Sri.D.Krishnappa,<br /> President<br /> <br /> 1. The grievance of the complainant who has approached this Forum against the Opposite parties, is that she is the wife of D.E.Nagaraju who was working as a Conductor in the Karnataka State Road Transport Corporation. That her husband on 20.08.1997 while he was working as a conductor took an endowment Life Insurance Policy from Opposite parties 1 to 3 with an assured sum of Rs.2,00,000/- on his life with annual premium of Rs.1,882/-, which was deducted from the salary. The premium has been deducted from his salary of her husband till 06.12.2000. That her husband when he was in service died on 26.08.2005 due to heart attack. Thereafter she made a claim for payment of the insurance amount as it matured on 20.08.2007. But, the Opposite parties 1 to 3 refused to pay the amount. That she got issued a legal notice on 27.09.2007. The deceased in all paid has 39 premiums amounting to Rs.73,398/-, therefore she is entitled for that amount and attributing deficiency to Opposite parties 1 to 3 in they having not paid the insurance amount or the paid up value has prayed for a direction to the Opposite parties 1 to 3 to pay Rs.73,398/- with interest at 18% p.a.<br /> 2. The complainant has made the 4th Opposite party as the party after the Opposite parties 1 to 3 filed their version in having had not received the premiums till the death of the insured.<br /> 3. The 1st Opposite party has filed version on behalf of Opposite parties 1 to 3 admitting to had issued a policy on the life of the deceased, which commenced from 20.08.1997, has further contended that the employer has only deducted premiums from the salary of the deceased up to February 1999 and the policy stood lapsed from March 1999 onwards. The Opposite parties further denied to have received premiums upto December 2000 as contended by the complainant. Opposite parties 1 to 3 further admitted that the insured was an employee of K.S.R.T.C. till 06.12.2000, but contended remittance of premium has been made up to February 1999, that the deceased was not diligent in keeping the policy in force by regularly paying the premiums, therefore the policy came to be lapsed. That as per the condition No.2 of the policy, a grace period of 15 days is allowed for payment of monthly premium, if the premium is not paid within the days of grace period the policy lapses and nothing is payable under the policy. As per condition No.3 of the policy, the assured failed to revive the policy within 5 years from the date of lapse. As per condition No.5 of the premiums are not duly paid as per the contract, the policy become void and the premium paid so far is to be forfeited and thus denying all other allegations have prayed for dismissal of the complaint. <br /> 4. The 4th Opposite party has filed their version that they are not liable to pay any relief to the complainant, they have no knowledge of facts narrated in paras no. 3 to 5 of the complaint and as stated that the husband of the complainant had taken a policy while in their service premises are paid till 06.12.2000 and therefore has prayed for dismissal of the complaint.<br /> 5. In the course of enquiry into the grievance of the complaint, the complainant, one A.R.Mahesh for Opposite parties 1 to 3 and one M.B.Prabhakara for 4th Opposite party have filed their affidavit evidence. The complainant has produced copy of the policy, some pay slips copies, and death certificate. The 4th Opposite party has produced extract of certain entries of the salary register. Heard the counsel for both the parties and perused the records.<br /> 6. On the above contentions, following points for determination arise.<br /> 1. Whether the Complainant proves that her husband the insured had maintained a valid insurance policy and that the Opposite parties 1 to 3 have failed to pay the insurance amount or the paid up value and thereby have caused deficiency in their service? <br /> 2. To what relief the complainant is entitled to?<br /> 7. Our findings are as under:-<br /> Point no.1 : In the Negative.<br /> Point no.2 : See the final order.<br /> REASONS<br /> <br /> 8. Point no. 1:- The claim of the complainant that she was the wife of D.E.Nagaraju, a conductor working with 4th Opposite party had an endowment insurance policy on his life for an assured sum of Rs.2,00,000/- and that policy commenced on 20.08.1997 has not been denied by the Opposite parties, and they have admitted it. But, it is the grievance of the complainant that after the death of her husband on 26.09.2005 when she made a claim with Opposite parties 1 to 3 for paying the paid up value, the Opposite parties refused to honour her claim, therefore has approached this Forum for the relief.