JUDGMENT Deoki Nandan, J. - This is a plaintiffs second appeal in a suit for recovery of Rs. 10,160. The plaintiff claimed that her son Ashutosh Gupta had made a proposal on the 4th March 1966, being proposal N. 825215 for a 20-years anticipated endowment insurance policy with profits, for Rs. 10,000 and had paid Rupees 551.20 p., as the first years premium along with the proposal. This amount formed part of a cheque for Rs. 1,653.70 p., the balance being the amount of first years premia in respect of two other proposals for insurance on the lives of Santosh Gupta and Ajay Gupta who were the two other sons of the plaintiff. The plaintiff alleged that the proposal for insurance of the life of Ashutosh Gupta was accepted by Sri Ram Swarup Chandak, Agent, and Sri D. C. Sharma, Field Officer and Development Officer of the defendant-Life Insurance Corporation of India. It was alleged that they were both -authorised and must be deemed to have been authorised to accept proposals on the defendants behalf; that the cheque by which the premium was tendered along with the proposal was cashed by the defendant; that the acceptance of the first years premium by and on the defendants behalf amounted to acceptance of the proposal and the risk stood covered with effect from the 4th March 1966, the date on which the proposal was made. The plaintiff was the nominee of Ashutosh Gupta and entitled to recover the amount due under the insurance. Unfortunately Ashutosh Gupta, the assured, died on 27th June 1966 at Devangore (Karnataka) as a result of an accidental shot which hit him in the course of firing by the police. The insurance was for Rs. 10,000 and Rs. 160 was the amount of the first years profit which the plaintiff was entitled to recover. The defendant refused to pay the claim even in spite of a registered notice of demand. Hence the suit. 2. In defence the Life Insurance Corporation of India pleaded that the deceased Ashutosh Gupta had earlier submitted a proposal No. 367215 dated 27th Sept, 1005 under the plan and term 34-30 for insuring his life in the sum of .Rs. 10,000 and had paid Rs. 360 along with the proposal. Hence the suit. 2. In defence the Life Insurance Corporation of India pleaded that the deceased Ashutosh Gupta had earlier submitted a proposal No. 367215 dated 27th Sept, 1005 under the plan and term 34-30 for insuring his life in the sum of .Rs. 10,000 and had paid Rs. 360 along with the proposal. That proposal was not accepted, instead Ashutosh Gupta was informed that a proposal for insurance &of his life for plan and term 143.30 with an extra premium of Rs. 1.50 p. per thousand per annum, or for the plan and term 14-25 could be accepted at the ordinary rates of premium, whereupon Ashutosh Gupta did not agree to pay the extra amount of premium at the rate of Rs. 1.50 per thousand per annum, but consented to have himself insured for the plan and term 14-25 and paid the balance of Rs. 6.20 p. and a policy No. 27587415 was issued to him covering the risk from the 17th November 1965. The claim under that policy, which was also for Rs. 10,000 had duly been paid. But, pleaded the Life Insurance Corporation, the proposal No. 825215 submitted on 4th March 1966 along with the deposit of Rs. 551.20 p., was not accepted and only memorandum showing the receipt of the amount as a deposit was issued on the 4th March 1966 wherein it was clearly stated that the payment was received as initial deposit involving no risk to the Corporation. It was then pleaded that a proposal was submitted to the Corporations Divisional Office at Lucknow for consideration that the agent or the Development Officer were not authorised to accept the proposal, and on a scrutiny of the proposal the Divisional Office decided to call for a medical report, that Ashutosh Gupta got himself medically examined on 31st March 1966 and after considering the medical report the Divisional Office decided that the proposal could not be accepted unless an extra amount of Rs. 1.50 p. per thousand per annum was paid as premium and Ashutosh Gupta gave his consent for such extra payment, that the Branch Officer of the Corporation at Budaun communicated the said decision to Ashutosh Gupta by letter dated 12th April 1966 and asked for his consent for payment of the extra premium of Rs. 1.50 p. per thousand per annum was paid as premium and Ashutosh Gupta gave his consent for such extra payment, that the Branch Officer of the Corporation at Budaun communicated the said decision to Ashutosh Gupta by letter dated 12th April 1966 and asked for his consent for payment of the extra premium of Rs. 1,50 p. per thousand per annum that the same was handed over personally to Ashutosh Guptas father Sri A. P. Gupta and a copy thereof was also sent to the agent Sri R. S. Chandak for complying with the requirements of that communication. However, Ashutosh Gupta never consented to pay the extra premium of Rs. 1.50 p. per. thousand per annum and it was pleaded that the proposal was not accepted by the Corporation and did not mature into a concluded contract of insurance at any time before the death of Ashutosh Gupta, and no liability was fastened by the proposal on the Corporation to pay the amount of the insurance proposed, and that the Corporation had only to refund the amount of the deposit of Rs. 551.20 p. made with the proposal, which the Corporation was ever ready and willing to pay. 3. The following issues were framed by the trial court: 1. Whether the health of Ashutosh Gupta was such that the proposal could not be accepted as such? 2. Whether any information was conveyed to the proposer that his proposal was not acceptable without excess amount? 