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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J.M. Malik, Presiding Member and Dr. S.M. Kantikar, Member
KRISHNA BAI - Appellant
Versus
LIC OF INDIA - Respondent
Revision Petition No. 2583 of 2011 (Against the Order dated 28.3.2011 in Appeal No. 2441 of 2009 of the State Commission Madhya Pradesh)
Decided on : 03-03-2016
Mr. Vikas Rai, Advocate, for the Appellant; Mr. Neelesh Khare, Advocate, for the Respondent
The date of acceptance of a life insurance proposal determines the commencement of the risk, and the insurance company cannot benefit from a contract concluded after the insured's death.
Headnote:
Insurance - Life Insurance Policy - Acceptance of Proposal - Date of Risk Commencement
Fact of the Case:
The insured made a proposal for a life insurance policy and paid the premium on 11.6.2006. The insurance policy was issued on 15.7.2006, but the insured passed away on 18.7.2006. The communication of the acceptance of the proposal was issued on 4.8.2006.
Finding of the Court:
The court found that the date of risk commencement should be the date of acceptance of the proposal, and the insurance company cannot take the benefit of both worlds by concluding the contract after the insured's death.
Issues: The main issue was the determination of the date of risk commencement and the validity of the insurance contract after the insured's death.
Ratio Decidendi: The court held that without acceptance, there is no concluded contract, and if the offerer dies before acceptance, the offer lapses. The court also emphasized the importance of the date of risk commencement and the misleading procedure adopted by the insurance company.
Final Decision: The court set aside the order passed by the State Commission and restored the order of the District Forum, allowing the complaint filed by the wife of the insured.
ORDER
Mr. Justice J.M. Malik, Presiding Member(Oral)—Learned counsel for the parties present. Arguments heard.
2. Shri Narbada Prasad Rayakwar, the insured, made a proposal on 11.6.2006. He deposited the amount on the same date with the Life Insurance Corporation of India, for getting the insurance policy. He was given the insurance policy on 15.7.2006. The relevant extract of the policy runs as follows:
Policy No. and date of Commencement Table and Term Sum Assured (Rs.) Due date and mode of payment Instalment premium payable (Rs.) -------
352501189
15.07.2006 014
16 16 2,00,000 15th
Qly 3462.00 626
15.07.2006
Nominee under Section 39 of the Insurance Act, 1938
SMT KRISHNA BAI WIFE Date of Maturity 15.07.2022
Name and Address of Proposer and Life Assured Date of Last Payment 15.04.2022
Narmada Prasad Raikwar Date of Birth 25.05.1963
S/o Sh. Tijva Prasad Raikwar Bhoi-Mohlla Friganj Age/Admission 43 Y
Shujalpur Mand Dist. Shajapur M.P. 100000
3. The IDV was in the sum of Rs. 2 lakhs. Unfortunately, the insured passed away on 18.7.2006. However, the contract according to the opposite party concluded on 21.7.2006. The communication of the acceptance of the proposal was issued on 4.8.2006.
4. The District Forum allowed the complaint filed by the wife of the insured, Ms. Krishnai Bai. An appeal was preferred before the State Commission by LIC of India. The State Commission accepted the appeal while placing reliance on the celebrated authority of the Supreme Court in Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba and Ors. (1984) 2 SCC 719, first appeal No. 365 of 2009 titled as Smt. Munni Agrawal v. Life Insurance Corporation of India by the National Commission and the another judgment of National Commission in Manoj Balmukund Aggarwal v. Life Insurance Corporation of India and Ors., revision petition No. 1170 of 2006.
5. We have heard the learned counsel for the parties.
6. Learned counsel for the petitioner has placed reliance on Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba and Ors. (supra). He has also invited our attention towards another Supreme Court authority reported in Life Insurance Corporation of India and Ors. v. Rakshna Devi, civil appeal No. 808 of 2007. In that case, it was held as under:
"A contract under the Contract Act implies offer, acceptance and consideration. Without acceptance there is no concluded contract. If before the acceptance the offerer dies, the offer immediately lapses and hence there cannot be any acceptance after his death."
7. Learned counsel for the petitioner has also invited our attention towards the proposal form wherein the insured made a declaration "I further agree that if after the date of submission of proposal but before the issue of his premium receipt (i) any change in my occupation or any adverse circumstances connected with my financial position or the general health of myself or that of any members of my family occurs or (ii) if a proposal for assurance or an application for revival of a policy on my life made to any office of the Corporation has been withdrawn or dropped, deferred or accepted at an increased premium or subject to a lien or on terms other than as proposed I shall forthwith intimate the same to the Corporation in writing to reconsider the terms of acceptance...."
8. Learned counsel for the petitioner has also cited a judgment of our Bench in case Manisha Haridas Gawande v. Life Insurance Corporation of India, revision petition No. 4082 of 2012.
9. We are of the considered view that all these authorities are not applicable to this case. The facts of this case are peculiar and unique. The OP cannot be allowed to take the benefit of both the worlds. The premium was paid on 11.6.2006 and the risk started on 15.7.2006. The petitioner was communicated on 15.7.2006 itself. It is also interesting to note that the date of maturity is 15.7.2022 and not 21.7.2022. Had the risk started on 18.7.2006 or 21.7.202
