Summary
An acceptance-cum-first-premium receipt, realised premium and surrounding documentary circumstances established acceptance of life insurance before the proposer’s accidental death. NCDRC misapplied the rule that mere retention of premium is not acceptance and exceeded its limited revisional jurisdiction in overturning reasoned concurrent findings. Its substitution of an ex gratia payment was unsustainable. The District Forum’s award of policy benefits, interest, compensation and costs was restored, payable within two months.
Issues
- Whether the documentary circumstances established acceptance of the insurance proposal before death.
- Whether NCDRC could reverse concurrent findings within its limited revisional jurisdiction.
- Whether an ex gratia direction could replace the established policy entitlement.
Provisions considered
- Section 21(b), Consumer Protection Act, 1986Revision permits intervention for jurisdictional failure, illegality or material irregularity; no such defect justified overturning the concurrent acceptance finding here. (¶¶ 9, 10, 25, 26, 27)
Held
- Mere silence or retention of premium does not by itself conclude insurance. But Raja Vasireddy must be applied to the actual circumstances, including clear indications of acceptance; D. Srinivas requires that inquiry and recognises reciprocal utmost-good-faith obligations. (¶¶ 14, 15, 16, 17, 18)
- The receipt expressly communicated acceptance and assumption of risk subject to realisation and stated conditions. The premium cheque had been realised before death, the policy particulars and next premium date were recorded, and the insurer did not produce the original or overleaf conditions despite being called upon. Taken together, the documents and circumstances supported acceptance before death. (¶¶ 19, 20, 21, 22, 23, 24, 25, 26)
- The District Forum and State Commission had examined relevant documents and given sustainable concurrent reasons. The insurer’s inconsistent account and questionable later entries did not show illegality or material irregularity in those findings. NCDRC could not replace them through an unrestricted reappraisal in revision. (¶¶ 23, 24, 25, 26, 27)
- Ex gratia is voluntary payment rather than discharge of a legal duty. The previously rejected offer did not justify replacing established policy benefits with Rs.1 lakh ex gratia; a specific payment direction also meant the impugned order was substantively a modification rather than an unqualified dismissal. (¶¶ 8, 9, 11, 12, 13, 27)
- NCDRC’s order was set aside and the District Forum award, affirmed by the State Commission, restored. It required policy benefits with 12% annual interest until realisation, Rs.5,000 compensation and Rs.2,000 costs. The insurer was granted two months to pay under the restored order. (¶¶ 3, 29, 30)
Result
Appeal allowed; concurrent consumer-forum award restored. LIC directed to effect payment under that award within two months.