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Judgment
, PRESIDENT 1. PETITIONERS which were the opposite parties before the District Forum, have filed this Revision Petition against the order dated 06.07.07 passed by the State Consumer Disputes Redressal Commission, Andhra Pradesh (for short, ''the State Commission'') in appeal no. 1122/05 upholding the order of the District Consumer Disputes Redressal Forum, Hyderabad (for short, ''the District Forum'') dated 25.05.05 except that it reduced the rate of interest from 12% to 9% and set aside the award of compensation of Rs.20,000/-. District Forum had directed the Petitioners to pay the claim amount of Rs.2 lakh to the Respondent along with interest @ 12% p.a. from the date of death of the policy holder till the date of payment, Rs.20,000/- as compensation and Rs.1,000/- as costs. FACTS
COMPLAINANT/Respondent''s husband had taken a money back policy with accidental benefits from the Petitioners commencing from April 4, 2003 by paying a premium of Rs.6,380/-. As per the conditions of the policy, the premium was to be paid every year on due date or within one month of grace period. Insured defaulted in the payment of the premium due in April, 2004 and subsequently died on 18th August, 2004 in a road accident. As per averments made in the complaint, when the Respondent approached the Petitioners she was told that a sum of Rs.6,380/- was due as payable towards the premium which fell due in April, 2004 and the same had not paid till August, 2004. It was further alleged that the Petitioner Corporation told the Respondent that the premium amount can be paid along with penal interest as late payment charges which were Rs.239.30. That the Respondent deposited the unpaid premium of Rs.6,380/- seeking renewal of the policy along with late payment charges of Rs.239.30. On 19th October, 2004, Complainant/Respondent informed the Petitioner about the death of the assured and requested it to settle the claim. The claim lodged by the Respondent was repudiated by the Petitioner on the ground that second installment of premium was paid after the death of the policy holder and after the lapse of grace period and as such no amount was payable. Aggrieved by the repudiation, Respondent filed the complaint before the District Forum claiming insured sum of Rs.2 lakh along with interest, compensation and costs.
DISTRICT Forum allowed the complaint and directed the Petitioners to pay the insured amount of Rs.2 lakh to the Respondent along with interest @ 12% p.a. in addition to compensation and costs of Rs.20,000/- and Rs.1,000/- respectively. Petitioners, being aggrieved, filed an appeal before the State Commission. State Commission dismissed the appeal except that it reduced the rate of interest from 12% to 9% and set aside the award of compensation of Rs.20,000/-.
COUNSEL for the Petitioners contends that the Respondent had intentionally without disclosing the fact of the death of her husband made the payment of second premium to claim the policy amount by misleading the Petitioner Corporation. That the second premium was due in April, 2004 which could be paid either in the month of April or within the grace period of one month. Since the premium amount was not paid the policy lapsed. That the lapsed policy could be revived only during the life time of the insured and not after his death. That in the present case since the policy had been revived after the death of the insured, Petitioner is not liable to pay the insured amount. In support of his submissions, Counsel for the Petitioner has relied upon the judgment of the Hon''ble Supreme Court in the case of Life Insurance Corporation of India Vs. Jaya Chandel - 2008 (3) SCC 382. We find substance in the submissions made by the Ld. Counsel for the Petitioners. Insured took the policy in April, 2003. Premium was to be paid every year. The second premium was due in April, 2004 which could be paid in the month of April or within the grace period of one month. Since the premium was not paid, the policy lapsed. Assured died on 18th August, 2004 and Respondent paid the second premium along with renewal charges of Rs.239.30 without disclosing the fact that the assured had died. A lapsed policy can be revived during the life time of the assured and not thereafter. Supreme Court in Jaya Chandel''s case (supra) has held that as per the conditions of the policy, a policy could be revived during the life time of the assured only. The relevant para 6 of the judgment reads as under:-
"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 life time of the assured. In the instant case the cheque was admittedly 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. "
THE facts of the present case are similar to the facts of the aforesaid judgment of the Supreme Court. It is a settled law that a lapsed policy can be revived during the life time of the assured only and not after his death. Since in the present case the policy was sought to be revived after the death of assured, the Insurance Company is not liable to pay the insured amount as the policy was lying in lapsed condition on the date of death of the assured.
FOR the reasons stated above, the Revision Petition is allowed and orders passed by the fora below are set aside. Petitioner Insurance Company in its reply filed before the District Forum had admitted that the amount of Rs.6,619.30 paid by the Respondent towards second premium and late fee charges is refundable to the Respondent without any interest, we direct the Petitioner to pay the said amount to the Respondent within four weeks failing which the amount shall carry interest @ 9% from the date of deposit till payment.