- (1.) THIS appeal arises from order dated 31.8.2001 rendered by the learned Vadodara District Consumer Disputes Redressal Forum in Consumer Complaint No. 178 of 1999 directing the opponent Life Insurance Corporation of India [LIC for short] to pay to the complai -nant Rs. 2,00,000/ - being the proposed insurance amount with interest @ 12% p.a. from 14.6.1999 till payment and cost quantified at Rs. 1,000/ -.
(2.) WE have heard the learned Advocates for the parties. We have gone through the impugned order. We have gone through the material which was submitted before the learned Forum for consideration. A very short question that arises for determination is whether there was concluded contract of life insurance between proposed life assured Ramanbhai Khodabhai Patel (since deceased) and opponent LIC of India. It is not in dispute that the proposed life assured submitted proposal form for taking life insurance policy in the sum of Rs. 2,00,000/ - on 30.7.1998 and also tendered premium deposit in the sum of Rs. 6,076/ -. It is not in dispute that the proposed life assured stated in the proposal form that he had an occasion to take treatment for kidney ailment and was required to be admitted to the hospital for three days in Column 11(f) of the proposal form. It would appear that this resulted into the opponent LIC of India calling from the proposed life assured papers with regard to ailment from which the proposed life assured suffered. There is a dispute with regard to when the papers were submitted by the proposed life assured. According to the opponent LIC of India, the proposed life assured submitted the papers on 16.11.1998 whereas according to the complainant the papers were submitted on or around 16.9.1998. In our considered opinion that does not make any difference with the ultimate outcome of the matter. It is not in dispute that the opponent requisitioned for papers on account of expiry of more than six months and the proposed life assured was also required to submit fresh proposal which he had submitted on 31.3.1999. Once again there is a dispute with regard to whether fresh reports were requisitioned from the proposed life assured. According to opponent LIC of India, fresh reports were requisitioned although there is no material to show that fresh reports were requisitioned. According to the complainant, although no fresh reports were requisitioned the same reports were again sent. The proposal form was then processed. According to opponent LIC of India investigation was carried out on or around 6.4.1999 and a decision was taken on 16.5.1999 to decline the proposal. By that time the proposed life assured died on 11.5.1999 resulting into filing of the complaint before the learned Forum by the complainant. Opponent LIC of India communicated its decision not to accept the proposal along with the cheque for return of the premium deposit amount which the complainant refused to accept and returned saying that the complaint was already filed for the policy amount. It is in the aforesaid facts and circumstances that the learned Forum came to the conclusion that since there was delay in accepting the proposal and not issuing the policy of insurance till up to the time proposed life assured breathed his last, there was deficiency in service on the part of the opponent LIC of India which was also guilty of unfair trade practice. The learned Forum, therefore, proceeded to accept the complaint by passing the impugned order.
(3.) IT is settled law that unless a proposal for entering into a contract is accepted by the person to whom the proposal is made, contract does not come into being. In the present case when the proposal remained pending for more than six months, admittedly it was on account of the fact that the opponent LIC of India was required to scrutinise the nature of ailment from which the proposed life assured suffered. It also transpires that more than six months had lapsed since the proposal form was submitted. Proposed life assured was required to submit fresh proposal form. It is not in dispute that fresh proposal form was submitted on 31.3.1999. Hence, the passage of time prior to 31.3.1999 will have no impact on the merits of the present case. At the same time, it has to be noted that this is not a case of mere delay without any cause on the part of the opponent LIC of India. Proposed life assured was suffering from kidney disease and it was obvious for the LIC of India to investigate the nature of disease from which the proposed life assured suffered. The 2nd proposal form came to be processed and decision came to be taken within less than a couple of months. Unfortunately, the proposed life assured died prior to that. Bearing in mind the said facts of the case, it has to be held that there is no concluded contract of insurance for Rs. 2,00,000/ - proposed by the proposed life assured. The law is settled in the case of LIC of India v. Raja Vasireddy Komalavalli Kamba and Others, 1984 AIR(SC) 1014It has been observed by the Apex Court that a 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. 