The father of the petitioner, complainant, during his life-time, had applied for taking an insurance policy from the respondent insurance company, under Jeevan Rekha Scheme for Rs.2 lakh through M/s. Nutan D. Bhadane. The proposal was sent to Development Officer on 3.12.2002, premium was paid and medical examination was done on 6.12.2002. Insurer died on 4.1.2003 before the issuance of the Policy. Complainant being the nominee filed the claim before the respondent, which was repudiated on the ground that there was no concluded contract between the parties. Petitioner, being aggrieved, filed a complaint before the District Forum. District Forum allowed the complaint and directed the petitioner to pay the assured sum to the complainant. Insurance company, being aggrieved, filed an appeal before the State Commission, which has been allowed and the order passed by the District Forum has been set aside. The State Commission held that since there was no concluded contract between the parties, the insurance company shall not be liable to pay the assured sum to the petitioner. The Hon’ble Supreme Court of India in “Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba & Ors.” [AIR 1984 Supreme Court 1014] has held that till the issuance of the policy, no binding contract comes into existence between the parties and the Insurance Company is not liable to pay the sum assured. Para 13 & 14 of the Judgement (supra) are reproduced below:- “13. When an insurance policy becomes effective is well-settled by the authorities but before we note the said authorities, it may be stated that it is clear that the expression "underwrite" signifies accept liability under’. The dictionary meaning also indicates that. (See in this connection The Concise oxford Dictionary Sixth Edition p. 1267.) It is true that normally the expression "underwrite" is used in Marine insurance but the expression used in Chapter III of the Financial powers of the Standing order in this case specifically used the expression "underwriting and revivals" of policies in case of Life Insurance Corporation and stated that it was the Divisional Manager who was competent to underwrite policy for Rs 50,000 and above. The mere receipt and retention of premium until after the death of the applicant or the mere preparation of the Policy document 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. See in this connection the statement of law in Corpus Juris Secundum, Vol. XLV page 986 wherein it has been stated as:- "The mere receipt and retention of premiums until after the death of applicant does not give rise to a contract, although the circumstances may be such that approval could be inferred from retention of the premium. The mere execution of the policy is not an acceptance; an acceptance, to be complete, must be communicated to the offer or, either directly, or by some definite act, such as placing the contract in the mail. The test is not intention alone. When the application so requires, the acceptance must be evidenced by the signature of one of the company’s executive officers." 14. Though in certain human relationships silence to a proposal might convey acceptance but in the case of insurance proposal silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. Mere delay in giving an answer cannot be construed as an acceptance, as, prima facie, acceptance must be communicated to the offeror. The general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer. Whether the final acceptance is that of the assured or insurers, however, depends simply on the way in which negotiations for an insurance have progressed. See in this connection statement of law in MacGillivray & Parkington on Insurance Law, Seventh Edition page 94 paragraph 215.” (emphasis supplied) We agree with the view taken by the State Commission and find no infirmity in the same. Dismissed.
......................JASHOK BHANPRESIDENT
......................B.K. TAIMNIMEMBER | | 
