The present Revision Petition, under Section 21 (1) (b) of the Consumer Protection Act, 1986 has been filed by the Petitioners, against order dated 11.04.2013 of the Punjab State Consumer Disputes Redressal Commission, Chandigarh (‘the State Commission’) in Appeal no. 700 of 2008. 2. Case of the Respondent/ Complainant is that his son, Mr Sunil Arora son of the Respondent/ Complainant obtained a Personal Life Insurance Policy from Petitioner no.2/ Opposite Party no.2 on 06.06.2005 for a sum of Rs.2.70 lakh. Quarterly instalment of the premium was fixed at Rs.3094/- which was being paid regularly through an agent Mr Neeraj Kakkar. The maturity date of the Policy was 06.06.2025. The Respondent was the nominee of his son in the Policy. One of the conditions of the Policy was that in case the Policy holder died in a road accident, he would be paid an amount of Rs.1.00 lakh, in addition to the face value of the Policy of Rs.2.70 lakh. Unfortunately, Mr Sunil Arora died in a road accident on 26.04.2007. An FIR no. 86 dated 26.04.2007 was registered at P S Jandiala. Respondent informed the Petitioners about the death of the Policy holder, along with copies of FIR, post mortem report and other relevant documents. The Insurance Company appointed a Surveyor. The Complainant alleged that the Surveyor demanded bribe to make a favourable report, which he did not pay. Petitioner no.1, vide letter dated 13.06.2007, informed the Complainant that the premium due on 06.03.2007 was not paid and hence the claim of the Complainant could not be considered. There was no prior intimation of lapsing of the Policy before 13.06.2007. Aggrieved by the deficiency in service on the part of the Petitioners, the Respondent filed a Complaint before the District Forum with the following prayer: To pay Rs.2,70,000/- as face value of the Insurance Policy plus Rs.1,00,000/- as the death was accidental; The Opposite Parties be also directed to pay Rs.50,000/- to the Complainant for mental agony and harassment caused to him, with costs of the complaint.
3. The case was contested by the Petitioners/ Opposite Party. Mr Sunil Arora had applied for Invest Assure Insurance Plan, vide application dated 06.06.2005, for a sum of Rs.2.70 lakhs, where the Complainant was made the nominee. Policy No. U1500004273 was issued on 08.06.2005 with quarterly premium payment fixed at Rs.3094/-. Complainant lodged the claim on 26.04.2007 for a sum of Rs.4.20 lakhs after the life assured expired in a road accident. The Petitioners informed, vide letter dated 13.06.2007, that the Insurance Company had no liability as the premium due on 06.03.2007 was not received and the Policy had lapsed. The Policy stood lapsed at the end of 31st day from the date when the premium was due. The insured could have applied for reinstatement of the Policy, but no steps were taken and no benefit could be given. The Complaint was, therefore, liable to be dismissed. 4. After hearing both the Parties and perusing the record, the District Forum, vide its order dated 08.04.2008, concluded that there was no deficiency on the part of the Petitioners, as the Insurance Policy of the deceased had lapsed and the Complaint was dismissed with no order as to cost. 5. Aggrieved by the order of the District Forum, the Respondent/ Complainant filed an appeal before the State Commission. The Petitioner/ Insurance Company did not appear before the State Commission at the time of arguments. The Respondent was heard. The State Commission accepted the Appeal filed by the Respondent and set aside the order of the District Forum by observing as under: “Consequently, the Complaint filed by the Appellant/ Complainant is allowed and the Respondents are directed to pay the sum insured of Rs.2.70 lakh under the Policy to the Appellant and Rs.1.00 lakh on account of accidental death of the young and unmarried son of the Appellant. The Respondents are also directed to pay Rs.20,000/- as compensation and Rs.10,000/- as litigation expenses to the Appellant. The Respondents shall comply the order within 45 days of the receipt of copy of the order.” 6. Aggrieved by the order of the State Commission, Petitioners filed the present Revision Petition. 7. Heard the learned Counsel for the Petitioners and perused the record. Since the Respondent has not been appearing on several dates and none appeared today, the Respondent is proceeded ex parte. 8. Learned Counsel for the Petitioners contended that the Respondent has not paid the last premium due on 06.03.2007 and therefore, the Policy lapsed. The Respondent also did not apply for reinstatement of the Policy. Hence, no benefit could be given to the Petitioners and the Complaint be dismissed. 9. The entire case revolves around Section 50 of the Insurance Act which reads as under: “50. Notice of options available to the assured on the lapsing of a policy: An insurer shall (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable, but not paid), give notice to the policy-holder informing him of the options available to him (unless these are set forth in the policy)”. 10. Section 50 of the Insurance Act imposes a statutory obligation on the part of the Insurance Company to issue notice before the expiry of three months from the date on which premium is payable and has not been paid and to give notice to the Policy holder informing him about the options available to him, unless the said conditions are set forth in the Policy. 11. The main contention of the Petitioners is that the premium was payable on 06.03.2007 and was not paid even during the grace period. The Policy stand lapsed at the end of 31st day from the date of premium fell due. The Respondent/ Complainant could have applied for reinstatement of the Policy but had not done so and hence, no benefit under the Policy could be given to the Respondent/ Complainant. As is evident from the record, the Petitioners, vide letter dated 21.03.2007, informed the Respondent that the Policy was overdue for payment and would lapse if the premium was not paid on or before 06.04.2007. On 11.04.2007, again a lapsed notice was issued to the insured that outstanding premium had not been received and the benefit under the Policy, hence, stood forfeited. To restore the original benefit and protection, service agent/ Policy owner service may be contacted for reinstatement. Having not received any response from the insured, vide letter dated 13.06.2007, the Petitioners informed the respondent/ complainant that since quarterly premium due on 06.03.2007 was not paid, the Policy lapsed. Thereafter the Complaint was filed by the Respondent/ Complainant on 02.07.2007. As seen from the above, due notice of the available options of the lapsed policy was given to the insured, which he did not avail. Reinstatement option was also not availed by the deceased insured. There was no violation as the Petitioners had acted in accordance with the terms and conditions of the Policy. The Complaint therefore, deserves to be dismissed. 12. In view of the above, the order of the State Commission is set aside and the order of the District Forum is upheld, with no order as to cost. |
