DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the  25^th day of  November,  2021

Present    :  Sri.Vinay Menon V.,  President

                  :  Smt.Vidya A., Member                                                 Date of Filing: 01/01/2019 

     CC/02/2019

Thomas P. Chacko,

S/o P.T.Chacko,

Panamthodathil House,

Kappadam, Karimba P.O.,

Palakkad – 678 597.

(By Adv.  P.Sreenath Sankar)                                                 -           Complainant

                                                                                      Vs

1.         Senior Post Master,

            Rural Postal Life Insurance,

            Ottappalam Division.

2.         Senior Superintendent of  Post Office,

Ottappalam, Palakkad – 679 101

(OPs represented by Authorised Representative)      -           Opposite parties

O R D E R 

By Sri. Vinay Menon V.,  President

1. Complaint simpliciter for return of premium amounts remitted by the complainant, towards a lapsed and  void  insurance policy.  
2. Complainant alleged that he had availed a Rural Life Insurance Policy bearing no.      R – KL – EA - 560093 from the opposite party on 14.03.2012. He remitted premium for 32 instalments. But due to certain reasons, he could not remit the balance premium due. The policy period was till 06.02.2018. After policy period he sought for return of the premium remitted. But the opposite party refused his demand on the ground that the amount is non-refundable. The complainant is entitled to and sought for an order directing refund of Rs. 46,080/- along with a cost of Rs. 5000/-
3. Opposite parties entered appearance and filed version opposing the pleadings in the complaint.  Essentially the version pleadings are that the non-payment being effective from 32^nd installment  (not after completion of 36 installments/3 years), the policy was not an Auto Paid up policy but a lapsed policy and therefore void. They referred to the various provisions of Post Office Life Insurance Rules, 2011. In short, they contented that the Rules did not permit refund of premium in any manner whatsoever.   And sought for dismissal of complaint.
4. The following issues arise for consideration

1. Whether the complaint is barred by limitation?
2. Whether the Post Office Life Insurance Rules, 2011 totally prohibits return of premium in void policies?

3.         Whether there is deficiency in service on the part of the 1^st opposite party?

4.         Reliefs and cost, if any ?

5.         Evidence comprised of Proof affidavits and Exhibits A1 to A4 and Exhibits B1 to B9.

6.         At our instance, the Authorized Representative of the opposite parties had produced a Compendium of Post Office Life Insurance Rules, 2011, Forms & Standard Operating Procedures. Rules which are not produced and marked by the opposite parties as exhibits  are referred to from this Compendium. Wherever the word Rule is stated, it refers to a Rule in Post Office Life Insurance Rules, 2011, unless otherwise specifically stated.

            Incidentally  we place our appreciation  for the authorised representative of the department who sailed us through the various provisions of Compendium.

     Issue No. 1.

7.         The policy started on 14.03.2012. The complainant effected payment of premium for 32 months, that is till November, 2013. Thereafter it became void under Rule 56(1). The question is,  when would have the cause of action started?

The policy, had it been alive, would have matured on 14.03.2018. Until that date the complainant had an option to revive the said void policy in terms of Rule 58(1). The complainant would be left optionless only on 14.03.2018. Hence the only inference that can be made is that the policy of the complainant, though it became void in terms of the Rules, was not terminated. It was salvageable in terms of Rules 58(1) to 58(5).

The complainant raised his claim for the premium only after the maturity period was covered, ie. when repayments become due. Even if on the face of it, it appears that the complaint is barred by limitation, the complainant’s right to revive the policy was kept alive till the date of maturation, ie, 14.03.2018. The complaint is filed on 01.01.2019, which is within the period of limitation.

Hence the complaint is not barred by limitation. Issue no. 1 is found accordingly.

Issue No. 2

8.         The sole relief sought for by the complainant is return of the premium that he had remitted for 32 months. And the definite case of the opposite parties is that there are no provisions in the Rules that permit repayment of premium  in the event of a policy lapsing and becoming void before completing 3 years (ie, 36 months).  Period. But we have our reservations to this proposition embraced by the opposite parties, however much passionately the authorized representatives of the opposite parties advocated for this stance.   

9.     Initially, we have to consider the basic nature of Rural Postal Life Insurance. The beneficiaries of  RPLI are the rural populace of India, with special emphasis on weaker sections and women workers. This Beneficial Policy was introduced as a result of the recommendation of the  Official Committee for Reforms in the Insurance Sector. The entire procedure of this insurance policy is dealt with under Post Office Life Insurance Rules, 2011. Issuance, payment of premium, lapsing, reviving, payment of sum assured, discretion of authorized officers etc., from inception of the policy till termination / maturation are the subject matter of the aforesaid Rules.  It goes without saying that they are statutory and mandatory in nature. 

10.     In this case also the opposite party relied on the various provisions of the Rule to deny repayment of premium to the complainant. In order to ascertain the validity and legality of the pleadings of the opposite party and to arrive at a decision in this dispute we have to assay the relevant Rules. 

         To that end, we dissect Rule 56 of the Rules.  Note 1 to Rule 56(2) permits refund of premia in appropriate cases. The question therefore is whether Note 1 applies to Rule 56(2) alone or Rule 56(1) and Rule 56(2), taken together. Reply to this query decides the legality of the conduct of the opposite party. To conclude the extent of applicability of the Note, the scheme, placement and progression of  Rule 56 is to be pried into. Lapsing of Policy within thirty six months and settlement of claims is discussed in Rules 56(1) to 56(3).

11.       Rule 56(1) deals with situations similar to those as that of the complainant. This Rule has no proviso or note.  Rule 56(1) states the result of a policy which lapses within thirty six months. Subject to the condition in Rule 44 not being satisfied, the policy shall become void.

