.A died intestate on 12-1-1961. He had filled A proposal for insurance of Rs. 50,000 on 27-

12-1960. There was a Medical Examination by the Doctor of the life of the deceased on 27-

12-1960. The deceased had issued two cheques for Rs. 300 and Rs. 220 respectively in

favour of Life Insurance Corporation. The cheque for Rs. 300 was encashed by Insurance

Corporation. While the cheque for Rs. 220 was dishonoured three times but was finally

encashed on 11-1-1961.

The insurance papers were put up by the concerned insurance staff to the divisional manager

but he did not sign the insurance policy. The divisional manager was the competent authority

to accept the policy, but no communication accepting the proposal of insurance policy was

issued by the insurance corporation.

The widow of A wrote to Insurance Corporation on 16-1-1961 intimating death of "A" on 12-

1-1961 and demanded payment of Rs. 50,000. The divisional manager denied liability on 28-

1-1961.

Thereafter, there was correspondence between the parties between 1-2-1961 and 23-12-1963

wherein the wife of the deceased A claimed payment and insurance corporation denied the

liability for the same.

The widow of the deceased, A filed a suit on 10-1-1964 for recovery of Rs. 50,000 with

costs. How will you decide? Give reasons.