<br /> 9. The Opposite parties No.1 to 3 as stated above admitting the issue of policy have contended that the policy commenced with effect from 20.08.1997, but the deceased had paid premium through the salary from his employer up to February 1999, therefore the policy stood lapsed from March 1999 and therefore invoking condition No.2, 3 and 5 have contended that the paid up amount stands forfeited to the Insurance Company. The 4th Opposite party with whom the insured was working has been made as a party to give particulars of deduction of premium from the salary of the insured and payment to Opposite parties 1 to 3, has not come up with categorical statement as to how many premiums are paid and till what period the premiums are paid. But made an ambiguous statement, stating that the premiums are deducted from the salary of the insured till the year 2000 and remitted to the LIC. But, have only produced the extracts of salary or pay register for the month of June 1999 to September 1999, February 2000 and March 2000. On perusal of these documents, it is evident that insurance premiums are not deducted from the salary of the insured. The 4th Opposite party has not come forward to explain in their not having deducted and remitted the insurance premiums for these months to the Opposite parties 1 to 3. <br /> 10. The complainant herself has produced certain pay slips for the month of August 1997, February 1998 to April 1998, then June 1998, September 1998 to December 1998, then January 1999 and February 1999. Under these pay-slips, premiums are deducted from the salary of the insured. Thereafter, the premiums are also deducted from July 2000 to December 2000. As could be seen from the pay slips produced by the complainant, neither the complainant nor the 4th Opposite party have produced any documents to prove the premiums of the remaining months in between. The complainant in para 8 of her complaint and also in the affidavit evidence has admitted due to the ill-health of her husband after the year 2000, the insured could not attend to his duty, therefore the policy could not be continued. Therefore, it is made clear that the insured had not kept the policy alive by paying the premiums regularly and that he was not regular in attending to his duty, therefore his employer the 4th Opposite party was not in a position to deduct the premium amount from his salary and remitted to Opposite parties 1 to 3 regularly. It is on perusal of the documents produced by the complainant herself after the inception of the policy on 28.08.1997 the insured committed, default in payment of the premium amount for the month of August 1998, thereafter from March 1999 till the end of 1999. Thereafter, further committed default in payment of the premiums from January 2000 till June 2000 and thereby it is evident that there is no continuity in maintenance of the policy. As such the insured as evident from these facts had not maintained the policy for a minimum period of 3 years. <br /> 11. Condition no.2 of the insurance policy provides for payment of premium. Under this conditions a grace period of 15 days is provided for payment of monthly premium and it also says if premiums are paid within the period of grace, the policy do not lapse and if the premium is not paid before the expiry of the grace period, the policy lapses. Condition no.3 of the policy provides for revival of the discontinued policy which says that the policy if lapsed, it may be revived during the life time of the life assured, but within a period of 5 years. Further under condition no.3, non-forfeiture regulations speak if the policy is not kept alive or if the premiums are not paid atleast for 3 full years then the paid amount stands forfeited. In the case on hand, it could be seen that the insured has not paid the premiums for full 3 years then neither the assured nor the nominee will be entitled for paid up value. Therefore, whatever the premiums that were paid by the insured through his employer stands forfeited after lapsing of the policy. Hence, we find no merits in the claim of the Complainant that she is entitled for the paid up value.<br /> 12. It is the contention of the Opposite parties 1 to 3 that the policy of the deceased lapsed from March 1999 onwards. Thereafter undoubtedly the policy had not been revived. Hence, neither the insured nor the beneficiary would be entitled for paid up value in view of condition no.2 and 3 of the policy. But it is found that the employer of the deceased that is 4th Opposite party has deducted premiums for the months of July 2000 till December 2000 and said to have remitted to Opposite parties 1 to 3. Therefore, the premiums for the period of 6 months during the year 2000 are deducted from the salary of the insured and shown to have been remitted to Opposite parties 1 to 3, and those payments cannot be held to have been forfeited by Opposite parties 1 to 3 on account of the lapse of the policy. Therefore, the premiums of these 6 months which have been deducted and sent to Opposite parties 1 to 3, which cannot be retained by Opposite parties 1 to3 since the policy had lapsed by that time and therefore they are liable to refund that amount to the Complainant. The Complainant for the above reasons in our view has failed to prove deficiency in the service of Opposite parties 1 to 3 as attributed by her. However, she is entitled for return of premiums of 6 months with interest. To that extent, the Complaint deserves to be allowed and therefore we answer point no.1 accordingly and pass the following order:-<br /> <br /> ORDER<br /> <br /> 1. The Complaint is allowed in part.<br /> 2. The Opposite parties 1 to 3 are held as jointly and severally liable to refund Rs.11,292/- to the Complainant with interest at 12% p.a. from 1st January 2006 during which period she made a claim for the paid up value and the Opposite parties are further directed to pay that amount with interest within 60 days from the date of this order, failing which they shall pay interest at 15% p.a. from the above date till the date of payment.<br /> 3. The Opposite parties 1 to 3 are also directed to pay cost of Rs.1,000/- to the Complainant. <br /> 4. The Complaint is dismissed against 4th opposite party.<br /> 5. Give a copy of this order to each party according to Rules.<br /> <br />