3. Whether the receipt of the first deposit by the Development Officer of the defendant was towards the premium and amounted to acceptance of the proposal? 4. Whether the deposit memo contained any entry as mentioned in para 30 of the written statement ? If so is it binding on the plaintiff? 5. Whether the defendant was entitled to demand fresh medical examination within six months of the previous medical examination for the previous policy? If not its effect? 6. Whether there was a concluded contract between proposer and the defendant? 7. To what relief, if any, is the plaintiff entitled? 4. If so is it binding on the plaintiff? 5. Whether the defendant was entitled to demand fresh medical examination within six months of the previous medical examination for the previous policy? If not its effect? 6. Whether there was a concluded contract between proposer and the defendant? 7. To what relief, if any, is the plaintiff entitled? 4. The trial court held that the health of Ashutosh Gupta was such as to warrant, under the rules of the defendant corporation a fresh medical examination as the proposal had been submitted more than three months after the earlier medical report in the context of the proposal No. 367215 dated 27th September, 1965 that defendant-Corporations demand for extra premium was duly conveyed to Ashutosh Gupta that the payment made had not been accepted by the Development Officer as premium nor did he have any authority to do so, that the memorandum of deposit clearly showed that it was being received merely as an initial deposit towards the proposal that the proposal in question had not been accepted by the defendant-corporation and that it did not mature into a concluded contract of insurance before the death of Ashutosh Gupta. In the result the trial court dismissed the suit. 5. The lower appellate court has maintained the dismissal of the suit. The lower appellate court found that on the basis of the earlier medical examination, the life of Ashutosh Gupta had been found standard for the plan and term 14-25 at ordinary rates. From this the lower appellate court concluded that it was sub-standard for all other plans and terms and consequently, vide proposal review slip, Ex. A-5, dated 28th March 1966 with reference to the earlier medical report Ashutosh Gupta could have been insured for the plan and term 25-20 only on payment of an extra premium of Rs. 1.48 per thousand per annum. On the question whether the calling for a fresh medical report by the defendant corporation on 28th March 1966 was not justified in view of the printed instructions at page 40 of the Manual for Agents of the corporation to the effect that a medical report remains in force for six months and that further proposal could be entertained during that period without a fresh medical examination on the basis of a personal statement only in form No. 660. The lower-appellate court found that the rule was not universal and there were certain exceptions to it and that the life of Ashutosh Gupta having been found to be sub-standard on appraisal of the first medical report dated 28th Sept. 1965' for any plan and term of insurance except the plan and term 14-25 at ordinary rates, the second proposal for insurance made on 4th March 1966 for the plan and term 25-20 could have been accepted only on payment of an extra premium of Rs. 1.48 per thousand per annum and consequently the defendant-corporation was 'well within its right to call for a second medical report. The lower appellate court then observed; that however, Ashutosh Gupta did submit a second medical report dated 31st March, 1966 and a fresh personal statement of that date vide paper No. 44/Kha-and 44/2Kha Ex-A-7 and these showed that the measurements and weight of Ashotosh Gupta were the same as at the time of the first medical examination and when these were put up before the Divisional Officer at Lucknow he ordered call consent fee Rs. 1.50 P. extra and balance on which a letter dated 7th April, 1966 vide Ex. A-9 was sent to Ashotosh Gupta requiring him to give his consent for payment of the extra premium of Rs. 1.50P per thousand per annum and to pay the balance. On these findings the lower appellate Court held that the life of Ashotosh Gupta was sub-standard for the proposed plan and terms and that the defendant-corporation was entitled to ask for extra premium. 