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2002 DIGILAW 171 (PNJ)

L. I. C. Of India v. Amar Preet Kaur

2002-02-07

K.C.GUPTA

body2002
Judgment Gupta and J JJ. 1. This is a regular second appeal filed by the defendant Life Insurance corporation of India (for short l. I. C. )against the judgment dated 13.6.2000, whereby the appeal was dismissed and the judgment and decree dated 29.4.94 passed by Additional Senior Sub Judge, Kapurthala, vide which the suit of respondentsplaintiffs was decreed, was upheld. 2. Briefly stated, the facts are that one nachhatar Kaur, wife of Mohinder Singh, respondent No.3, and mother of respondent Nos.1 and 2 was employed as teacher at a monthly salary of Rs.2,300. She applied for getting life insurance policy from the petitioner and for that purpose filed proposal form No. S-3973151 in the sum of Rs.1,00,000 on 25.5.1989. She also paid the requisite premium of Rs.1,068 vide receipt, which was accepted by the petitioner on 29.5.1989 vide BOC No.386 issued by Kapurthala office. Nachhatar kaur was to pay a premium of Rs.535 per month by instalments till the date of maturity or death whichever is earlier. Unfortunately Nachhatar Kaur expired on 5.6.1989 due to heart attack and intimation of the said death was given to the Branch Manager at Kapurthala. At the time of handing over the proposal all the formalities were got completed by the Corporation. 3. On receipt of intimation about the death of the insured, the officials of L. I. C. sent advance discharge form for execution of the same vide letter dated 11.10.1989. However later on, they did not send the amount and ultimately refused to pay the same. 4. L. I. C. and the other defendant filed written statement, wherein they state that there was no concluded and completed contract between Nachhatar Kaur, proposer and L. I. C. and in the absence of concluded contract, they were not liable to pay any amount as the proposal was never accepted by the Corporation. They also stated that the amount of first instalment of initial deposit had already been refunded to mohinder Singh, respondent No.3, after deducting the medical fee vide cheque dated 13.10.1989 and as such the claim was not maintainable. Accordingly, the following issues were framed: " (1) Whether the plaintiff has got no cause of action to file the present suit? opd (2) Whether the suit is not maintainable in the present form? OPD (3) Whether the plaintiffs are entitled to recover Rs.1,00,000? OPP (4) Relief. " The parties adduced their evidence. Accordingly, the following issues were framed: " (1) Whether the plaintiff has got no cause of action to file the present suit? opd (2) Whether the suit is not maintainable in the present form? OPD (3) Whether the plaintiffs are entitled to recover Rs.1,00,000? OPP (4) Relief. " The parties adduced their evidence. Additional Senior Sub Judge, Kapurthala, vide his judgment dated 23.4.1994 decreed suit of the respondents-plaintiffs by holding under issue Nos.1 to 3 that a concluded contract of insurance had taken place between Nachhatar Kaur, deceased and L. I. C. and as such, the beneficiaries under the contract of insurance were entitled to recover the amount of Rs.1,00,000. 5 Aggrieved by the said judgment and decree, L. I. C. filed an appeal, which was dismissed vide judgment dated 13.6.2000 by the Additional District Judge, Kapurthala. 6. Still dissatisfied the defendant L. I. C. has filed the present appeal. 7. I have heard Mr. D. R. Mahajan, counsel for the appellant, Mr. J. M. Sethi, counsel for the respondents and carefully gone through the file. 8. It is an admitted fact that Nachhatar kaur was the wife of Mohinder Singh, PW 1 and mother of respondent Nos.1 and 2 (plaintiff Nos.1 and 2 ). She was J. B. T. Teacher at the time of her death and she was getting Rs.2,200-2,300 per month as salary. There is no dispute about it that she filed proposal form No. S-3973151 on 29.5.1989 to get herself insured for a sum of Rs.1,00,000. It is further admitted fact that she paid the requisite premium amount of Rs.1,068 vide receipt which was received by the Corporation on 29.5.1989, vide BOC No.386. There is no dispute about it that she filed proposal form No. S-3973151 on 29.5.1989 to get herself insured for a sum of Rs.1,00,000. It is further admitted fact that she paid the requisite premium amount of Rs.1,068 vide receipt which was received by the Corporation on 29.5.1989, vide BOC No.386. Now the only question to be determined is whether on the acceptance of premium of Rs.1,068, a concluded contract has come into existence or there should be intimation regarding acceptance of the proposal on behalf of L. I. C. The case of the appellant is that on scrutiny of the proposal, it was found that it was not complete since age proof, operating surgeons report and date of operation were not submitted with the proposal form, which were called from Nachhatar Kaur vide letter dated 3.6.1989 and since this information was not submitted to the Corporation, so the proposal remained incomplete and the initial amount deposited was refunded to the respondent No.3 and in these circumstances, it cannot be said that the contract of insurance was complete or a concluded contract had taken place between L. I. C. and Nachhatar Kaur. For this contention, the counsel for the appellant has placed reliance on the authority of the Hon ble supreme Court, i. e. , L. I. C. of India V/s. Raja vasireddy Komalavalli Kamba, 1984 ACJ 345 (SC), in which it was held that mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy document is no acceptance. Acceptance must be signified by some act or acts agreed upon by the parties or from which the law raises presumption of acceptance. Similarly, it has been held by the Kerala High Court in l. I. C. of India V/s. Prasanna Devaraj, 1995 acj 577 (Kerala), that in a case where the proposal form when duly filled in and signed by the proposed assured and forwarded to the insurer along with a cheque after getting himself medically examined and l. I. C. had issued a receipt, encashed the cheque and credited the amount in suspense account and where the death had occurred within 10 days on account of sudden renal failure, then from the mere acceptance of cheque accompanied the proposal form would not amount to acceptance of the proposal and a concluded contract of insurance had not taken place. To the same effect is the authority of l. I. C. of India V/s. Brazinha Dsouza, AIR 1995 Bombay 223. Therefore, in view of the dictum laid in the above-mentioned authorities, a concluded contract had not taken place because L. I. C. had not accepted the offer. Mere delay in giving answer cannot be construed as an acceptance as prima facie acceptance must be communicated to the offer. The general rule is that the contract of insurance is 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. Consequently, the finding of the trial court on issue Nos.1 to 3 are set aside and it is held that respondents had no cause of action to file the suit and suit is not maintainable in the present form and further they are not entitled to recover rs.1,00,000 under the so-called insurance policy as concluded contract had not taken place. 9. In view of the above discussion, the appeal is accepted and the judgment and decree of the courts below are set aside being illegal and the suit of the plaintiffsrespondents for recovery of Rs.1,00,000 on account of life insurance of Nachhatar kaur is dismissed. However, in the peculiar facts and circumstances of the case, the parties are left to bear their own costs. Appeal allowed.