Patna High Court
Smt. Kiran Sinha vs Life Insurance Corporation Of India And ... on 18 December, 1982
Equivalent citations: AIR1983PAT142, AIR 1983 PATNA 142, (1983) ACJ 669
JUDGMENT S. Shamsul Hasan, J.
1. The petitioner has in this writ application prayed for quashing Annexure-'10' and also seeks writ of mandamus directing the respondents to make payment to the petitioner the amounts payable to her on the insurance policies of her husband of which she is the nominee.
2. The petitioner is the wife of the deceased purchaser, late Sri Arun Kumar Sinha, of three insurance policies from the Life Insurance Corporation of India (hereinafter referred to as 'the Corporation'). By communication dated 2-9-1981 which is Annexure-'10' the Divisional Manager of the Corporation has finally informed the petitioner that since the policies stood lapsed on the date of the death of the insured, no amount is payable to the petitioner.
3. There is no dispute that late Arun Kumar Sinha died on 10-1-1980, He was holding three life insurance policies in his own name with respondent No. 1 the Corporation, at the time of his death. The relevant details of the policies are as follows:--
Policy No. Amount assured for Premium due for
1.
30717199 date of commencement 9.8.1978 Rs. 10,000/-
Only November 1979.
2. 30732806 date of commencement 5.2.1979.
Rs. 20,000/-
Only August and November, 1979.
3. 30719937 date of commencement 8.8.1978.
Rs. 10.000/-
Only August and November, 1979.
The stand of the petitioner is that on 5-1-1980 a cheque for Rs. 954.10 paise on the United Industrial Bank, Ranchi, being Cheque No. 001532 was paid in the office of respondent No. 1 in presence of one Sri Vijay Gopal, Advocate, and Sri I. N. Jha, the agent of the Corporation who was responsible for the sale of the Policies to the deceased. On 7-1-1980 a money order was sent by the petitioner for Rs. 249.30 paise from Daltonganj as payment of premium of the third policy. The aforesaid cheque was for the payment of first two policies dated 9-8-1978. It is not disputed that no receipt was obtained by the deceased when the aforesaid payment by cheque was made by him. This application contains affidavits by Sri Vijay Gopal and Sri I. N. Jha which are Annexure '1'' and 1A to this application to the effect that they were present when deceased deposited the cheque. Sri I. N. Jha has also slated that he was responsible for the sale of the policies to the deceased-assured. Sri Jha in his affidavit has also stated a fact of considerable relevance to this dispute to which reference would be made later. He has stared that on 12-1-1980 he had informed the office of the Branch Manager, Life Insurance Corporation of India, Branch 1 and 2, Ranchi, about the death of the deceased and on the same day he had also requested for claim forms from the office. He was advised to obtain the form from the Jamshedpur Office. He had also informed one Sri E. Viswa-nathan the Development Officer of the Corporation on the same day, that is, 12-1-1980, about the death of the deceased. On 12-1-1980 the petitioner filed an application before respondent Nos. 4 and 5 which is Annexure-'2' to this petition. This application dated 12-1-1980 was a request for claim form from the respondents and also an intimation to them once again about the death of the deceased-assured having occurred on 10-1-1980 and her being a nominee under the said policies. It is stated by her that respondents 4 and 5 directed her to obtain the claim form from respondent No. 2. She has asserted that respondent No. 1 and other respondents were at all material time in possession of the knowledge of the death of the deceased. An-nexure-'3' is a letter of Sri E. Viswanathan dated the 12th January, 1980 conveying his condolence to the brother of the deceased who has also stated in that letter that he was informed about the death by Sri I. N. Jha, the Corporation agent. On 28th July, 1980, a communication was sent by the Divisional Manager of the Corporation from Jamshedpur to the petitioner which is Annexure '4' to the petition stating that premium in regard to the first two policies was received on 14-1-1980 and in regard to the third policy on 23-1-1980 and since the assured-deceased expired on 10-1-1980, the policies stood lapsed and, therefore, nothing was payable to the petitioner. This communication by refering to the claim by the petitioner clearly indicates, though not so stated the receipt of Annexure-'2' by the relevant officer of respondent No. 1. On the receipt of this communication, an application, under Articles 226 was filed in this Court which was numbered as C. W. J. C. No. 117 of 1981 (R). In that application, Annexure-'2' of that application was quashed and respondent No. 1 of that application was directed to give an opportunity to the petitioner to place before him such materials as she was advised to place in support of her claim. It was also directed that the enquiry should be completed within, four months. It may be stated that Annexure-'2' of that writ application is the same as Annexure-'4' of the present writ application, which as stated above, stood quashed. Annexure '10' has been passed as a result of the enquiry which, according to the petitioner, was never really held and no substantive opportunity was given to her to explain her case. This is borne out by Annexures-6, 7, 8 and 9 of the petition. According to the petitioner, these Annexures indicate that no enquiry was really held and the respondent concerned was always trying to create conditions and making demands which were impossible to fulfil To this I shall refer later. This Annexure-'10' is sought to be quashed in this application.
