State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Allareddy Suguna W/O Jaganmohan Reddy on 23 January, 2012
BEFORE A BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD F.A.No.810 OF 2009 AGAINST C.C.NO.96 OF 2005 DISTRICT FORUM NELLORE. Between: Life Insurance Corporation of India Rep.by its Branch Manager Kavali Post and Mandalam, Nellore District Appellant/opposite party A N D Allareddy Suguna W/o Jaganmohan Reddy aged 63 years, R/o C/o G.Vasanth Kumar Reddy Flat No.D, Second Floor, Garden Towers Apartments James Garden, Nellore Respondent/complainant Counsel for the Appellant Sri AVS Rama Krishna Counsel for the Respondent Sri P.Ganga Rami Reddy QUORUM: SRI R.LAKSHMINARASIMHA RAO, HONBLE MEMBER
AND SRI THOTA ASHOK KUMAR, HONBLE MEMBER MONDAY THE TWENTY THIRD DAY THE JANUARY TWO THOUSAND TWELVE Oral Order (As per Sri R.Lakshminarasimha Rao, Honble Member) ***
1. The Life Insurance Corporation of India has filed the appeal on the premise that the District Forum had arbitrarily allowed the complaint directing it to pay the sum assured with accident benefit and bonus along with interest @ 9% p.a.
2. The respondents son Lakshmi Priyatham during his life time paid premium of `4,392/- and obtained Jeevan Mitra insurance policy bearing No.650957254 on 11.01.1992 for the sum assured of `2 lakh and equal amount towards accident benefit with bonus. The maturity date of the insurance policy is 11.01.2017. The premium was payable for every six months. The appellant insurance company addressed letter dated 16.11.1992 informing the respondents son that an amount of `29.20ps was received by their Kavali Branch in excess of the second half yearly premium of `4,490.80 plus late fee of `98.80 and the excess amount received was kept in deposit. The respondents son died on 1.10.1992. The respondent got issued notice to the appellant insurance company claiming the benefits conferred by the Insurance Policy.
3. On behalf of the appellant insurance company it is contended that the respondent is not entitled to the benefits under the policy as the policy was in lapsed condition as on the date of death of the insured and the respondent had not informed the appellant company about the death of her son till she got issued notice on 9.05.2005.
4. The respondent has filed her affidavit and the documents Exs.A1 to A16. On behalf of the appellant insurance company no affidavit nor any documents had been filed.
5. The counsel for the appellant insurance company has filed written submissions.
6. The point for consideration is whether the respondent is entitled to the benefits conferred by the insurance policy?
7. The facts which have been admitted and which do not require elaborate discussion are that the appellant insurance company had issued Jeevan Mitra Insurance Policy for a sum assured of `2,000,000/- with accident benefit and bonus, in favour of the respondents son. The premium of `4,392/- is payable in every six months. The respondent is the mother of the insured and is appointed as nominee for the purpose of benefits under the insurance policy.
8. The insured died on 1.10.1992. The insured along with Tallapallli Chenchu Ramaiah was riding on his motor cycle bearing registration number AP26-4402 from his native to Nellore and when they reached Venkateshwer Rao Rice Mill a Lorry bearing registration number AP-13T-2527 came in opposite direction and dashed the Motor Cycle as a result of which the respondents son and the pillion rider sustained grievous injuries. The insured died at the spot as also a pedestrian who sustained injuries in the accident succumbed to injuries while undergoing treatment in the hospital. The FIR in crime number 82 of 1992 issued by the Police, Kodavalur and the Report of Post Mortem Examination establish the death of the insured in the accident. The death of the insured being proved due to accident, accident benefit is rightly claimed by the respondent.
9. The appellant had issued Deposit Memorandum dated 16.11.1992 informing the insured that an amount of `29.20 was received in excess to the second half yearly premium plus late fee. The appellant insurance company issued receipt dated 16.11.1992 for `4,490.80.The excess amount of `29.20 said to have been refunded to the deceased along with payment voucher cum covering letter dated 23.11.1992 . The learned counsel for the appellant contends that the respondent played fraud on the insurance company and the appellant company being not aware of the death of the insured, had sent bonus intimation letter dated 25.01.1993.
