State Consumer Disputes Redressal Commission
L.I.C. Of India vs Gajadhar Jhara & Ors. on 1 May, 2015
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/13/320
Instituted on : 03.05.2013
Life Insurance Corporation of India,
Branch Manager, Life Insurance Corporation of India,
Branch Office : Sattigudi Chowk,
Raigarh, Tehsil & District Raigarh (C.G.) ... Appellant
Vs.
01. Gajadhar Jhara, S/o Shri Khatkuro Jhara,
Age 36 Years, R/o : Jharapara, Ektaal, Post Netnanger,
Police Station : Chakradhar Nagar,
Tehsil and District Raigarh (C.G.)
02. Smt. Kaushalya Patel, W/o Shri Puranjan Patel,
Profession : Agent, L.I.C.
03. Shri Puranjan Patel,
Profession : Government Service,
Both are resident of : Rajiv Nagar, Near Milk Dairy,
Kotra Road,
Raigarh (C.G.), Tehsil & District Raigarh (C.G.). ... Respondents
PRESENT :
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE MISS HEENA THAKKAR, MEMBER
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES :
Shri D. Dutta, for the appellant.
Shri Mahendra Yadav, for the respondent No.1.
Shri Ghanshyam Patel, for the respondent Nos.2 & 3.
ORDER
DATED : 01/05/2015 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. This appeal is directed against the order dated 05.04.2013, passed by District Consumer Disputes Redressal Forum, Raigarh (C.G.) // 2 // (henceforth "District Forum") in Complaint Case No.109/2010. By the impugned order, the learned District Forum, has allowed the complaint filed by the respondent No.1 (complainant) and directed the appellant (O.P.No.1) to pay within a period of one month from the date of order the sum assured Rs.1,25,000/- to the respondent No.1 (complainant) along with interest @ 09% p.a. from the date of the order till date of payment. The appellant (O.P.No.1) has further been directed to pay a sum of Rs.5,000/- towards compensation for physical and mental agony and Rs.2,000/- towards cost of litigation.
2. Briefly stated, the facts of the complaint are that wife of the respondent No.1 (complainant), namely Sukmati Jhara, purchased an insurance policy bearing No.384173958 from the appellant (O.P.No.1) (Insurance Corporation) through agent Smt. Kaushalya Patel, who is respondent No.2 (O.P.No.2). The premium of the insurance policy, was to be paid quarterly @ Rs.565/-. First premium was deposited, thereafter as per case of the respondent No.1 (complainant), subsequent amount of premium was given to the respondent No.3 (O.P.No.3) - Puranjan Patel, who is husband of the respondent No.2 (O.P.No.2), for depositing it in the office of the appellant (O.P.No.1) (Insurance Corporation), but the premium was not deposited. In the meantime, on 27.01.2008, wife of the respondent No.1 (complainant) died due to electrocution and then the respondent No.1 (complainant) preferred claim before the appellant (O.P.No.1) (Insurance // 3 // Corporation), which was repudiated by it on the ground that the policy was in lapsed condition, therefore, amount was not payable under the policy. When letter of the repudiation was received by the respondent No.1 (complainant), then a consumer complaint was filed before the District Forum against the OPs and he prayed for granting reliefs, as mentioned in the relief clause of the complaint.
3. The appellant (O.P.No.1) (Insurance Corporation) filed its written statement and reiterated same defence that policy in question, was in lapsed condition and in the account of that policy on 06.02.2008 after the death of the insured, consolidated amount of premium was deposited by playing foul and suppressing the information that insured had already died, with the appellant (O.P.No.1) (Insurance Corporation) and by such deposit, no benefit can be granted to the respondent No.1 (complainant).
4. The case of the respondent No.2 (O.P.No.2) and respondent No.3 (O.P.No.3) before the District Forum, was that after receiving first premium, no subsequent premiums were collected either of them from the respondent No.1 (complainant) or his wife (insured). They were not authorized to collect premium from the insured person or her authorized person. It was the duty of the respondent No.1 (complainant) or his wife (insured) to deposit the amount of // 4 // subsequent premium. Thus, it has been denied that any amount of premium was ever paid after payment of first premium to any of them.
5. Earlier, the complaint filed by the respondent No.1 (complainant) before the District Forum, was decided by the District Forum vide order dated 30.05.2012 whereby the complaint was allowed and the respondent No.2 (O.P.No.2), who was an agent of the appellant (O.P.No.1) (Insurance Corporation), has been directed to pay the sum assured Rs.1,25,000/- along with interest @ 9% p.a. from the date of order till date of payment to the respondent No.1 (complainant) within a period of one month from the date of order, The appellant (O.P.No.1) (Insurance Corporation) has also been directed to pay Rs.5,000/- as compensation for mental agony and Rs.2,000/- as cost of litigation to the respondent No.1 (complainant).