4. The case of the respondent-Corporation is stated in the counter-affidavit sworn by an Assistant Divisional Manager who claims to be the constituted attorney of respondent No. 1 at Jamshedpur. It is admitted that, in fact, three policies were issued in favour of the deceased-assured and these policies covered double accident benefits etc. The receipt of the cheque on 5-1-1980 is denied and it is also stated that from the record of the office of respondent No. 1 it appears that no payment in respect of the policies was received by respondent-office prior to 14-1-1980, The affidavits of Sri Vijay Gopal and I. N. Jha have been stigmatised as being with some ulterior motive and it is contended that the affidavits should not be accepted since no receipt was obtained when payment by cheque was made. Their further contention is that the information about the death of the petitioner was not received in the office at the respondent-Corporation till they received a letter dated 4th March, 1980 which was received on 24-3-1980. Their case is that since premium was received after the death of the deceased-assured, the policies stood lapsed. In regard to the third policy, the money order was received, according to them, on 23-1-1980 and, therefore, that policy also stood lapsed. It is also stated that since the amount covered by the cheque was more than what was required to be paid up to 5-1-1980, it indicates that the cheque could not have been paid on 5-1-80. It is further stated that respondents 4 and 5 may have advised the petitioner to apply for claim form from respondent No. 2 without actually knowing the fact of the death of the assured-deceased. It is surprising that no affidavit has been sworn by respondents Nos. 4 and 5 who are persons fully concerned with the matter. In fact, the deponent of the counter-affidavit can hardly be said to have personal knowledge about anything.
5. The points raised by the learned counsel for the petitioner is that since the cheque was received and encashed and the money remitted by money order was received after having knowledge of the death of deceased assured, the policies stood revived, and the respondents were precluded from raising the plea of lapse of policy and should have made the payment under the policies. It is further submitted that the information to the agent and to the Development Officer and subsequent communication, Annexure-'2' as stated above, to the respondents Nos. 4 and 5 dated 12-1-1980 clearly indicate that respondents had knowledge of the death of the assured. In reply to this, it has been submitted by the learned counsel for the respondent No. 1, the Corporation, that the Corporation being a body-corporate had no knowledge of the death of the assured. Personal knowledge of the agent, Development Officer or respondents Nos. 4 and 5 cannot be said to be the knowledge of the Corporation. He, however, admitted that if the date of the payment of the cheque was 5-1-1980 and the money order was remitted on 7-1-1980 then the payment of premium would be in proper time. In regard to Annexure-'2' it is stated on the basis of paragraph 12 of the counter-affidavit that no such letter was received in the office of respondent No. 1. Lastly it is submitted that since respondent No. 1 had no knowledge of the death of the assured-deceased, encashment of cheque or acceptance of payment by money order does not amount to waiver, thereby binding the respondent No. 1 to pay the amount payable under the three policies to the petitioner by the revival of the three lapsed policies.
