KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM.
APPEAL No. 42/2010
JUDGMENT DATED:26-03-2011
PRESENT:
SHRI. M.V. VISWANATHAN : JUDICIAL MEMBER
1. The Branch Manager,
LIC of India, Pazhavangadi,
Ranni – 689 673.
: APPELLANTS
2. The Divisional Manager,
LIC of India, Divisional Office,
Kuriuan Uthup Road,
Nagampadam, Kottayam.
(By Adv:Sri.G.S.Kalkura)
Vs.
S.Rajamma,
Puthenpurackal house,
Mundanmala, Ranni, : RESPONDENT
Perunadu.P.O, Pathanamthitta.
(By Adv:Sri.Vijayamohan.R)
JUDGMENT
SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER
Appellants were the opposite parties and respondent was the complainant in CC.160/05 on the file of CDRF, Pathanamthitta. The complaint therein was filed alleging deficiency of service on the part of the opposite parties (LIC of India) in repudiating the insurance claim preferred by the complainant with respect to the life policy No.390614525 issued infavour of the complainant’s son Jayan. The opposite parties entered appearance and filed written version denying the alleged deficiency of service. They contended that the subject life policy was lapsed due to non payment of the premium and that the said life policy issued in the name of the insured Jayan was in a lapsed condition on the date of his death on 19/9/2004. The insured failed to remit the premium due to June 2004 and that he also failed to remit the premium within the grace period of one month. The said policy was in a lapsed condition on the date of death of the life assured. Thus, the opposite parties justified their action in not honouring the insurance claim for the insured sum and other benefits under the said policy.
2. Before the Forum below the complainant was examined as PW1 and Exts.A1 to A4 documents were marked on the side of the complainant. From the side of the opposite parties DW1, the Manager (L & HPF) of the LIC of India, Divisional Office, Kottayam was examined and Ext.B1 copy of the delegation letter issued by the LIC, South Zonal Office authorizing DW1 was marked. On an appreciation of the evidence on record, the Forum below (CDRF, Pathanamthitta) passed the impugned order dated:12th November 2009 allowing the complaint and thereby directing the opposite parties to pay the policy amount of Rs.50,000/- with all the benefits under the policy No.390614525 after deducting the premium amount of Rs.3708/- with interest thereon. Aggrieved by the said order, the present appeal is filed by the opposite parties therein.
3. We heard both sides. The learned counsel for the appellants/opposite parties submitted his arguments based on the grounds urged in the memorandum of the present appeal. He argued for the position that the subject life policy issued in the name of the insured, Jayan was in a lapsed condition and that the life assured failed to pay the premium within the stipulated period or within the grace period and thereby the subject policy was in a lapsed condition on the date of death of the life assured; that the complainant being the nominee of the life assured is not entitled to get any benefits under the said policy other than the paid up value of Rs.3708/-. It is further submitted that the Forum below cannot be justified in finding fault with the opposite party/LIC of India in not producing the original policy with the terms and conditions as there was no dispute regarding the fact that the policy was lapsed for non payment of the premium by the life assured and that there was also no dispute regarding the terms and conditions of the policy. Thus, the appellants/opposite parties prayed for setting aside the impugned order passed by the Forum below and also for dismissal of the complaint in CC.160/05. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below and prayed for dismissal of the present appeal.
4. The points that arise for consideration are:-
1. Whether the subject policy bearing No.390614525 was in a lapsed condition on the date of death of the life assured (Jayan)?
2. Whether there was any deficiency of service on the part of the appellants/opposite parties in repudiating the claim preferred by the complainant with respect to the life policy No.390614525 ?
3. Whether the Forum below can be justified in passing the impugned order dated:12/11/2009 in CC.160/05 allowing the complainant and directing payment of the policy amount of Rs.50,000/- with all the benefits under the said policy?
4. Is there any legally sustainable ground to interfere with the impugned order passed by the Forum below in CC.160/05?
5. Whether the petition filed as I.A.466/11 by the appellant for accepting additional documents at this appellate stage can be allowed?
