Petitioner was the opposite party before the District Forum.  Respondent was ordered to be proceeded ex parte on 24.11.2010 as the respondent had not appeared despite service.  Fresh Notice sent to the respondent for today has also been received back with postal remarks ‘refused’.

          Husband of the complainant had applied for issuance of a life insurance policy on 28.3.2002 in the sum of Rs.1 lakh and paid half-yearly premium of Rs.2,645/- .  Insured died on 8.4.2002 before the issuance of the policy on 15.4.2002.  Respondent, being the nominee, lodged a claim with the petitioner, which was repudiated on the ground that no contract of insurance had come into force, as the insured had died prior to the issuance of the policy.  Aggrieved by the repudiation of the claim, respondent filed a complaint before the District Forum.

          District Forum dismissed the complaint, aggrieved against which, the respondent filed an appeal before the State Commission.  State Commission allowed the appeal and set aside the order of the District Forum by observing :

“In our considered opinion, since the letter dated 30.3.2002 clearly shows that the proposal form of the deceased was accepted by the insurance company on 30.3.2002 and policy number 501118941 was given and that policy was for Rs.one lac, which came into force with effect from 28.3.2002 and its half yearly premium to the tune of Rs.2645/- was accepted by the respondent insurance company, therefore, in these circumstances, it can reasonably be concluded that the contract of insurance between the deceased and insurance company was complete on 30.3.2002.

Furthermore, when policy number and other details of policy have been mentioned in the letter dated 30.3.2002 meaning thereby all formalities on the part of the deceased were complete and policy number could only be given when proposal was found OK and if subsequent to that some enquiry about age was to be made by respondent and the same was made in this case, it would not negative that proposal which was accepted by the respondent on 30.3.2002, especially when date of birth disclosed at the time of proposal and as contained in the declaration of age duly attested by Notary on 3.4.2002 was found to be the same i.e. 1.7.1966.

Thus, repudiation of the claim of the complainant appellant by the respondent insurance company was not justified and it amounted to deficiency in service on the part of the respondent.  This is one of the aspects of the matter.”

          Counsel for the petitioner, relying upon a judgment of the Supreme Court in Life Insurance Corpn. of India Vs. Raja Vasireddy Komalavalli Kamba & Ors. – (1984) 2 SCC 719 contends that till the issuance of the policy, no binding contract comes into existence.  That since the life assured had died prior to the issuance of the policy, petitioner was not liable to pay the insured amount to the nominee of the insured deceased.  We find substance in this submission.  Supreme Court, in the aforesaid case, has held that till the issuance of the policy, no binding contract comes into existence and the insurance company is not liable to pay the insured amount, in case the insured dies before the issuance of the policy.  Relevant observation of the Supreme Court reads as under :

“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.XLIV, Pg.986 wherein it has been states 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 offerer, 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.”

          Admittedly, in the present case, the insured had died on 8.4.2002, i.e., much before the issuance of the policy on 15.4.2002.  No binding contract had come into force.  Petitioner, under the circumstances, was not justified in repudiating the claim.

          In view of the observations made above, Revision Petition is allowed and is disposed of accordingly.