order dated 18/03/2009<br /> <br /> <br /> O R D E R<br /> <br /> M.R. DEVAPPA, PRESIDENT<br /> <br /> Briefly stated the case of the complainant is as follows;<br /> 1. That the complainant has purchased a policy for a sum of Rs.1,00,000/- from the Life Insurance Corporation of India Virajpet Branch, Kodagu District and paid a sum of Rs.6,352/- in two installments as one year premium.<br /> <br /> 2. That the complainant is a small farmer could not pay the 2nd year installment due to the drastic price fall of the agricultural commodities in the year 2002 onwards.<br /> <br /> 3. That the opposite party taking advantages of the complainant’s financial constrains have forfeited his hard earned money and ignored his pleas to refund the same. <br /> <br /> 4. That the complainant made an application before the Manager LIC of India, Virajpet Branch to refund his premium amount through RPAD which was duly served on them. But the opposite party in para number of his version denied this as false. <br /> <br /> 5. That the opposite parties inspite of the complainant’s personal and written request to refund the amount have not responded and settled his claim and thereafter the complainant filed an RTI application before the 2nd opposite party, but inturn the 1st opposite party sent a letter dated 4-8-2009 asking the complainant to file an appeal before the Senior Divisional Manager, Divisional Office, Bannimantap and accordingly he filed an appeal before the said authority but to his surprise he received an endorsement about the forfeiture of his hard earned money, the said endorsement has already been produced for perusal of the Forum.<br /> <br /> 6. That the forfeiture clause invoked by the opposite party is illegal and violation of the fundamental right of the complainant.<br /> <br /> 7. That the forfeiture clause invoked by the opposite party, is unfair, restrictive and self stailed practices and no other Life Insurance Company have carried such illegal trades. <br /> <br /> 8. That neither the law nor the government permits the opposite party to forfeit the premium paid by the people. <br /> <br /> 9. That the Hon’ble Justice Hulusadi G. Ramesh of Karnataka High Court delivered the judgement against the Life Insurance Corporation of India in December 2006 and observed “in the event of policy holder being unable to continue with the policy by paying the premium, the amount paid to the Insurance Company by the policy holders shall be refunded without invoking the forfeiture clause and without waiting for the expiry of the maturity period”. That the Hon’ble Justice said that, the condition of the forfeiture clause was void and without any basis as the forfeiture clause is detrimental to the interest of a common man.<br /> <br /> 10. For the foregoing reasons it is prayed for a direction to the opposite party to refund the above said amount along with the interest at 18% with cost and damages.<br /> <br /> 11. The complainant has produced the copy of the R.T.I application with RPAD receipt, Copy of the appeal before SDM LIC of India, Mysore and Endorsement by LIC.<br /> <br /> 12. After admitting the complaint notice was ordered to be sent to the opposite party. The opposite party no.1 and 2 have appeared through their advocate and filed their version and affidavit evidence and have taken following contentions;<br /> <br /> 1. That the complainant has no locustandi to file this complaint as it is bared by efflux of time. The policy stood lapsed with effect from 8-2-2003 and as such the complaint is liable to be dismissed.<br /> <br /> 2. That without prejudice to the above contention the following particulars are furnished.<br /> <br /> a. Policy No. 721400406<br /> b. Date of commencement 8-2-2002<br /> c. Plan & term 103-20<br /> d. Mode of premium payment Half-yearly<br /> e. Sum Assured Rs.1,00,000/-<br /> f. Last premium paid 8-8-2002<br /> g. Next premium payable 8-3-2003<br /> h. Premium amount Rs.3176/-<br /> <br /> 13. That the averment made in para 1 of the complaint that the complainant applied for refund of premium to the Manager of the opposite party is utterly false.<br /> <br /> 14. That the averment made in para 2 of the complaint is admitted. However the appeal has been preferred bearing No.WA No.254/07 in LIC v/s Huchappa in the High Court of Karnataka against the ruling in W.P No.22682/2004 and had obtained a stay against the orders in W.P. No.22682/2004.<br /> <br /> 15. That the averment in para 3 of the complaint that the complainant filed an application under RTI Act is admitted but the complainant’s application was suitably replied by this opposite party on 4-8-2008 and the other averments made in the same para are utterly false. Like wise the averments made in para 4 and 5 of the complaint are also false. <br /> <br /> 16. That as per condition no.5 of the policy the premium already paid has been forfeited and nothing becomes payable under the policy and as per condition no.3 of the policy, the policy cannot be revived as the complainant failed to revive the policy within a period of 5 years from the date of lapse i.e., 8-3-2003.<br /> <br /> 17. That the complainant was not diligent in keeping the policy in force and the cause of action arose on 8-3-2003 when the policy lapsed.<br /> <br /> 18. That the complainant having kept quite for morethan 5 years and mere sending of an application on 4-8-2008 under RTI Act would not serve as a savior of limitation period, as such the complaint is liable to be dismissed on this count also. <br /> <br /> 19. That in similar case in RP no.31/2004, in LIC V/s Dr. S.P. Das and others the National Consumer Disputes Redressal Commission has held that the insurer cannot be asked to refund the premium for the period when he had covered the risk and there is no record to show that there is any provision for refund the premium under a lapsed policy, as the insured cannot take advantage of risk coverage has also of refund of premiums.