LIC – Concluded Contract of Insurance – SC important decis
Life Insurance – Proposal and premium cheque prior to accidental death due to electric shock – Policy prepared before death but not communicated and blocked – Repudiation of Claim for non existence of concluded contract
On 6.7.1996, the deceased husband of the appellant submitted proposal for LIC policy and on 9.7.1996 issued the cheque for premium on State Bank of Saurastra.
On 14.7.1996, the husband of the appellant died in an accident due to electric shock. The insurance claim was repudiated on the grounds that the proposal was not accepted and there was no concluded contract.
In fact, the policy was prepared but was not communicated to the deceased. In fact, it was blocked on 15.7.1996. According to LIC, the proposal was accepted only on 15.7.1996 and death occurred on 14.7.1996.
The District Consumer Forum allowed the consumer complaint vide order dated 19.7.2001. The appeal of the LIC was dismissed by the State Consumer Commission vide order dated 25.7.2006.
However, the National Commission allowed the revision of LIC and dismissed the complaint of the appellant.
Mere receipt and retention of the premium until after the death of the insured or even mere preparation of the policy and its blocking would not amount to acceptance of the proposal for insurance policy.
After dismissing the complaint, the NCDRC directed payment of Rs.1 lakhs as ex-gratia as offered by LIC in its revision.
It is not the case of the respondent that the cheque was dishonoured.
The entire circumstances based on the documents and discussed in the orders of the District Forum and State Commission constrain us to hold that the proposal was accepted. There is incongruity in the contentions and the documents.
Along with written submission of the respondent, true copy of suspense memorandum / first premium receipt was produced as Annexure B. A perusal of the same would reveal certain disturbing aspects as noted in paras 24 to 26 of the judgment.
Judgment dated 8.5.2024 in Civil Appeal No.270 of 2012 of Mrs. Bhumikaben N. Modi and others Vs. Life Insurance Corporation of India
