Sunita vs Life Insurance Corporation Of India & Anr

The present Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), has been filed by the Complainant challenging the order of the State Consumer Disputes Redressal Commission, Jaipur, Rajasthan (for short "the State Commission") dated 12.01.2018 in Appeal No.1203 of 2013 filed by the Respondent against the order dated 14.10.2013 of the District Consumer Disputes Redressal Forum, Alwar (for short "the District Forum" in Complaint No.507 of 2013 filed by the Petitioner. Vide the impugned order dated 14.10.2013, the District Forum had allowed the Complaint and passed the following directions:

"It is ordered that the Respondent shall pay to the Complainant a sum of Rs. 3,75,000/- against the death of the policy holder Pradeep Kumar in the said policy within one month from today, towards accident benefit along with interest @ 9% p.a. from the date of presentation of complaint i.e. 22.04.2013 and the learned Forum also directed the Respondent to pay a sum of Rs. 10,000/- towards mental agony and litigation expenses within a period of 2 months, failing which to pay interest @18% p.a. from the date of judgment till the date of payment to the complainant."

The Respondent had challenged the order of the District Forum before the State Commission. The order of the District Forum was set aside vide the impugned order.

The Petitioner/Complainant has impugned the said order before us. It is stated that the State Commission has committed an illegality as the impugned order is against the settled proposition of law and the facts proved on record. It is submitted that the insured had purchased the Jeevan Saral policy no.198029848 with double accidental benefit on 14.04.2011. The policy had provided death benefit sum assured under the main plan Rs. 3,75,000/- and accident benefit sum assured of Rs. 3,75,000/-. The insured met with an accident on 06.03.2012. On 09.03.2012, he made the payment of the defaulted payment along with late fee charges and the policy was revived/renewed. The insured lost his life due to the accident on 21.03.2012. While the Respondent paid the death benefit sum assured under the policy, it denied the accidental benefits of Rs. 3,75,000/- to the Petitioner on the plea that on the date of accident, i.e., on 06.03.2012, he did not have the valid policy as the premium was not paid. The Petitioner thereafter filed the Complaint alleging that on the date the insured had expired, there was a valid policy in existence since the policy was revived/renewed on payment of premium plus late fee on 09.03.2012 and hence the denial of the benefit under that policy was illegal.

Before the District Forum, the same plea that on the date of accident there was no valid policy in favour of the insured, had been raised by the Respondent. Parties led their evidences and after hearing the arguments of the parties, the District Forum reached to the following conclusion:

"Therefore keeping in view the provisions mentioned in the Wings Ready Reckoner and the death of the policy holder by depositing the instalment of premium prior to his death, the Respondent had committed a deficiency in services by having failed to pay the accident claim benefit to the Complainant, thus the Complaint of the Complainant shall be admitted against the Respondent as per our following orders;"

In the Appeal, vide the impugned order the State Commission has set aside the order of the District Forum and has held as under:

"Naturally on 09.03.2012 when the premium was paid, prior to that, the husband of the complainant had been met with an accident on 06.03.2012 and after passing 3 days of the said accident, due premium was paid on 09.03.2012, thus the policy was not in force as on the date of accident, although payment of due premium was paid within 1 years, Thus policy was revived, but the Rider of the Accident Claim Benefit cannot be included therein as it was mentioned as it was mentioned under condition of policy. Hence in consequent thereof the Appeal is admitted and order of Ld. District Forum is set aside."

We have heard arguments of learned counsel for the parties.

Admitted facts are that the policy had lapsed on the date of accident, i.e., 06.03.2012 since the premium was not paid. However, the premium along with late fee in terms of conditions of the policy was paid to the Respondent on 09.03.2012 and thereafter, the policy was revived/renewed and on the date of death, the deceased had the valid policy. The terms and conditions of the policy explains the effect of renewal/revival of the policy. Clause 3 of the said terms and conditions reads as follows:

"Revival of discontinued policies: if the policy has lapsed, it may be revived during the lifetime of the life assured; but within a period of 6 years, from the due date of the first unpaid premium and before the date of maturity on submission of proof of continued incurability to the satisfaction of the corporation and the payment of all the arrears of premium together with interest compounding half yearly at such rate as may be fixed by the corporation from time to time. The corporation, reserves the right to accept or accept with modified terms or declines the revival of discontinued policy, the revival of a discontinued policy shall take effect only after the same is approved by the corporation and is specifically communicated to the proposer/life assured.

(emphasis supplied)

From these terms and conditions, it is apparent that the policy stood "revived from the date of first unpaid premium and before the date of maturity". Therefore, on payment of premium with late fee on 09.03.2012, subsequent to which the policy was revived, the revival dates back to the date on which the premium was payable and this date was prior to 06.03.2012. Hence, the policy stood revived prior to the date 06.03.2012 (on which date the insured had met with an accident. It is apparent that he was holding a valid policy on the date he met with the accident. Therefore, the order of the State Commission suffers with gross illegality and is liable to be set aside.

For the aforesaid reasons, the Revision Petition is allowed. The impugned order of the State Commission is set aside and the order of the District Forum dated 14.10.2013 is hereby confirmed.