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. The present appeal will have to be allowed only by making a reference to this decision of the Apex Court. However, the complainant s learned Advocate would rely upon a decision of the Honourable National Commission in the case of LIC of India v. Mrs. V. Jeeva, 1995 3 CPJ 1 . In that case the LIC of India, repudiated the claim on the ground that there was no concluded contract of insurance. Upon appreciation of evidence both the Forathe trial Forum as well as the State Commission came to the conclusion that there was in fact concluded contract between the parties. On account of such a concurrent finding by both Fora below, the National Commission appears to have held that there was no illegality or irregularity in the conclusion so arrived at by both the Fora. It has to be noted from the facts stated in the aforesaid citation, 1999 NCJ(NC) 93, that husband of the complainant there had taken out life insurance policy for Rs. 50,000/ - over and above his earlier two policies in the sum of Rs. 8,000/ - and Rs. 7,000/ -. The claim for the said earlier policies was settled by the LIC of India but the third policy claim was repudiated. In that respect it has been stated that the proposal form was submitted and premium was debited on 24.6.1988 and the balance premium which was found payable was also submitted on 25.10.1988. However, before the policy could be issued, husband of the complainant died on 1.11.1988. Upon appreciation of the evidence, both the Fora concluded that there was a concluded contract inasmuch as even the balance premium which was required to be paid by the husband of the complainant was paid and mere formality of issuance of policy was left out on account of mistake on the part of the Madurai office of the LIC of India in not sending the details of the previous policies. Under such peculiar circumstances, there was a finding of fact arrived at by both Fora that there was acceptance of proposal of insurance submitted by the husband of the complainant in that case. In our considered opinion this decision will hardly have any application to the present case. Reference has been made to a decision of this Commission in Pravinchandra Shantilal Piyara v. Life Insurance Corporation of India and Another,1993 1 CPR 333. In that case proposal was submitted for Rs. 50,000/ - on 12.3.1989 against premium deposit. The proposed life assured there disclosed that his one kidney was removed. He was, therefore, required to pay enhanced premium of Rs. 2,500/ - instead of Rs. 1,600/ -. The premium was allegedly accepted by LIC of India. The policy of insurance was also prepared and issued but was not received by the proposed life assured. However, LIC of India disputed allegation about issuance of policy. Unfortunately, the proposed insured expired on 17.8.1989 i.e., after more than five months from the date of proposal and the information of death was communicated to the LIC of India on 17.10.1989. The claim was repudiated on 28.10.1989 and the premium received was refunded. Under such circumstances, this Commission had an occasion to hold that the proposed life assured and, therefore, the complainant was a potential consumer and there was deficiency in service on the part of the Life Insurance Corporation of India in not issuing the policy of insurance inasmuch as there was negligence and indifference in that regard. This Commission, therefore, proceeded to award the policy amount with interest @ 12% p.a. while further observing that the case deserved exgratia payment of at least Rs. 50,000/ - by the LIC of India. It is in this connection that reference has been sought to be made to a decision of the National Commission in the case of Branch Officer, LIC of India v. Kanchanben H. Shah and Others,1994 2 CPJ 62(NC). In that case order passed by this Commission was subjected to challenge in Revision Petition No. 318 of 1993 decided on 3.5.1994. Husband of complainant had 7 LIC policies and he intended to have one more policy and paid 1st premium on 31.3.1989 for the proposed policy. On 1.11.1989 the Insurance Company asked him to pay additional amount under Plan 14 -12 and submit medical check up report. That was not possible for the proposer as he died earlier. The claim which was lodged by the complainant was not honoured. The District Forum dismissed the complaint on the ground that there was unconcluded contract but this Commission set aside that order and allowed the complaint. In the contest of such facts, the National Commission had an occasion to refer to the decision in the case of LIC of India v. Raja Vasi Reddy and Others, . Majority of the Members of the National Commission came to the conclusion that merely because there had been a delay in the acceptance of the proposal of the deceased, it could not be said that there had been deficiency in rendering service by the LIC of India. Relying upon the aforesaid decision of the Apex Court the Bench proceeded to accept the revision petition by setting aside the order passed by this Commission. Another Member Mr. Y. Krishan, referring to the decision of the Apex Court observed that the order passed by this Commission was erroneous both in law as well as on facts and the Forums should not travel beyond their jurisdiction. It is of paramount importance that while granting reliefs to the consumers those who provide goods or services are dealt with justly and fairly. In our considered opinion, this decision of the National Commission also provides a clear answer to the decision of this Commission referred to on behalf of the complainant.;