(1) The question which arises for determination in this appeal is whether the contract of insurance between the parties had been completed before the appellant had issued the letter of revocation? The policy of life insurance was proposed by Ram Dev Appellant for a sum of Rs.30,000/- with the respondent Lakshmi Insurance Company on 22nd of December 1953, at an annual premium of Rs.2826/5/-. The Company issued a letter of acceptance on 28th of December 1953 mentioning that 'the risk will commence from the date of issue of the First Premium Receipt under the policy'. Underneath the letter there is an endorsement in rubber stamp that 'the acceptance letter is issued subject to personal statement duly completed by the Doctor'. On 31st of December 1953, the interim policy receipt was issued and there is an endorsement to this effect: 'the receipt is issued subject to personal statement duly completed by Doctor'.
Nothing happened thereafter till the plaintiff-appellant gave a notice to the Company on May the 19th 1954, that the proposal for insurance having been accorded only qualified acceptance was liable to revocation and was revoked by the said notice. The Company repudiated the suggestion that the acceptance had been qualified and took the position which it has maintained that the proposal had matured into agreement by the acceptance letter and the issue of the interim receipt.
(2) The plaintiff accordingly brought the present suit for recovery of the insurance premium paid to the Company. It was pleaded that the contract of insurance was made on the condition that the personal statement of the assured would be completed by a Doctor. This not having been done till the date of the revocation, the proposal for insurance fell through and the money paid as the first premium was liable to be refunded. The Insurance Company denied that the endorsements were made on the receipt and the acceptance letter and pleaded that the contract had been completed by the issuance of the acceptance letter. As regards the policy, it was stated that it had actually been issued.
(3) Both the trial Judge and the lower appellate court did not accept the plea of the Company with regard to the endorsements of the acceptance letter and the receipt and came to a conclusion in favour of the plaintiff in this matter. It has, however, been held by the Courts below that the contract had been completed and whatever remained to be done was of a formal nature without any material effect on the validity of the contract of insurance. The plaintiff has come in appeal to this Court.
(4) It seems that the personal statement had not been made in the hand-writing of the Doctor himself and this necessitated the two rubber-stamp endorsements on the acceptance letter and the interim receipt. It is no doubt true that the Company took alternative pleas in this matter. In the first place, the existence of any endorsement was denied. It was further pleaded that if at all there had been a defect it was of a minor nature ad lastly that they had waived the objection which was mentioned in the two endorsements. Though the learned counsel for the appellant had laid great stress on the inconsistent whether the contract had been completed by the issuance of the acceptance letter and the interim receipt. The findings of both the Courts that the endorsements on the acceptance letter and the receipt existed when these were despatched to the appellant have not been seriously challenged by the learned counsel for the respondent and must be accepted as correct, these being matters relating to facts.
(5) It is axiomatic to say that an offer remains open for acceptance for a reasonable time and the proposal can be withdrawn before it has actually been accepted. The letter of acceptance of 28th of December 1953 mentions only that it is being issued subject to personal statement duly completed by the Doctor. Nothing was to be done by the appellant and the statement which had already been completed had to be re-written in the handwriting of the Doctor. The same endorsement is repeated in the interim receipt. It is, however, well to remember that the risk was to commence from 31st of December 1953 and no qualification was attached to this term. It would have been a different matter if the receipt had been issued subject to the approval of the life of the assured by the medical officer in which case offer could have been withdrawn any time before the medical officer signified his approval.
As stated in Macgillivray on Insurance Law, Fourth Edition, section 649,
'Where any particular from of executing or completing a policy is required only by the conditions of the policy, such conditions may be waived by the principal officers of the company issuing the policy without the required formalities having been observed.'
The matter may be looked at in a different way. If the Insurance Company had tried to back out from the contract could they have done so? The answer is provided in the Division bench authority of the Allahabad High Court in Muhammad Sultan v. Clive Insurance Company Ltd.148 Ind Cas522: (AIR 1934 All 298). In that case, insurance policy had not been received by the assured when the burglary took place. It was held that the acceptance of the proposal was completed since it was communicated to the plaintiff and it did not matter if the policy had not actually been issued. The medical examination of the assured in the present instance had been completed. All had to be completed in the hand-writing of Doctor. At best it was a mere formality and the fact that the policy had been issued shows that the defect, if any, had been overlooked. In my opinion, it is not open for the appellant to withdraw from the offer which had been irrevocably accepted by the Company on 31st of December, 1953. In this view of the matter, there is no force in the appeal which fails and is dismissed with costs.
(6) Appeal dismissed.