An insurance contract is not concluded merely by the receipt of a proposal and premium. The contract is finalized only upon the insurer's unconditional acceptance of the proposal and communication thereof, especially where the insurer has specifically requested additional underwriting requirements (medical reports) that remain unfulfilled.

VISHAV KANT GARG, MEMBER :

Appellant/Opposite Party i.e. LIC of India Ltd., has filed the present Appeal through its Branch Manager to challenge the impugned order dated 20.03.2025 passed by the District Consumer Disputes Redressal Commission, Amritsar (in short, “the District Commission”), whereby the Complaint filed by the Respondents/Complainants-Rajbir Singh & Others had been allowed.

2. It would be apposite to mention here that hereinafter the parties will be referred, as were arrayed before the District Commission.

3. Briefly, the facts of the case as made out by the Respondents/Complainants in the Complaint filed before the District Commission are that the father of the Complainants Ajit Singh had applied for the purchase of LIC Policy i.e. Plan Code 936 on 29.12.2021 by paying premium of Rs.16,655/-. On the same day the LA had provided cheque No. 16664 dated 29.12.2021 and the OP had given the deposit receipt. However, after some days i.e. on 24.01.2022 the LA had expired. The OP was informed about the death of the LA and claim had been lodged. All the formalities regarding the claim were completed. The OP had supplied the cover note of the policy but had not provided the complete terms and conditions of the policy. The OP instead of paying the claim amount lingered on the matter on one pretext or the other.

4. Stating the act of the opposite party to be a case of ‘deficiency in service’ and ‘unfair trade practice’, it was prayed in the Complaint that the OP be directed to pay Rs.10 Lakh as insurance amount alongwith accrued bonus. OP be further ordered to pay 12% interest on the same from 24.01.2022 till realization. Rs.2,00,000/- was prayed on account of compensation. Litigation expenses had also been prayed for.

5. Upon issuance of notice in the Complaint, the Appellant/ Opposite Party had filed the written statement by raising certain preliminary objections that the Complainants had not approached the District Commission with clean hands. It was denied that any insurance cover of Rs.10 Lakh had been issued in the name of Ajit Singh. Said Ajit Singh had only submitted Proposal Form and had deposited the premium of Rs.16,655/- on dated 29.12.2021. Receipt of deposited amount was only a Proposal Deposit Receipt and it was clearly mentioned on the same that ‘acceptance of this deposit does not make the Corporation liable for acceptance of risk’. Only after the acceptance of the Proposal Form, the Policy Number is to be allotted and policy is issued but no such policy number was issued to the Proposer. In the present case, the proposer had not completed all the requirements and he had expired before the issuance of the policy. The contract of Insurance in the present case was not concluded. The proposer had been informed to provide the following medical reports i.e. ECG report, FBS report, Lipidogram report, RUA report and HB% report. The Divisional Medical Referee of LIC of India on 10.01.2022 had called for fresh 2D Echo report of the proposer and only after supplying the same is to examine at different levels before issuance of policy. Competent Authority also sought the exact cause of death in family history, DO MHR in ACR i.e. Development Officer’s Moral Hazard Report in Agent’s Confidential Report and all the documents Self Attested. The proposer was again informed vide letter dated 11.01.2022 to complete the said requirements. To this, the Proposer had informed vide lett