5. Points 1 to 5:-
There is no dispute that the respondent/complainant’s son, Jayan had taken 2 life insurance polices issued by the LIC, Ranni branch. The one policy was for Rs.25,000/- with policy No.390610438 and the other policy with No.390614525. The life assured, Jayan died on 19/9/2004. The respondent/complainant is the nominee of the life assured. She is also the mother of the life assured Jayan. After the death of the life assured the respondent/complainant claimed the insurance amount under the aforesaid 2 polices. Admittedly, the opposite party/LIC of India paid the insurance amount due under the policy No.390610438. The dispute is with respect to the claim preferred by the respondent/complainant with respect to the policy No.390614525. The insurance claim preferred by the respondent/complainant was settled by the opposite party/LIC of India by paying the paid up value of Rs.3708/- to the respondent/complainant being the nominee of the life assured. The insured amount of Rs.50,000/- and the total accident benefit under the said policy and other benefits were disallowed by the opposite party/LIC of India on the ground that the said policy No.390614525 was in a lapsed condition for non payment of the insurance premium by the life assured. It was specifically contended by the LIC that on the date of death of the life assured the policy was in a lapsed condition and so the claim for the insured amount by the nominee cannot be allowed. Hence the complainant preferred the complaint in CC.160/05 before the CDRF, Pathanamthitta.
6. It is admitted by the complainant that the life assured remitted the insurance premium for the policy No.390614525 for the half year ended by December 2003 and that the said premium was paid on 7/6/2004. Ext.A1 renewal premium was paid on 7/6/2004. Ext.A1 renewal premium receipt dated:7/6/2004 would make it abundantly clear that the premium for the half year for December 2003 was remitted on 7/6/2004 with late fee of Rs.11.60. A1 receipt itself is styled as renewal premium receipt. A1 receipt would also show that the next premium due is in June 2004 (next premium due – 06/2004). The complainant as PW1 has also admitted this fact that the half yearly premium for December 2003 was remitted only on 7/6/2004 with late fee. There is no case for the complainant that after the payment of premium covered by A1 receipt no premium was paid by the life assured for the said policy No.390614525. Thus, A1 receipt and the evidence of PW1 would make it abundantly clear that there occurred failure on the part of the policy holder to remit the premium for the policy and that the said policy was lapsed due to non payment of the premium.
7. The case of the complainant in her written complaint in CC.160/05 is that she approached the branch of LIC at Ranni on 7/6/2004 for payment of premium for the month of June 2004; but the person at the counter of the opposite party/LIC was reluctant to accept the premium for the month of June and he instructed the complainant to remit the premium after the month of June. The complainant as PW1 has also deposed to that effect. The aforesaid case of the complainant has been denied by the opposite party in the written version. DW1 has also denied the said case of the complainant. It is the case of the complainant that she used to remit the premium for the policy holder. But the circumstances of the case would not support the case of the complainant that she was ready to pay premium for the month of June 2004. But one thing is admitted by the complainant that the half yearly premium for the month of June 2004 was not remitted till the death of the policy holder on 19/9/2004. Admittedly the policy No.390614525 was a half yearly premium and the half yearly premiums were due on 27th June and 27th December. Ext.A1 renewal premium receipt would show the policy No.390614525 and the date of the commencement of the policy as 27/6/1998. It would also show the sum assured as Rs.50,000/- with half yearly premium of Rs.309/- and the half yearly premiums ought to have been paid on 27th June and 27th December of the succeeding years. So, the details of the policy and the terms and conditions of the policy were admitted by the parties to the complaint in CC.160/05 and there was no dispute about the details of the policy. In such a situation it was not fair or proper on the part of the Forum below in finding fault with the opposite party/LIC of India in their failure to produce the original policy certificate with terms and conditions. It is a well settled position that admitted facts need not be proved. The facts regarding the details of the policy and the mode of payment were not in dispute. In such a situation it was not incumbent upon the appellant/opposite party, LIC of India to produce the original insurance policy which was surrendered by the complainant for getting the insurance benefits. So, the finding of the Forum below that the opposite party/LIC of India failed in proving the terms and conditions of the policy cannot be upheld. The Forum below cannot be justified in allowing the complaint for non production of the original policy by the opposite party/ LIC of India.
