LIFE INSURANCE CORPORATION OF INDIA vs ROSHNI DEVI

THIS appeal is directed against the order dated 23.6.2005 passed by District Forum, Kurukshetra whereby while accepting the complaint of the respondent -complainant, direction has been given to the appellant -opposite parties to pay the insured amount of Rs. one lac to the complainant along with interest @ 10% per annum from the date of filing of the complaint till its realization, within a period of 30 days from the date of preparation of the copy of the order.

PUT shortly the facts of the case are that Chand Ram, husband of the complainant had obtained an insurance policy No. 173304949 for a sum of Rs. one lac issued by the opposite party No. 2 The said Chand Ram died on 28.4.2003. Thereafter the complainant sent claim papers along with death certificate of her husband to the opposite party No. 1 but no response was received by them. A registered legal notice was also given to opposite party No. 1 and in reply she was informed that her claim has been repudiated as first instalment amount of Rs. 3,350 has been submitted on 24.4.2002 along with proposal form without age proof of the deceased and for that reason premium chargeable could not be calculated. After the pooof of age was submitted premium receipt was issued on 29.4.2003 and by that time the insured had died on 28.4.2003 which fact was concealed by the complainant and thus a fraud was practised upon the opposite parties. Challenging the action of the opposite parties, the complainant had invoked the jurisdiction of the District Forum by filing the present complaint alleging that after the issuance of policy the contract was concluded and the opposite parties were duty -bound to pay the sum assured on the death of the insured. Accordingly, the complainant sought direction against the opposite parties to pay a sum of Rs. one lac along with interest @ 18% per annum from the due date till payment, Rs. 5,000 as damages on account of mental agony and harassment, Rs. 3,000 as expenses incurred in pursuing the complaint and Rs. 2,200 as litigation expenses. The opposite parties in their joint written statement refuted the stand of the complainant. It was pleaded by them that the deceased had failed to submit his poof of age before his death and in the absence of proof of age, the age could not be determined to calculate the premium chargeable from him. It was pleaded that the complainant had played a fraud as she had submitted the age proof of the insured without disclosing factum of his death to them on 29.4.2003. It was further pleaded that first premium receipt was issued on 29.4.2003 the date on which the affidavit of the age proof was executed before the Oath Commissioner, Panchkula and the said document is a fictitious document as life insured had already died on 28.4.2003 and for that reason risk under the policy could not be deemed to have been covered. Thus, they justified the repudiation of the claim. The District Forum on scrutiny of the evidence and pleadings of the parties accepted the complaint and issued the direction as already noticed. It is against this order, the present appeal has been filed.

THE learned Counsel representing the parties have been heard at length.

IT is manifest from the record that deceased Chand Ram had decided to take endowment policy in the sum of Rs. one lac on 24.4.2001 and he had paid Rs. 3,350 on that day along with proposal form to the opposite parties. Proposal deposit receipt dated 24.4.2003 Ex. C -2 has been placed on record. It is the case of the opposite parties that along with the proposal form he has not submitted any proof of his age and without that document opposite parties were not in a position to calculate the premium chargeable from him. The complainant had submitted to the opposite parties affidavit of Chand Ram deceased as evidence of proof of his age. This affidavit was attested by the Oath Commissioner, Panchkula on 29.4.2003. The death certificate of Chand Ram produced by the complainant in evidence is Ex. C -3 which records date of death of Chand Ram as 28.4.2003. The stand of the opposite parties that at the time when affidavit of Chand Ram, which was got attested from the Oath Commissioner on 29.4.2003 was submitted to him, factum of death of Chand Ram was not disclosed, is fully substantiated on record. It is well settled that where it is proved on record that the death of insured had taken place before acceptance of his proposal, in that event Insurance Company would not be liable to pay the insurance claim because there is no concluded contract of insurance. In this regard, one may notice observations of the Hon''ble Supreme Court made in a case reported as L.I.C. of India v. Raja Vasi Reddy Komalavalli and Others, (1984) 3 SCR 350, wherein while deciding the question as to whether the insurance policy become effective, it was laid down as under: "The mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy document is not acceptance. Acceptance must signified by some act or acts agreed on by the parties or from which the law raises a presumption of acceptance. Though in certain human relationships 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. Mere delay in giving an answer cannot be construed as an acceptance as, prima facie, acceptance must be communicated to the offerer. 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.''

In this case, first premium receipt was issued by the opposite parties on 29.4.2003 though factually Chand Ram had already died on 28.4.2003. Therefore, there could not be any contract of insurance with a dead person by the opposite parties. Under the circumstances, it has to be held that as proposer had died before acceptance of the proposal there was no concluded contract of insurance between the parties and for that reason the District Forum was not justified in accepting the complaint of the complainant.

IT is apparent from the impugned order that the District Forum was persuaded to accept the complaint primarily for the reason that date of birth of the deceased has been mentioned in the proposal form as 15.2.1966 and for that reason it could not be assumed that the age proof was not submitted at the time of proposal form. It has also returned a finding that there was no evidence on record to establish that first premium receipt was issued on 29.4.2003 and in the absence of any document regarding issuance of receipt on that day, it is proved that first premium receipt was issued on 24.4.2003. This finding on the face of record is based on surmises and against the evidence on record. By no stretch of evidence proposal deposit receipt dated 24.4.2003 could be construed as first premium receipt issued on 24.4.2003 as has been concluded by the District Forum. Further it has been totally ignored that the complainant has not come to the District Forum with clean hands and tried to play fraud because she had produced affidavit of a dead person which was got attested from the Oath Commissioner on 29.4.2003. The observations made in the case LIC v. Mrs. V. Jeeva, III (1995) CPJ 1 (NC)=1997 (1) CPC 100, relied upon by the complainant, under the circumstances of the case, renders no assistance to the complainant at all. Therefore, the order of the District Forum as such cannot be sustained.

FOR the aforesaid reasons, we accept the appeal and while setting aside the impugned order, dismiss the complaint.