6. The respondent No.2 (O.P.No.2) filed appeal No.FA/12/301 before this Commission against the order dated 30.05.2012 of the District Forum. This Commission vide order dated 31.10.2012 allowed the appeal, set aside the impugned order and remitted back the case to the District Forum with directions that :-
"11. As we feel that replies are necessary of the questionnaires containing questions, proposed for delivery by the appellant to respondent No.1/complainant, as well as Officer of the respondent No.2/Insurance Corporation, therefore, we refrain from expressing our further opinion regarding facts of the case. The case has got very // 5 // peculiar features because only first premium was deposited with the respondent No.2/Insurance Corporation at the time of inception of the policy and thereafter consolidated amount of premium was deposited after the death of the insured. In these circumstances, what can be done by the respondent No.2 / Insurance Corporation or by the appellant / Agent in question, which has got legal importance also and is to be answered by the District Forum by referring relevant law and the provisions of the Insurance Act, 1938 in genera. This has not been done by the District Forum.
12. Considering the aforesaid, the appeal succeeds and is allowed. The impugned order is set aside. the order dated 25.05.2012 of the District Forum is also set aside. The District Forum is directed to deliver the questionnaires filed by the appellant before it to the respondent No.1/complainant and respondent No.2 / Insurance Corporation and seek their replies in the form of affidavits, then permit all parties to lead further evidence in the matter and after doing this exercise, decide the matter afresh on merit. Parties are directed to appear before District Forum on 10.12.2012. No order as to the cost of this appeal.
7. After remand of the matter to the District Forum, the respondent No.2 (O.P.No.2) and respondent No.3 (O.P.No.3) delivered the questionnaires to the respondent No.1 (complainant) and Branch Manager of the appellant (O.P.No.1) which were replied by them. After having considered the material placed before it by both the parties, learned District Forum, allowed the complaint and directed the appellant (O.P.No.1) to pay compensation to the respondent No.1 (complainant), as mentioned in para 1 of this judgment.
// 6 //
8. The respondent No.1 (complainant) filed documents. Annexure 1 is copy of insurance policy, Annexure 2 is letter dated 06.09.2008 sent by the appellant (O.P.No.1) to the respondent No.1 (complainant), Annexure 3 is First Premium Receipt, Annexure 4 is Renewal Premium Receipt (Revival), Annexure 5 is Death Certificate of Smt. Sukmati, Annexure 6 is final report of the Police, Annexure 7 is letter sent by the respondent No.1 (complainant) to the Incharge, Police Station, Chakradhar Nagar, Raigarh (C.G.), Annexure 8 is LIC's Money Plus Policy, Annexure 9 is First Premium Receipt, Annexure 10 is Renewal Premium Receipt, Annexure 11 is Renewal Premium Receipt.
9. Shri D. Dutta, learned counsel appearing for the appellant (O.P.No.1) has argued that the insured Sukmati Jhara died on 27.01.2008 and intimation regarding her death was given to the appellant (O.P. No.1) after 15 days of her death. The premium amount was not paid for the months of March, 2007, June, 2007, September, 2007 and December, 2007 and the policy was in lapsed condition. The insured Sukmati Jhara died on 27.01.2008 and premium amount was paid on 06.02.2008 after death of the insured Sukmati Jhara, therefore, the policy could not be revived. The impugned order passed by the learned District Forum, is erroneous and is liable to be set aside. He placed reliance on judgment of Hon'ble National Commission in Revision Petition No.900 of 2007 - Life Insurance // 7 // Corporation of India vs. Girdharilal P. Kesarwani & Anr. order dated 14.01.2009, reported in I (2009) CPJ 228 (NC).
10. Shri Mahendra Yadav, learned counsel appearing for the respondent No.1 (complainant) has supported the impugned order and has argued that the premium amount of the policy was given to the respondent No.2 (O.P.No.2) through respondent No.3 (O.P.No.3). The respondent No.2 (O.P.No.2) is an agent of the appellant (O.P.No.1) and if the respondent No.2 (O.P.No.2) has not deposited the premium amount before the appellant (O.P.No.1) then the respondent No.1 (complainant) is not responsible for this act of the respondent No.2 (O.P.No.2. The respondent No.1 (complainant) had timely deposited the premium amount to the respondent No.2 (O.P.No.2), therefore, it is the duty of the respondent No.2 (O.P.No.2) to deposit the premium amount before the appellant (O.P.) immediately after receiving the same. The respondent No.1 (complainant) also gave intimation regarding death of the insured Sukmati Jhara to the respondent No.2 (O.P.No.2) and if the respondent No.2 (O.P.) had failed to give intimation regarding the death of the insured Sukmati Jhara to the appellant (O.P.No.1), then the respondent No.1 (complainant) cannot be held responsible for the same. The respondent No.1 (complainant) had already gave premium amount to the respondent No.2 (O.P.No.2) in time to deposit the same before the appellant (O.P.No.1), therefore, the respondent No.1 (complainant) is entitled to get the sum assured // 8 // under the insurance policy from the appellant (O.P.No.1). The impugned order passed by the learned District Forum, is just and proper and does not call for any interference by this Commission.