8. The appellants/opposite parties (LIC of India) have also filed I.A.466/11 requesting for acceptance of additional documents in the appeal and to mark those additional documents as to Ext.B2 to B8. The aforesaid petition for acceptance of additional documents was filed in the light of the aforesaid finding made by the Forum below that the opposite party/LIC of India failed to produce the original policy and other documents. The additional documents produced are:-
(1) The original policy having the policy No.390614525.
(2) Letterdated:8/2/2005 issued by the appellants/opposite parties (LIC of India) to the complainant regarding settlement of claim.
(3) Discharge voucher dated:8/2/2005 executed by the complainant infavour of the LIC of India.
(4) Authorisation letter dated:11/2/2005 issued by the complainant.
(5) Premium payment chart.
(6) Premium payment chart.
(7) Copy of letter dated:7/3/2005.
9. The complainant as PW1 has admitted existence of the documents produced as additional documents in the present appeal. No material prejudice or inconvenience will be caused to the respondent/complainant by allowing the above I.A.466/11 to accept additional documents at this appellate stage. We have already discussed about the facts admitted by the parties to the complaint in CC.160/05. So, the present petition I.A.466/11 is allowed for the ends of justice. The original policy produced from the side of the appellants would show that the details of the policy incorporated in A1 renewal premium receipt dated:7/6/2004 are correct. Thus, it is established that the policy holder failed to remit the half yearly insurance premium for the said policy No.390614525.
10. The case of the respondent/complainant that she was prevented by the staff of the branch office of the LIC at Ranni in remitting half yearly premium for June 2004 cannot be accepted as such. If there was any such refusal to accept the half yearly premium on 7/6/2004, the complainant or the policy holder could have remitted premium thereafter. Admittedly the half yearly premium for June 2006 was due on 27/6/2004. There is nothing on record to show that on 27/6/2004 or thereafter within the grace period of one month or even after the grace period, the policy holder Jayan or the complainant was ready to remit the half yearly premium for the said policy. The complainant has also no such case that she was ready to remit the half yearly premium for the month of June 2004 on 27/6/2004 or thereafter. Another important aspect to be noted at this juncture is the remittance of the quarterly premium by the policy holder for the policy No.390610438. Ext.A2(a) is the renewal premium receipt issued by the LIC branch office at Ranni for payment of the quarterly premium for the policy 390610438. A2(a) receipt is dated 10/8/2004. It would show that the quarterly premium was paid by the policy holder for the policy No.390610438 on 10/8/2004. If the complainant or the policy holder was interested in remitting the half yearly premium for the policy No.390614525 he or she would have remitted the half yearly premium at least on 10/8/2004. Thus, Ext.A2(a) receipt would negative the case of the complainant that the policy holder failed to remit the half yearly premium for the subject policy only because of the refusal of the LIC to accept half yearly premium for the subject policy.
11. Admittedly the half yearly premium for the subject policy was having grace period of one month. The grace period expired by 27/7/2004. Thus, the subject policy lapsed for the failure to remit the half yearly insurance premium. The policy holder or the complainant has also failed to remit the half yearly premium with late fee and to get the lapsed policy renewed. Admittedly, the policy holder, Jayan died on 19/9/2004. There was no payment of the half yearly premium which became due on 27/6/2004 till the death of the life assured. Thus, on the date of death of the life assured, the policy was in a lapsed condition. In the eye of law, the policy was not in existence or the policy was not effective. In such a situation, the complainant being the nominee of the life assured is not entitled to get the insured amount and the other benefits under the said policy No.390614525 which was in a lapsed condition on the date of death of the life assured. If that be so, appellant/opposite party (LIC of India) is justified in not honouring the claim for the insured sum of Rs.50,000/- with other benefits. The Forum below cannot be justified in directing the appellants/opposite parties to pay the insured sum with all other benefits.
