HEMANT G. LAKHANI vs Life Insurance Corporation of India

-THIS complaint has been filed by Hemant G. Lakhani claiming an amount of Rs. 1,00,000/- as the sum assured and Rs. 1,00,000/- more for mental distress and agony.

ACCORDING to the complaint his son Lt. Manoj H. Lakhani had paid an amount of Rs. 4,808.20 as premium to the Life Insurance Corpn. of India for getting his life insured for a sum of Rs. 1,00,000/- and this amount was accepted by the Life Insurance Corp. through its Sr. Branch Manager at Jaipur. Manoj H. Lakhani had nominated the complainant as beneficiary of the said insurance. Manoj H. Lakhani expired on 25-8-91. The complainant made a claim for the sum assured for the death of his son Manoj H. Lakhani but the claim was repudiated by the Life Insurance Corpn. of India by its letter dated 5.3.92. The version of the opposite parties is that 13.8.91 Lt. Manoj H. Lakhani had submitted a proposal form for getting himself insured for an amount of Rs. 1,00,000/-. It admitted that a cheque for Rs. 4,808.20 was given in the office of opposite party No. 3. to wards the premium which was accepted for collection Manoj H. Lakhani died in Santokba Durlabhji Memorial Hospital, Jaipur on 25.8.91. According to the opposite parties by this date acceptance of the proposal was not communicated to Manoj H. Lakhani and insurance policy was also not issued in his favour by that date. The proposal had been accepted in the office and the insurance policy was made to commence on 28.8.91, but Manoj H. Lakhani had already expired on 25.8.91 before the acceptance was communicated and policy was issued. Thus it was said, that no concluded contract for insurance came into between the deceased and the opposite parties.

In the letter of repudiation sent by the Life Insurance Corpn. of India to the complainant on 5.3.92, it was stated that the Corporation held indisputable proof to show that after the deceased submitted the proposal dt. 13.8.91 but before the acceptance letter was issued on 31.8.91, the deceased has suffered from fever and weakness of limbs and taken medical treatment for the same. The deceased did not disclose these facts to the Life Insurance Corpn. of India which he was bound to do in terms of the acceptance letter dated 31.8.91 and proposal dated 31.8.91.

THE real question for determination in this complaint is whether the contract of insurance had concluded between the deceased Manoj H. Lakhani and the Life Insurance Corp. of India. THE opposite parties had produced the proposal form given by the deceased Manoj H. Lakhani as Anx. A-l. It would appear from the proposal form that the deceased had submitted the proposal for insurance on 13.8.91. In this proposal form, the deceased had mentioned that he had no illness during the last five years and had not consulted medical practitioner for any ailment. THEreafter the proposal was processed in the office of the Life Insurance Corp. of India and Anx. A-2 goes to show that the insurance was proposed to be commenced from 28.8.91. THE premium amount has been collected on 14.8.91. THE proposal was accepted on 31.8.91. However, Manoj H. Lakhani had expired on 25.8.91 before the acceptance of the proposal and before the communication of the acceptance to him. The Learned Counsel for the complainant urged that in the letter of repudiation, the Life Insurance Corp. of India has mentioned Policy No. as 190629864 and therefore the risk of the life of Manoj H. Lakhani was covered. It is true that in the letter of repudiation dated 5.3.92, the Life Insurance Corp. has referred the policy No. as 190629864 favouring Manoj H. Lakhani. However, in the contents of the repudiation letter it has been mentioned clearly that the proposal was submitted on 13.8:91 and acceptance letter was issued on 31.8.91. It was thus appear that what the Life Insurance Corp. of India had said was that the acceptance of the proposal was issued on 31.8.91. Before that date Manoj H. Lakhani had already expired. From Anx. A-2 it is clear that the decision on the proposal was taken on 31.8.91 and the decision was to commence the policy from 28.8.91. A contract becomes complete only when acceptance of the proposal is communicated to the proposer. Before the acceptance was communicated on 31.8.91, the proposer had already expired on 25.8.91. No complete contract of insurance therefore came into existence.

WE may refer to the decision of the Lordships of the Supreme Court in Life Insurance Corporation of India v. Raja Vasireddy Komalavalli Kamba and others reported in AIR 1984 SC 1014. In this case 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 not acceptance. Acceptance must be signified by some act or acts agreed on by the parties or from which the law ranges a presumption of acceptance. More delay in giving an answer cannot be construed as an acceptance, as prima facie, acceptance must be communicated to the offer or. The general rule is that the contract of insurance wil 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. We may also refer to the decision of the National Commission in Life Insurance Corporation of India and Others v. Smt. Mumtaz Begum (Revision Petition No. 164 of 1992 decided on 15.10.92). In this case the National Commission held that the proposal had not been accepted by the L.I.C. prior to the date of death of the proposer not had the policy been issued. It was therefore held that no contract of insurance had come into operation and no liability could be fixed on the Insurance Co. for the payment of the amount mentioned in the proposal form as payable in the event of death. This State Commission had also in Complaint Case No. 73 of 1992 Smt. Pushpa Devi v. Branch Manager, Life Insurance Corporation decided on 29 ASA had held that if acceptance was not communicated by the Life Insurance Corp. to the deceased before his death, no contract of insurance to indemnify on the death of the proposer came into existence.

THUS it is quite clear that before Manoj H. Lakhani died on 25.8.91, the Life Insurance Corporation of India had neither accepted the proposal made on 13.8.91 and had also not communicated their acceptance to the proposer before the death of Manoj H. Lakhani. The opposite parties are, therefore not liable to pay the amount of Rs. 1,00,000/- as alleged sum assured and are also not liable to pay any compensation for mental distress and agony.

THIS complaint is, therefore, dismissed. In the circumstances of the case parties are left to bear their own costs. Complaint dismissed.