MR. PRABODHA KUMAR DASH, PRESIDENT:-
This C.C.Case No. 19/2021 taken up today for order. Heard Ld. Counsels on behalf of both the parties. Perused the materials/documents available on record on affidavit & exhibited.
Brief Fact:-
The Complainant being the nominee on demise of her insured husband claimed death benefit under the Policy. The LIC repudiated the death claim for non-payment of Policy premium within grace period, but paid it on the date of death of insured. The Ops received the same premium on date of death & kept it for five years and denied claim benefit due to remark that the Policy was not in force and lapsed for non-payment within grace period.
Being aggrieved by the inaction, non-settlement of death claim under the Policy, the Complainant approached this Commission for various reliefs including deficiency of service. Further the Complainant prayed that, she had no other alternative efficacious remedies available to her. Therefore, this Commission should redressed the same.
We are before adjudicating the case in hand, necessary points to be determined by framing issues as under involving facts & laws.
Issue No.1
Whether the Complainant is a consumer or not under the C.P.Act, 2019 and whether the case is maintainable or not on question of limitation?
Issue No.2
Whether non settlement of claim is a deficiency in service ?
Issue No.3
Whether the Policy in question lapsed due to non-payment of premium after the grace period?
Issue No.4
Whether the Complainant is entitled to various reliefs sought for? If entitle to what extent ?
Issue No.1
The Complainant coming within the perview of consumer under Sec-2(7)(ii) of C.P.Act-2019 which it includes any beneficiary of such service other than the person who avails such service.
The Complainant is a consumer on death of her husband has locus standi as per Sec-2(5)(vi) which says, in case death of a consumer his legal heir or legal representative can be a consumer within the ambit of C.P.Act, 2019.The deceased obtained the Policy from the Ops in 2013 & regularly paid its installments and policy continued for 2030. The same policy of contract is a continuing contract. Therefore non-performance of contract within the time period & dispute arising out of same contract is a continuing one and moreover the Ops received the premium in 12/2014 & returned it on dt. 02.08.2019 to the Complainant and as such cause of action continuing from that date and this C.C.Case filed within the limitation period and the issue is in favour of Complainant.
Issue No.2
Non-settlement of death claim as well as repudiation of Complainant’s claim is a deficiency in service under Sec-2(11)(i) read with sub-Sec(42) of C.P.Act and such deficiency in service is within the letter & spirit of Sec-2(11)(i) C.P.Act. Hence repudiation of claim is a deficiency in service towards the Complainant.
Issue No.3
The policy of insured vide 599671993 was issued on dt. 05.05.2013 till last date of payment is dt. 28.04.2030. Policy commenced on dt. 28.10.2013. Installment was Rs. 8032/- half yearly. The Premium for due date was 10/2014, grace period 30 days when included it was 11/2014, but the premium was paid on dt. 26.12.2014, after the grace period. As per the averment of insured being a illiterate, labour class, poor person, entrusted the premium amount of Rs. 8032/- to Op No.3 in presence of Complainant to deposit the same, because of deceased usually worked as a labour in Banglore. The Op No.3 usually deposited the premium given by the deceased. Unfortunately, due to reason unknown to Complainant, the Op No.3 could not deposited the same in right time & deposited the same, when heard regarding the death of the insured. The LIC received the premium on dt. 26.12.2014 & provided receipt for the concerned half yearly premium with interest. Hence, the premium was said to be received by the LIC. Furthermore LIC kept the premium with interest nearly 5 years & returned it on dt. 02.08.2019. As the principle of estoppel as provided in Indian Evidence Act Sec-115, once the LIC received the premium with interest & kept it which presumes that, the policy was in force by accepting the premium with interest & thus the shortfall or omission rightly removed by accepting the premium with interest. Hence, the LIC can’t allowed to question on which he acted upon & specifically debarred to dispute subsequently what he accepted formerly.