6. On the basis of the averments made it is essential to ascertain the date on which the respondents acquired knowledge of the death of the assured. It is well settled that the determination of disputed question of facts should not usually be attempted in an application, under Article 226 of the Constitution of India. In the circumstances of the present case, however, the facts are so compelling and the denials so specious that there appears to be no difficulty in holding that the respondent No. 1 and other respondents had knowledge of the death of the assured before they encashed the cheque and received payment by money order meant for paying the premium and the interest on the aforesaid three policies. The petitioner relies firstly on the affidavit of Sri Indu Nath Jha which is Annexure-'l' to the petition. His statement in the affidavit is that he informed the Branch Manager, Life Insurance Corporation Branch-I and II Ranchi about the death of the assured-deceased on 12-1-1980 and made a request for a claim form. He has further stated that he had also informed Sri E. Vishwanathan, Development Officer of the Corporation in the office of the respondents on the same date. This affidavit sworn by Sri Jha has also been supported by the petitioner in the application. Another material brought on the record by the petitioner is a letter of the Development Officer of respondent No. 1 dt. 12-1-80 addressed to the petitioner's brother-in-law conveying his condolence to him and other members of the family. This letter corroborates the affidavit of Sri Jha on this point. This letter is Annexure-13' to the petition. The third document is Annexure-'2', a letter written by the petitioner to respondents 4 and 5 informing them of the death of the assured on 10-1-1980-This letter is dated 12-1-1980. Knowledge of death of the assured is also apparent from Annexure-'4' which refers to a claim made by the petitioner which can only mean Annexure-'2'. In reply, the respondents have vaguely denied these assertions. They have firstly disputed the validity, correctness and legality of the affidavits of Sri Vijay Gopal and Sri I. N. Jha. They denied the contents also by saying that no deposit was made on 5-1-1980. Secondly, about An-nexure-'3' the despatch of such a letter has been denied since it does not appear from the record of respondent No. 1 that such a letter was sent. It was also asserted that respondent No. 1 and its officer had no knowledge about the death of the assured. Lastly in regard to Annexure-2 it is stated that the letter dated 12-1-1980 from the petitioner was not received by respondents Nos. 4 and 5. The significant factor justifying the rejection of the averments made in the counter-affidavit is the fact that the affidavit is sworn by a person who has no knowledge of the real state of affairs and had merely sworn on the basis of knowledge derived from the office records. It is surprising that respondents 4 and 5 who are officers directly concerned with the dispute should have avoided filing any counter-affidavit. The denials are also entirely self-serving and vague and cannot dislodge the effect of the averments of the petitioner. It was also argued in this connection that respondent No. 1 had no knowledge of the fact of death of the assured and the information to the agent or to the Development Officer of respondent No. 1 which is a body corporate and is a juristic person is no information. These submissions make the stand of the respondents entirely dubious.