6. The next point taken into consideration by the lower appellate court: was whether the decision of the Divisional Office of the corporation at Lucknow was communicated to Ashotosh-Gupta or not and held that due information was conveyed to Ashotosh. Gupta, through his father that his proposal was not acceptable without payment of the excess amount of the premium demanded. The lower appellate court also held in the context of this question that the proposal made by Ashotosh Gupta could not be deemed to have been accepted by the defendant-corporation. 7. Gupta, through his father that his proposal was not acceptable without payment of the excess amount of the premium demanded. The lower appellate court also held in the context of this question that the proposal made by Ashotosh Gupta could not be deemed to have been accepted by the defendant-corporation. 7. On the fourth question raised before it, the lower appellate court held that until the proposal is accepted and the advance is treated as premium the risk is not covered by the corporation and that in the present case there was no such acceptance of the proposal and the amount of Rs. 551,20P. was not adjusted by the corporation as premium in respect of the proposal in question. 8. Lastly the lower appellate court held that the requirements of the counter proposal made by the corporation not having been accepted or fulfilled by Ashutosh Gupta a concluded contract of insurance between the parties did not come into existence and the risk was therefore, not covered and with these findings the lower appellate court maintained the dismissal of the suit. 9. The first two questions which arose in the case before the lower appellate court were whether the health of Ashotosh Gupta was such that the proposal could not be accepted as such and whether the defendant corporation was entitled to demand fresh medical examination within six months of the previous medical examination, and if not its effect. In view of the fact that Ashotosh Gupta did undergo a second medical examination on 31st March 1966 and the result thereof was not different from that of medical examination which he had earlier undergone in September, 1965 think the second question does not really arise. The question that &does really arise was whether his health was such that the proposal made by him on 4th March 1966 could not be accepted as such that is without calling upon him to pay extra premium at the rate of Rs. 1.50P. per thousand per annum. The earlier proposal made by Ashotosh Gupta was for the plan and term 34-30, the prescribed premium rates for which are shown at page 285 of the Manual for Agents Vth Edition (November, 1967) published by the defendant Life Insurance Corporation. The premium prescribed is Rs. 37.25 P. per year where the age of the assured person is eighteen years. The earlier proposal made by Ashotosh Gupta was for the plan and term 34-30, the prescribed premium rates for which are shown at page 285 of the Manual for Agents Vth Edition (November, 1967) published by the defendant Life Insurance Corporation. The premium prescribed is Rs. 37.25 P. per year where the age of the assured person is eighteen years. This proposal was not accepted at ordinary rates and an offer was made on behalf of the defendant corporation that it could be accepted for the plan and term 14/30 on payment of an extra premium of Rs. 1.50 P. per thousand per annum or for the plan and terms 14-25 at ordinary rates. Ashotosh Gupta had already elf posited Rs. 360/- against that proposal the premium for the plan and term 14-30 after adding the extra of Rs. 1.50P. per thousand for year amounted to Rs. 35.50 P. but deducting the rebate of Rs. 1.50 P. per thousand per annum if the premium was paid annually, the total amount of premium on the proposal for insurance of Rupees 10,000/- worked out to Rs. 340/- and acceptance advice was accordingly sent to Ashutosh Gupta, but he did not agree to pay extra premium vide his letter dated 12th November, 1965 and the insurance was altered to the plan and term 14-25 which as stated earlier defendant corporation was prepared to accept at ordinary rates and the policy of insurance was also issued in due course and paid on the death of Ashotosh Gupta without any objection. 10. The proposal made by Ashutosh Gupta on 4th March, 1966 was for the plan and term 14-25 vide paper Number 40/2. The rate of premium for the plan and term 14-25 by a person aged 19 years was Rs. 41-19 per thousand per year as shown at page 215 of the Manual of Agents. The total amount of premium would have amounted to Rs. 411.90 P. and after deducting the prescribed rebate of Rs. 1.50,/- for annual payment the total amount of premium payable was Rs. 396.90 p. However the amount deposited was Rs. 551.20P. and the proposal review slip made by the office of the defendant corporation paper No. 42 Kha show that the proposal was treated as one for the plan and term 25-20 under which the annual premium payable at age 19 years is Rs. 56.62P. 396.90 p. However the amount deposited was Rs. 551.20P. and the proposal review slip made by the office of the defendant corporation paper No. 42 Kha show that the proposal