<br /> <br /> 20. That there is no deficiency in service on the part of this opposite party and as such this complaint is liable to be dismissed.<br /> <br /> 21. The opposite party has produced the following documents;<br /> <br /> 1. Office copy of policy bond No.721400406<br /> 2. Copy of letter addressed to the complainant<br /> 3. Status report of the policy<br /> 4. Orders of the High Court of Karnataka in W.P.No.254/07<br /> 5. Orders of the NCDRC,New Delhi in R.P.No.31/2004<br /> <br /> 22. Both the parties have filed their affidavit evidence in lieu of examination in chief.<br /> <br /> 23. Having regard to the averments made in the complaint and the documents relied by the complainant and to the defence taken by opposite party no.1 and 2 and the documents relied by the opposite party, the following issues arise for determination.<br /> <br /> 1. Whether the opposite parties have committed deficiency in service in not refunding the premium amount paid by the complainant?<br /> <br /> 2. To what order ?<br /> <br /> <br /> R E A S O N S<br /> <br /> 24. It is submitted by the learned advocate for the complainant that the other Insurance companies have no forfeiture clause in the policies and only the Life Insurance Corporation of India is having it to the disadvantage of the policy holder and further it is contended that the High Court of Karnataka has observed that the LIC of India cannot forfeit premium paid by the policy holder and has issued the stay to the advantage of the policy holder. But the said order has been stayed by the division bench of the Hon’ble High Court of Karnataka in writ appeal No.254/2007 and the matter appears to be pending, as such the complainant cannot take advantage of the order passed by the Single bench of the Hon’ble High Court of Karnataka. <br /> <br /> 25. The learned advocate for the opposite party has relied on a decision rendered by the National Consumer Disputes Redressal Commission passed in R.Pno.31/2004 in LIC of India V/s Dr. S.P. Das and others. It is necessary to reproduce the relevant portion of the order.<br /> <br /> “We find two things against the respondent/ complainant, firstly, that there was no effort made by them to revive the policy, which has lapsed in September 1988 itself, for five years. We are unable to appreciate as to on what ground the District Forum and State Commission could direct refund of premium? The premium is given by an insured, to cover the risk for a give period, and the insurer covers the risk for the period for which the premium has been paid. It is not the case of the complainant that the risk was not covered for the period for which the premium was given. If after that the policy lapsed, under no provision of terms of policy or law, could any fora direct for refund of any premium for the simple reason, as already stated, that the risk stood covered for the period for which premium had been paid. The State Commission has also, in our view, wrongly appreciated the absence of any forfeiture clause in the policy. Without being repetitive, in our view, this was not a question of forfeiture. This was not a question of any hypothecated goods, which were forfeited. This was a simple case of lapse of policy for non-payment of premium as a result of which the policy had lapsed. Insurer cannot be asked to refund the premium for the period when he had covered the risk. Introduction of element of ‘forfeiture’ is a novation of the State Commission, when it was not warranted by the facts and circumstances of the case. Nothing is on record to show that any provision exists for refund of premium of a lapsed policy. The insured cannot be given advantage of ‘risk coverage’ as also of refund of premium in the present circumstances”.<br /> <br /> 26. It is further contended by the learned advocate for the opposite party that the condition no.5 of the policy provides for forfeiture of the premium amount and as per the condition no.3 of the policy, the policy cannot be revived as the complainant failed to revive the policy within a period of 5 years from the date of lapse i.e. 8-3-2003 and the complainant has kept quite for morethan 5 years and mere sending of an application on 4-8-2008 under RTI Act would not serve as a saviour of limitation period as such the complaint is liable to be dismissed.<br /> <br /> 27. It is pertinent to note that the order passed by the Hon’ble National Commission binds on all the State Commissions and District Forums and when the Hon’ble National Commission has categorically observed that no provision in the Insurance Act and the conditions of the policy exist for refund of premium of a lapsed policy, the amount paid by the policy holder cannot be refunded, but the same is liable to be forfeited. Therefore the different view cannot be taken by the District Forum.<br /> <br /> 28. Moreover the conditions of the policy also provide for forfeiture of the premium amount if for any reason policy is lapsed.<br /> <br /> 29. The complainant, as contended by the advocate for the opposite parties, has kept quite nearly 5 years without reviving the policy and for efflux of time he cannot seek the remedy for refunding the amount by filing the complaint on 22-8-2008.<br /> <br /> 30. For the foregoing reasons it can be said that the complainant has not established, by producing tangible evidence, that the opposite party no.1 and 2 have committed deficiency in service on their part. Hence we answer point no.1 negatively and proceed to pass the following order.<br /> <br /> O R D E R<br /> <br /> The complaint is dismissed. The parties to bear their own cost.<br /> <br /> Communicate the order to the parties.<br /> <br /> Dictated to the Stenographer. Got it transcribed and corrected. Pronounced in the open Forum on this 18th day of March 2009.<br /> <br /> <br /> (M.R. DEVAPPA), (K.S. PRASAD), (A.S. HEMALATHA),<br /> PRESIDENT MEMBER MEMBER<br /> <br />