7. First I would like to dispose of the point whether the knowledge of respondents Nos. 4 and 5 and the agent and Development Officer amounts to the knowledge of respondent No. 1 and is also sufficient knowledge of the fact and that whether the claim of the petitioner that the respondents had knowledge of the death on 12th January, 1980, is correct. Indeed, the Corporation is a body corporate taut being inanimate it functions through its officers at various levels. In the absence of any specific direction in any Act or rules or any material to show that the Corporation has indicated any special authority who should be informed on behalf of the Corporation respondent No. 1 in regard to any fact relating to the policy particularly the death of the assured, it is futile to contend that the Corporation had no knowledge and the only person who could be deemed to have been the correct authority for the purpose was the divisional Manager. It has not been shown by any document as stated above as to how the Divisional Manager alone is the relevant authority for conveying the information regarding the death of an assured. It is well known that agents, selling insurance policies have an official status in the heirarchy of respondent No. 1 and they are the real contact between the Corporation and the assured who not only by persuation succeed in obtaining the sale of the insurance policy to an individual but is also expected to nurse the policy and ensure by personal approach that premiums are paid in time. He is the link between an assured and the Corporation and represents the Corporation in all its spheres connected by a policy. If an information of the death of an assured is given to the Agent it is adequate information which in my view, amounts to an information to the Corporation itself. It is more so if even the Development Officer under whom the agent functions is also informed. The fact that respondents 4 and 5 themselves did not deny the receipt of Annexure-2 will clearly justify an inference that they were also informed of the death of the assured by the letter. It is the case of the respondents, that respondent No. 1 came to know of the death of the assured by a letter dated 4th March, 1980, which was received by respondent No. 1 on 24-3-1980, but surprisingly, this letter has not been annexed in the counter-affidavit. A communication was sent to the petitioner by the Jamehedpur Division Office of the respondent No. 1 on 28th July, 1980, by which communication the payment was refused on the ground that the policies had lapsed. This letter is Annexure-4 to the petition. In this letter no reference is made about any communication dated 4-3-1980 sent by the petitioner as claimed in the counter-affidavit received on 24-3-1980, but only refers to a claim having being made by the petitioner which claim should not be any other communication except Annexure-2 particularly when the so called communication of 4-3-1980, is not produced or even intimated. I have, therefore, no hesitation in holding that the respondents were fully aware of the death of the assured by the 12th of January, 1980.
8. The next question that has to be determined is the date on which the cheque was actually paid and the money order sent towards the payment of the premium. While the case of the petitioner is that the cheque was deposited on 5-1-1980, by the deceased himself, the case of the respondents is that the cheque was received on 14-1-1980. The circumstances, without doubt show that the case of the petitioner is correct and the denial of the respondents is merely an attempt to create dispute which is not bona fide. Admittedly, the cheque is dated 5-1-1980. This fact is not denied by the respondents. Secondly, it is averred by the respondents that the cheque was received on 14-1-1988 and was duly receipted on the same day, They do not, however, say who brought the cheque to the office on 14-1-1980, particularly when the assured was dead on 10-1-1980 and thirdly the affidavit of Sri Vijaya Gopal and Sri I- N. Jha agents, clearly support the fact that the cheque was deposited on the 5th of January, 1980. The untenable attitude of the respondents with regard to these affidavits has already been discussed by me above and applies here also. Much has been made of the fact that no receipt was obtained by the assured on his paying the cheque in the office of the respondents on the 5th of January 1980, by the learned counsel for the respondents. In my view, there is no sub-stance in this submission. The payment by cheque itself is a guarantee of payment and surely the deceased-assured did not anticipate the attitude of the Corporation, after his death that he should insist on getting the receipt while giving the cheque. The fact that the cheque is dated 5th January, 1980, is an answer to this point It is also a fact of common experience that it is not always that the receipts are given promptly by the Corporation. The State of affair is so frequent that it is now a normal feature. Receipts are even sent by post to the assured by the Corporation. The learned counsel for the respondents also failed to produce before the Court in their counter-affidavit the copy of the receipt he claims was issued on 14-1-1980, when the cheque was received nor is he in a position to state from the counter affidavit as to whom the receipt was given. Non-availability of the receipt has also been complained of in Annexures-1 and 1A. In my view, therefore, the circumstance, of there being no receipt available is of no consequence and will not defeat the assertion of the petitioner that the cheque was paid on the 5th of January, 1960.
9. Coming to the money order it is not disputed that the money order was received by the Corporation on 23-1-1980, which was claimed to have been sent on 7-1-1980. The respondents do not deny receipt of the money order on 23-1-1980. They did not, however, accept that the money order was sent on 7-1-1980. The effect of having accepted the amount payable under the money order after the death of the assured would amount to reviving the policies. Suffice it to say that the Corporation did accept the money order on 23-1-1980 with the knowledge that the assured is dead. No further detail need be discussed.
