LexMRS. BHUMIKABEN N. MODI & ORS. versus LIFE INSURANCE CORPORATION OF INDIA
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* Author [2024] 6 S.C.R. 452 : 2024 INSC 395 Mrs. Bhumikaben N. Modi & Ors. v. Life Insurance Corporation of India (Civil Appeal No.270 of 2012) 08 May 2024 [A. S. Bopanna and C. T. Ravikumar,* JJ.] Issue for Consideration Whether the issuance of Acceptance-cum-First Premium Receipt gave rise to a presumption of acceptance of the policy by the insurer; whether the NCDRC was justified in dismissing the appellants’ complaint and reversing the concurrent orders of the forums below, in exercise of its revisional jurisdiction, wherein directions were issued for payment of benefits in terms of the subject life insurance policy and for grant of compensation. Headnotes† Consumer Protection Act, 1986 – s.21(b) – Revisional power – Insurance – Life Insurance Policy – Deceased submitted proposal for Life Insurance Policy on 06.07.1996 – Issued cheque towards premium on 09.07.1996 – Met with an accidental death on 14.07.1996 – Appellants (widow and children of deceased) claimed benefits based on Insurance Policy – Claim repudiated by respondent primarily contending that the proposal form was accepted only on 15.07.1996 whereas the death of the deceased was on 14.07.1996 and therefore, there was no concluded contract as mere preparation of the policy document is not acceptance so as to create a concluded contract – District Forum allowed the complaint filed by appellants – Appeal thereagainst dismissed by State Commission – In revision, NCDRC reversed the said orders of the forums below and dismissed the complaint – Sustainability: Held: It is the case of the appellants that the first premium was accepted and a duly signed receipt (Acceptance-cum-First Premium Receipt-Annexure B) therefor was issued by the respondent on 09.07.1996 – The factum of receipt of cheque amount cannot be disputed by the respondent – The cheque amount was received prior to the death of ‘the deceased’ is also not in dispute – In Annexure B, it is specifically stated that the acceptance of [2024] 6 S.C.R. 453 Mrs. Bhumikaben N. Modi & Ors. v. Life Insurance Corporation of India payment would place the insurer on risk with effect from the date of the said Acceptance-cum-First Premium Receipt, subject to the realization of the amount in cash and the terms and conditions of acceptance printed overleaf – What is printed overleaf is not on record as the same was not produced – The circumstances justify the conclusion of acceptance of the proposal prior to the death of ‘the deceased’ – Annexure B would justify drawing of presumption of acceptance of the policy and not otherwise – Thus, in view of the entire circumstances based on the documents in the orders of the District Forum and the State Commission, in the light of the decision in D. Srinivas’s case, the proposal was accepted – No material irregularity or illegality in the conclusions drawn with regard to the acceptance of proposal by the District Forum confirmed by the State Commission with reasons – In the absence of anything suggesting that the State Commission acted in the exercise of its jurisdiction illegally or with material irregularity, interference with an order of the State Commission confirming the order of the District Forum, in exercise of the limited revisional power u/s.21 (b), by NCDRC, is unsustainable – Impugned order set aside and that of the District Forum which was confirmed by the State Commission,is restored. [Paras 19, 23, 24-27, 29] Consumer Protection Act, 1986 – s.21(b) – Revisional power – Despite reversing the concurrent orders of the forums below in revision and thus, dismissing the appellants’ complaint seeking benefits in terms of the subject policy, NCDRC directed for payment of ex-gratia taking note of the offer made by the respondent to the appellant: Held: Powers u/s.21(a) and (b) are different and distinct – Powers u/s.21 (b) is very limited – Further, ex gratia is an act of gratis and has no connection with the liability, payable as a legal duty – Also, such an offer was made by the Respondent much earlier even before the matter reached the District Forum, but the appellant had denied to accept such an offer – The impugned order virtually partakes the character of an order modifying the order of the District Forum which was confirmed by the State Commission – No justification for NCDRC to upturn the concurrent orders and to order for the dismissal of the complaint and at the same time issue a direction
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