          Rule 56(2) refers to the same condition, but when the insurant dies within the said period and where certain eventualities occur.

Post Rule 56(2),   there is a Note. The Note refers to discretionary powers of  a Postmaster General to permit  partial or complete repayment of premium with or without interest or pro-rata value of policy.

            Then comes Rule 56(3). This Rule deals with  procedures to be followed where a policy holder of a void policy is desirous of re-instatement  or reanimation of  a lapsed  policy, within a stipulated period.

12.      Rule 56(1) and Rule 56(2) deals with  situations wherein the policy lapses in the event of non-payment of premia before 3 years. There is a common thread underlying the nature of these two Rules.   But Rule 56(3) is different from these two, in as much as, this being a provision that revive and reanimate  the void policy, i.e. if 56(1) and 56(2) deals with the  effect of non payment of premium within 36 months, and eventual lapsing and becoming void and its implications upon death of parties and certain other eventualities,   Rule 56(3) seeks to reanimate the policy and bring it back to life.

13.      Note 1 following Rule 56(2) reads as follows: “The Postmaster General, however, has discretionary powers in special cases to allow ex-gratia payment of the value of a policy or a part thereof, or ex-gratia refund of premia paid by the insurant or part thereof, with interest or without interest, provided he is satisfied that there has  been no deliberate infringement of rules with the object of using the insurance fund in a manner adversely affecting its interest and circumstances warrant payment of policy money.”   (underline provided by us).

Rule 56(2)(b)(v), where it comes to the part where payment is to be effected,  there is clear reference to the nominee or the legal heir of the insurant. But the provision of Note 1 is conspicuous by the absence of the word nominee or legal heir. To whom the refund of premia or part thereof is to be paid is not mentioned.  The recipient is not specifically stated. It can either be the insurant or the legal heir or the nominee. To put it lightly, Note 1 is in harmony with both Rule 56(1) and Rule 56(2). There are no inconsistencies, incongruencies or  incompatabilities whatsoever.   Both 56(1) & 56(2) takes in Note 1 without the result leading to an absurdity or perversity. 

15.      In accordance with the  principles of interpretations underlying the legislative intents, we are of the opinion that in such a circumstance as in this one, where two alternative interpretations are available, the one that would further the spirit of the statue and working of the system which the statute purports to regulate has to be adopted.  The beneficiaries herein are people who are marginalized and those who cannot afford the main stream insurance companies. Interpretation of the Rules    have to be made  to benefit keeping in mind their plight. Had the intention of the Authority who promulgated this Rule been to exclude a live   insurant, the words Legal heir or nominee would have been inserted as being the recipient.   Hence it is clear from a reading of the  Note that it can relate and qualify both Rule 56(1) and 56(2) without leading to absurdity or illegality.

Hence we do not find merit in the contention raised by the opposite party that the premium remitted by the complainant cannot be returned. The proposition is not absolute. We find that the Rules does not issue a blanket prohibition in returning the premium in void policies. The Postmaster General can, in his discretion, permit repayment as stated supra.  

            Issue Nos. 3 & 4

16.       One  can’t predicate which way the discretion of the Postmaster General would swing. But that is not a ground for not offering a chance to those likely placed as those of the complainant. Informing of the avenues of opportunity is one thing, shutting of the door is another thing. And failure to inform the Commission as to the presence of a provision like Note 1 to Rules 56(1) & 56(2) is also callous indifference to the service they are rendering.

We consider this a gross deficiency in service on the part of the opposite parties.

17.       In view of our findings in Issue nos. 2 and 3, we hold that the complainant is entitled to be compensated amply for the dispute he had been pulled into and for the ensuing  mental pain and agony. We believe that an amount of Rs. 50,000/- (Rupees Fifty thousand only) would amply alleviate the grievance of the complainant. We further hold that the complainant is entitled to a cost of Rs. 5,000/- (Rupees  Five thousand only) also.

The opposite parties shall pay Rs. 55,000/- (Rupees Fifty five thousand only) to the complainant within 45 days of receipt of a copy of this Order.

            Pronounced in the open court on this the 25^th  day of November, 2021.

Sd/-

                                                                              Vinay Menon V.

                                                 President

 Sd/-

Vidya A.

                    Member      

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1 –  Original of Schedule of RPLI Policy bearing no. R – KL -EA - 560093.

Ext.A2 –  Original of Premium receipt book RPLI Policy bearing no. R – KL -EA - 560093.

Ext.A3 –  Original of Acceptance letter of proposal of RPLI Policy bearing no.

                 R – KL -EA - 560093.

Ext.A4 -  Original of Communication dated 04.06.2018 issued by 1^st opposite party to

                 the complainant.

Exhibits marked on the side of the opposite party

 Ext. B1 –  Certified copy Exhibit A3.

 Ext. B2 –  Printout of History sheet of Policy bearing no. R – KL -EA - 560093.

Ext. B3  -  Print out of Financial history of Policy bearing no. R – KL -EA - 560093.

Ext. B4  -  Copy of Postal Life Insurance Rules, 2011 showing Rule 5(5).

Ext. B5  -  Copy of Postal Life Insurance Rules, 2011 showing Rule 5(27).

Ext. B6  -  Copy of Postal Life Insurance Rules, 2011 showing Rule 5(37).

Ext. B7 -   Copy of proposal form submitted by Complainant

Ext. B8  -  Copy of Postal Life Insurance Rules, 2011 showing Rule 5(20).

Ext. B9  -  Copy of Postal Life Insurance Rules, 2011 showing Rule 58(1).

Witness examined on the side of the complainant

Nil

Witness examined on the side of the opposite party

Nil

Cost :  5,000/- allowed as cost.

NB : Parties are directed to take back all extra set of  documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.