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    LIC Vs Raja Vasireddy

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    Abhishek Rai
    1. Raja Vasireddi filed a life insurance proposal for Rs. 50,000 and paid two premium cheques, one of which was dishonored multiple times before being encashed. 2. After Raja died, his widow claimed the Rs. 50,000 but LIC denied the claim, saying no contract existed. 3. The Supreme Court ultimately ruled that mere receipt of a premium does not constitute acceptance, and no contract was formed before Raja's death. LIC was entitled to return of the premium paid but only demanded half.

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    LIC Vs Raja Vasireddy

    Uploaded by

    Abhishek Rai
    3K views10 pages
    1. Raja Vasireddi filed a life insurance proposal for Rs. 50,000 and paid two premium cheques, one of which was dishonored multiple times before being encashed. 2. After Raja died, his widow claimed the Rs. 50,000 but LIC denied the claim, saying no contract existed. 3. The Supreme Court ultimately ruled that mere receipt of a premium does not constitute acceptance, and no contract was formed before Raja's death. LIC was entitled to return of the premium paid but only demanded half.

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    LIC vs Raja Vasireddy

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    1. Raja Vasireddi filed a life insurance proposal for Rs. 50,000 and paid two premium cheques, one of which was dishonored multiple times before being encashed. 2. After Raja died, his widow claimed the Rs. 50,000 but LIC denied the claim, saying no contract existed. 3. The Supreme Court ultimately ruled that mere receipt of a premium does not constitute acceptance, and no contract was formed before Raja's death. LIC was entitled to return of the premium paid but only demanded half.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views10 pages

    LIC Vs Raja Vasireddy

    Uploaded by

    Abhishek Rai
    1. Raja Vasireddi filed a life insurance proposal for Rs. 50,000 and paid two premium cheques, one of which was dishonored multiple times before being encashed. 2. After Raja died, his widow claimed the Rs. 50,000 but LIC denied the claim, saying no contract existed. 3. The Supreme Court ultimately ruled that mere receipt of a premium does not constitute acceptance, and no contract was formed before Raja's death. LIC was entitled to return of the premium paid but only demanded half.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 10

    LIFE INSURANCE CORPORATION

    V.
    RAJA VASIREDDY
    KOMALAVALLI KAMBA

    ABHISHEK RAI
    2014/BA.LLB/003
    Facts
    • Raja Vasireddi filed a proposal for insurance
    for Rs. 50,000 on 27th December, 1960.
    • He eventually issued two cheques for Rs. 300
    and Rs. 220 as first premium.
    • While the first cheque was encashed, the
    other cheque was dishonored three time
    before finally getting encashed on 11th
    January, 1961.
    Facts (Continued…)
    • Raja Vasireddi died on 12th January, 1961 and on
    16th January 1961, the plaintiff (widow) wrote to
    the defendant and asked for payment of Rs.
    50,000.
    • On 28th January 1961, Divisional Manager,
    Masulipatnam rejected it and denied any liability
    on its part.
    • Correspondences were exchanged between them
    from 1961 – 1963.
    • On 10th Jan 1964, plaintiff filed a suit in the court
    of subordinate judge Masulipatnam.
    Contention (Plaintiff)
    • The plaintiff contended that:
    – The Deceased was assured and told by the local
    agent and field officer that payment of first
    premium would amount to acceptance of the
    proposal.
    – A valid insurance contract came in to being as
    soon as the second cheque was encashed on 11th
    January 1961
    Contention (Defendant)
    • The defendant contended that:
    – The cheques issued by the deceased were kept in
    deposit in suspense account
    – Payment of first premium does not amount to
    acceptance of proposal
    – Assurance given to the deceased is either:
    • Factually incorrect
    • Bad in Law.
    Question for consideration

    • Whether there was a concluded valid


    insurance contract between the deceased and
    Life Insurance Corporation of India?
    Chronology of the Courts Ruling

    Trial Court • There was no concluded contract.

    • There was acceptance of proposal and


    High Court the contract of insurance was
    completed.

    Supreme • There was no concluded contract of


    insurance between the deceased and
    Court LIC
    Ratio
    “The mere receipt and retention of
    premium until after the death of the applicant
    or the mere preparation of the policy
    document is not acceptance. Acceptance must
    be signified by some act or acts agreed on by
    the parties or from which the law raises a
    presumption of acceptance.”
    Ratio
    “The general rule is that the 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.”
    Judgment
    “It was concluded that no contract of
    insurance existed between the deceased and
    LIC. Also, LIC was entitled to Rs. 85,000 that had
    already been paid to the family of the deceased
    but LIC demanded only half the amount.”

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