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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Hon’ble Mr. Justice S. Parvatha Rao, President;
Mr. K. Ranga Rao & Dr. (Mrs.) Mamata Lakshmanna, Members
M/S. JAGTIAL CONSUMER WELFARE COUNCIL & ANR.—Complainants
versus
THE S.D.M., LIC, NAKKALAGUTTA, HANAMKONDA,
WARANGAL & ANR.—Respondents
C.D. No. 58 of 1992—Decided on 15.4.1999
Counsel for the Parties :
For the Complainants :Mr. V. Gourisankar Rao, Advocate.
For the Opposite Parties :Mr. P. Naga Pradeep, Advocate.
Mere receipt of premium amount does not amount to acceptance of an insurance proposal.
Headnote:
CONSUMER PROTECTION ACT - SECTION 12, 17(A)(I) - INSURANCE POLICY - DEFICIENCY IN SERVICE - NO CONCLUDED CONTRACT - NO POLICY ISSUED - NO ENTITLEMENT TO POLICY AMOUNT - EX-GRATIA PAYMENT RECEIVED - COMPLAINT DISMISSED.
Fact of the Case:
The complainant's son sent a proposal for a Money Back Insurance Policy with double accident benefit to the Life Insurance Corporation of India (LIC). He paid the first half-yearly installment of the premium. However, the proposal was not accepted by LIC for want of proof of age. Before the proof of age was received, the proposer died. LIC paid Rs. 50,000/- as ex-gratia payment to the complainant, who claimed the entire policy amount of Rs. 1 lakh.
Finding of the Court:
The court held that there was no deficiency in service on the part of LIC. The proposal was not accepted and no policy was issued. The complainant was not entitled to the policy amount. The court also held that the complainant was not entitled to claim further amount as she had received Rs. 50,000/- as full and final settlement of her claim.
Issues: Whether there was deficiency in service on the part of LIC.
Ratio Decidendi: The court relied on the decision of the Supreme Court in Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba, wherein it was held that 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 or from which the law raises a presumption of acceptance.
Final Decision: The complaint was dismissed.
Mr. K. Ranga Rao, Member—This is a complaint filed before this Commission on 24.3.1992 under Section 17(a)(i) read with Section 12 of the Consumer Protection Act, 1986 with the following averments. The first complainant is M/s. Jagtial Consumer Welfare Council represented by its Secretary and the second complainant is one Smt. Mahesh Rangamma, w/o. Jalpat Rao of Gopulapur Village, Dharmapuri Mandal, Karimnagar District. One Mahesh Umapathi Rao son of the second complainant sent proposals for Money Back Insurance Policy with double accident benefits under Table No. 75/20 for a sum of Rs. 50,000/- on 31.8.1990 by paying sum of Rs. 304/- on 17.8.1990 and another sum of Rs. 1,000/ on 31.8.1990. Subsequently he was murdered by Naxalites on 27.9.1990. The second complainant being his mother and being a nominee under the policy submitted her claim forms to the Branch Manager, Life Insurance Corporation of India, Jagtial (opposite party No. 2) requesting for payment of Rs. 1 lakh payable under the said policy. But on 31.5.1991 the Senior Divisional Manager, Life Insurance Corporation of India, Hanamkonda sent a cheque for Rs. 50,000/- only as ex-gratia payment, though the second complainant is entitled to a sum of Rs. 1 lakh as per the terms of the policy. The second complainant got issued a legal notice dated 23.9.1991 calling upon the opposite parties to pay the balance of Rs. 50,000/-. But the second opposite party sent a letter stating that the contract was not concluded between the son of the second complainant and the Corporation and the Corporation is therefore not liable to pay any more amount. The complainants therefore filed the present complaint praying for a direction to the opposite parties to pay Rs. 50,000/- towards balance of policy amount, to pay interest at 21% on Rs. 1 lakh from 27.9.1990 till 31.5,1991, to pay interest at 21% from 1.6.1991 till the date of realisation, to pay eligible bonus, to pay compensation of Rs. 25,000/- and costs.
2. The authorised signatory of the Life Insurance Corporation of India filed a counter denying the allegations made in the complaint and contending that late Mahesh Umapathi Rao made a proposal on 17.8.1990 for taking a policy with double accident benefit, that he paid Rs. 304/- on 17.8.1990 and Rs. 1,000/- on 1.9.1990 to cover the first half-yearly instalment of premium, that however the proposal was not accepted by the Corporation for want of certain documents namely proof of age, that the proof of age was not received till 6.10.1990, that because the proposer Mahesh Umapathi Rao died even before the proof of age was received by the Corporation, the proposal was not accepted and no policy was issued and that the complainant is not entitled to the policy amount. It was further stated in the counter that after taking into consideration the cause of death of the deceased as he was murdered by unknown persons, the Corporation decided to pay Rs. 50,000/- by way of ex-gratia and accordingly paid the said amount. Finally the opposite parties prayed for dismissal of the complaint.
3. At the time of enquiry the complainant examined 3 witnesses PWs 1 to 3 and got marked Exs. A-1 to A-4. The opposite parties have not adduced any oral evidence but got Exs. B-1 to B-3 documents marked in defence.
4. The point for consideration is whether there is deficiency in service on the part of the opposite parties.
5. The case of the complainant is that her late son Mahesh Umapathi Rao sent a proposal for Money Back Insurance Policy with double accident benefit under Table No. 75/20 by paying a sum of Rs. 304/- on 17.8.1990 and also another sum of Rs. 1,000/- on 31.8.1990, that her late son was killed by Naxalites on 27.9.1990, that being the nominee of her late son under the said proposal she made a claim for payment of the policy amount of Rs. 1 lakh and that the opposite parties unreasonably and arbitrarily repudiated her claim. The contention of the opposite parties is that though Mahesh Umapathi R