11. Shri Ghanshyam Patel, learned counsel appearing for the respondent No.2 (O.P.No.2) and respondent No.3 (O.P.No.3) submitted that the District Forum, has rightly exonerated the respondent No.2 (O.P.No.2) and respondent No.3 (O.P.No.3) from the liability of payment of the compensation to the respondent No.1 (complainant).
12. The respondent No.1 (complainant) filed documents i.e. insurance policy (Annexure 1) and death certificate of Sukmati Jhara (Annexure 5). The Death Certificate of Sukmati Jhara (Annexure 5) was issued by Gram Panchayat, Ektaal, Block Pusaur, District Raigarh (C.G.). In the above Death Certificate, it is mentioned that Sukmati Jhara died on 27.01.2008. The insurance policy was issued in favour of the insured Sukmati Jhara on 17.12.2006. The quarterly premium of the policy, was to be paid in the months of March, June, September and December every year. The respondent No.1 (complainant) specifically pleaded that the premium amount Rs.565- was given to the respondent No.3 (O.P.No.3) on behalf of respondent No.2 (O.P.No.2) in the month of May, 2007, July, 2007 and December, 2007. The respondent No.2 (O.P.No.2) and respondent No.3 (O.P.No.3) both // 9 // have denied the above allegations of the respondent No.1 (complainant). The appellant (O.P.No.1) specifically pleaded that the premium was not paid to it and policy in question, was in lapsed condition. After death of insured, if any amount was paid, then the appellant (O.P.No.1), is not liable to revive the policy. Annexure 4 is Renewal Premium Receipt (Revival) issued by the appellant (O.P.No.1) in which it is mentioned that a sum of Rs.2,329.30 was paid on 06.02.2008.
13. Now we shall examine whether after receiving premium amount, the policy was revived ?
14. In Life Insurance Corporation of India vs. Jaya Chandel, 2008 AIR SCW 1404, Hon'ble Supreme Court has observed thus :-
"6. The grace period is one month and therefore the State Commission was not justified in holding that the payment was made within the grace period. Condition 3 relates to revival of discontinued policy. A bare reading of the condition shows that it can be revived during the lifetime of the assured. In the instant case the cheque was admitted received after the death of the assured. Further the revival takes effect only after the same is approved by the Corporation and is specifically communicated to the life insured. In the present case this is not the situation.
Further Section 43 of the Act reads as follows :
43. Application of the Insurance Act.
(1) The following section of the Insurance Act, shall, so far as may be, apply to the Corporation as they apply to any other insurer, namely // 10 // :- Sections 2, 2B, 3, 18, 26, 33, 38, 39, 31, 45, 46, 47A, 50, 51, 52, 110A, 110B, 110C, 119, 121, 122 and 123.
(2) The Central Government shall as soon as may be after the commencement of this Act, by notification in the Official Gazette, direct that the following sections of the Insurance Act shall apply to the Corporation subject to such conditions and modifications as may be specified in the notification, namely :- Sections 2D, 10, 11, 13, 14,
15 20, 21, 22, 23, 25, 27A, 28A, 35, 36, 37, 40, 40A, 43, 44, 102 to 106, 107 to 110, 111, 1133, 114 and 116A.
(2A) Section 42 of the Insurance Act shall have effect in relation to the issue to any individual of a licence to act as an agent for the purpose of soliciting or procuring life insurance business for the Corporation as if the reference to an officer authorised by the Controller in this behalf in sub-section (1) thereof included a reference to an officer of the Corporation authorised by the Controller in this behalf.
(3) The Central Government may, by notification in the Official Gazette, direct that all or any of the Insurance Act other than those specified in sub-section (1) or sub-section (2) shall apply to the Corporation subject to such conditions and modifications as may be specified in the notification.
(4) Every notification issued under sub-section (2) or sub-section (3) shall be laid for not less than thirty days before both Houses of Parliament as soon as possible after it is issued, and shall be subject to such notifications as Parliament may make during the session in which it is so laid or the session immediately following.
(5) Save as provided in this section, nothing contained in the Insurance Act shall apply to the Corporation.
7. Section 43 of the Act enumerates the various Sections of Insurance Act which have application to the Act and Section 64-VB is // 11 // not one of them. That being so also the National Commission was not justified in its conclusion about the applicability of that provision."
