JUDGEMENT

(PER MR. JUSTICE RAM SURAT RAM (MAURYA), PRESIDING MEMBER

1.      Heard Mr. Umesh Kumar, Advocate, for the complainant and Mr. Rajesh Mahindru, Advocate, for the opposite party. 

2.      Smt. Shobha Gambhir (mother and nominee of Mukul Gambhir, the deceased life Assured) has filed above complaint for directing Life Insurance Corporation of India (the Insurer) to pay (i) Rs.10000000/- with interest, from 10.02.2017 till the date of payment, as the insurance claim; (ii) Rs.1500000/-, as compensation for mental agony and harassment; (iii) Rs.50000/-, as litigation costs; and (iv) any other relief, which is deemed fit and proper in the fact of the case.

3.      The complainant stated that her son Mukul Gambhir, aged about 26 years, was a Charted Accountant and had good income. The agent of the opposite party approached Mukul Gambhir, in December, 2015, for taking insurance policy and informed in respect of different policies and its benefits. Mukul Gambhir was not interest in taking insurance policy but due to persistent request of the agent, he agreed for taking policy. The agent obtained signatures Mukul Gambhir on 08.12.2015 on the Proposal Form and collected necessary papers pertaining to the age and PAN etc. and a cheque of Rs.23931/-. The agent deposited the cheque in Divisional Office-I of the opposite party on 10.12.2015 which was acknowledged by the opposite party by releasing proposal review slip. The cheque was encashed on 11.12.2015. Unfortunately Mukul Gambhir met in an accident on 16.11.2016 near Mapple Farm House, Chattarpur, New Delhi and died on the same day. The husband of the complainant consulted in the Branch Office, Karol Bagh of the opposite party after some time in respect of payment under the Insurance Policy, who advised for submitting Claim Form. The complainant submitted Claim Form, with necessary documents. Then the opposite party replied on 14.02.2017, repudiating the claim on the ground that no Insurance Policy was issued and the amount of Rs.23931/- could not be refunded because of non-availability of NEFT details of Mukul Gambhir. The complainant gave legal notice dated 11.01.2018 to the opposite party to settle his insurance claim. In spite of service of the notice, the opposite party did not respond. Then the complaint was filed on 05.09.2018.

4.      The opposite party filed its written reply on 12.03.2019 and contested the complaint. The opposite party stated that although the agent had deposited a cheque of Rs.23931/- in Divisional Office-I of the opposite party on 10.12.2015, which was encashed on 11.12.2015 but the agent had not deposited the filled up Proposal Form in any office of the opposite party. For the Health Insurance Policy for the coverage exceeding Rs.1000000/-, medical examination report of the Insured such as ECG, Haemogram, SBT-13 and routine urine analysis were required before consideration of the proposal for approval. Neither the agent nor the Insured ever made any effort for filling up the proposal form and submitted required medical examination reports. Therefore no insurance policy was issued. The premium amount could not be returned in the absence of NEFT details of Mukul Gambhir. In the absence of Insurance Policy, the claim as set up was not payable. There is no deficiency in service on the part of the opposite party. The complaint is liable to be dismissed.

5.      The complainant filed Rejoinder Reply, Affidavit of Evidence of Shobha Gambhir and documentary evidence. The opposite party filed Affidavit of Evidence of Rashmi Singh and documents. Both the parties have filed their written synopsis.

6.      We have considered the arguments of the counsel for the parties and examined the record. The opposite party admitted that the agent had deposited a cheque of Rs.23931/- in Divisional Office-I of the opposite party on 10.12.2015, which was en-cashed on 11.12.2015 and blank Proposal Form. The opposite party stated that for the Health Insurance Policy for the coverage exceeding Rs.1000000/-, medical examination report of the Insured such as ECG, Haemogram, SBT-13 and routine urine analysis were required for consideration of the proposal for approval. Neither the agent nor the Insured ever made any effort for filling up the proposal form and submitting required medical examination reports. Therefore insurance policy was not issued to Mukul Gambhir. In the absence of his NEFT details, the premium amount could not be returned. Non-issuance of Insurance Policy to Mukul Gambhir has not been disputed.

7.      Supreme Court in Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba, (1984) 2 SCC 719, held that in 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. The insurance proposal has to be accepted by the Competent Authority as per Standing Order of the Insurer for creating a binding contract. This judgment has been followed in Civil Appeal No.808 of 2017 Life Insurance Corporation of India Vs. Dakshna Devi (decided on 03.02.2011) and Mahendra Todi Vs. Birla Sunlife Insurance Company Limited (2023) 1 SCC 534 and by this Commission in LIC Vs. Kanchanben, II (1994) CPJ 62 (NC) and LIC Vs. Shubhra Bhambri, III (2007) CPJ 365 (NC).

8.      The counsel for the complainant relied upon judgment of Supreme Court in D. Srinivas Vs. SBI Life Insurance Company Limited, (2018) 3 SCC 653, in which, relying upon the terms of Home Loan, Supreme Court held that medical examination of the Life Assured was a condition precedent for acceptance of premium. If premium of policy has been accepted and retained for a long time then a presumption of acceptance of proposal form would arise.

9.      There was no provision either under law or under scheme of Insurer which makes medical examination of the Life Assured as a condition precedent for acceptance of premium. On the other hand medical reports as stated above were condition precedent for issuance of insurance policy. The Insurance policy is a contract like any other contract. Section 2(b) of the Contract Act, 1872 provides that when the person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes promise. Communication of acceptance is complete as against the acceptor when it comes to the knowledge of the proposer under Section 4. Insurance companies carry on its business on large scale. For discharge of business, Standing Orders have been issued, designating the power and authority of different officers. Proposal of insurance policy has to be accepted by the competent authority. No presumption of acceptance can be raised only on the ground that branch office or any other office has accepted the proposal form and the premium and retained it for a long time. Acceptance of proposal and its communication to the proposer makes the binding contract.      

O R D E R

In view of the aforesaid discussion, the complaint is partly allowed. The opposite party is directed to return the premium amount deposited by the son of the complainant with interest @9% per annum from the date of deposit till the date of refund, within a period of two months from the date of judgment; if not already refunded.