Rajasthan

StateCommission

A/296/2022

Bhartiya Jeewan Beema Nigam - Complainant(s)

Versus

Smt. Archana Garg - Opp.Party(s)

20 Jan 2023

ORDER

BEFORE THE RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION,JAIPUR

 

FIRST APPEAL NO: 296/2022

 

Life Insurance Corporation of India, Br. Manager, Br.Office, RIICO Industrial Area, Hindon city, Distt. Karauli & ors.

Vs.

Smt. Archana Garg w/o Late Sh. Sanjay Kumar r/o D-44, Mohan Nagar, Hindon city, Distt. Karauli. At present r/o Opp. Government College Karauli, Distt.Karauli. (Raj.)

 

Date of Order 20.01.2023

Before:

Hon'ble Mr. Atul Kumar Chatterjee- Member(Judicial)

Hon'ble Mrs. Shobha Singh- Member

Present:

Mr. Mukesh Kumar Goyal learned counsel for the appellants

Mr. Varun Chauhan learned counsel for the respondent

 

BY THE STATE COMMISSION ( PER HON'BLE MR.ATUL KUMAR CHATTERJEE, MEMBER ( JUDICIAL):

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This appeal has been preferred by opponent LIC of India against the judgment of learned District Consumer Commission, Karauli dated 29.10.2021 passed in Complaint Case No 37/2018. By this judgment the learned DCC Karauli had allowed the complaint filed by the respondent/ complainant.

 

In this appeal the main controversy involved is that whether the appellant LIC was justified in denying the accident benefit during the Auto Cover Period or whether case of respondent/ complainant regarding the accident benefit claim of her husband Late Sh. Sanjay Kumar, who lost his life in a road accident on 15.1.2017, fell under part 1 of clause 4 of the policy “ Non-forfeiture Regulations” or in second part of the same ?

 

It is more or less admitted that deceased Late Sh.Sanjay Kumar had procured two policies bearing nos. 195095653 and 197129045 with insured value of Rs. 50,000/- and Rs. 10 lakhs respectively. The first policy i.e. LIC's Golden Jubilee Bima Gold Policy commenced w.e.f. 6.11.2005 and the second policy i.e. Jeevan Saral commenced w.e.f. 30.11.2009. The

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premium was to be paid yearly and the maturity date was 01.11.2025 and 28.11.2024 respectively. The case of the respondent /complainant is that after the demise of her Late husband the appellant LIC though had paid the basic claim on account of death of the deceased in respect of both the policies but had declined to give the accident cover benefit. The appellant LIC has pleaded that since the premium payable on 1.11.2016 and 28.11.2016 in respect of both the policies respectively remained unpaid and the same was not paid despite the passage of grace period of 30 days hence both the policies acquired the status of paid-up lapsed policies. According the the appellant LIC the case of respondent/ complainant did not fall under the part 1 of clause 4 “ Non-forfeiture Regulations” but was covered under the exception clause wherein it has been provided that Accident Benefit Rider will cease to apply if the policy is in lapsed condition and during the auto cover period the accident benefit rider shall not be available.

 

The learned counsel for the appellant LIC in his contentions has more or less reiterated the contents of the memo of appeal as well as that of its reply filed before the

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learned DCC Karauli and has referred to the judgments of Hon'ble National Commission in Revision Petition No. 3176 of 2014 ( Smt. Anita Vs. Br.Manager, LIC of India )decided on 20.8.2014 and Revision Petition No.2726 of 2014 (Bhushan Kumar Vs. LIC of India ) decided on 17.10.2017.

 

Per contra the learned counsel for the respondent/ complainant contended that the impugned judgment passed by the learned DCC Karauli is well founded factually and legally and no interference is called for in it. According to him the learned DCC Karauli has rightly held that the case of respondent complainant is covered under part 1 of clause 4 “Non-forfeiture Regulations”.

