Page 9 - Suri’s - NCDRC ON LIFE INSURANCE 2017 V1.3

Suri’s - NCDRC ON LIFE INSURANCE 2017 9

to an order passed by the Hon‘ble Delhi High Court in ―Life Insurance Corporation
of India versus Anita Rani & Ors.” [RSA No. 164/2004 & CM No. 8584/2004 de-
cided on 11.03.2011], saying that the acceptance of any consideration, tantamounts to
an acceptance of the proposal. The learned counsel has further drawn attention to an
order passed by this Commission on 27.11.2012 in RP No. 2613/2012, “Life Insur-
ance Corporation of India versus C.P. Sinha”, in which a view had been taken that
the insurance cover starts, the moment the cheque is accepted. The learned counsel
has also drawn attention to the Insurance Regulatory Development Authority (IRDA)
Regulations 2002, saying that the risk cover starts, the moment the premium is re-
ceived. The order passed by the District Forum was therefore, in accordance with law
and should be restored and that of the State Commission should be set aside. The
learned counsel for the petitioner has also filed his written submissions, containing
the arguments advanced at the time of the oral hearing.

7. Per contra, the learned counsel for the OP LIC stated that the impugned or-
der passed by the State Commission was in accordance with law and should be up-
held. After the submission of proposal forms by the deceased, there had been no ac-
ceptance on the part of the LIC and no policy had been issued in favour of the appli-
cant. The learned counsel stated that the State Commission had rightly relied upon
the judgment of the Hon‘ble Supreme Court in the case, ―Life Insurance Corporation
of India versus Raja Vasireddy Kamalavalli Kamba & Ors.‖ (supra). The learned
counsel has also drawn attention to an order dated 13.08.2008 passed by this Com-
mission in FA No. 243/1999 in “Elsa Tony Phillip vs Life Insurance Corporation of
India”, in which a view had been taken that mere encashment of a cheque was not
enough to conclude that a contract came into existence between the parties. Referring
to the guidelines issued by the IRDA, the learned counsel has drawn attention to an
order dated 03.02.2017, passed by this Commission in FA No. 560/2012, “SBI Life
Insurance Co. Ltd. vs D. Srinivas & Ors.”by majority judgment, in which it was held
that the non-compliance of period of 15 days for processing the applications on behalf
of the LIC, does not amount to acceptance of the contract.

8. We have examined the entire material on record and given a thoughtful con-
sideration to the arguments advanced before us.

9. As per the facts admitted on record, the policies in question had not been is-
sued by the OP LIC, neither the acceptance of the proposal had been conveyed to the
applicant before his death. It is also admitted that a sum of ₹1051/- had been paid by
the applicant for each policy proposal at the time of submission of the necessary
forms. The only issue that requires consideration is whether the payment of the said
money, amounted to an acceptance of the contract on behalf of the LIC or not. The
State Commission has relied upon an order passed by the Hon‘ble Supreme Court in
―Life Insurance Corporation of India versus Raja Vasireddy Kamalavalli Kamba &
Ors.‖ (supra) wherein it was held as under:-
―A contract of insurance will 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. Though in certain human relationships, silence to

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