10. The premium is payable once in every six months and the due date is 11th January and 11th July every year. The premium has to be paid till 11.07.2016 or on the death of the insured. Admittedly, the insured died on 1-10-1992. The amount towards second half yearly premium has to be paid by 11.07.1992 or within 30 days therefrom as the grace period of 30 days was provided by the terms and conditions of the insurance policy. The intention of the parties is manifest by their conduct that the insurance policy would not lapse even if the premium is paid after the expiry of the due date as also after lapse of the grace period. The appellant insurance company except stating that the insurance policy was lapsed as on the date of death of the deceased, it could not show how the amount was received towards the second half yearly premium after the due date and on completion of the grace period.
11. Another interesting aspect as to the payment of the premium is the mode of the payment. The insured issued cheque and the appellant had encashed the amount covered under the cheque as also it had refunded the amount of `29.20 on the premise that the amount was received in excess of the premium and the interest. Even if it is presumed that the cheque was issued after the death of the insured, the Bank would not honour it as the signature in the cheque must be tallied with the specimen signature. Therefore, in all probability, during the period prior to 1.10.1992, the insured issued the cheque in favour of the appellant insurance company for whatsoever reason neglected to present the cheque and subsequently presented the cheque with its bank on 16.11.1992. The respondent who is a senior citizen by now cannot be attributed the charge of fraud as the duration of time from the date of death of the insured till the time of filing of the complaint is evidently manifest her bonafide intention. Had she intended to play fraud on the appellant insurance company to get the sum insured, she would not wait for as many as thirteen years.
12. The appellant insurance company refused to pay the claim on the premise that the insurance policy was in lapsed condition. The relevant conditions of the insurance policy read as under:
2. Payment of Premium: A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the Policy will still be valid and the Sum Assured paid after deduction of the said premium as also the unpaid premium/s falling due before the next anniversary of the Policy. If the premium is not paid before the expiry of the days of grace, the Policy lapses.
If the Policy has not lapsed and the claim is admitted in case of death under a Policy where the mode of payment of premium is other than yearly, unpaid premiums if any, falling due before the next Policy anniversary shall be deducted from the claim amount.
3. Revival of Discontinued Polices: If the Policy has lapsed, it may be revived during the life time of the Life Assured, but within aperiod of 5 years from the date of the first unpaid premium and before the date of maturity, on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest at such rate as may be fixed by the Corporation from time to time, compounding half-yearly. The Corporation reserves the right to accept or decline the revival of a discontinued Policy. The revival of a discontinued Policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the Life Assured.
13. As per clause 3 of the Insurance Policy, a lapsed insurance policy will be revived subject to fulfillment of the conditions that the insured has submitted document showing continuity of insurance, he has paid the arrears with interest, and the appellant insurance company has approved the revival of the policy as also it ha specifically communicated the insured about its approving the revival of the policy. The appellant insurance company conveniently has omitted to mention its obligation of approving and communicating the approval of the revival of the policy, in the written version and the written submission as well.
14. It is contended that the appellant insurance company has given reply to the notice on 11.05.2005 through its Divisional Office that premium was due from 11.01.1993 and as the premiums were not paid from January,1993, the insurance policy was moved to lapsed status and the relevant records were destroyed. The plea that the policy was lapsed as on the date of the death of the insured is contradictory to the plea that the policy has acquired lapsed status from 11.01.1993. Both pleas are mutually destructive and considered together would give rise to the result the insurance policy was not lapsed as on the date of death of the insured.
15. The insured died due to injuries sustained in the road accident. The insurance policy was in force as on the death of the insured. The appellant company though pleaded that a reply dated 11.05.2005 was issued by its Divisional Office, no such notice is filed by the appellant. The respondent specifically mentioned in her notice that she submitted the claim and requested the appellant for several times to settle the claim. No response was seen from the side of the appellant insurance company. The appellant insurance company has not settled the claim on untenable grounds and thereby subjected the respondent to deprivation of the legitimate amount she is entitled to. The District Forum pointed out the admission of the appellant insurance company as to the policy being in force till the month of January,1993 which is subsequent to the date of death of the insured and held the appellant liable to pay the sum insured and other benefits in terms of the policy to the respondent.
16. The appeal is devoid of any merits. For the foregoing reasons, we do not see any reason to interfere with the finding recorded by the District Forum in regard to the liability of the appellant insurance company to pay the benefits conferred by the Insurance Policy.
17. In the result, the appeal is dismissed confirming the order of the District Forum with costs of `5,000/-. Time for compliance four weeks.
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MEMBER Sd/-
MEMBER Dt.23.01.2012 KMK*