Per Shri P.N. Kashalkar, Hon’ble Presiding Judicial Member
This is an appeal filed by Life Insurance Company/org. opponent against the judgement and award passed by District Consumer Disputes Redressal Forum, Kolhapur. While allowing consumer complaint No.65/2000 by judgement and order dated 01/02/2001, District Consumer Disputes Redressal Forum directed the LIC to pay a sum of `50,000/- to the complainant with effect from 01/01/2000 with interest @ 12% p.a. and also directed to pay `500/- as costs. As such LIC has filed this appeal challenging said award.
2. The facts to the extent material may be narrated as under :-
Zulekha Nashir Herlekar, deceased wife of complainant-Mr.Nashir Allabaksh Herlekar had filled in a proposal form on 19/10/1999 for a sum assured of `75,000/- to purchase life insurance policy. She had deposited `977/- as proposal deposit on that date. On 22/10/1999 LIC informed said lady that she should produce evidence about her date of birth and she should reduce the sum assured to `50,000/- in place of `75,000/-. Accordingly, Zulekha Nashir Herlekar went to the office of LIC at Kolhapur on 23/10/1999 and she produced proof of birth certificate and applied for reduction of sum assured from `75,000/- to `50,000/-. She rectified proposal form accordingly and put her signature. Unfortunately, before issuance of policy on 24/10/1999 she expired. Her husband lodged insurance claim with the LIC. However, LIC repudiated the claim on the ground that there was no concluded insurance contract and they had sent amount of `977/- which the insured had deposited as proposal deposit. Not satisfied with the repudiation of the claim, her husband filed consumer complaint in the District Consumer Disputes Redressal Forum. Consumer complaint was however allowed by the District Consumer Disputes Redressal Forum and District Consumer Disputes Redressal Forum directed that the complainant should be paid `50,000/- the sum assured with interest @ 12% p.a. from 01/01/2000 and awarded cost of `500/-. As such LIC has filed this appeal.
3. We heard Advocate Mr.Jay Navlani, Proxy Advocate for Advocate Mr.Kaushik, Advocate for the appellant/LIC and Mr.Santosh Patil, Advocate for the respondent.
4. We are finding that the order passed by the District Consumer Disputes Redressal Forum is not sustainable in law for the simple reason that the policy has not been issued by the LIC to Zulekha Nashir Herlekar before her death on 24/10/1999. No doubt she had submitted proposal form with LIC, Kolhapur on 19/10/1999. No doubt that LIC had asked her to produce proof of date of birth and also informed her by letter dated 22/10/1999 that she should reduce the sum assured to `50,000/- then only her proposal could be accepted. According to the complainant his wife on the next day went to the office of LIC and told them that they could reduce the sum assured at `50,000/-. She gave written application on 23/10/1999. It appears that this was received by LIC as per Inward Register on 25/10/1999. However, before this application could be acted upon, the lady had expired on 24/10/1999. In the circumstances, there was no concluded insurance contract as rightly argued by Advocate for the appellant. Unless there is concluded insurance contract between the proposer on the one hand and Underwriter on the other hand, there cannot be a liability of the Insurance Company. Mere payment of proposal deposit for purchase of policy along with proposal form would not tantamount to a concluded contract between proposer and the Insurer. At Exhibit-C there is a proposal deposit receipt issued by the LIC about having received deposit amount of `977/- from Zulekha N. Herlekar. However, from the letter dated 23/10/1999 received by LIC on 25/10/1999, it is crystal clear that till 24/10/1999 proposal submitted by Zulekha N. Herlekar was not accepted by the LIC and therefore, death claim was ultimately rightly rejected by the LIC by sending repudiation letter dated 24/12/1999 to the complainant and he was also given back amount of `977/- by cheque which deceased had deposited towards proposal deposit. In our view the District Consumer Disputes Redressal Forum erred in law in not appreciating the facts on record and erroneously directed the LIC/appellant herein to pay a sum assured of `50,000/- with interest @ 12% p.a.
5. There is judgement of this Commission appended at Exhibit-C at page-42 of appeal compilation. In this judgement between LIC and Shri Shriniwas L. Bhattad, this Commission had laid down that, “mere acceptance of premium and proposal deposit would not mean that LIC had accepted the proposal and there was no concluded insurance contract between the parties. Unless proposal is accepted and policy is issued, the LIC is not bound to pay insurance claim if in the meantime before issuance of policy, proposer dies.” This Commission has relied upon the judgement of Apex Court in support of its finding in the case of LIC V/s. Raja Vasireddy Komalavalli Kamba & Ors., A.I.R. 1984 SC page-1014. This question was extensively considered by the Hon’ble Apex Court and it laid down that acceptance is complete only when it is communicated to the offerer i.e. life assured. Silence or receipt and retention of premium cannot be construed as acceptance. Said ruling of Apex Court and the judgement of this Commission on the same line is squarely applicable to the facts and circumstances of our case and relying on the Supreme Court ruling, we hold that the District Consumer Disputes Redressal Forum erroneously allowed the complaint and by allowing this appeal, the same will have to be dismissed. Hence, we pass the following order :-
-: ORDER :-
1. Appeal is allowed. The impugned order dated 01/02/2001 is quashed and set aside. Consumer complaint No.65/2000 stands dismissed.
2. No order as to costs.
3. Copies of the order be furnished to the parties.
Pronounced
Dated 15th September 2011.
