KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
VAZHUTHACADU THIRUVANANTHAPURAM
APPEAL NO: 305/2006
JUDGMENT DATED:03..01..2011.
PRESENT
SMT. VALSALA SARANGADHARAN : MEMBER
SRI. M.V. VISWANATHAN : JUDICIAL MEMBER
1. The Branch Manager,
Life Insurance Corporation of India,
Branch Office, PB No.24,
Aban Towers, Pathanamthitta.
: APPELLANTS
2. The Senior Divisional Manager,
LIC of India, Divisional Office,
Nagampadom, Kottayam.
(By Adv.Sri.R.S.Kalkura)
Vs.
Radhamani,
Satheesh Bhavan, Azhoor, : RESPONDENT
Pathanamthitta.
JUDGMENT
SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER
Appellants were the opposite parties and respondent was the complainant in OP.183/03 on the file of CDRF, Pathanamthitta. The complaint therein was filed alleging deficiency of service on the part of opposite parties in their failure to refund the premiums paid by the life assured with respect to the life policy No.390235240. Thus, the complainant claimed refund of the said sum of Rs.7896/- with interest, compensation and cost. The complaint was filed by the wife and nominee of the life assured, Sreedharan. The opposite parties entered appearance and filed written version denying the alleged deficiency of service. They contended that the complainant is not entitled to get any benefit under the said policy as the policy had lapsed for non payment of the premium. It was further contended that the policy lapsed on 28/8/1996 and during the life time of the policy holder, the same remained lapsed. The life assured died in 2003 and so the complainant being the nominee of the life assured is not entitled to get refund of the premium amount of Rs.7896/- which the life assured paid as quarterly premiums up to 9/8/1996. They also relied on the terms and conditions of the policy and submitted that the policy had no paid up value. As the same remained in lapsed condition from 28/11/1996 onwards. Thus, the opposite parties prayed for dismissal of the complaint.
2. Before the Forum below the complainant was examined as PW1 and Manager of the Divisional Office, LIC of India, Kottayam was examined as DW1. Exts.A1 to A3 documents were marked on the side of the complainant. Ext.B1 and B1(a) documents were also marked from the side of the opposite parties. On an appreciation of the evidence on record, the Forum below passed the impugned order dated:17th February 2006 directing the opposite parties to disburse the interest on the premium amount of Rs.7,896/- at the rate of 12% per annum from 9/10/96 till the date of the impugned order and thereafter at the rate of 6% per annum till the date of realization with cost of Rs.1000/-.The opposite parties were also directed to disburse the bonus accrued on the premium amounts from the dates of remittance of the premiums till the date of the order. It is against the said order the present appeal is preferred by the opposite parties therein.
3. When this appeal was taken up for final hearing, there was no representation for the respondent/complainant. We heard the learned counsel for the appellants/opposite parties. He submitted his arguments based on the grounds in the memorandum of the present appeal. He much relied on B1(a) terms and conditions of the life policy and argued for the position that there was no paid up value or surrender value with respect to the lapsed policy No.390235240. Thus, the appellants prayed for setting aside the impugned order passed by the Forum below.
4. Points that arise for consideration are:-
1. Whether the claim of the complainant for refund of the premium amount of Rs.7,896/- which was paid by the life policy holder, Sreedharan towards the quarterly premiums for the policy No.390235240 can be upheld?
2. Whether the Forum below can be justified in ordering interest and bonus on the premium amount of Rs.7,896/- with cost of Rs.1000/-?
3. Whether the appellants/opposite parties can be justified in repudiating the claim for refund of the premium amount of Rs.7,896/- with interest?
5. Point Nos:1 to 3:-
There is no dispute that the respondent/complainant is the widow of P.N.Sreedharan, the policy holder who died on 18/4/2003. The deceased, Sreedharan had taken a life policy during his lifetime as policy No. 390235240. The date of commencement of the said policy was 28/5/2005 and the date of the said policy is 25/7/1995. The said life policy was a money back policy with the sum assured at Rs.50,000/-. The mode of remittance of the premium was quarterly with the quarterly premium of Rs.1316/-. The maturity date of the said policy was 28/5/2010. The policy holder, Sreedharan had remitted 6 quarterly instalments at the rate of Rs.1,316/-. The last premium was paid on 9/10/1996. A total of Rs.7896/- was remitted by the life assured by way of the quarterly premiums. There can also be no doubt about the fact that the said policy became lapsed with effect from 28/11/1996. The aforesaid life policy remained in a lapsed condition till the death of the life assured on 18/4/2003. It is also to be noted that during the life time of the policy holder the aforesaid lapsed policy was not got revived and that the policy holder never demanded refund of the remitted premiums of Rs.7896/-.
6. The respondent/complainant is shown as the nominee of the life assured. She is also the widow of the life policy holder, Sreedharan. The respondent/complainant requested the opposite party/LIC of India to refund the premium amount of Rs.7,896/- which was paid by the policy holder towards the quarterly premiums of the said policy. The complainant also claimed interest on the said premium amount of Rs.7896/-. The aforesaid claim was denied by the opposite party. Hence the complaint in OP.183/03 was filed for getting refund of the premium amount of rs.7896/- with interest, compensation and cost.
