Research › Search › Judgment

J&K High Court · body

2001 DIGILAW 310 (JK)

Life Insurance Corp. Of India v. Bindu Bala

2001-11-29

T.S.DOABIA

body2001
1. When Bharat Bhushan Sharma, husband of respondent No.1, filled the proposal form to get an insurance cover in the sum of Rs.50, 000/- little did he realize that he would meet his end ten days later. This Bharat Bhushan Sharma was electrocuted on 20th March™97. On his death, the private respondents lodged a claim with the Life Insurance Corporation of India, (hereinafter referred to as the Corporation). This was not settled. The respondents preferred a complaint before the District Consumer Forum constituted under the Jammu and Kashmir Consumer Protection Act of 1987. The complaint was dismissed. An appeal was preferred before the Jammu and Kashmir Consumer Protection Commission. The Commission has allowed the appeal. It is the appellate order passed by the State Commission which is subject matter of challenge in this petition. 2. The facts as are apparent from the original file, which has been produced, are as under :- i/ The proposal form was filled by Bharat Bhushan Sharma on 10th March 97. ii/ The challan for payment made to the branch office is dated 17th March 97 and the amount deposited is to the extent of Rs.853/- iii/ The fact that proposal was made on 10th March 97 is apparent from the proforma which is at page 7 of the office file maintained by the Corporation. The effective date for this policy was given as 20th March 97. iv/ The policy which was prepared and is on the file is dated 8th May 97. 3. The policy makes mention of the fact that the date of commencement of the policy is 20th March 97. It also makes mention of the proposal Number and date. The proposal number is 16700 and the date is mentioned as 10th March 97. The date of maturity has been shown as 20th March 2017. 4. The Corporation refused to honour its commitment on the plea that no doubt, the premium was deposited on 17th March 97 in the branch office of Karan Nagar, Jammu, and no doubt, the proposal was registered on 20th March 97 after 10 am, the FPR was issued on 22nd march 97. It is on this basis the claim is sought to be negatived. The commission was of the view that the consistent stand taken by the complainant respondents was that Bharat Bhushan Sharma died at 10.45 a.m. The statement of four witnesses was recorded. It is on this basis the claim is sought to be negatived. The commission was of the view that the consistent stand taken by the complainant respondents was that Bharat Bhushan Sharma died at 10.45 a.m. The statement of four witnesses was recorded. These statements were found to be duly corroborated by the hospital record. This was in the shape of a certificate issued by the Medical Officer, Government Medical College Jammu. This makes mention of the fact that Bharat Bhushan Sharma, s/o Sh. Bal Mukund Sharma, was brought dead to the Casualty at 12.30 pm. on 20th March 97. The Commission was of the view that policy was signed on 22nd March 97 but it was made effective w.e.f. 20th March 97 therefore, the claimants are entitled to enforce the claim against the Corporation. It is this order, which as indicated above, is the subject matter of challenge in this petition. 5. In Corpus Juris Secundum Vol. 44, at page 270 it has been mentioned The almost invariable custom of life insurance companies is to make no contract, and to assume no liability to insure the life of any person, until a premium has been paid. At page 27, it has been mentioned "A provision in an application that the insurance will take effect from its date if the first premium is paid in cash therewith has been enforced even where the agent neglected to give a premium receipt.� It has been further observed that on payment of the initial premium on a life insurance policy there is a contract of insurance for the whole life of insured (State life Insurance Co, V. Murray, Pa., 159 F. 408, 86 C.C.A. 344�. At page 272, it has been mentioned Payment of the first premium to insurer™s agent authorized, or having apparent authority, to receive it is equivalent to, or constitutes, payment to insurer, the policy having its inception from the instant such payment is made.� It is further mentioned that it is no defence to the company that the agent has not remitted at all, or that remittance was not made until after the loss.� In the present case, as noticed above, the proposal form was filled on 10th March 97 the payment was received and deposited on 17th March 97. The insurance policy was issued later on but has been made effective from 20th March 97, therefore, to say that a complete contract had not come into existence is an argument which cannot be accepted. Once the policy came into effect w.e.f. 20thMarch 97 and Bharat Bhushan Sharma died thereafter, his heirs would be entitled to the benefit of the policy. A positive finding has been recorded that Bharat Bhushan Sharma died at 10.45 am and this is substantiated by the hospital record. Therefore, the finding of fact recorded by the Commission cannot be faulted. The judicial precedents do support that once payment in cash is made to the agent and it has gone into the coffers of the Insurance Company, then a contract would come into existence. The fact that the contract in question in this case was made effective from 20th March 97 cannot be lost sight of. This petition as such is found to be without merit and is dismissed.