BRANCH MANAGER, LIFE INSURANCE CORPORATION OF INDIAAppella vs KOLLI VENKATESWARA RAO

THE second opposite party in C.D. 180/1995 on the file of the District Forum, Khammam is the appellant.

THE case of the complainant is that his wife late Rama Satyavani has insured her life with the opposite party for a sum of Rs. 75,000/- commencing from 28.3.1991. While so, on 26.3.1994 at about 9.00 p.m. her saree caught fire from the kerosene stove and with a view to put off the same she ran into the bath room where she died instantaneously. THE opposite party merely paid the premium amount of Rs. 8,327.00 to the complainant but he did not pay the amount legally due. As her death is accidental death, the complainant is entitled to double the assured amount. As the amount was not paid, he approached the District Forum. In the counter, the appellant, while admitting the policy bearing No. 680552628 for Rs. 75,000/- commencing from 28.3.1991, stated that since the duration of the policy from the date of commencement till death is less than three years, but only two years 11 months and 28 days, Clause IVB of the policy applies, and as such, the complainant is not entitled to the amount claimed. It is further stated that the deceased died due to suicide, and as such the complaint is not maintainable.

The District Forum, however, observed that there is deficiency in service and accordingly directed the appellant to pay a sum of Rs. 1,50,000/- with interest at 12 per cent per annum from the date of complaint till realization together with costs of Rs. 2,000/-. Hence the appeal.

BEFORE we decide the controversy, it is relevant to extract Clause 4B of the policy conditions as : Notwithstanding anything mentioned to the contrary, it is hereby declared and agreed that in the event of death of the life assured occurring as a result of intentional self-injury, suicide or attempted suicide, insanity, accident other than an accident in public place or murder at any time on or after the date on which the risk under the policy has commenced but before the expiry of three years from the date of this policy, the Corporations liability shall be limited to the sum equal to the total amount of premiums (exclusive of extra premiums, if any) paid under this policy without interest provided that in case the Life Assured shall commit suicide before the expiry of the year reckoned from the date of this policy, the provisions of the clause under the heading suicide printed on the back of the policy shall apply. There is no dispute about the policy which commenced on 28.3.1991. There is also no dispute that late Ram Satyavani died on 26.3.1994. Of course, the appellant contends that she died due to suicide. Whatever may be the truth or otherwise of the said contention, the fact remains that she died within three years from the date of the policy. What is the effect of Clause 4B on the said policy is the question. The policy clearly shows that Clause 4B has been adopted and read into the policy. The complainants wife agreed for the said clause and signed for adoption of the said clause. Therefore, it cannot be said that the clause has no application to the policy in question.

THE learned Counsel for the complainant relied on a decision rendered by the National Commission in R.P. No. 417/1993 decided on 19th September, 1994 which directly deals with the effect of Clause 4B. It is held that since the death occurred within a period of three years of the issuance of the policy of insurance, the liability of the Corporation is limited to the amounts paid by way of premium under the policy without interest and consequently there is no deficiency of service on the part of the Corporation and accordingly allowed the revision petition setting aside the orders of the District Forum and State Commission. Following the said decision, we have no hesitation to hold that Clause 4B squarely applies to this case, and as such, there is no deficiency in service on the part of the opposite parties. The learned Counsel for the respondent, however, relying on a decision rendered by the National Commission in F.A. 255/1992 dated : 19.7.1994 submits that Clause 4B cannot be applied to the facts of this case. But in that case, the main contention was that the deceased had personal income in respect of which she was assessed to income-tax and wealth-tax since 1975-76 and as such there was suppression of material information before obtaining the policy. The National Commission found that the deceased cannot be held to be responsible for suppression of any material fact or by non-disclosure as she did not derive any advantage, but, on the other hand, it operated to her prejudice by inviting incorporation in the policy of Clause 4B. The National Commission finally held that incorporation of Clause 4B in the policy issued was the result of a mistake, as if the correct facts has been disclosed in the proposal form by the Agent. Clause 4B could not have been incorporated in the policy. Therefore, Clause 4B was not applied to the policy as it had no application to the facts of the case. In juxta position, the facts of the case in hand attract application of Clause 4B and, therefore, the decision rendered in R.P. 417/1993 dated 19th September, 1994 squarely applies to this case. Therefore, we are constrained to hold that there is no deficiency in service on the part of the appellant. The appeal, therefore, is allowed, the order of the District Forum is set aside and the complaint is dismissed, but, in the circumstances, without costs. Appeal allowed.