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Judgment
THE present appellant is the original opponent who has filed the appeal against the order of the District Forum, Junagadh. THE judgment was delivered on 27.11.92 and the present appeal is filed on 5.2.93 and, therefore, there is a delay of more than one month. THErefore, the appellant has also made an application for condonation of delay.
THAT the order of the District Forum is only to return the amount of Rs. 660.50/- to the complainant. The amount being very small and there being a delay in filing the appeal, we were not inclined to entertain the appeal. However, Mr. P.B. Desai, the learned Counsel appearing on behalf of the LIC states that they are not interested in saving the amount but the complaint involves a principle of law which might hurt the Insurance Company in future. According to Mr. Desai, the son of the complainant had taken life insurance and has paid the first premium of Rs. 660.50. After the payment of the first premium, the insured never cared to pay any other premium till he died. According to the rules and conditions of the policy, the policy will automatically lapse on non-payment of second premium. Once the policy is lapsed, the relationship between the insured and Insurance Company comes to an end and in case, if the insured subsequently dies, the premium already paid is not recoverable because the policy has lapsed. If the insured has paid three years'' premium, then, he can get the surrender value. But in the instant case only one premium was paid and if this judgment is allowed to be alive, the LIC shall have to refund the premium in thousands of cases.
Mr. Desai has fairly stated that the LIC will return the premium amount by way of ex-gratia payment but is not prepared to refund it as premium. We have considered the arguments of Mr. Desai. The LIC has also taken the. contention before the District Forum that non-return of premium does not amount to deficiency in service because it has nowhere been pointed out in the conditions of policy that in case policy lapses, the Insurance Company is under obligation to return the premium amount.
HOWEVER, we are of the opinion that the findings of the District Forum is erroneous. If the policy has lapsed and if the insured has not paid three years'' premium, he cannot get the refund of the premium amount paid because the Insurance Company has already taken risk for the period for which the premium has been paid. The premium is consideration for taking the risk of life of the insured and if that consideration is not paid thereafter, the Insurance Company is free from the risk and policy will lapse. Since the premium has been appropriated for the period of risk no right or equity arises in favour of the insured for refund the premium amount. We, therefore, find the order of the District Forum as erroneous and is liable to be set aside. We appreciate the concession made by the LIC to return the premium which we are sure they will return. ORDER The appeal is allowed. The order of the District Forum is set aside Complaint stands dismissed. In the circumstances there will be no order as to costs. Appeal allowed. _____________