Divisional Manager, Life Insurance Corporation of India vs TANGELLA RAJESWARI

AGGRIEVED by the order dated 21.1.1998 passed by the Khammam District Forum in CD. No. 166/1995 directing the opposite parties 1 and 2 to refund the premium amounts paid by the deceased, Hanumanthu from the date of obtaining two policies till May, 1993, this appeal is preferred by the opposite parties 1 and 2, who are the Divisional Managers, L.I.C. of India, Warangal and the Branch Manager, L.I.C. of India, Bhadrachalam Branch.

THE case of the respondent herein, who is the complainant before the District Forum is that her husband Hanumanthu while working in Singareni Colleries Company obtained one policy for Rs. 10,000/- on 28.1.1992 and another policy for Rs.40,000/-on 14.9.1992, that all the monthly premiums were paid by her late husband for the said policies, that her husband died on 4.9.1993 due to ill-health and that when she claimed the policy amounts the opposite parties 1 and 2 repudiated their liability to pay the policy amounts. THErefore she filed a complaint CD No. 166/1995 before the Khammam District Forum against opposite parties 1 and 2 and also the General Manager, Singareni Colleries Company Limited; Kothagudem, opposite party No. 3 requesting for direction to pay the policy amounts. THE opposite parties 1 and 2 being the officials of the L.I.C. resisted the complaint by filing a counter contending that the policies lapsed on account of the failure of the insured to pay the premium amounts from June, 1993 and that therefore they are not liable to pay any amounts under the said policies. THEy also contended that both the policies of the insured lapsed without acquiring any paid up value. Opposite party No. 3, the General Manager, Singareni Colleries Company Limited filed a counter stating that the deceased did not earn sufficient wages in June, 1993 and therefore, the premiums were not paid.

At the time of enquiry the complainant got Exs. A-l to A-3 marked. She has not adduced any oral evidence. The opposite parties have not placed any evidence either oral or documentary.

AFTER considering the material on record, the District Forum held that the policies of the deceased husband of the complainant lapsed for non-payment of the monthly premiums and that there is no deficiency of service on the part of opposite parties. However, the District Forum passed the impugned order directing the opposite parties 1 and 2 to refund the premium amounts paid for the two policies in question with interest on ex-gratia basis. The learned Counsel for the appellants submits that when once policies are in lapsed condition and when they have not earned the paid up value, the question of refunding premium amounts does not arise. It may be noted that the deceased died before expiry of two years from the date of obtaining policies. The policies of the deceased have not earned any paid up value. In the circumstances, we hold that the District Forum is not right in directing the payment of premium amounts on ex-gratia basis and the order of the District Forum is not sustainable. In the result, the appeal is allowed and the order of the District Forum is set aside and the complaint is dismissed. There shall be no order as to costs in this appeal. Appeal allowed.