Branch Manager, Life Insurance Corpn Of India vs Saraswati Devi W/O Late Birender Kumar

THIS revision petition has been filed by the petitioners against the order dated 28.01.2013 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, ''the State Commission'') in Appeal No. 493/2005 Smt. Saraswati Devi Vs. Branch Manager, LIC of India by which, while allowing appeal, order of District Forum dismissing complaint was set aside.

BRIEF facts of the case are that complainant/respondent''s Birendra Kumar had taken ''New Jeevan Shree'' policy from OP/petitioner by filling a proposal form and depositing premium amount of Rs.32,977/ - for policy of Rs. 5,00,000/ - on 15.6.2002. Complainant''s husband was murdered and died on 7.7.2002. Complainant lodged claim with OP, but OP repudiated on the ground of non -acceptance of proposal form. Alleging deficiency on the part of OP, complainant filed complaint for double of the insured amount on account of accidental benefits under the policy. OP resisted complaint and submitted that claim was rightly repudiated as proposal form was not accepted by OP and prayed for dismissal of complaint. Learned District Forum after hearing both the parties dismissed complaint with direction to OP to return back the amount of premium with 9% p.a. interest. Appeal filed by complainant was allowed by learned State Commission vide impugned order by which OP was directed to pay assured amount as per terms of contract with 9% p.a. against which this revision petition has been filed.

HEARD learned Counsel for the parties and perused record. Learned Counsel for the petitioner submitted that on account of non -acceptance of proposal form and in the absence of concluded contract between the parties, learned District Forum rightly dismissed complaint; even then, learned State Commission committed error in allowing appeal and allowing complaint; hence, revision petition be allowed and impugned order be set aside. On the other hand, learned Counsel for the respondent submitted that order passed by learned State Commission is in accordance with law; hence, revision petition be dismissed.

IT is not disputed that complainant''s husband Birendra Kumar submitted proposal form to OP on 15.6.2002 along with premium of Rs.32,977/ - for a policy of Rs.5,00,000/ -. It is also not disputed that Birendra Kumar was murdered and died on 7.7.2002.

NOW , the core question to be decided is whether; OP was liable to make payment against the premium paid for the policy.

LEARNED Counsel for the petitioner submitted that neither proposal form was accepted, nor policy was issued to the deceased and in such circumstances, as there was no concluded contract between the parties, no amount was payable under the policy. In support of his contention, he has placed reliance on judgment of Apex Court in LIC of India Vs. Raja Vasireddy Komalavalli Kamba and Ors., 1984 2 SCC 719 in which it was held as under: "Mere receipt and retention of premia until after the death of the appellant or mere preparation of the policy document is not acceptance and therefore, do not give rise to a contract. The general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer Whether the final acceptance is that of the assured or insurers, however, depends on the way in which negotiations for an insurance have progressed. Mere delay in giving an answer cannot be construed as an acceptance. Though in certain human relationship silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance".

ADMITTEDLY , OP has not accepted proposal and has not issued policy and in such circumstances, merely on the basis of retention of premium, complainant does not get right to claim amount under the policy in the absence of concluded contract. Mere delay in not accepting proposal cannot construe as an acceptance in the light of aforesaid judgment. Learned Counsel for the petitioner has also drawn my attention towards proposal review slip pertaining to the assured in which reports for medical tests have been called. It appears that medical reports were not submitted by the assured and in such circumstances, proposal was not accepted and policy was not issued in favor of the assured. As there was no acceptance of the proposal, OP rightly repudiated claim and learned District Forum has not committed any error in dismissing complaint with direction to return premium retained by OP with interest.

LEARNED State Commission wrongly observed in its order that after acceptance of proposal deceased was asked to pay premium whereas I do not find any acceptance of the proposal. Later on, in paragraph 12, learned State Commission observed that OP in such situation was supposed to accept only such proposal forms which could have been verified and found properly filled meaning thereby, learned State Commission agreed in this paragraph that proposal form was not accepted by OP; even then, in paragraph 14 again wrongly mentioned that proposal form was accepted. Learned State Commission was persuaded in passing impugned order by the fact that the proposal was not accepted for so many days and no offer was made by OP to provide premium money along with interest before or during pendency of the complaint. But, this cannot be a ground for allowing complaint.

LEARNED Counsel for the respondent placed reliance on judgment of this Commission in SBI Life Insurance Company Ltd. Vs. Asha Lata Parida and Anr., 2010 3 CPJ 228 in which claim of the insured was allowed as OP did not take decision for acceptance or rejection of the proposal for a period of 8 months whereas, as per IRDA Regulations, decision was to be taken within 15 days from the receipt of proposal by the insurer. In the case in hand, Birendra Kumar died within 22 days from submitting proposal form along with premium and as per proposal review slip, proposal remained pending for want of medical examination of Birendra Kumar. In the light of judgment of Hon''ble Apex Court in Raja Vasireddy Komalavalli Kamba and Ors. , I do not agree with the judgment of this Commission in SBI Life Insurance Company Ltd. and it is held that OP rightly repudiated claim as there was no concluded contract between the deceased and OP at the time of death of Birender Kumar and learned State Commission committed error in reversing finding of District forum and allowing complaint and in such circumstances, revision petition is to be allowed.

CONSEQUENT LY , revision petition filed by the petitioner is allowed and impugned order dated 28.1.2013 passed by the State Commission in Appeal No. 493/2005 Smt. Saraswati Devi Vs. Branch Manager, LIC of India is set aside and order of District Forum dated 9.5.2005 passed in Complaint No. 076/2004 Smt. Saraswati Devi Vs. Branch Manager, LIC of India and Ors. is affirmed with no order as to costs.