Page 8 - Suri’s - NCDRC ON LIFE INSURANCE 2017 V1.3

Suri’s - NCDRC ON LIFE INSURANCE 2017 8

that her husband had died before the conclusion of valid contract between the parties.
The complainant filed the consumer complaint in question, seeking directions to the
LIC to pay the amount of ₹3 lakh to her, saying that her husband had been insured by
the LIC for the said amount.

3. The complaint was resisted by the OP LIC by filing a wrong reply before
the District Forum, in which they stated that the proposal submitted by the husband of
the deceased for the issuance of the policies in question, had not been accepted till his
death and hence, there was no concluded contract between the parties and thus, the
LIC was not liable to pay the amount in question. The LIC had requested the com-
plainant to send the discharge slips duly signed, so that the amount deposited by the
deceased with them could be released in her favour. The LIC stated that the accep-
tance of the proposal by the LIC had taken time, because the medical reports etc. in
respect of the husband of the complainant were to be evaluated at the level of their
controlling office and not the branch office, as the amount involved was large. Before
the first premium receipt-cum-acceptance could be sent, the applicant had died.

4. The District Forum, after considering the averments of the parties, allowed
the consumer complaint vide their order dated 20.05.2001 and directed the LIC to pay
a sum of ₹3 lakh to the complainant alongwith interest @12% p.a. with effect from
04.11.1998 till realisation. Being aggrieved against the said order of the District Fo-
rum, the LIC filed an appeal before the State Commission, which was accepted by
them vide the impugned order. Being aggrieved against the order of the State Com-
mission, the petitioner/complainant is before this Commission by way of the present
revision petition.

5. During arguments, it was contended by the learned counsel for the peti-
tioner that since the amount of premium paid by the deceased had been accepted by
the LIC, there was a concluded contract between the parties and hence, the LIC was
liable to pay the amount in question as rightly ordered by the District Forum. The
learned counsel stated that even after the deceased husband had died just a few days
after the submission of the proposal forms, the LIC was liable to pay the amount, be-
cause the non-issuance of policy documents amounted to negligence on their part.
The learned counsel has drawn attention to section 8 of the Indian Contract Act,
which states as follows:-
―8. Acceptance by performing conditions, or receiving consideration.—
Performance of the conditions of a proposal, or the acceptance of any considera-
tion for a reciprocal promise which may be offered with a proposal, is an accep-
tance of the proposal.‖

6. The learned counsel argued that since the LIC had accepted the money de-
posited by the deceased, it amounted to acceptance of the offer and hence, there was a
concluded contract between the parties. The learned counsel further argued that the
State Commission had wrongly placed reliance on the order passed by the Hon‘ble
Supreme Court in ―Life Insurance Corporation of India versus Raja Vasireddy Ka-
malavalli Kamba & Ors. [AIR 1984 Supreme Court 1014]”. He has drawn attention

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