 

Having pondered upon the rival contentions and going through the pleadings, evidence, impugned judgment as well as judgments of Hon'ble National Commission referred by the learned counsel for the appellant LIC,we find that admittedly the premium payable on 1.11.2016 ( in respect of policy no. 195095653 ) and on 28.11.2016 ( in respect of policy no. 197129045 ) remained unpaid. It is also apparent from the record that the grace period permissible under clause 2 of the

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policy had also expired and the premium still remained unpaid as such the plea of the appellant LIC that both the policies had acquired the status of 'paid -up lapsed ' is found to be true. Upon pondering on the point as to whether part 1 of clause 4 “Non-forfeiture Regulations” is applicable or part 2 where the accident benefit rider has been shown to be ceased in respect of the policy which is in lapsed condition is applicable. It is worthwhile to reproduce clause 4 which is as under:

 

“ 4. Non-forfeiture Regulations: If after at least two full year's premiums have been paid and any subsequent premium be not duly paid, full death cover shall continue for a period of two years from the due date of the first unpaid premium (FUP). This period of 2 years from FUP shall be called Auto Cover Period. During the Auto Cover Period, the life assured can pay one or more installments of premiums with interest without submission of any evidence of health. On payment of part or full arrears of premiums with interest, the Auto Cover Period of 2 years from the due date of new FUP shall again be available during

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the term of the policy.

Notwithstanding what is stated above, if after atleast three 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 after the expiry of two years auto cover period from the due date of first unpaid premium, but shall subsist as a paid up policy for an amount equal to the total premiums paid (excluding any extra /optional premium) less the survival benefits paid earlier if any. This amount shall be called as paid up value. This paid up value shall be payable on the date of maturity or at life assured's prior death. No survival benefit shall be payable under paid up policies. The policy thereafter be free from all liabilities for payment of the within mentioned premiums.

The Accident Benefit Rider will cease to apply if the policy is in lapsed condition. During the Auto Cover Period, the Accident Benefit Rider shall not be available.”

 

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The first part of the above clause would reveal that if after at least two full years' premiums have been paid and any subsequent premium was duly not paid, full death cover shall continue for a period of two years from the due date of First Unpaid Premium (FUP). This period of two years from FUP shall be called Auto Cover Period. During this Auto Cover Period the life assured can pay one or more installments of premiums with interest without submission of any evidence of health and if the amount of due premium/s paid with interest, the Auto Cover Period of two years in respect of FUP shall again be available. In last part of the above regulations it has been provided that the Accident Benefit Rider will cease to apply if the policy is in lapsed condition. It is further provided that during the Auto Cover Period the Accident Benefit Rider shall not be available.

 

As stated above since the life assured Late Sh. Sanjay Kumar died on 15.1.2017 as such the Auto Cover Period regarding both the policies would be available for the FUPs which fell due on 1.11.2016 and 28.11.2016 respectively but as stated above in the last part of clause 4 “Non-forfeiture Regulations” it is very much clear that the Accident Benefit Rider will cease to apply if the policy is in lapsed condition.

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Since the appellant LIC has disbursed the death benefit available under the both polices to the respondent /complainant and the Accident Benefit Rider could not be paid to her because of the last part of clause 4 as given above, in our humble view the learned DCC Karauli has probably mis- read the terms of clause 4 regarding “Non-forfeiture Regulations” because it is not correct to say that how the death benefit has been paid under the policy.

 

In our humble view the learned DCC has again deviated from the factual aspect wherein it has stated that the opposite parties LIC has not adduced any document to establish that the deceased/assured did not die due to an accident because in the case in hand the fact of accidental death of the assured is not disputed at all.

 

The judgments of Hon'ble National Commission given in Smt. Anita Vs. Br.Manager, LIC of India and Bhushan Kumar Vs. LIC of India (both supra) are most relevant in the present matter. In both these cases facts were more or less similar and in both these cases the concerned policies were in lapsed condition as such the Hon'ble National Commission

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held that the Auto Cover Period i.e. two years period after the date of first unpaid premium was in force as such the death benefit cover was held to be payable under clause 4 but the accidental benefit rider was held to be not payable due to its being ceased under the last part of clause 4.

 

On the basis of above discussion, we arrive at a conclusion that appellant LIC had rightly pleaded that the respondent/ complainant was not entitled for the Accident Benefit Rider because both the policies had acquired the position of paid-up lapsed as such the accident benefit cover had ceased despite availability of Auto Cover Period.

 

In view of above discussion, we find that the judgment of learned DCC Karauli is not sustainable in the eye of law as such the same is hereby set aside and the appeal filed by the appellant LIC is hereby allowed. No costs.

 

(Shobha Singh) (A.K.Chatterjee)

Member Member Judicial

 

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