National Consumer Disputes Redressal
L.I.C. Of India vs Smt. Amarjit Kaur on 18 February, 2003
ORDER
J.K. Mehra, Member(J)
1. This Revision Petition arises out of the order of the State Consumer Disputes Redressal Commission, Punjab, whereby the State Commission upheld the order of the District Forum. The fats in brief which lead the Complainant to approach the District Forum are as under:
2. The claim of the Complainant before the District Forum was that the Life Insurance Corporation of India had wrongly repudiated the claim made by the Complainant, the wife of the insured, though her husband had died in road accident on 1.1.1991, after the commencement of the policy taken by him on 26.7.1990. The husband of the Complainant had paid the first quarterly premium on 21.8.1990 and the second quarterly premium which was due on 26.10.1990 was paid by him through a cheque on 18.12.1990. The stand of the Insurance Company is that the second quarterly premium could be paid by the insured on 21.10.1990 or within the grace period of one month thereafter, i.e. by 26.11.1990. As this was not done, the policy had lapsed and the Insurance Company was right in repudiating the claim. The District Forum upon considering the matter held as under:
"The cheque for Rs. 1,692.50 dated 18.12.1990 was duly entered in the receipt register at Sr. No. 1091 at page 77 on 21.12.1990. The mere fact that it was the last entry in the month of December in the register was no ground to suspect that it was a forgery or manipulation since no official who was incharge of the register or the ledger had been examined by the Life Insurance Corporation of India. In view of this position, the complaint was allowed".
3. Feeling aggrieved by the order of the District Forum, the Insurance Company went in appeal Counsel for the Appellant. Insurance Company, upheld the order of the District Forum and dismissed the appeal.
4. Now, the Opposite Party/Insurance Company is Petitioner before us.
5. On the hearing held on 8th April, 2002, we passed the following order:
6. In this case, it was the stand of the Petitioner, Life Insurance Corporation of India, that the policy lapsed on 26.10.1990. The accused died in accident on 1.1.1991. It was claimed that the cheque dated 18.12.1990 was given towards the premium for the next quarter ending on 26.10.1990. The claim of the Petitioner has been that the cheque was received on 3.1.1991. However, there is a concurrent finding that the cheque was dated 18.12.1990 and it finds mention in the books of the Petitioner on 21.12.1990. It is contended by the Petitioner that since the policy had already lapsed by the time the cheque was received, even assuming it was given on 18.12.90, the policy had already lapsed and there could not be any revival of the policy and as such the claim was rightly repudiated. Our attention has been drawn to Section 50 of the L.I.C. Act in which it is stated that mandatory notice is required, if the policy lapses. In the circumstances, as in the present case, let the matter be listed again for arguments on 11.11.2002.
7. Heard the learned Counsel for both the parties. We find force in the argument of the learned Counsel for the Insurance Company.
8. Section 50 of the Insurance Act reads as under:
"50. Notice of options available to the assured on the lapsing of a policy:-
An insurer shall, [before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid,] give notice to the policy-holder informing him of the options available to him [unless these are set forth in the policy.] The section only requires that if the premium which has become payable before the expiry of 3 months has not been paid, the insurer will give notice to the policy holder informing him of the options available to him Unless these are set forth in the policy.
Clause (2) of the policy in question reads as under:
"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 unpaid the premiums falling due before the next anniversary of the policy. If promised 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".
Even though the relevant clause is printed in the policy it is desirable that a notice as contemplated under Section 50 be given.
Thus, we would see from the above that consequences of non-payment have been duly communicated to the insured by incorporating such terms [Clause (2)] in the policy itself and this is sufficient communication, in case the insurer gives any notice apart from this, that would be by way of abundant caution apart from being desirable. But in view of the aforesaid clause being printed in the policy itself such further notice under Section 50 cannot be said to be mandatory.
9. In view of our above discussion, we hold that repudiation of the claim by the Insurance Company is correct. In view of the above discussion, we allow the revision and set aside the orders of the State Commission as well as the District Forum. In the end we may observe that, in the peculiar facts and circumstances of the case, the premium received from the insured be refunded within four weeks from the date of the receipt of copy of this order. The Revision Petition is disposed of in the above terms.