7. Remittance of Rs.7896/- by the policy holder towards the quarterly premiums for the policy No. 390235240 is admitted. It is also admitted that the said life policy remained in a lapsed condition with effect from 28/11/1996. The lapsed condition of the policy continued till the death of the life assured, Sreedharan on 18/4/2003. It is deposed by DW1 that the lapsed policy could be revived within 5 years provided the policy holder is alive. Ext.A1 is copy of the money back with accident benefit policy issued by LIC of India in favour of the life assured, P.N.Sreedharan. The conditions and privileges are printed on the reverse side of the said policy certificate with schedule. Condition No.3 of the A1 policy deals with the revival of discontinued policies. It is as follows:-
“If the policy has lapsed, it may be revived during the life time of the life assured, but within a period of 5 years from the date of the first unpaid premium and before the date of maturity, on submission of proof of continued insurability to the satisfaction of the corporation and the payment of all the arrears of premium together with interest at such rate as may be prevailing at the time of the payment compounding half yearly. The corporation reserves the right to accept or decline 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 life assured”.
8. The aforesaid revival clause would make it clear that the policy issued in the name of the life assured, Sreedharan could not have been revived because lapse of more than 5 years from the date of the first unpaid premium. It is to be noted that the policy was lapsed with effect from 28/11/1996 and the policy holder died on 18/4/2003. There was no attempt on the part of the policy holder to get the lapsed policy revived. So, it can very safely be concluded that the said life policy issued in the name of Sreedharan was in a lapsed condition.
Condition No.4 of the conditions and privileges deals with Non-Forfeiture Regulations: “If, after at least 3 full years premiums have been paid in respect of this policy, any subsequent premium be not duly paid this policy shall not be wholly void, but shall subsist as a paid up policy for a reduced sum payable on the date of maturity or at the life assuror’s prior death provided the paid up sum assured is not less than Rs.250/-. The amount of paid up assurance for integral number of years’ premiums paid will be calculated as per table given below. The policy so reduced shall thereafter be free from all liability for payment of within-mentioned premium but shall not be entitled to participate in future profits. The existing bonus additions if any, will remain attached to the reduced paid up policy.”
9. The aforesaid Non Forfeiture Regulations contained under Condition No.4 of the policy would make it clear that to get paid up value for the policy there should be payment of premiums at least for 3 full years. But, as far as the present policy is concerned, the premiums were paid only up to 9/10/1996 and the policy remained lapsed with effect from 28/11/1996. The date of commencement of the policy was on 28/5/1995 and the date of the policy is 25th July 1995. The life assured had only paid 6 quarterly premiums. Thus it can be seen that there was no payment of the premiums for the said policy for 3 full years. If that be so, there was no paid up value for A1 policy. The respondent/complainant being the nominee is not entitled to get any benefit under A1 policy.
10. Condition No.5 of A1 policy deals with forfeiture in certain events. It reads as follows:-
In case the premiums shall not be duly paid or in case any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents or any material information is withheld, then and in every such case but subject to the provisions of Sec.45 of the Insurance Act, 1938, wherever applicable, this policy shall be void and all claims to any benefit in virtue hereof cease and determine and all monies hereafter shall belong to the corporation, excepting always in so far as relief is provided in terms of the privileges herein contained or may be lawfully granted by the corporation.
11. The aforesaid forfeiture clause would make it clear that in case the premiums shall not be duly paid the policy shall be void and all claims under the said policy shall cease and determine and all monies that have been paid shall belong to the LIC of India.
12. In the present case the policy holder himself defaulted payment of the premium which he was bound to pay. Thus, at the time of death of the life assured, the policy became void and no amount was due to the policy holder from the opposite party/LIC of India. In effect the amount of Rs.7896/- remitted by the policy holder by way of 6 quarterly premiums had been forfeited by virtue of the forfeiture clause. If the policy holder himself had no right or benefit available under the said policy, the present claim put forward by the respondent/complainant is legally unsustainable. The respondent/complainant being the nominee of the policy holder is not expected to get any benefit or privilege which was not available to the policy holder himself. Thus, the claim preferred by the respondent/complainant ought to have been disallowed by the Forum below. The Forum below failed to appreciate the evidence available on record in its correct perspective. The Forum below omitted to consider the terms and conditions incorporated in A1 life policy. The appellants/opposite parties rightly relied on B1 terms and conditions of the policy. But, the Forum below was not prepared to consider the aforesaid terms and conditions of the policy in the correct perspective. So, we have no hesitation to set aside the impugned order passed by the Forum below and to dismiss the complaint in OP.183/03. These points are answered accordingly.
In the result, the appeal is allowed. The impugned order dated:17/2/2006 passed by the CDRF, Pathanamthitta in OP.183/03 is set aside. Thereby the complaint in OP.183/03 on the file of CDRF, Pathanamthitta is dismissed. As far as the present appeal is concerned, the parties are directed to suffer their respective cost throughout.
M.V. VISWANATHAN : JUDICIAL MEMBER
VALSALA SARANGADHARAN : MEMBER
VL.
