MARIAM vs Life Insurance Corporation of India

THIS appeal has been filed by the complainant-appellants against order dated 11. 9. 2003 passed by the District Forum, Nagaur in Complaint No. 56/2003 by which the complaint of the appellants was dismissed.

IT arises in the following circumstances: that the complainant-appellants had filed a complaint before the District Forum on 30. 4. 2003 inter alia stating that the husband of complainant-appellant No. 1 and son of complainant-appellant Nos. 2 and 3 Mohd. Ali, now deceased had taken a LIC policy for a sum of Rs. 1 lac with accidental benefit from the respondents bearing policy No. 501138231 and the deceased had died on 19. 3. 2003 and the information of the death of the deceased was given by the appellants to the respondents on 30. 4. 2002 and claim was preferred before the office of the respondents but that claim was repudiated by the respondents through letter dated 19. 3. 2003 on the ground that the proposal form for the policy was filled in up by the deceased on 18. 3. 2002 and the premium was paid by the deceased on 19. 3. 2002 and on the same day i. e. , on 19. 3. 2002 the deceased had died in a road accident and the proposal form was registered in the office of the respondents on 22. 3. 2002 and receipt of the premium was issued on 23. 3. 2002 and since prior to that the deceased had died on 19. 3. 2002, therefore, on the date of death the policy was not in existence and there was no concluded contract of insurance between the parties especially when the proposal of the decased was not accepted by the respondents LIC and the deceased had died prior to acceptance. Thereafter the present complaint was filed by the complainants. A reply was filed by the respondents LIC and they have taken the same pleas which were taken by them in the repudiation letter dated 19. 3. 2002 and it was prayed that complaint be dismissed as claim was rightly repudiated by the LIC. After hearing the parties, the District Forum, Nagaur through impugned order dated 11. 9. 2003 had dismissed the complaint inter alia holding that on the date of death, there was no concluded contract between the parties. Aggrieved from the said order of the District Forum, Nagaur, this appeal has been filed by the complainant-appellants. In this appeal the main contention of the learned Counsel for the appellants is that since the amount of the policy in question was paid by the deceased on 19. 3. 2002 and the same was accepted by the respondent''s agent and if the deceased had died on 19. 3. 2002, therefore, from every point of view it should be treated that there was valid insurance contract between the parties. Hence, repudiation of the claim of the complainant-appellants by the respondents was wholly illegal and arbitrary and in view of this the findings of the District Forum rejecting the claim of the complainant-appellant cannot be sustained as they suffer from basic infirmity, illegality and perversity and appeal be allowed.

On the other hand the learned Counsel appearing for the respondents has supported the impugned order of the District Forum.

WE have heard the learned Counsel appearing for the parties and gone through the entire materials available on record. There is no dispute on the point that the proposal form in question was filled in up by the deceased on 18. 3. 2002 and the premium for the policy was paid by the deceased on 19. 3. 2002 and on the same day he had died in an accident.

THERE is no dispute on the point that the proposal form along with the receipt were received by the office of the respondents on 23. 3. 2002 and the policy in question was issued by the respondents. There is also no dispute on the point that prior to 23. 3. 2002, the deceased had died on 19. 3. 2002 and information of death of the deceased was given by the appellants to the office of the respondents. There is no dispute on the point that before the papers in question could have reached before the office of the respondents on 23. 3. 2002 the deceased had already died on 19. 3. 2002.

THUS, in the facts and circumstances just narrated above, the question for consideration is whether repudiation of claim of the complainant-appellants by the respondents was justified or not or whether the findings of the District Forum rejecting the claim of the complainant-appellants could be sustained or not.

IT may be stated that the policy of insurance is the evidence of the terms of the agreement between the insurer and the insured. The promise of the insurer to indemnify the insured is subject to the terms, conditions and exceptions of the policy. Some of the terms of the policy are of the nature of exceptions, exempting the insurer from liability and some are of the nature of conditions subject to which the insurer will be liable. Apart from this, there are some conditions precedent to the valdity of policy and they are- (a) that the statmenets made in the proposal must be true and complete; (b) that the subject matter of insurance must be adequately described and must be in existence when the policy comes into force and so on.

Furthermore, acceptance of premium by insurer does not result in concluded contract of insurance. Mere payment of the premium and its acceptance by the agent does not amount to a concluded contract of insurance.

SINCE in the present case, the papers submitted by the deceased had reached in the office of the respondents LIC on 23. 3. 2002 and prior to that the deceased had died on 19. 3. 2002, therefore, the present case would be trated where it could be said that there was no concluded contract of insurance between the parties, especially when proposal of deceased was not accepted by the respondents LIC and no policy or cover note was issued by the respondents LIC in favour of the deceased. In LIC of India v. Mrs. Bimala Routray, II (1993) CPJ 146 (NC), where the proposer died before the acceptance of the proposal, it was held by the Hon''ble National Commission that there was no concluded contract of insurance.

IN Life Insurance Corporation of India v. Raja Vasi Reddy Komalavalli Kamba and Ors. , (1984) 3 SCR 350, while deciding the question as to when an insurance policy becomes effective, the Hon''ble Supreme Court held that a mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy documents is not acceptance. Acceptance must be signified by some act or acts agreed on by the parties after which the law raises a presumption of acceptance. In the present case, this aspect is also missing. From that point of view also, there was no valid contract of insurance between the deceased and the respondents LIC. So far as the decision given by this Commission in Appeal No. 1473/2001 on 3. 7. 2001 in the case of Chhitar Mal v. New India Assurance Co. , is concerned, the facts of the present case stand distinguished with this case.

THUS, for the reasons stated above, the respondents were justified in repudiating the claim of the complainant-appellants and in view of this, the findings of the District Forum rejecting the claim of the complainant-appellants are liable to be confirmed as they are based on correct appreciation of entire materials and evidence available on record and they do not suffer from any basic infirmity, illegality or perversity. Hence, no interference is called for with the same and this appeal deserves to be dismissed. Accordingly, this appeal filed by the appellant-complainants is dismissed. Appeal dismissed.