L.I.C. Of India vs Tajdin Javerbhai Mavany

THIS first appeal has been filed by the appellant L.I.C. against the order of State Commission accepting the complaint of the respondent/complainant.

BRIEF facts of the case are that the respondent/complainant had taken a "Limited Payment Life Policy with Profits" on 12.7.1968 for Rs. 50,000/- and endorsed the policy to Government of India under Estate Duty Act, 1953 and making his wife a nominee to receive the balance amount from the Policy after satisfying the Estate Duty demand. As per the Terms of Policy, the respondent/complainant paid all the instalments till 7.7.1990. In-between Estate Duty Act, 1953 was abolished; Government of India reassigned the said Policy in favour of the respondent/complainant on 2.8.1985 and thereafter he assigned the said Policy in favour of appellant without any nomination. The respondent/complainant approached the appellant for payment of the insured amount on maturity on 12.7.1990 which was repudiated by the appellant on the ground that maturity amount is payable in the case of death only. It is in these conditions that the respondent/complainant approached the State Commission for relief, who after hearing both the parties ordered the appellants before us, to pay the full amount of Rs. 50,000/- with interest @ 18% from 12.7.1991.

The respondent/complainant did not appear before us inspite of notice served on him, hence it was decided to proceed ''ex parte'' against him.

IT was argued by the learned Counsel for the appellant that a mere perusal of the policy shall show that it is a ''Limited Payment Life Policy with Profits'' and against the column ''Event on the happening of which sum assured payable'' it is written on the death of the life assured''. Since the policy remained the same, the terms of the policy remained the same. IT is also important to note that the respondent/complainant continued to pay the instalments as per terms of the policy. Since amount is payable only after the death of the respondent/complainant, the order of the State Commission is bad in law and facts of the case; hence it needs to be set aside. IT was also stated by him that there is an outstanding loan against the respondent/complainant which will need to be adjusted. We have heard the arguments and perused the material on record. We find that policy, which is a contract between the parties, clearly lays down that amount assured is payable on the death of the life assured i.e. of respondent/complainant. The argument of the State Commission that after abolition of Estate Duty Act, the general conditions which are applicable to pay Insurance Policy become applicable to the said policy, in our view, cannot be sustained. If after the abolition of Estate Duty Act, the respondent/complainant wanted any change in the policy terms, he should have moved L.I.C. in this regard. His not doing so, does not bring him anywhere near his claimed amount being given to him, contrary to the terms of the policy. It is not denied by the appellant that all the instalments were paid and in time by the respondent/complainant, but the main issue is that benefit of the policy could accrue only after the death of the policy holder. In the light of this we are unable to sustain the order of the State Commission. The record also shows that the respondent/complainant died on 8.12.1994, hence fulfilling the condition of the Policy for release of the policy amount. Keeping this fact in view that the basic requirement of the policy for release of assured amount i.e. on the death of the assured, having been fulfilled, we direct the appellant to pay the assured amount plus bonus if any along with interest @ 18% from 8.12.1994 till the date of payment along with costs of Rs. 2,000/- to the LRs of the respondent/complainant. We also make it clear that amount of outstanding loan, if any, may be adjusted before making the payment to LRs of the respondent/complainant. We are constrained to observe that it would have been in the fitness of things had the appellants paid the amount after the death of the respondent/complainant in December, 1994 on their own volition, as per the terms of Policy. Appeal disposed of.