State Consumer Disputes Redressal Commission
Lic vs Smt. Jyoti Shikha on 1 December, 2009
BEFORE
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CIRCUIT BENCH,
RAJASTHAN, JAIPUR
Appeal No. 17/2007
LIC
of India, through Branch Manager (II), Meera Marg, Jawahar Nagar,
Sri Ganganagar (Raj).
LIC
of India, through Manager (Claims), Divisional Office:'Jeevan
Prakash', Jaipur Road, P.B. No. 66, Bikaner(Raj).
.
.Appellants-Opposite Parties
VS
Smt.
Jyoti Shikha W/o Late Shri Vishnu Bhagwan C/o Shri Narottam Sharma,
Near Govt. Senior Secondary School, Lalgarh Jataan, Tehsil
Sardulshahar, Distt. Sri Ganganagar (Raj.)
..Respondent-Complainant
Before:
Mr.
G.S. Hora, Presiding Member
Mr. Sikandar Punjabi, Member Present:
Mr. J.P. Sharma, counsel for the Appellant Mr. Bhartesh Goyal, counsel for the Respondent ORDER Dated: 01.12.2009 PER Mr. G.S. HORA, PRESIDING MEMBER This appeal has been filed against the order dated 18.11.2006 passed by the learned District Forum, Sri Ganganagar directing the Appellant Insurance Corporation to pay to the Complainant a sum of Rs. 2,00,000/- with all benefits attached thereto and further to pay interest @ 9% per annum from 1.5.2005 till the date of payment along with Rs. 10,000/- as compensation and cost of litigation.
The Complainant and her Husband Late Shri Vishnu Bhagwan had obtained a Double Cover Joint Life Plan with profits plus accident benefits by submitting a proposal form on 13.12.2004. Unfortunately, the Husband of the Complainant died in an accident on 31.12.2004. The claim was filed with the Corporation but the payment was not made to the Complainant on the ground that before the proposal was accepted, Shri Vishnu Bhagwan had already expired on 31.12.2004 of which no information was given by the Complainant to the Corporation.2
There is no dispute on the point that the death of the deceased occurred on 31.12.2004. The policy on record goes to show that the proposal for the policy was made on 13.12.2004 and First Premium Receipt was also issued on 31.12.2004. The learned counsel for the Appellant has submitted that the proposal form submitted to the Corporation was registered on 31.12.2004 which was reviewed on 2.1.2005 and policy was issued on 12.2.2005. According to the learned counsel, the First Premium Receipt was issued on 2.1.2005. As the Life Assured (LA) died before the acceptance of the proposal, no contract was entered into between the LA and the Corporation.
The learned counsel has relied upon AIR 1984 SC 1014 wherein it has been held that a contract concludes only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making offer. Similarly the mere receipts and retention of premium until after the death of the applicant or mere preparation of the policy document is not acceptance and does not give rise to contract. Acceptance must be signified by some act or acts agreed on by the parties or from which the law raises a presumption of acceptance. In LIC vs Smt. K. Aruna Kumari Revision Petition No. 533 of 1994, Legal Digest Jan-April, 1999 the National Commission has held that mere receipt and retention of premium until after the death of the applicant is not acceptance of contract. This Commission in the case of Baudi vs LIC of India III (2007) CPJ 414 has held that where the proposer died before the acceptance of the proposal, there was no concluded contract of insurance.
The learned counsel for the Respondent on the other hand, while citing 2006 NCJ 297 (NC) LIC vs Rakshsna Devi submitted that the contract was concluded on 31.12.2004 when the proposal was accepted which is clear from Annexure-P4. On the same day, First Premium was received by the Corporation which is evident from the First Premium Receipt No. 0515354. The accident occurred on 31.12.2004 in the evening at 6.35 PM. As per the counsel, the LA died after the insurance contract was concluded and therefore the Complainant was entitled to get the amount awarded by the learned District Forum.
If we look at Section 2 of the Contract Act, it becomes clear that a contract concludes only when the proposal is accepted and acceptance is communicated to the person making offer. The policy cover indicates that the proposal was made on 13.12.2004. First Premium Receipt also indicates that the proposal was made on 3 13.12.2004.
This proposal appears to have been accepted on 31.12.2004. The authority under the Insurance Act has framed Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations 2002. The said Regulations provide that the proposal shall be processed by the insurer with the speed and efficiency and all decisions shall be communicated by it in writing within a reasonable period not exceeding 15 days from the receipt of the proposal by the insurer. Applying the aforesaid guidelines, it is apparent that there was delay in accepting the proposal dated 13.12.2004. The proposal should have been processed, accepted or rejected and communication of the same should have been sent to the proposer within 15 days of the receipt of proposal but the guidelines were not adhered to. This demonstrates deficiency in service on the part of the Corporation. Apart from this, the First Premium Receipt goes to show that the premium was accepted on 31.12.2004. It further goes to show that on 31.12.2004, the contract had been concluded and therefore the First Premium Receipt was issued. Even if the version of the Corporation is accepted that the proposal was accepted after the death of the LA but then also the Corporation is bound to make the payment because the acceptance shall conclude the contract retrospectively. The policy was to commence from 28.12.2004 and with the acceptance of proposal on 31.12.2004, the policy shall be deemed to have run from 28.12.2004. As the proposal had been accepted by the Insurance Corporation, the Complainant is entitled to get it enforced. The plea of the Corporation is that the agreement was void because before the acceptance of the proposal, the LA had died and where the agreement is made under mistake, the same would be void as per Section 20 of the Contract Act. Needless to say that the mistake has to be mutual under section 20 and in order that the agreement to be treated as void, both the parties must be shown to be suffering from mistake of fact. Unilateral mistake is outside the scope of Section 20. Viewed from any angle, the case of the Complainant appears to be is on a strong footing and therefore we do not find any infirmity, illegality and perversity in the impugned order and no interference is called for with the same and the appeal deserves to be dismissed.
Consequently, the appeal fails and the same is dismissed with cost on parties.
Member Presiding Member Hira Lal