Life Insurance Corporation of India vs GYANWATI SINGH

BOTH these appeals arise from the order dated 24.9.2002 passed by District Forum, Rewa in Case No. 412/2001 hence taken up together and are being disposed of by this common order.

LATE Jawaharlal Singh on 28.6.1994 took out a life insurance policy from Life Insurance Corporation of India (for short ''LIC''), the Opposite Parties, for a sum of Rs. 50,000/-. It was for the period from 28.6.1994 to 28.6.2014. Six monthy premium @ Rs. 1,056/- was payable on 28th day of June and December every year. It is no more in dispute that last premium under the said policy was paid on 28.6.1996. The premium due on 28.12.1996 and onward was not paid. Insured-Jawaharlal died on 6.11.2000. The policy had lapsed on account of non-payment of premium and no step was taken by the insured for revival of the policy during his lifetime. It appears that the LIC unaware of the death of the insured, issued a letter on 27.11.2000 offering to revive the policy on payment of the arrears of the premium amount with interest. Complainant Smt. Gyanwati Singh, the widow and the nominee of the deceased, on receipt of the said letter dated 27.11.2000, submitted claim to the LIC claiming the amount of insurance of her late husband. The claim was however repudiated by the opposite party on the ground that the policy had lapsed much before the death of the insured. The complainant therefore approached the Forum below claiming awardment of the said amount against the LIC. The complaint was resisted by the opposite party on the same ground as aforesaid. The Forum below after taking evidence of the party came to the conclusion that there was no deficiency in service on the part of the LIC and as the policy had lapsed there was no question of payment of the insured amount. However, the Forum below directed the LIC to pay back to the complainant the amount of premium deposited by the husband of the complainant with the LIC. Feeling aggrieved by this order both the parties have come up in appeal before this Commission. We have heard learned Counsel for the parties. Taking the appeal of the complainant first, it is seen that policy had lapsed on 28.12.1996 as the insured failed to pay any premium after that date. No step was also taken by the insured for revival of the policy during his lifetime. He died on 6.11.2000 and on that date no policy was in existence and as such no claim could be preferred by the nominee of the insured for payment of the amount assured. Issuance of letter dated 27.11.2000 for revival of the policy by the LIC did not amount to revival of the policy. In fact there could be no revival of the policy after the death of the insured. The Forum below was therefore right in holding that there was no deficiency in service on the part on the LIC in repudiating the claim of the complainant.

Coming to the appeal of the LIC, it is seen that under the terms and conditions of the policy, no amount could be ordered to be refunded to the complainant. As per condition No. 4 contained in the policy document, it was only when the policy had survived for three years and the premium has been paid for those full years then only the insured and in case of his death his nominee could claim the paid-up value of the policy which had lapsed on account of non-payment of further premium. In the instant case, the policy had survived only for two years. There was no payment of premium for full three years as required by the said condition. Under the circumstance, no order for refund of the premium amount or the paid-up value could be made against the LIC. The Forum below seems to have missed the aforesaid condition while making the order for refund of the said amount. This order for refund of the amount therefore deserves to be set aside.

ACCORDINGLY, while we dismiss appeal No. 2070/2002 filed by the complainant Smt. Gyanwati Singh, we allow the appeal No. 1747/2002 of the Life Insurance Corporation of India and set aside the impugned order. The complaint filed by Smt. Gyanwati Singh shall stand dismissed in toto. However, we make no order as to costs which the parties are left to bear their own as incurred throughout. This order be retained in Appeal No. 1747/2002 and a copy be placed in Appeal No. 2070/2002. Copies were also conveyed to the parties and the Forum below. Ordered accordingly.