12. Condition No.2 & 3 of the policy conditions and privileges incorporated in the original policy are as follows:-
2. Payment of Premium.
A grace period of one month but not less than 30 days will be allowed for payment of yearly, half yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the Death benefit paid after deduction of the said premium as also unpaid premium/s falling due before the next anniversary of the policy. If the premium is not paid before the expiry of the days of grace, the Policy lapses.
If the policy has not lapsed and the claim is admitted under a policy where the mode of payment of premium is other than yearly, unpaid premiums, if any, falling due before the next policy anniversary shall be deducted from the claim amount.
3. Revival of Disconitnued or Lapsed Policy.
When the premiums not paid within the days of grace, the policy lapses without acquiring any paid up value, but it may be revived during the life time of the life assured, but within a period of 5 years from the due date of the first unpaid premium and before the Date of Maturity on production of evidence of health and habits of Life Assured (including a Medical Report on his life at his own expense) to the satisfaction of the Corporation and of evidence to show that there has been no adverse change in the personal or the family history or occupation and on payment of the premiums in arrears with interest there on at such rate as may be fixed by the Corporation from time to time compounding ½ yearly reckoning from the due date of such premium paid late. The Corporation reserves the right to accept or decline the revival of a discontinued Policy. The revival of the discontinued Policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the Life Assured.
13. The aforesaid conditions would make it clear that the half yearly insurance policy was having grace period of 30 days and that if the premium is not paid before the expiry of the days of grace, the policy lapses. Thus, it can very safely be concluded that the subject policy was in a lapsed condition on the date of death of the life assured. It would further show that the complainant being the nominee of the life assured was not entitled to the sum assured by the policy because of the fact that the policy was in a lapsed condition and the same was not revived or renewed during the life time of the policy holder.
14. The complainant as PW1 has admitted acceptance of Rs.3708/- by way of full and final settlement of the claim. B1 authorisation would show that DW1 has authorized to conduct the case for the LIC of India. DW1 has deposed in support of the contentions adopted by the opposite parties in CC.160/05. He deposed on the basis of the data and other informations collected from the records maintained by LIC of India with respect to the claim preferred by the complainant. It can be concluded that the complainant was not entitled to get the claim preferred by her in the aforesaid consumer complaint No.160/05.
15. The Forum below allowed the said complaint without appreciating the facts and circumstances of the case. The finding of the Forum below that the appellant/opposite party (LIC of India) failed to intimate the policy holder about the lapsed condition of the policy and that it was incumbent upon the appellant/opposite party (LIC of India) to give notice of options to the life assured on the lapsing of the policy by virtue of section 50 of the Insurance Act, 1938 cannot be accepted as such. It is to be noted that the notice stipulated under section 50 of the insurance Act need be given in the absence of the details of the policy prescribing in the policy. It is made clear in Section 50 itself as amended by Act XI of 1939 and added by Act XIII of 1941 that such a notice is to be given unless the options are set forth in the policy. A perusal of the original policy would make it clear that the options are set forth in the original life policy itself. In such a situation no notice need be given to the life assured regarding lapsing of the policy etc. In that respect also the Forum below has gone wrong. Thus, the impugned order passed by the Forum below is liable to be set aside. Hence we do so. These points are answered accordingly.
In the result, the appeal is allowed. The impugned order dated:12/11/2009 passed by CDRF, Pathanamthitta in CC.160/05 is set aside and the complaint therein is dismissed. Considering the facts and circumstances of the case, the parties are directed to suffer their respective costs throughout.
M.V. VISWANATHAN : JUDICIAL MEMBER
VL.