15. In Life Insurance Corporation of India & Anr. vs. Ranganath, II (2014) CPJ 178 (NC), Hon'ble National Commission has observed thus :-
"7. Learned Counsel for respondent submitted that no separate intimation regarding payment of premium and grace period was given which amounted deficiency on the part of petitioner. We do not agree with the submission because in the policy cover itself it has been mentioned that premium was payable in March, June, September and December and in such circumstances, no separate intimation for payment of premium was required. As policy lapsed before death of insured, no claim was payable under the policy and petitioner rightly repudiated the claim, but the District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal and revision petition is to be allowed.
16. In Sheela Devi vs. Life Insurance Corporation of India & Ors. II (2014) CPJ 484 (NC), Hon'ble National Commission has observed that "deceased while going to his office on scooter fell in the canal and died - LIC has right to accept or decline the revival of discontinued policy and revival of discontinued policy shall be effective only after the same is approved by Corporation and specifically communicated to life assured.
// 12 //
17. According to the respondent No.1 (complainant), he gave premium amount of the policy to the respondent No.3 (O.P.No.3) on behalf of the respondent No.2 (O.P.No.2) for depositing the same before the appellant (O.P.No.1) (Insurance Corporation).
18. In Revision Petition No.900 of 2007 - Life Insurance Corporation of India vs. Girdharilal P. Kesarwani & Anr. order dated 14.01.2009 (Supra), Hon'ble National Commission has observed thus :-
"Counsel for the petitioner relies upon the Judgment of the Supreme Court of India, i.e. Harshad J. Shah & Anr. v. L.I.C. of India & Ors. reported in III (1997) CPJ 9 (SC) = III (1997) CLT 360 (SC) = AIR 1997 Supreme Court 2459, wherein Their Lordships, after considering a similar contention arising under similar circumstances, held that an agent has no authority to accept the premium on behalf of LIC and that the deposit made by the agent after the death of the deceased would not entitle the claimant to get the amount insured under the policy. It was held as under :-
"17. In the instant case, it cannot be said that respondent No.3 had the express authority to receive the premium on behalf of the LIC because in the letter of appointment dated December 5, 1962 there was a condition expressly prohibiting him from collecting the premium on behalf of the LIC. Nor can it be said that respondent No.3 had an implied authority to collect the premium on behalf of the LIC because in 1972 the LIC has made a regulation (Regulation 8(4), which in 1981 became a rule, prohibiting the agents from collecting premium on behalf of the LIC. This shows that collection of premium was not necessary for or ordinarily incidental to the effective execution of his express authority by an agent. In view of this // 13 // express prohibition in the Regulations/Rules which were published in the Gazette, it is not possible to infer an implied authority by the LIC authorising its agents to collect premium on behalf of the LIC."
19. In the instant case, it is not disputed that insured Sukmati Jhara died on 27.01.2008 and premium amount was deposited on 06.02.2008 i.e. after death of the insured Sukmati Jhara and when the insured had died, the policy was already in lapsed condition due to non-payment of premium amount. From bare perusal of the record of the District Forum, it appears that the premium amount for quarter ended March, 2007, June, 2007 September, 2007 and December, 2007 were not paid as per Clause 2 of the conditions of the policy. Even after due date, 30 days grace period was allowed for payment of quarterly premium but premium amount was not paid before the expiry of grace period, therefore, policy was lapsed. In the instant case, initially the payment of quarterly premium was due in March, 2007 thereafter the premium were due in the month of Jun, 2007, September, 2007 and December, 2007, which were not paid within due date as well as within grace period and in such circumstances the policy stood lapsed. It is also not disputed that amount of premium was deposited after death of the assured.
// 14 //
20. Therefore, the policy had already lapsed before the death of the insured Sukmati Jhara, therefore, it could not be revived and no separate intimation for payment of premium was required as policy was lapsed before death of the insured, no claim was payable under the policy and the appellant (O.P. No.1), has rightly repudiated the claim of the respondent No.1 (complainant) but learned District Forum committed error in allowing the complaint. Therefore, the respondent No. 1(complainant), is not entitled for getting any amount on the basis of the insurance policy. Hence, the impugned order passed by the District Forum, is not sustainable in eye of law and is liable to be set aside.
21. Hence, we allow the appeal of the appellant (O.P.No.1) and set aside the impugned order dated 05.04.2013 passed by the District Forum. Consequently, the complaint also stands dismissed. No order as to the cost of this appeal.
(Justice R.S. Sharma) (Ms. Heena Thakkar) (D.K. Poddar) (NarendraGupta) President Member Member Member /05/2015 /05/2015 /05/2015 /05/2015