was treated as one for the plan and term 25-20 under which the annual premium payable at age 19 years is Rs. 56.62P. and after allowing the rebate of Rs. 1.50P. for annual payment it works out to Rs. 55.12 per thousand per year. It appears that the mention of the plan and term 14.25 in the proposal paper No. 40/2 Kha was a mistake for the confidential report accompanying the proposal which is paper No. 40/5 Kha, shows that the plan and term of the insurance was 25-20 and the personal statement regarding health which is signed by Ashutosh Gupta, paper No. 40/4, Kha shows that the amount tendered as premium was Rs. 551.20P. which was the correct amount of the premium payable by a person aged 19 years for a life insurance of 10.000/- under the plan and term 25-20 and this seems to be the reason why it was treated as a proposal for insurance under the plan and term 25-20. Now Sri P. S: Misra D. W. 2 the Assistant in the new business department of the Divisional Officer of the defendant corporation at Lucknow who had appeared for the defendant corporation stated that Sri R. Krishna Swami who was the Senior Officer to whom the witness used to submit the proposal review slips called for a full medical report by endorsing the words call EMR on the review slip paper No. 42/Kha of the proposal in question on 28th March, 1966 and again called for payment of an extra premium of Rs. 1.50 P. per thousand per annum and balance after considering the office notes and the full medical report dated 31st March, 1966. The question is whether this demand for extra premium was justified. The witness was cross-examined on this point and he stated that the risk goes up as the period or term of insurance increases, and goes down as the period or term of insurance is reduced, and this seems to be common sense as well. The term or the period of insurance for which the earlier proposal of Ashutosh Gupta had been accepted by the defendant was 25 years, under the plan and term 14-25 at ordinary rates. The term or the period of insurance for which the earlier proposal of Ashutosh Gupta had been accepted by the defendant was 25 years, under the plan and term 14-25 at ordinary rates. In the original proposal made by him on 4th March, 1966 the same plan and term of insurance had been indicated and for that the premium payable would have been only, Rs. 396.90P. as shown above. However even treating it as an insurance under the plan and term 25-20 the period of insurance was not increased, it was decreased from 25 years to 20 and it stands to reason that the risk was also lesser. The premium paid was higher because the total amount of premium had to be paid over a shorter period of time. Without attributing any mala fides to shri R. Krishna Swami, it may be that he failed to notice this fact when he called for the extra premium of Rs. 1.50 per thousand per annum and the medical report dated 31st March, 1966. He probably thought that the medical report was the same as the earlier one, and extra premium was also called for at the same rate as demanded earlier. 11. Thus, it appears to me that the demand for payment of extra premium at the rate of 1.50P. per thousand per annum in respect of the proposal made by Ashutosh Gupta on the 4th March, 1966 was not justified in the light of the material placed by the defendant corporation itself and the general instructions issued by it from time to time. 12. With regard to the question whether the information of this demand' was conveyed to Ashutosh Gupta or not there is not good reason to doubt the-evidence placed by the defendant corporation and accepting the same and: agreeing with the conclusion arrived at by the courts below that the demand was communicated to-the father of Ashutosh Gupta it appears to me that Ashotosh Gupta was. a young lad aged 19 years at that time and it was his father who looked after these things on his behalf. It is unfortunate that Ashotosh Gupta died in an accident soon thereafter before any action could be taken to finalise the matter and that is why the question has arisen whether the transaction amounted to a concluded contract such as to-make the defendant corporation liable on it. 13. It is unfortunate that Ashotosh Gupta died in an accident soon thereafter before any action could be taken to finalise the matter and that is why the question has arisen whether the transaction amounted to a concluded contract such as to-make the defendant corporation liable on it. 13. The learned counsel for the appellant relied on a Division Bench decision of Calcutta High Court in Hindustan Co-operative Insurance Society v. Shaym Sunder, AIR 1952 Cal 691 and urged that the proposal papers having been sent to the defendant corporation along with the full amount of the premium payable by a cheque which was-cashed, the appropriation of the amount by the defendant corporation amounted to an acceptance of the proposal. It was not necessary that the acceptance should' have been communicated to the assured, the contract was complete as soon as the money was appropriated the subsequent