SENIOR BRANCH MANAGER, L.I.C. vs SNEHALATA DAS

THIS appeal is directed against the judgment of the District Forum, Khurdha, Bhubaneswar in C.D. Case No. 133 of 1992. The complaint petition was filed by the State Consumers'' Protection League, describing it as complainant No. 2 on behalf of Smt. Snehalata Das who was described as complainant No. 1. The complainant has asserted in the complaint petition that she deposited a sum of Rs. 1,521/- on 30.10.93 through opposite party No. 2, the agent of the Life Insurance Corporation of India for issue of ''Ashadeep'' Bond. Since she was not issued any Ashadeep Bond, she made enquiries by writing letters on 28.2.94 and 23.4.94. Having not been given any response, she approached the League to pursue the matter on her behalf, with the Branch Manager of the local Branch of the L.I.C. On enquiry by the said League, the L.I.C. intimated that as the proposer failed to furnish the required documents as asked for in the letter dated 5.11.93, the deposited amount was only to be refunded and no Ashadeep Bond could be issued. It was asserted by the complainant that the complainant did not receive any letter dated 5.11.93 requiring to give any further information or document. It was further submitted that the proposal and the medical report having been submitted before the L.I.C. on 15.11.93, there was no scope for requireing the complainant to rectify the defects in the letter dated 5.11.93. After filing of this proceeding before the District Forum, the L.I.C. sent a Cheque to the complainant for Rs. 1,471/- deducting a sum of Rs. 50/- towards medical examination fee. But the cheque was returned by the complainant on the plea that the case had already been filed by her before the District Forum. The opposite party No. 2, the agent of the L.I.C. filed a show cause stating that he made deposit of the initial amount and submitted the proposal form before the L.I.C. after 15.11.94 and also stated that the medical examination was conducted on 15.11.93 itself. A joint written statement was filed by the Senior Branch Manager of the Life Insurance Corporation and the Development Officer of the said Corporation who had been arrayed as opposite parties Nos. 1 and 3 respectively. They stated that certain questions in the proposal form were not answered at all by the complainant and she was informed by letter dated 5.11.93 to rectify the defects by properly filling up the form against Serial Nos. 7, 8, and 13A to 13C. Reminder was also sent by a letter dated 9.5.94 and since the complainant did not agree to rectify the defects, the proposal could not be accepted and the deposited amount was refunded by a cheque deducting a sum of Rs. 50/- towards medical examination fees.

THE District Forum after considering the case of both parties, came to a conclusion that the proposal form having been submitted after 15.11.93, the question of requiring the complainant to rectify the defects by letter dated 5.11.93 did not arise and, therefore, the plea taken by the L.I.C. for non-acceptance of the policy is not correct. It also held that the proposal form of the complainant was not properly attended to after it was filed. Referring to a decision of the National Commission, it accepted the proposition that mere receipt and retention of premium does not amount to acceptance by the L.I.C. But at the same time it held that the complainant having not been afforded the service she was entitled to, the L.I.C. is guilty of deficiency in service and, therefore, liable to compensate for that. Having found that the deduction of Rs. 50/- towards medical expenses incurred, it directed the L.I.C. to refund the entire amount together with a compensation of Rs. 3000/- and a cost of Rs. 200/- to the complainant. Hence this appeal. The learned Counsel for the appellant strenuously argued that the complainant is not a consumer as defined in the Act in as much as her proposal form submitted before the L.I.C. was not accepted and no contract did take place between the complainant and the Corporation. He has argued that the amount of money which the complainant had deposited along with the proposal form cannot be termed as premium as there was no policy of insurance in existence at that time. It was at the stage when a proposal was to be examined by the L.I.C. with a view as to whether it would be or would not be accepted by it. He has also urged that the observation of the District Forum that the proposal form was not submitted before the Forum though called upon to do so is an error of record, in as much as the L.I.C. had in fact submitted the proposal form which forms a part of the record. He further wanted to invite our attention to the date of filing of the proposal form which has been noted as 1.11.93.

The learned Counsel appearing for the respondent urged that since the proposal form was filed by the complainant as per the requirements of the Corporation, it amounts to acceptance of the form by the L.I.C. as soon as the same is filed and, therefore, the complainant became a prospective consumer and is entitled to certain services from the L.I.C. He reiterated the stand taken by the complainant before the District Forum that no letter was received by her requiring her to rectify the defects and at any rate, the defects now pointed out are minor in nature and did not stand on the way of acceptance thereof. According to him, there having been deficiency in service on the part of the L.I.C. the award of compensation and cost in favour of the complainant was fully justified.

IT is of primary importance to us to determine as to whether the complainant is a consumer whose grievances can be redressed by a consumer forum. Consumer has been defined in the Act to mean a person who hires or avails of service for consideration. We are not concerned in this case with the other category of consumers who purchase goods for consideration. IT is an admitted position that according to the scheme floated by the L.I.C. the complainant submitted a proposal form before the L.I.C. along with a sum of Rs. 1,521/- as was required under the scheme. The aforesaid deposit of money is neither premium nor consideration which could be adjusted against the dues payable by the complainant, had the proposal form been accepted. Whether the Corporation was justified in not accepting the proposal is a different matter, but the fact remains that the proposal had not been accepted. IT is elementary that in order that an agreement would come into existence, there must be an offer and there must be an acceptance. Here the complainant was the person who filed a proposal form for the purpose of acceptance by the L.I.C. The proposal having not been accepted, no legal relationship came into existence between the two and, therefore, the complainant did not become a consumer merely on submission of a proposal form for acceptance with the amount required under the scheme. That being so, the proceeding at her instance before the District Forum was misconceived. The District Forum in its analysis also came to similar conclusion by observing that mere deposit or retention of the premium does not amount to acceptance. At any rate, the complainant not being a consumer, the redressal if any available to her cannot be given by a consumer forum. During the course of hearing of the appeal, we wanted to know as to why the L.I.C. should not refund back the entire amount deposited by the complainant since her proposal was not accepted by the L.I.C. It has been assured to us by the learned Counsel for the appellant that the L.I.C. would take up the matter and see that the entire amount is refunded back to the complainant.

WE, therefore, find that the District Forum was not correct in awarding compensation and cost against the present appellant. WE, therefore, allow this appeal and set aside the impugned order, but without costs. The amount deposited by orders of this Court as condition for stay shall be paid back to the appellant. Appeal allowed.