SBI Life Insurance Company Ltd Vs Hemangi & 2 Ors (NCDRC Delhi)
The National Consumer Disputes Redressal Commission (NCDRC) has ruled in favor of SBI Life Insurance Company Ltd., setting aside a State Commission order that had directed the insurer to pay a claim to the family of the deceased, Rohit Vaid. The NCDRC’s decision, based on the fundamental principles of insurance law, held that no valid insurance contract was ever formed. The late husband of the respondent, Rohit Vaid, had applied for a life insurance policy, and his bank, the State Bank of India (SBI), had paid the premium. However, the insurer sent a health questionnaire to the proposer, which was not returned. Subsequently, the insurer refunded the premium to the borrower’s account before his death. The central issue before the NCDRC was whether the proposer was eligible for life cover and if the repudiation of the claim was justified. The NCDRC cited several precedents from the Supreme Court and its own rulings to establish that a contract of insurance is not concluded merely by the payment of a premium or the submission of a proposal form. The principle of a concluded contract is that an offer must be unconditionally accepted, and that acceptance must be communicated. In this case, the insurer’s request for additional health information and the subsequent refund of the premium indicated that the proposal was still under consideration and had not been accepted.