10. The last question that has to be determined is the effect of the encashment of the cheque and the acceptance of the amount sent by the money order on the policies of the deceased. It was submitted by the learned counsel for the petitioner that firstly the acceptance of cheque and its encashment on the 14th of January, 1980, and the acceptance of money order amounts to a waiver on the part of the Corporation and they cannot now say that the policies had lapsed, particularly when they had knowledge of the death. He goes further and submits that even if the Corporation had no knowledge of the death, once they accept the payments, the Corporation is now precluded from raising the plea that the policies have lapsed. According to the learned counsel for the respondent even encashment of cheque and money order will not amount to waiver without the knowledge of the death of the assured and that, too, the knowledge not by the officers of the Corporation but by the Corporation itself. The learned counsel for the petitioner relied on a bench decision of this Court reported in 1979 Pat LJR 232 : (AIR 1979 Pat 124) (L.I.C. Bombay v. Ramdas Agarwal). The facts of this case are :--
"The premium on the policy issued to the assured was paid on the 18th April of every year. According to terms and conditions of the policy thirty days period of grace was to be given to the assured after which the policy would lapse. It appeared that the assured sent the second premium on 18th July, 1964. Thereafter for the years 1965, 1966 & 1967 also the assured sent the premiums. For all these amounts the Corporation sent deposit memos, although not official receipts. It appeared also that the Corporation was aware in 1967 that interest was due from him. In this appeal the Corporation contended that the policy had lapsed both for breach of the conditions as well as for non-payment of interest" (Per B. P. Jha, J.). It is clear that the Corporation had knowledge about the condition in the policy and it had also knowledge that some amount is due as interest with the assured, and, in spite of this knowledge the Corporation never intended to realise the interest and never in-formed the assured to that effect. In this circumstance, the waiver on the part of the Corporation was an intentional act with knowledge. If it is so, the Corporation is precluded from realising the interest. The policy had not lapsed for the simple reason that the Corporation went on accepting the premium even after 1964. By accepting the premium even after the policy had lapsed, the "Corporation is precluded from saying that it accepted the money not as premium but otherwise". (Per L. M. Sharma, J.). All the facts were known to the Corporation and its officers and it cannot be legitimately suggested that the acceptance of one premium after another premium was in ignorance of the rights which the Corporation could claim under the conditions of the policy."
The ratio of this decision applies entirely to the matter in issue in this dispute. The distinction made by the learned counsel for the respondents is that knowledge of death being essential this decision does not apply because payments were made during the life time of the deceased. I see no substance in this submission. This decision does non make any distinction between the two situations. The effect will be the same in either case. Even if the payments were received after the death of the deceased-assured and that the Corporation with or without the knowledge of such death encashes the cheque and accepts payment by money order, the principle of waiver as enunciated in this decision shall apply. With the Corporation accepting the payment of premium, the claim of lapse of a policy disappears, There is no distinction between the acceptance of payment before death or after the death. The learned counsel for the petitioner also relied on AIR 1977 Gau 11 (L.I.C. v. Omprakash Agarwalla), In this case the premium was paid without interest yet it was held that the nominee will be entitled to full amount assured less interest payable for late payment. The learned counsel for the petitioner also cited a decision reported in 1980 BB CJ (HC) 404 : (AIR 1981 Pat 1) (FB) (Bibi Amna Khatun v. Zahir Hussain) dealing with a case under Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 on the question of waiver.
