GOKAL CHAND (D) THR. LRS. versus AXIS BANK LTD. & ANR.

Citation: [2022] 17 S.C.R. 739 · Decided: 15-12-2022 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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   [2022] 17 S.C.R. 739
739
GOKAL CHAND (D) THR. LRS.
v.
AXIS BANK LTD. & ANR.
(Civil Appeal No. 9237 of 2022)
DECEMBER 15, 2022
[K. M. JOSEPH AND HRISHIKESH ROY, JJ.]
Consumer Protection – Insurance Policy – Deficiency of
Service – A home loan was secured by the appellants for which
obtaining a life insurance was a pre-requisite – Life insurance in
the name of husband of the complainant (the insured, now deceased)
was obtained – As per the appellants, respondent No.1-bank acting
as an agent for respondent no.2-Insurance Company, on 25.07.17
sanctioned the home loan – From the disbursed loan amount,
insurance premium was paid on behalf of the insured by the bank
to the insurance company – The insured was subjected to medical
tests on 30.07.17 as a pre-condition for securing the home loan –
Died of cardiac arrest on 08.08.17 – Death of the insured was
intimated to the insurance company on 16.08.17 with a request to
process the insurance claim, however the claim was repudiated –
Consumer complaint dismissed by State Commission – Appeal
dismissed by National Commission – Held: On 30.07.17, the insured
was called for medical examination and the treadmill test, did not
flag any health issue – In such backdrop, the communication (an
ante-dated letter) of the insurance company for postponing the life
insurance coverage by six months by adverting to the treadmill test
report and that too at a stage after intimation about the death of the
insured, appears to be a malafide act – Moreover, the insurance
company declining the policy by unilaterally refunding the insurance
premium, suggests that the respondent no.2 was deficient in
rendering services to the appellant – Impugned judgment set aside
– Complaint allowed – Consumer Protection.
Consumer Protection – Insurance policy – Presumption of
acceptance of the policy by the insurer – Ratio of decision in Raja
Vasireddy Komalavalli Kamba case as clarified in D. Srinivas case –
Discussed.
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
Allowing the appeal, the Court
HELD: 1.1 The reason for deferment is surprisingly shown
as treadmill test finding, although, no abnormality as such was
detected in the said test report. Yet, the insurance company
dispatched an antedated letter (written after getting intimation
about the death of the insured), informing about 6 months
postponement of the proposal. This 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. Even in this first
ante-dated communication of the insurance company, there was
no mention of rejection of the proposal or refund of the insurance
premium (Rs. 6,24,172), remitted by the bank to the insurance
company on 25.7.2017 i.e., the date when the loan amount was
sanctioned. The tracking details of the insurance postponement
communication of the respondent No. 2 sent through the Blue-
Dart Courier reflects that the insurance company’s letter was
dispatched only at 19:38 hours on 16.8.2017. There was no
mention in this letter, about the refund of the premium. 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.
[Paras 15-17][747-A-E]
1.2 It was a prerequisite for the home loan borrower to
obtain life insurance coverage and the records show that the loan
amount was sanctioned on 25.7.2017. On that very day, Rs.
6,24,172/- was remitted towards insurance premium by the bank
to the insurance company. This would suggest that all the
requirements for the policy as prescribed by insurance company
were satisfied at that stage. On 30.7.2017, the insured was called
for medical examination and the treadmill test, did not flag any
health issue. In such backdrop, the communication of the
insurance company for postponing the life insurance coverage
by six months by adverting to the treadmill test report and that
too at a stage after intimation about the death of the insured to
the respondents, appears to be a malafide act. Moreover, the
decision by the insurance company declining the policy by
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unilaterally refunding the insurance premium in the given
circumstances, would suggest that the respondent No. 2 were
deficient in rendering services to the appe

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