Life Insurance Corporation Of India @APPELLANT@Hash Jammu & Kashmir S. C. D. R. C. And Others

The present petition has been filed, challenging the order dated 21.08.2009, whereby the appeal filed by the petitioner â€" Life Insurance

Corporation of India against the order of Divisional Forum dated 11.12.2003 has been dismissed and consequently the order of the Forum upheld.Â

Briefly stated, the material facts are as under:-

An insurance policy was obtained by the complainant in the name of his minor son for a sum of Rs. 3,00,000/- with yearly installment of premium

of Rs. 26,170/- payable @ Rs. 13,310/- half yearly from the Life Insurance Corporation of India (hereinafter called as LIC). The case of the

complainant was that he submitted a half yearly premium through a cheque No. 005046 dated 27.08.1998 for a sum of Rs. 13,310/-, which cheque

was drawn on the Central Bank of India (CBI), Talab Tillo Branch. The said cheque was also admittedly deposited with the LIC, who presented the

same with their banker, i.e., Punjab National Bank.Â

It appears that the Punjab National Bank instead of sending the cheque for clearance to the CBI, Talab Tillo Branch, where the complainant had

an account, sent the same to the Raghunath Bazar Branch of CBI. A memo appears to have been generated by the CBI, Raghunath Bazar Branch

that there were no funds in the account of the complainant. The memo admittedly was without any basis, inasmuch as, there was no account being

maintained by the complainant in the CBI, Raghunath Bazar Branch. It appears that upon receiving the memo, LIC by virtue of notice dated

02.11.1998 informed the complainant regarding the cheque having bounced.Â

It further appears that upon non-receipt of the premium, Life Insurance Corporation as per their own guidelines treated the policy to have lapsed.

Upon getting the information that the policy had lapsed, the complainant appears to have approached the LIC to emphasize the issue that his account

had sufficient funds, which was maintained in the CBI, Talab Tillo Branch and not in the CBI, Raghunath Bazar Branch.Â

However, it appears that the LIC insisted that for reviving the policy, the complainant had to make the payment afresh. Admittedly, the

complainant made the payment of premium once again through a cheque. However, according to Mr. C. S. Gupta, learned counsel for the

Corporation, the said cheque was returned, as the Life Insurance Corporation of India could not accept the premium through cheque again, if once the

cheque had been dishonoured.Â

It is in the background of the aforementioned facts that the complainant approached the Divisional Forum, Jammu, who vide order dated

11.12.2003, after noticing the evidence on record directed the Corporation to either review the Insurance Policy of the insured after fulfilling the

procedural formalities, without receiving any past premium from him or in the alternative return the entire amount received as premium from the

complainant along with interest @ 9% p.a. from the date of last premium paid, besides making payment of Rs. 1 lac for the harassment, mental agony

and humiliation as also inconvenience suffered by the complainant and his family members.Â

Needless to say that the Forum had noticed the evidence on record that the complainant had to cut-short his visit abroad and had to return back to

India upon being informed that the policy obtained by him on his son’s name had lapsed.Â

The order dated 11.12.2003 came to be challenged by the LIC before the State Consumer Disputes Redressal Commission, Jammu who vide

order dated 21.08.2009 dismissed the appeal and upheld the order of forum below. It is in those circumstances that the present petition has been filed,

challenging the order of the fora below.

The star argument of the learned counsel for the Corporation was that there was no occasion either for the Divisional Forum or the State Forum to

return a finding in favour of the complainant, inasmuch as, no fault could be attributed to the Corporation and if at all there was any negligence, it was

on the part of the Banker of the Insurance Company, i.e., Punjab National Bank. It was also stated that a specific plea had been raised by the

Corporation to implead the Punjab National Bank as party respondent in the proceedings earlier but the same was rejected without any justification. It

was thus prayed that the order impugned was unsustainable in law.

Mr. K. K. Pangotra, learned counsel for the respondent/ complainant, however, reiterated the stand earlier taken and emphasized that the order

impugned was legal and justified in the facts and circumstances of the case.Â

Heard learned counsel for the parties.

The scope of judicial review in writ jurisdiction of the Court is no longer res integra. The Apex Court in “H. B. Gandhi, Excise and Taxation

Officer-cum-Assessing Auhority, Karnal and others Vs/ M/s Gopi Nath & Sons and others†reported in 1992 Supp(2) SCC 312 in paragraph 8 held

as under:-

“8. ………………..Judicial review, it is trite, is not directed against the decision but is confined to the decision making process. Judicial review

cannot extend to the examination of the correctness or reasonableness of a decision as a matter of fact. The purpose of judicial review is to ensure

that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised

by law to decide, a conclusion which is correct in the eyes of the court. Judicial review is not an appeal from a decision but a review of the manner in

which the decision is made. It will be erroneous to think that the court sits in judgment not only on the correctness of the decision making process but

also on the correctness of the decision itself.â€​

In the present case, admittedly, the Divisional Forum as well as the State Commission have appreciated the evidence on record in its correct

perspective and no procedural irregularity has been established. While, it is true that the LIC relied upon a memo generated by the CBI, Raghunath

Bazar Branch, yet, sufficient care should have been exercised even by the LIC to ensure that the memo, which formed the basis of declaring a policy

as ‘lapsed’ was issued by the correct branch or not, inasmuch as, the Corporation had received a cheque, which also contained clearly the

imprint that the same was drawn on the Central Bank of India, Talab Tillo Branch. Being the recipient of the cheque, which clearly mentioned the

Branch, the LIC would be deemed to have the knowledge where the cheque ought to have been presented and then should have taken pains to

compare it with the ‘memo’ generated by the Bank.Â

There is no justification for the LIC to claim that no fault could be attributed to the LIC. The LIC on its part appears to have blindly relied upon the

memo generated by their Banker â€" Punjab National Bank for which, it would have been open to the LIC to proceed against their Banker â€" Punjab

National Bank for deficiency of service.

Be that as it may, the views expressed by the Divisional Forum as well as the State Consumer Disputes Redressal Commission do not suffer from

any procedural illegality or perversity.

For the reasons mentioned above, this petition is found to be without any merit and is, accordingly, dismissed along with connected interim

applications.Â

The amount deposited in the Registry of Court be released in favour of the complainant.

Record be sent back forthwith.