This decision has laid down that though the rent is deposited out of time, withdrawal of amount by the landlord amounts to waiver. This incidence of waiver also applies to the present dispute. Undoubtedly the Corporation had intentionally relinquished a right vested in it that is to say that the policy has lapsed, by accepting the payment. It can also be said that by its conduct of receiving payment, it had relinquished or abandoned a legal right that the policy has lapsed and this conduct calls for an inference of waiver. Our attention was also drawn to AIR 1976 SC 2229 (Damadilal v. Parashram) to assert the point that payment by cheque amounts to a valid tender. There can be no doubt in this proposition. Last case cited is that of A. I. R. 1952 Trav Co 181 (Krishnan Neelakandhan v. Kerala Gilt Edged Security Life Assurance Co. Ltd.). It has been held in this case that sending of premium by money order was one of the approved and sanctioned methods of payment, though in this case this was the method which was inferred from previous conduct of the parties. There is however, nothing to show in this case that there was similar conduct in the past. Yet when the money order was accepted by the Corporation it can certainly be inferred that the Corporation had no objection to receive the premium and since they did accept the premium sent by money order it amounted to waiver on their part of the right to claim that the policies had lapsed. It is stated in a decision reported in (1937 3 All ER 124 (Farquharson v. pearl Assurance Co.) as follows:--
"By the terms of a policy of insurance upon the life of the assured, the policy moneys were expressed to be payable provided the insurance company received the premium on the dates specified, and it was provided that 30 days of grace were allowed for the payment of premiums. The Policy was taken out as security for a loan the mortgage providing that if the assured should at any time make default in payment of any of the premiums it should be lawful for the claimant to pay the same. On Apr. 9, 1936, the claimant, being aware of the assured's financial difficulties called on the insurance company's district Manager and offered to pay the premium for March 15, 1936. The district Manager declined this offer and said he was arranging for a cheque to be paid by the assured in a few days. On April 17, 1936, the district manager received a cheque signed by the assured and post-dated to April 23, 1936. The district manager in the premium account described this premium as outstanding. He did not state that the policy had lapsed. On April 20, 1938, the assured died. The claimant claimed the policy moneys, but the insurance company repudiated the policy on the ground that it had lapsed, owing to nonpayment of the premium due on March 15, 1936 :--
Held : (i) the insurance company could not, in the circumstances, be heard to say that the premium due on March 1936, had not been tendered to it by the claimant on April 9, (ii) although it might not have been within the scope of the district manager's authority to waive the condition requiring payment of the premium on March 15, 1936, or within 30 days thereafter, the insurance company ought not, after the refusal of the premium, to be allowed to raise that question."
Para 496 of Halsbury's Laws of England (4th Edition) may also be usefully referred.
I have therefore no hesitation in holding that the conduct of the respondent amounts to waiver and they can not now take the plea of lapse of policy to defeat the claim of the petitioner.
11. Before I conclude this judgment, I am constrained to make some observations in regard to the enquiry made by the Divisional Manager on the orders of this High Court as well as the attitude of the respondents. A mere perusal of the concerned Annexures, Annexures 6 to 10 shows that no proper attempt was made to hold an enquiry that would lead to any useful result objectively and dispassionately thus inflicting upon the petitioner undue hardship instead of providing her with succor in the situation fate placed her to mitigate which the late assured took steps, so cruelly frustrated by the Corporation. There is no need in my view to discuss in details or highlight the information in the inquiry itself. Suffice it to say that the inquiry was entirely self-serving, replete with self-created anomalies only to defeat the claim of a suffering nominee by a powerful Corporation. About mala fide and self serving attitude of the respondent the less said the better. The Corporation would be expected to refrain from behaving like an ordinary litigant resisting the claim arising out of a policy by unjustified methods. In fact, in the circumstances of this case, when the premium due was paid and actually accepted, the Corporation would have been well advised to refrain from taking refuge behind the unjustified technicalities and meet its obligation in paying to the nominee the full payment due under those policies.
12. I have, therefore, no hesitation in allowing this application and directing by a writ of mandamus the respondents to pay to the petitioner within 15 days from today the entire amount payable to the petitioner on the three policies above including accident benefits, interest', bonus etc. Let writ be issued accordingly.
13. In the result, the application is allowed with costs of Rs. 500/- (Rupees five hundred) from each respondents.
Abhiram Singh, J.
14. I agree.