It was held by Honbl’e National Commission in Metlife Insurance Co. Ltd. Vs Urbashi Goel & another 2018(2) CPR, 450(NC) that, Insurance company can’t refuse to settle the death claim after retaining premium amount for long period. The LIC by receiving the premium amount with interest has extinguished his rights to say that, the policy was not in force at the time of death of the insured. By accepting & keeping it for long time itself revived the policy into force. Therefore, LIC can’t repudiated claim because of lapsed policy. The issue of lapsed policy well analised by Honbl’e Apex Court in the case, Chairman, LIC of India vs Rajib Ku. Bhaskar, 2005 A.I.R. SCW,3636 wherein it was held non-payment of premium for any reason whatsoever should be intimated to the insured. In another case Smt. Meenakshi Popat Kambhoje & others vrs LIC of India & another, it was held that reliance has been placed on Sec-50 of the Insurance Act,1938, in which it has been mentioned that a notice shall be given to the policy holder informing him of the options available before the expiry of three years of the date on which, the premium in respect of the policy of Life assured was payable. In a reported case passed by Honbl’e Apex Court Delhi Elect. Supply Co. Vrs basanti Devi & Another, 1999(8) Sec-229, it was held that, insured person not suffered because of negligence of 3rd party arising out of non-payment of premium by the employer on death of employee. Honbl’e Apex Court directed LIC to pay the insured amount. The case in hand, we think is squarely applicable because of premium was entrusted to OPNo.3 (3rd party) & the same not deposited in time. Therefore the Complainant kept ignorant about the payment & such benefit gone in favour of Complainant. The policy for non-payment of premium does not lapse unless the same remain unpaid for 3 years & the insured could have intimated to take steps to ensure that, the policy did not lapse. We therefore going through ratio decided by Honbl’e Apex Court, National Commission, various State Commission’s Judgement/order found the policy did not lapse. The LIC received premium with interest on the date of death & the policy in question not lapsed, but in force. The LIC kept the premium amount for 5 years & liable to pay all the benefit legally entitle to the complainant, repudiation of which is illegal, arbitrary & against the settled principle of law.
Issue No.4
Whenever there was a default or negligence with regard to such settlement of an insurance that will constitute a “deficiency” in service on part of the Insurance Company & it will be perfectly open to the concerned aggrieved consumer to approach the Redressal Forums under the C.P.Act seeking appropriate relief.
The consumer himself could have a complainant before he dies, his legal representative filed complaint claiming compensation. Complainant being the legally married wife of her deceased husband and nominee has rightly entitled to all the reliefs as available under the policy as per law.
The insured purchased the Policy to safeguard his family in future misfortune and for that reason paid premium his family is in distress after his demise & the policy was made for such purposes. The Complainant has right to receive benefit arising out of the policy which was sum assured Rs. 2,50,000/- & date of commencement of risk was 28.10.2013, death of sum assured 26.12.2014.
Per contra, the Learned Counsel for Op No.1 & 2 only argue that LIC policy is a contract & no deviation from terms & conditions can be acceptable, non-payment of premium within grace period of policy, the policy was lapsed and acceptance of premium with interest did not revive the policy in question. Further the Ld. Counsel for Ops unable to provide appropriate case law in their favour. Therefore all the contradictions raised by Ops are denied and not acceptable by this Commission. All the issues of facts & laws gone in favour of Complainant.
O R D E R
As discussed above about fact & law as per contention of parties & already issue framed, we came to the conclusion that the issues are in favour of the Complainant. The balance of convenience gone in favour of the Complainant and the Ops failed to mitigate the issues raised by the Complainant.
Therefore, the Complainant is entitled to the sum assured Rs. 2,50,000/- with 9% from the date of death i.e 26/12/2014. For mental agony suffered Rs. 20,000/- and in addition to Rs. 10,000/- for litigation expenses. This Commission directed Op No.1 & 2 shall pay the decided amount to the Complainant within one month from the date of receipt of this order, failing which @12% will be paid till its realization. This Complainant’s complaint is here by allowed.
Issue extract of the order to the parties for compliance.
Pronounced in the open Court, this the 20th day of June,2022.
I, agree.
Sd/- Sd/-
MEMBER PRESIDENT
