Heard learned counsel for the appellants on V.C. None appears for the respondent. It appears from the record that the respondent is not appearing since long. This matter is of the year 2003. Therefore, this Commission inclined to dispose of the matter on the materials available on record.
2. Here is an appeal filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The factual matrix leading to case of the complainant is that the son of the complainant purchased LIC policy under Table and Term 75 – 20 plan on 28.7.2000 from the OPs for a sum assured of Rs.40,000/-. Complainant alleged inter alia that he was paying the premium regularly to the OPs. It is alleged by the complainant that for the month of April, 2001, the premium was not paid and thereafter, it was paid through agent of the OPs but he did not deposit the same. However, the said premium has already been paid on 27.8.2001. In the meantime, the policy holder met accident and on 27.8.2001, the policy holder succumbed to injuries. After the death of the insured, the claim was made. The complainant alleged that the OPs repudiated the claim without any justification for which complaint is filed.
4. The OPs filed written version admitting about purchase of policy by the policy holder who happens to be the son of the complainant. The OPs also admitted that three premiums have been already paid but the premium quarter beginning from April, 2001 was not paid. While the policy was in lapsed condition, payments were made on 27.8.2001 after the death of the policy holder. The OPs further averred that any delay caused by the agent of the LIC is not the responsibility of the OPs because under the LIC Act, 1956 any transaction between the agent and the policy holder not binding on the OPs. As the policy has already lapsed and not revived on time, they have repudiated the claim. It is also averred tht the OPs refunded the last premium paid on 27.8.2001 to the complainant. Thus, they have no any deficiency of service on their part.
5. Learned District Forum after hearing both sides passed the following impugned order:-
“xxx xxx xxx
Having regards to our judgment reflected above it is directed that opp.parties shall go for final settlement of insurance claim of the complainant in releasing Rs.40,000.00 (Rupees Forty thousands) only in her favour together with 18 per cent interest per annum accrued thereon from the date of repudiation i.e. 4.2.2002 till its realization by the complainant. Compliance of order be made within one month from the date of communication of order. In the result complaint is allowed.
Delay in any manner shall carry Rs.50.00 per day as an penal measure.
No order as to costs.”
6. Learned counsel for the appellants submitted that the learned District Forum has committed error in law by not considering the written version with proper perspective. According to him, when the policy has already been lapsed and the death of the policy holder occurred, any payment made after the death or the policy lapsed do not amount to payment of premium complying the policy condition. Learned District Forum has failed to appreciate such fact and law while passing the impugned order.
7. Learned counsel for the appellants further submitted that the learned District Forum erred in law by passing the impugned order to settle the claim for the two policies existence and the lapsed policy. He further submitted that the learned District Forum has erred in law by allowing interest on the claim amount to the extent of 18% per annum when such rate of interest was not prevalent on the date of passing of such impugned order. Further, he submitted that the alternative order passed by the learned District Forum is unknown with provisions of law because such order cannot be passed under the provisions of the Act. He also submitted that any amount paid to the agent of the LIC is also not conferring any legal status to the policy holder because of the Regulation made under LIC Act, 1956 because learned District Forum should have taken consideration such legal provision in to consideration while observing that the premium amount already been received by the LIC agent cannot be taken as a independent payment but same can be said as receipt of payment by the agent on behalf of the principal LIC of India. On the whole he submitted to set aside the impugned order by allowing the appeal.
8. Considered the submission of learned counsel for the appellants and perused the DFR including the impugned order.
9. It is well settled that the complainant has to prove the deficiency of service on the part of the OPs.
10. It is admitted fact that the son of the complainant has purchased LIC policy for Rs.40,000/- on 28.7.2000. It is not in dispute that the insured has paid premium till April, 2001. It is also not in dispute that the death of the insured occurred on 27.8.2001 due to facing accident.
11. The complainant stated in the complaint along with affidavit that they have handed over the premium for April, 2001 to the agent of the LIC who only deposited the premium with delay charges to the office of the LIC on 27.8.2001. Of course as per the policy condition, delay payment should be made within grace period. The quarter commencing from April, 2001 was supposed to end in June, 2001 as per the policy condition but since it was not paid, the payment was made with late fee charges on 27.8.2001. As per renewal premium receipt available on record vide Annexure – 2 produced by the complainant, it appears that premium has been already received by the LIC office. It is true that any payment made through the agent of the LIC cannot bind the LIC for the simple reason that there is already Regulation of LIC Act, 1956 that any sort of defect in the act of agent is not binding on the LIC. This position of law is well propounded by the Hon’ble Supreme Court in the case of Harasad J.Saha v. LIC of India AIR 1997 SC 2459. Said position of law has not been understood by the learned District Forum. However, when LIC premium has already been accepted by the LIC whether with late fee or not, but that receipt is binding on them.
12. The only plea taken by the OPs that this receipt is not a legal receipt for the simple reason that by the time it is received, the policy holder is already dead. It is only alleged in the written version that in the forenoon, the policy holder died but in the afternoon, the payment was made. In this regard the death certificate only shows that he died on 27.8.2001. Moreover, the OPs have not filed any document to show when the death occurred to the policy holder. During course of hearing on appeal the only postmortem report of the deceased policy holder is filed. As the postmortem report is not made available before the learned District Forum and such Doctor conducts autopsy was not examined, it cannot be said that the exact time when the death occurred. Moreover, the opinion of Doctor is only to be taken as expert opinion with regard to nature of injury and cause of death but cannot be constituted as a piece of evidence to find out exact time of death. Moreover, it was not produced during hearing of the case before the learned District Forum as discussed above.
13. Be that as it may, when the death of the policy holder occurred on the same day and payment has been received by the OPs on the same day, so it should be conceived that he has paid the premium on the same day before the death. The sole reason is that the date constitutes 24 hours from 12 AM to 12 PM. There is nothing made policy condition to show the time exactly when it should be paid. Moreover, premium receipt vide Annexure – II shows that it was granted at 3.03 PM but no time is mentioned as to when payment was made. In such facts and circumstances, as discussed above, it must be concluded that payment has been made while insured was alive. Apart from this when two views are possible, the view supporting insured should be accepted.
14. The above conclusion is also arrived at because of the fact that after long time, the OPs refunded the amount on 8.2.2004 as per the letter annexed to the complaint. Had they aware of the fact, why they waited for long time.
15. Be that as it may, payment has already received by the OPs and policy has been revived. When the policy holder expired during currency of the policy, the policy holder is entitled to the benefit as accrued under the policy.
16. From foregoing discussion, this Commission is of view that there is illegality in impugned order of the learned District Forum. Reasons by the learned District Forum although not acceptable but result is affirmed. However, operation portion of impugned order should be modified for the simple reason that the learned District Forum passed it under section 14 of the Act but the said provision does not allow the OPs to pay any sort of penal amount. Apart from this, during 2003, when the impugned order was passed, the maximum rate of interest under Interest Act, 1978 was not there for 18% per annum. In this process, the impugned order of the learned District Forum is modified to the extent that the OPs would pay sum assured of Rs.40,000/- with interest at the rate of 9% per annum from the date of the impugned order till payment within 45 days from today failing which it would carry interest at the rate of 18% per annum as ordered by the learned District Forum. No cost.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties.
