State Consumer Disputes Redressal Commission
Baudi vs Lic & Ors. on 22 November, 2006
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
BEFORE THE STATE CONSUMER DISPUTES
REDRESSAL COMMISSION,
RAJASTHAN JAIPUR
Appeal
No.1482/1999
Baudi
V/s Divisional
Manager, Life Insurance Corpn.
Of India and
ors.
22.11.2006
Honble Mr.Justice Sunil Kumar Garg,
President
Shri T.P.Gupta, Member
Smt.Vimla Sethia, Member Mr.Pramod Shandilya for the appellant.
Mr.Ravindra Pal Singh for the respondents.
Per Honble Mr.Justice Sunil Kumar Garg, President This appeal under section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act of 1986) has been filed by the appellant-complainant against the order dated 16.7.1999 passed by the learned District Forum, Nagaur in case no.162/98 by which the complaint filed by the complainant-appellant under section 12 of the Act of 1986 was dismissed.
2. The necessary facts giving rise to this appeal are as follows:-
The complainant-appellant had filed a complaint before the District Forum, Nagaur on 31.7.1998 stating inter-alia that her husband Andaram (hereinafter referred to as the deceased) had taken insurance policy for Rs.50,000/- from the respondent no.3 Manglaram, agent of the LIC. It was further stated in the complaint that on 15.4.1998, Rs.2907/- were paid by the deceased to the respondent no.3 as amount of premium of the policy. It was further stated in the complaint that on 24.4.1998, the deceased had died suddenly and after the death of the deceased, a claim was preferred by the complainant-appellant being wife and nominee of the deceased before the respondents-LIC and that claim was repudiated by the respondents-LIC through letter dated 10.6.1998 stating that since the amount of Rs.2907/- was paid by the deceased on 15.4.1998 and the proposal form was filled in up by the deceased on 21.4.1998 and since these papers had reached in the office of the respondents-LIC on 30.4.1998 and since prior to that, deceased had died, therefore, there was no concluded contract of insurance between the parties and furthermore, the amount, which has been deposited by the deceased on 15.4.1998, had been returned. Thereafter, the present complaint was filed.
A reply was filed by the respondents-LIC on 9.11.1998 in which they took the same pleas, which were taken by them in the repudiation letter dated 10.6.1998. It was further submitted that no doubt Rs.2907/- were paid by the deceased on 15.4.1998 and proposal form was filled in up by the deceased on 21.4.1998 and he was got medically examined on 22.4.1998 and these papers were received in the office of the respondents-LIC on 30.4.1998, but prior to that, deceased had died on 24.4.1998 before accepting his proposal form and thus, there was no concluded contract of insurance between deceased and respondents-LIC. Hence, claim of the complainant appellant was rightly repudiated by the respondents-LIC and the present complaint deserves to be dismissed.
After hearing the parties, the learned District Forum, Nagaur through order dated 16.7.1999 dismissed the complaint of complainant appellant holding inter-alia that there was no valid insurance contract between the parties as before accepting the proposal form, deceased had died.
Aggrieved from the said order dated 16.7.1999 passed by the learned District Forum, Nagaur, the appellant complainant has preferred this appeal.
3. In this appeal, the main contention of the learned counsel for the appellant is that since the amount for policy has been paid by the deceased before his death and the same was also accepted by the respondents before his death and proposal form was also filled in up by the deceased before his death and deceased was also got medically examined by the respondents, therefore, in these circumstances, from every point of view, it should be treated that there was valid insurance contract between the parties and thus, repudiation of claim of the complainant appellant by the respondents was wholly illegal, arbitrary and wrong one and it amounted to deficiency in service on the part of the respondents.
4. On the other hand, the learned counsel appearing for the respondents has supported the impugned order of the learned District Forum.
5. We have heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents and gone through the entire materials available on record.
6. There is no dispute on the point that on 15.4.1998, Rs.2907/- were paid by the deceased for insurance policy.
7. There is also no dispute on the point that the proposal form was filled in up by the deceased on 21.4.1998.
8. There is also no dispute on the point that the deceased was got medically examined on 22.4.1998.
9. There is also no dispute on the point that the papers submitted by the deceased were reached in the office of the respondents-LIC on 30.4.1998, but prior to that, deceased had died on 24.4.1998 before accepting his proposal form.
10. Thus, in the facts and circumstances just narrated above, the question for consideration is whether repudiation of claim of the complainant appellant by the respondents-LIC was justified or not or whether the findings of the learned District Forum rejecting the claim of the complainant appellant could be sustained or not.
11. It may be stated here 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.
12. Apart from this, there are some conditions precedent to the validity of policy and they are:-
(a) that the statements 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.
13. 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.
14. Since in the present case, the papers submitted by the deceased had reached in the office of the respondents-LIC on 30.4.1998 and prior to that, deceased had died on 24.4.1998, therefore, the present case would be treated 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.
15. In LIC of India V/s Mrs.Bimala Routray (II (1993) CPJ 146 (NC)), where the proposer died before the acceptance of the proposal, it was held by the Honble National Commission that there was no concluded contract of insurance.
16. In Life Insurance Corporation of India V/s Raja Vasi Reddy Komalavalli Kamba and ors. ((1984)3 SCR 350), while deciding the question as to when an Insurance Policy becomes effective, the Honble 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.
17. For the reasons stated above, it is held that there was no valid insurance contract between the deceased and the respondents-LIC and when this being the position, if the claim of the complainant appellant was repudiated by the respondents-LIC, it cannot be said that any illegality or irregularity has been committed by the respondents-LIC in doing so. In view of this, the findings of the learned District Forum rejecting the claim of the complainant appellant cannot be said to be illegal or erroneous or perverse one and rather they are based on correct appreciation of entire materials and evidence available on record. Hence, no interference is called for with the same and this appeal deserves to be dismissed.
Accordingly, this appeal filed by the appellant-complainant is dismissed.
(Smt.Vimla Sethia) (T.P.Gupta)(Justice Sunil Kumar Garg) Member Member President