letter from the corporation asking for further reports or making further demands could not unmake the contract which was complete on the-appropriation of the amount of the premium, unconcluded. It is true that the deposit receipt contains a note that the-amount was being received as a deposit and not as premium but the defendant corporation is a statutory body and it must work according to rules and regulations it would not have refused to accept the proposal or to issue the proper receipt for payment of the first premium and the policy, when the-amount of premium tendered along with the proposal was not deficient and the-proposal was not defective in any manner. The learned counsel further submitted that the defendant corporation could not have taken advantage of a wrong committed by one of its officers in demanding extra premium when according to its own rules the demand for extra premium could not have been made and it could not thus refuse to pay the amount of insurance on the death of the assured, simply because the papers were not completed and the policy was not issued by the defendant corporation at the proper time before the death of the assured. 14. 14. Clause (6) of Article 19 of the Constitution postulates that the fundamental right of the citizens of India to carry on business in this case of life insurers, could not be abridged unless the restrictions imposed by the Act which created the defendant corporation were reasonable and were imposed in the interest of general public. It is, therefore, implicit in the very Act of Parliament creating the Life Insurance Corporation of India, for carrying on the business of life insurance to the exclusion of every other person within the territory of India, under Cl. 6 (ii) of Article 19 of the Constitution that the corporation must act reasonably in its dealings with the public for the very object of granting it that monopoly as a corporation owned and controlled by the State was to ensure that the public receive a fair deal in matters of life insurance. The provisions of Article 14 of the Constitution also impose an obligation to act reasonably on all the organs of the State. The Life Insurance Corporation has been held to be an authority such as to be regarded the State within the meaning of Article 12 for purposes of Chapter III of the Constitution. Therefore, Article 14 applies to it as to the State itself (See Sukhdeo Singh v. Bhagat Ram AIR 1975 SC 1331 ). The Corporation therefore, owes a duty to the public not to discriminate between man and man and to act fairly and reasonably in all its dealings with them. Keeping this aspect of the matter in view the technical rules of the law of contract relating to offer and acceptance and the formation of contracts become subordinate to the substance and the object of the subject-matter of the present case. It has been seen above that but for the mistake committed by Sri R. Krishna Swami demanding the extra sum of Rs. 15/-at the rate of Rs. 1.50P. per thousand per annum the proposal in question was fit to be, and would have been accepted in due course by the defendant Corporation. The proposal in question complied with the requirements of the corporation as published in the Manual of Agents, which is its own publication., It was complete in all respects. 15/-at the rate of Rs. 1.50P. per thousand per annum the proposal in question was fit to be, and would have been accepted in due course by the defendant Corporation. The proposal in question complied with the requirements of the corporation as published in the Manual of Agents, which is its own publication., It was complete in all respects. The full amount of the premium required to be paid according to the tables published by the corporation had been paid along with the proposal, and even received by the defendant corporation. In such a situation, it could surely be said that the corporation was bound in law to accept the proposal. Having the monopoly of life insurance business in India it could not have refused to accept the proposal. Equity looks on that as done which ought to be done. 15. In the result it must be held, that there was nothing in the proposal in question which might have entitled the defendant Life Insurance Corporation to refuse to accept it. The Life Insurance Corporation must be deemed bound in law to accept all proposals lawfully made to it for life insurance in accordance with its published rules and requirements. The proposal in question as such a proposal and the the mere accident that the proposal in question was hot in fact accepted by the defendant Life Insurance Corporation before the death of the deceased will not absolve it from its obligation to pay the amount assured, as if the proposal had in fact been accepted during the lifetime of the deceased. 16. The appeal succeeds and is allowed with costs. The judgments and decrees of the two courts below are set aside. The plaintiffs suit is decreed for the recovery of the sum of Rupees. 10,160/- with pendente lite and future interest at 6% per annum and costs, throughout.