Life Insurance Corporation of India vs RASHMI H. TANWANI

THIS appeal arises from order dated 15.10.2003 directing the opponent Life Insurance Corporation of India to pay to the complainant the amount of indemnity compensation, Rs. 3,000/- being the amount of compensation on the head of mental agony and harassment and cost of the complaint quantified at Rs. 2,000/- rendered by the learned Consumer Disputes Redressal Forum, Kachchh in Complaint Application No. 113 of 1999. It was the complainant''s case that her deceased husband was serving as Professor in Chemistry in Science Faculty of Tolani Foundation and had proposed for life insurance in the sum of Rs. 1,00,000/- on 16.10.1997 and deposited Rs. 9,088/- with the opponent Life Insurance Corporation of India (LIC for short). Medical examination was performed by opponent LIC''s doctor. However, the concerned officers of the opponent LIC failed to process the proposal form expeditiously and failed to issue policy of insurance and thus there was delay in issuance of the policy of insurance amounting to deficiency in service. It has been alleged that the proposer was medically examined on 6.11.1997, ECG was taken on 11.11.1997 and its report was collected by the Development Officer of the opponent LIC on 18.11.1997 whereas the proposer died on 18.11.1997. Thus, there was unpardonable negligence on the part of the opponent LIC of India in not completing the process of issuance of life insurance policy proposed by the deceased. The complainant, therefore, prayed for compensation in the sum of Rs. 1,00,000/- as per the proposed policy of insurance, compensation in the sum of Rs. 50,000/- on the head of mental agony and cost in the sum of Rs. 10,000/-. Opponent LIC of India resisted the complaint inter alia on the ground that the amount of Rs. 9,088/- was taken as deposit and the proposer was medically examined by the doctor of opponent LIC of India. The ECG report which was submitted by the proposer could not be accepted by the opponent LIC of India as it was incomplete. Unless complete ECG report was made available, further procedure for acceptance of proposal and issuance of policy could not be undertaken. The ECG examination was made on 11.11.1997 and the report was submitted on 18.11.1997 when the proposer died. Hence, there was no delay in processing the proposal for insurance submitted by the deceased. The complaint was, therefore, sought to be dismissed.

THE learned Forum however came to the conclusion that there was deficiency in service on the part of he opponent LIC of India as there was delay in processing the proposal form. That is how the impugned order came to be passed in favour of the complainant against the opponent LIC of India. We have heard the learned Advocates appearing for the parties. We have gone through the impugned order. We have gone through the memorandum of appeal. The facts which have been noted hereinabove are more or less not disputed. The question is whether the procedure which was undertaken during the period between 6.11.1997 and 18.11.1997 could be said to be uncalled for or whether the time taken in such procedure could be said to be delay in acceptance of the proposal. At the outset it may be noted that the proposal for life insurance was not accepted and when it has not been transformed into issuance of policy, there is no concluded contract. Therefore, proposer of such policy cannot be said to be consumer in the eye of law. If that is so, heirs of the deceased proposer would not be entitled to claim any benefit under the policy of insurance which was not yet issued. That apart, passage of time between 6.11.1997 and 18.11.1997 can hardly be said to be unnecessary delay on the part of the concerned officer of opponent Insurance Company. It is not in dispute that the first ECG report which was submitted on behalf of the proposer was incomplete and, therefore, further procedure with regard to having complete ECG report was undertaken and that report was made available only on 18.11.1997 but unfortunately, the proposer died on that date. Thus, on the date of death of the proposer, there was no concluded contract. It is settled law that when there is no concluded contract of insurance, no indemnity compensation would be available to either insured or insured''s nominee or insured''s heir or legal representative. In that view of the matter, this is a clear case where the learned Forum appears to have misdirected itself in passing the impugned order. In view of what is stated above and in the facts and circumstances of the case, following order requires to be passed. ORDER Impugned order dated 15.10.2003 rendered by the learned Consumer Disputes Redressal Forum, Kachchh in Complaint Application No. 113 of 1999 is hereby set aside. The complaint bearing No. 113 of 1999 shall stand dismissed. Appeal allowed.