Order Name: District Consumer Disputes Redressal Commission, Solan vs PNB Metlife LIC Ltd
In a recent judgement by the District Consumer Disputes Redressal Commission in Solan, Himachal Pradesh, a customer complaint against PNB Metlife LIC Ltd was dismissed. The commission, led by D.R. Thakur (President), Vijay Lamba (Member), and Neelam Gupta (Member), found that the insurance company had indeed received the premium payment. However, the agreement for insurance hadn’t been finalized as the policy acceptance hadn’t been communicated to the policyholder.
Let’s break down the case. Mrs. Manjeet Kaur, the deceased and daughter-in-law of the complainant, had a savings account with Punjab National Bank (PNB). PNB doubled as an agent for PNB Metlife LIC Ltd, helping sell insurance policies. Following PNB’s suggestion, Mrs. Kaur decided to buy a policy from PNB Metlife LIC Ltd, deducting a premium of Rs. 8,579 from her account. The policy insured a sum of Rs. 11 Lakh, with double accidental benefits and a Rs. 22 Lakh payout in case of an unnatural death.
However, after Mrs. Kaur’s untimely death due to a snake bite, her sole legal heir, the complainant, filed a claim with the insurance company and informed PNB. The response wasn’t as expected – the claim was rejected, with PNB stating the premium amount had been refunded to Mrs. Kaur’s account.
Feeling wronged, the complainant turned to the District Consumer Disputes Redressal Commission in Solan, filing a complaint against both PNB and the insurance company. The bank’s stand was that, based on their records, the premium had been transferred to the insurance company’s account as per Mrs. Kaur’s instructions. The insurance company admitted that Mrs Kaur had approached them for the policy but argued that the necessary documents for policy issuance were missing in the proposal form. This led to the policy not being processed, and the premium amount was refunded to the customer’s account. They maintained that without a complete contract, they had no obligation to issue a policy certificate.
The commission referenced a Supreme Court ruling (Life Insurance Corporation of India Versus Raja Vasai Reddy Komalavalli Kamba and Ors [1984(2) SCC 719]), which established that an insurance policy is a contract that must be accepted by the insurer. Silence does not imply consent in the case of an insurance proposal, and a contract isn’t binding until the offeree communicates their acceptance. Mere delay in response cannot be interpreted as acceptance.
In light of this, the commission ruled that the mere receipt of the premium or preparation of the policy document did not imply acceptance. The insurance policy wasn’t issued nor was acceptance conveyed to the deceased. Hence, no contract was completed. The complainant could not provide counter-evidence, leading the commission to conclude that there was no service deficiency on part of the insurance company and PNB. Consequently, the complaint was dismissed.
The takeaway from this judgement is the importance of clear communication and complete documentation in insurance contracts. In the absence of these, even the receipt of a premium does not constitute an acceptance of the policy, leaving policyholders unprotected and their claims unmet.
