State Consumer Disputes Redressal Commission
The Divisional Manager,Life Insurance ... vs E. Sujatha,School Street, ... on 28 September, 2010
BEFORE THE STATE CONSUMER DISPUTES REDRESSSAL COMMISSION, BEFORE THE STATE CONSUMER DISPUTES REDRESSSAL COMMISSION, MYLAPORE, CHENNAI 600 004 PRESENT: HONBLE THIRU JUSTICE M. THANIKACHALAM PRESIDENT Tmt. VASUGI RAMANAN MEMBER I THIRU. SAMBANDAM MEMBER II F.A.NO.105/2007 Dated this the 28th day of September 2010 (Against the order in OP.No.92/2005, on the file of the District Forum, Cuddalore) The Divisional Manager Life Insurance Corporation of India Division Office Vellore Petitioner/ Opposite party Vs. E. Sujatha W/o. Elanchezian School Street, Pallipattu Thookkanam Pakkam Post Cuddalore Taluk Respondent / Complainant The Respondent as complainant filed a complaint before the District Forum against the Appellant/ opposite party praying for the direction to the opposite parties to indemnify a sum of Rs.1 lakh with 12% interest, to pay Rs.25000/- due in the policy, alongwith compensation of Rs.50000/- and cost of Rs.10000/-. The District Forum allowed the complaint. Against the said order, this appeal is preferred praying to set aside the order dt.11.10.2006 in O.P.No.92/2006. This appeal coming on before us for hearing finally on 20.9.2010. Upon hearing the arguments of the counsels on either side, this commission made the following order: Counsel for the appellant/ Opposite party: M/s. A. Panneerchelvam, Advocate Counsel for the Respondent/ Complainant: Mr. S. Natarajan, Advocate JUSTICE M. THANIKACHALAM, PRESIDENT 1.
The District Forum, by its order dt.11.10.2006, issued a direction to the opposite party to pay the sum assured, under the policy, as if they have committed deficiency, which is challenged by them.
2. The complainants husband by name Elanchezian, had taken two policies, with the opposite party, wherein he had nominated the complainant, as nominee. Unfortunately, Elanchezian died in a road accident, near Mathuranthagam.
Based upon the policies, as nominee, the complainant lodged claims, for which though amount was paid to some extent, for the policy No.731232936, they repudiated the claim under the policy No. 731232937. Since, as per the policy condition, in case of accidental death of policy, the LIC has to pay double the amount assured, as per policy No.731232936, which they failed to do so, amounting to deficiency in service. Under the other policy also, they have paid only Rs.25000/-, leaving the balance of another Rs.25000/-. Hence the claim for suitable direction, for the payment of the amount due under the policy.
3. The opposite parties admitting the policies, taken by the husband of the complainant, as well the process of the claim by the complainant, opposed the claim that as far as the policy No. 731232937 is concerned, it was settled, for which a discharge voucher also given by the complainant on 11.10.2002, and this being the position, the complainant is not entitled to any claim, on the basis of the alleged deficiency, that as far as the other policy viz. Bhima Kiran policy No. 731232936, is concerned, it was lapsed on the date of death of the complainants husband, and therefore the claim was justifiably and legally repudiated, which cannot be termed as deficiency in service, thereby praying for the dismissal of the complaint.
4. The District Forum has come to the conclusion, that the subsequent payment, made should be taken, as if the premium was paid for the policy, which was not properly considered by the insurance company, which should be construed as deficiency in service.
In this view, it came to the conclusion further, the complainant is entitled to a sum of Rs.1 lakh, for the policy No. 731232936. At the same time, as far as another policy is concerned, as per the conditions and privilege, the complainant having received the amount, under Ex.B3, not entitled to any further claim. Thus concluding, a direction came to be issued to pay a sum of Rs.50000/-, being the sum assured, as well a sum equal to the death benefit, when such option is mentioned in policy No. 731232936, which is challenged before this commission.
5. It is the common case of the parties, that the husband of the complainant had taken two policies, with the opposite parties, and their numbers are 731232936 and 731232937.
One of the policy No. 731232936, is called Bhima Kiran High Risk Policy.
After the death of the husband, when the complainant made the claim, under one policy, some amount paid, that was also challenged, negatived by the District Forum, which part is not challenged by the complainant, by way of appeal. Therefore, for not granting the relief under prayer two, we need not strain ourselves, since that finding reached finality.
