable to fathom the reason for such excessive delay in informing the
appellant, which cannot be excused. We are of the opinion that the
rejection of the policy must be made in a reasonable time so as to be fair
and in consonance with the good faith standards. In this case, we cannot
hold that such enormous delay was reasonable. Moreover, it is borne
from the records that the premium was only re-paid on 24.02.2011, after
a delay of more than one year five months. If we consider above aspects,
it can be reasonably concluded that the insurer is only trying to get out
of the bargain, which they had willfully accepted. From the aforesaid
circumstances we can easily conclude that the policy was accepted by
the insurer.
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16. In the circumstances, there is no reason to believe that there was no
complete contract. There is clear presumption of the acceptance of the
proposal in favour of the proposer. Therefore, the majority view of the
Commission would not sustain.
17. In the result, the appeal succeeds and is accordingly allowed. The
order of the National Commission dated 22.11.2016 is hereby set aside
and the order of the State Commission dated 16.7.2012 is restored.”
Hence when the policy is alive, then the petitioner is entitled to the policy
amount and the reasons stated by the respondents cannot be accepted as stated
supra.
17. It is seen that the 8th respondent (impleaded respondent) is
taking active steps to recover the loan along with interest. The Shriram Group
of Companies is recovering the loan on one hand but is refusing to disburse the
insurance on the other hand, thereby, the petitioner is put to hardship. The
petitioner is under the verge of losing the residential property which is the only
property available to the petitioner as per the affidavit. This action of the
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respondent Nos.1 to 8 (except respondent No.6) is nothing but total harassment.
Hence the petitioner is entitled to interest at the rate of 6% per annum from the
date of death of the insurer i.e. from 27.12.2018 until the payment is made to
the petitioner.
18. For the reasons stated supra, the order passed by the
respondents pending writ petition, dated 22.09.2023 is hereby quashed. The
respondents are directed to pay the insurance amount of Rs.20,00,000/- with
interest at the rate of 6% from 27.12.2018 until the payment is made to the
petitioner. The 8th respondent is directed to appropriate the loan and the balance
amount, if any shall be paid to the petitioner. The said exercise shall be
completed within a period of four weeks from the date of receipt of a copy of
this order.
19. With the above observations and directions, the writ petition is
allowed on above terms. No costs. Consequently, connected miscellaneous
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petition is closed.
28.12.2023
NCC : Yes/No
Index : Yes / No
Internet : Yes/ No
Tmg
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S.SRIMATHY, J.
Tmg
28.12.2023
https://www.mhc.tn.gov.in/judis
