National Consumer Disputes Redressal
Bhushan Kumar vs Life Insurance Corporation Of India on 17 October, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2726 OF 2014 (Against the Order dated 10/04/2014 in Appeal No. 524/2013 of the State Commission Chhattisgarh) 1. BHUSHAN KUMAR S/O MADAN LAL VIZ, R/O HOUSE NO-1050, ROAD NO-02. SUBHASH NAGAR,SHIVPURI, NEAR POST OFFICE, NEAR KAMLA LOTIA COLLEGE LUDHIANA PUNJAB ...........Petitioner(s) Versus 1. LIFE INSURANCE CORPORATION OF INDIA THROUGH:DIVISIONAL MANAGER, LIC COLONY,BARSATOLA ROAD, DALLIRAJHARA,TEHSIL & DISTRICT : BALOD C.G ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Petitioner : Mr. Rohit Dutta, Advocate
Mr. M.K.Ghosh, Advocate For the Respondent : Mr. Nikhil Jain, Advocate
Dated : 17 Oct 2017 ORDER
1. This revision petition has been filed by the petitioner Bhushan Kumar, against the order dated 10.04.2014 of the State Consumer Disputes Redressal Commission, Chhattisgarh, (in short 'the State Commission') passed in appeal No.FA/13/524.
2. The undisputed facts in the case are that the deceased son of the complainant Rajnish Kumar viz in his life time had taken an insurance policy namely Bima Gold whose policy No. was 383792845 dated 20-01-2007 for Rs.2,00,000/-. The policy holder died in the accident and the nominee was to be paid the sum assured by the OP, but the OP insurance company paid Rs.1,96,433/- and Rs.20000/- on 24-08-2012 and 14-09-2012, but the amount of accident benefit of Rs.2,00,000/- was not paid.
3. Aggrieved by the refusal by the opposite party to pay the accident benefit under the policy, the complainant filed a complaint bearing No.64 of 2013 before the District Consumer Disputes Redressal Forum, Durg(C.G), (in short 'the District Forum'). The complaint was resisted by the opposite party on the ground that the premium of July, 2011 was not paid even in the extended period of 30 days and the policy had lapsed. However, as per Clause 'F' relating to "Auto Cover" entitles the complainant to get life insurance coverage of the insured for 2 years from the date of first default. As the insured died on 24-09-2011, therefore, his death would be covered under clause of Auto Cover, and the policy amount along with bonus etc. has already been paid to the complainant. As per Auto Cover Clause, the accident benefit is not payable in such cases. Based on this ground, the opposite party requested for dismissal of the complaint.
4. The District Forum after considering the material on record and submissions of both the parties, dismissed the complaint vide its order dated 02-09-2013.
5. The complainant then preferred an appeal bearing No.FA/13/524 before the State Commission, which was also dismissed vide order dated 10.04.2014.
6. Hence the present revision petition.
7. Heard the learned counsel for both the parties and perused the record.
8. The learned counsel for the petitioner stated that the policy was continuing since 22.01.2007 and premiums were regularly paid. However, due to insured being ill, the insured could not pay the premium of July, 2011, even within the extended time of 30 days. The insured ultimately died on 24.09.2011. This complaint was filed only for the accident benefit, which was the part of the insurance. The Insurance Company had paid the death claim under the policy, but not paid accident benefit, which is also equal to the sum assured. The learned counsel also argued that the Insurance Company has deducted the premium amount from the death claim. Thus, the policy would be treated as continuing and not in a lapsed condition at the time of death of the insured. Therefore, if the policy is continuing at the time of death of the insured, the complainant is entitled to get accident benefit as well, because the Auto Cover clause shall not be applicable in the present case. Both the fora below have erred in not appreciating this point of view.
9. On the other hand, learned counsel for the respondent/opposite party stated that the premium of July, 2011 was not paid by the insured and the same was not paid even in the extended period of 30 days. Hence, the policy was in a lapsed condition on the date of death of the insured. 'Auto Cover' is an additional facility given to the insured that even after lapse of the policy, the death cover shall continue to be operative for two years from the date of first default. The Insurance Company has already given the death claim along with bonus to the complainant and the accident benefit is not payable as per Clause 'F' relating to 'Auto Cover' under the policy. This clause clearly states that accident benefit shall not be payable during the period of Auto Cover.
10. It was further argued by the learned counsel for the respondent that both the fora below have dismissed the complaint of the complainant and the scope under the revision petition is very limited. Thus even on this ground the revision petition needs to be dismissed.
11. I have given a thoughtful consideration to the arguments advanced by learned counsel for both the parties and have examined the material on record. Undisputed fact is that the premium of July, 2011 was not paid in time and therefore, the policy was in a lapsed condition as per the terms and conditions of the policy. The Clause 'F' states as follows:-
"F) AUTO COVER If after at least 2 full years' premiums have been paid and any subsequent premium be not duly paid, full death cover shall continue for a period of 2 years from due date of first unpaid premium.
This period of 2 years from FUP shall be called auto cover period.
During the auto cover period, the life assured can pay one or more instalments of premium with interest without submission of any evidence of health. On payment of part or full arrears of premiums with interest, the auto cover period of 2 years from the due date of FUP shall again be available during the term of policy.
During auto cover period, though death cover is extended, any SB instalments if falls due will not be paid, unless premiums are paid and policy brought in force.
During the auto cover period, the accident benefit rider shall not be available."
12. The policy is a contract between the insured and the insurer and its terms are to be construed as they are. Hence the provision of Auto Cover became effective once the premium of July, 2011 was not paid. This Clause clearly states that during the Auto Cover period, the accident benefit rider shall not be available. The Insurance Company has already paid death claim along with bonus etc. Thus, there seems to be no deficiency on the part of the Insurance Company so far as the payment of accident benefit under the policy is concerned.
13. So far as the question of deduction of premium for July, 2011 from the death claim is concerned, this deduction does not bring the policy out of its lapsed condition because there are specific guidelines, procedures and conditions in the policy for revival of the lapsed policy. In the present case, the payment has been made under the Clause of Auto Cover, which does not mention anything about the deduction of unpaid premiums. Hence, I deem it appropriate to order refund of premium amount that was payable for July, 2011 along with interest at 9% p.a. from the date of payment of death claim till actual payment.
14. Based on the above discussion, I find that the revision petition has no merit and the same is dismissed. However, the respondent Insurance Company is directed to refund the premium of July, 2011 deducted from the death claim of the insured to the complainant along with interest @ 9%p.a. from the date of payment of the death claim till actual payment, within a period of 45 days from the date of this order.
...................... PREM NARAIN PRESIDING MEMBER