6. In order to decide the benefits claimed under the policy No. 731232936, it is to be seen, the nature of policy, premium payable, date of premium, default if any and its effect, as well the lapse of policy if any. It was admitted before us, that the premium payable for that policy, was quarterly, for the period January, April, July and October, on or before 14th of the respective months. For the quarter ending April, the premium should be paid, on or before 14th April, or since it is a quarterly premium, giving grace period also, the premium should be paid, or should have been paid, on or before 14th May, of the respective year. It is the specific case of the opposite party, that the policy holder viz. Elanchezian, has not paid the premium, for quarterly due, April 2002, whereas the said premium was paid after the death on 3.7.2002 at 15.35 hours, deliberately not informing the insurance company, about the death of the insured.
The payment of premium, for quarterly due, April 2002 was paid, only on 3.7.2002,at about 15.35 hours, is not disputed, and infact it is evidenced, by the document also. In the absence of any information regarding the death of Elanchezian, the amount was also collected by the opposite party. Therefore, now it is to be seen, whether the acceptance of that amount, revive the policy, if it had already lapsed.
7. It is an admitted fact that the husband of the complainant, met with a road accident on 3.7.2002, and expired at about 7.30 p.m, for which FIR was also lodged, as seen from Ex.A1.
After the registration of the case, under Sec.304A IPC also, postmortem was conducted on the same day, at about 3.30 p.m., as seen from Ex.A2. Therefore, it is clear, that the complainant or her relative, must be aware of the accident, as well as the death of Elanchezian, and they cannot plead ignorance also. In the normal course, they should have intimated the death of Elanchezian to the insurance company, but as rightly contended, deliberately suppressing the date of death, as well as the time, they have paid the premium, ending quarterly April on 3.7.2002, at about 3.35 p.m., by cash, not challenged. Thus it is evident, only after the death of the policy holder, in order to lodge a claim, based upon policy, suppressing the real facts viz. the death of the policy holder, amount was paid. If on the date of the payment of the premium, even after the death of the policy holder, if the policy had not been lapsed, the claim could be justified. In this case, as pointed out supra, quarterly premium, payable by 14th April, adding the grace period, it should have been paid on or before 14th May. It is not the case of the complainant, that they have paid the premium on or before 14th May, and therefore the policy should be deemed to be taken as alive, since the policy holder or his nominee, or some 3rd party, has paid the premium, within the grace period. Thus it is evident, as contemplated under policy condition, for non-payment of the quarterly premium, for the period April, the policy came to an end, or it had lapsed on 14.5.2002.
8. The policy could be revived, if the policy holder is alive, though the policy was lapsed, for non-payment of premium. On the other hand, if the policy holder died, after the lapse of the policy, for non-payment of the premium, after the death of the assured, that cannot be revived, as held by the Apex Court in Life Insurance Corportion of India Vs. Jaya Chandel, reported in I (2008) CPJ 81 (SC). Thus it is made out, without any shadow of doubt, the policy had lapsed, even during the life time of the person assured, and therefore the attempt made by the nominee or her relatives to revive the policy, by paying the premium, after his death, will not give life to the lapsed policy, which should be taken, as postmortem, not surgery.
9. The District Forum, without considering whether the policy had lapsed during the period of the person assured alive or not, presuming that if he had been alive, would have paid the premium amount or something like that, came to the conclusion, which appears to be legally incorrect. The fact, that the policy holder had chance to pay the premium for the policy, if alive during the life time of the policy holder, will not give a relief to the nominee, if the policy holder failed to revive the same, paying the defaulted premium, which fact was not at all considered by the District Forum, resulting erroneous judgement, issuing unwarranted directions. For the above said reasons, we conclude that the policy No. 731232936 had lapsed, even during the life time of the policy holder viz. Elanchezian, and the payment of premium after his death, certainly will not renew the policy, the fact being, for the renewal of the lapsed policy, the policy holder must be alive, on the date of paying the premium, which is absent in this case. For these reasons, the appeal is very meritorious, and liable to be accepted.
10. In the result, the appeal is allowed, setting aside the order of the District Forum in CC.NO.92/2006 Dt.11.10.2006, and the complaint is dismissed. Considering the facts and circumstances of the case, there will be no order as to cost throughout.
Registry is directed to handover the Fixed Deposit Receipt, made by way of mandatory deposit, to the appellant, duly discharged.
S. SAMBANDAM VASUGI RAMANAN M. THANIKACHALAM MEMBER II MEMBER I PRESIDENT INDEX: YES / NO rsh/d/mtj/insurance