R.CHANDRIKA vs L.I.C. of India

THIS complaint is filed seeking a direction to the to pay an amount of Rs. 2,00,000/- with interest at the rate of 18% per annum from 28.8.90.

BRIEFLY stated the facts of the case are as follows: The husband of the complainant Dr. Rajendran insured his life with the 1st Opposite Party for Rs. 2 lakhs on 28th August, 1986. As per the terms and conditions of the policy, premium amount Rs. 3,777.50 had to be paid quarterly and if the premium amount was not paid on the due date, interest on the premium amount also had to be paid from its due date till its payment. The complainant alleged that he paid premium due upto 28.2.90 with interest on it. The next premium was due to be paid on 28.5.90. While so Dr. Rajendran died on 28.8.90 at S.S.N.M. Hospital at Varkala. So on the date of his death one premium on his life insurance policy was due and the due date for payment of the said unpaid premium was on 28.5.90. The complainant contended that according to the terms and conditions if after atleast three full years premium is paid in respect of the policy, any subsequent premium be not duly paid in the event of death of the life assured within 6 months from the due date of the first unpaid premium the policy will be paid as if the policy had remained in full force after deduction of (a) the premium of premia unpaid with interest thereon to the date of death on the same terms as for revival of the policy during such period and, (b) the unpaid premium falling before the next anniversary of the policy. The complainant alleged that she is the nominee of her husband under the policy and as per the law of insurance and as per the terms under which the policy was insured the complainant was entitled to get the full amount assured on the life of the deceased. Though complainant approached the Opposite Parties they did not pay full amount and intimated that they would pay only Rs. 49,000/- which is only the paid up value under the above policy. It is in these circumstances the complaint was filed claiming Rs. 2,00,000/- together with interest at the rate of 18%.

The Opposite Party filed version contending that the premium paid on 3.5.90 as towards premium due on 28.11.89. The premium was not paid and it was in a lapsed condition from 28.2.90. The policy was in force only for 3 years and therefore the non-forfeiture period of six months applicable expired on the midnight of 27.8.90. The life assured died after the expiry of the said period on the next day and, therefore, the claim was admitted for paid up value only. It is, therefore, contended that the complaint is without any merits.

IT is admitted at the time of argument by learned Counsel for the complainant that payment on 3.5.90 was towards the premium due on 28.11.89. The next premium was due on 28.2.90. The question to be considered is how the period of 6 months has to be reckoned to determine the question whether the complainant is entitled to relief claimed by the complainant. Learned Counsel for the Opposite Party submitted the first unpaid premium fell due on 28.2.90 and the 6 months period from that date expired on the midnight of 27.8.90 and since the death occurred on 28.8.90 the complainant is not entitled to the benefit of the claim.

LEARNED Counsel for the Opposite Party invited our attention to manual for policies of Survey Department. Chapter 2 Clause 3 relates to extension of the Claims Concessions. The principle to reckon the days of grace has been mentioned in Clause 3 which reads as follows: "The non-forfeiture period of 6 months under Claims Concession Clause should be reckoned from and including the due date. If premium e.g., if the due date of the 1st unpaid premium is 10th April, the non-forfeiture period would expire at the midnight of 9th October, even if that day happens to be a public holiday."

Learned Counsel for Opposite Parties also invited our attention to Section 3(35) of the General Clauses Act 1897 which lays down as follows: "month" shall mean a month reckoned according to British Calendar. He also invited our attention to the Law Lexicon by P. Ramanatha Iyer, 1987 Edition. At page 830 the learned Commentator states as follows: The term "month", whether employed in modem statutes or contracts, and not appearing to have been used in a different sense, denotes a period terminating with the day of the succeeding month numerically corresponding to the day of its beginning, less one. If there is no corresponding day of the succeedings month it terminates with the last day thereof.

HOW a Calendar month is to be reckoned is described in para 143 of Halsbury''s Laws of England Volm. 37, 3rd Edition in the following words: "When the period prescribed is a Calendar month running from any arbitrary date, the period expires with the day the succeeding month immediately preceding the day corresponding to the date upon which the period starts save that, if the period starts at the end of a calendar month which contains more than next succeeding month the period expires at the end of the latter month."

APPLYING the above principles to the facts of this case it has to be held that six months period mentioned in the terms and conditions falls on 27.8.90 and since the death occurred on 28.8.90, it was beyond the period of 6 months. It follows that stand taken by the Insurance Company that the complainant is not entitled to the benefit claimed by him is correct on a correct interpretation of the relevant clause. Learned Counsel submitted that the Chairman has been invested with powers for ex-gratia payment and this is a fit case to exercise such power. We cannot make any direction in this regard as it is only a discretion. If the complainant seeks such relief on the basis of clause for ex-gratia payments, the Opposite Parties will consider the application and pass orders. The complaint is disposed of as above. We direct the parties to bear their respective cost. Complaint disposed of.