IMPORTANT POINT
If there is no communication of approval of the proposal of the proposer the contract is not concluded.

ORDER

The present appeal has been filed by the appellant Life Insurance Corporation of India challenging the order dated 26.09.2016 passed by the State Consumer Disputes Redressal Commission, Maharashtra, (in short ‘the State Commission’) in Consumer Complaint No.CC/11/338.

2. Brief facts of the case are that Mr. Sanjay Kumar Savleram Bare submitted a proposal on 29.11.2004 for taking Life Insurance Policy “Jeevan Mitra double cover endowment plus profit plus accident benefit” and deposited Rs.1,68,609/- for sum assured of Rs.39,00,000. On 11.07.2005, the policy was issued, bearing no.960205662 under TT 88-24. On 25.11.2005, the policy lapsed for non-payment of premium. On 09.09.2009, the policy holder applied for revival of the policy and medical was done but no amount was paid. On 12.09.2009, medical report was received by the branch office Nasik of the opposite party. On 14.12.2009, the Divisional Office of the Insurance Company informed that the policy cannot be accepted for revival at this stage and may be kept in abeyance for six months. On 01.01.2010, a letter was sent to life assured which was duly received by him stating that the revival is postponed for six months. In the meanwhile, the life assured expired on 02.01.2010. On 27.12.2011, complaint was filed before the State Commission. The complaint was resisted by the opposite party by filing written version. On 26.09.2016, the State Commission passed the following order:-

“1. Consumer complaint is allowed with costs quantified at Rs.30,000/-.

2. Opponent/LIC of India is directed to pay an amount of Rs.78 lakhs (Rupees Seventy Eight lakhs only) (double the sum assured) along with Bonus accrued as per policy terms and conditions to the complainant within a period of 45 days from the date of this order. Non compliance of the order shall be liable for payment of interest @9% p.a. till realization on the amount ordered to be paid.

3. Opponent is also directed to pay an amount of Rs.1 lakhs (Rupees one lakh only) as compensation towards mental agony and suffering.”

3. Hence the present appeal.

4. Heard the learned counsel for both the parties and perused the record. Learned counsel for the appellant stated that the Deceased Life Assured (DLA) paid only one premium and did not bother to pay any further premium, accordingly the policy lapsed. The DLA applied for the renewal of the policy dated 11.07.2007, which was considered by the Insurance Company and the Insurance Company got the medical examination done of the life assured before taking any decision on the renewal of the said policy. After seeing the medical report, the decision was taken by the Insurance Company that the renewal should be kept pending for about six months and accordingly a letter dated .01.01.2010 was issued, which was received by the life assured on the same day. It was clearly mentioned in this letter that the renewal will be taken up after six months. The learned counsel stated that in postponing the decision on renewal for about six months, the idea was that in the meantime, the test report of the life assured might get better. Ultimately, the life assured died on 02.01.2010. The insurance claim was submitted by the complainant to the Insurance Company, however the Insurance Company repudiated the claim on the ground that there was no renewal of the policy and therefore, the policy was not valid on the date of death of the life assured. The State Commission has allowed the complaint of the respondent on the basis of the guidelines issued by IRDA vide their Circular No. 1385GI 2002 ENG dated 26.04.2002, which states that after receiving a proposal, Insurance Company should take the decision within 15 days. The State Commission has applied this guideline in the present case also, whereas the present case is not an initial proposal, rather it was an application for renewal of the lapsed policy. Clearly, no time limit is prescribed for renewal of the policy and it is the discretion of the Insurance Compa