ORDER

(Per: Mr. D.K. Tyagi, Member):

This is insurer’s appeal under Section 15 of the Consumer Protection Act, 1986 against the order dated 22.10.2013 passed by the District Forum, Haridwar in consumer complaint No. 307 of 2011.  By the order impugned, the District Forum has allowed the consumer complaint and directed the opposite party to pay the insured amount of Rs. 1,00,000/- to the complainant within one month from the date of order.

2.       Briefly stated the facts of the case are that the complainant’s husband Late Sh. Umesh Razak was the employee of the BHEL and his staff No. is 1637037.  The complainant’s husband expired on 18.10.2010 in a road accident near BHEL Hospital during morning walk. He had taken insurance policies during his lifetime from Life Insurance Corporation of India, Branch Ranipur Morh, Haridwar–opposite party having policy Nos. 250621429, 270077528, 270340501, 270719479, 270789069 and 272021169.  The complainant applied for the claim of all the policies, which have been paid by the opposite party, but they had not paid the claim of policy No. 272021169, despite that the complainant had submitted all the documents alongwith original policy bond to the opposite party. The complainant visited so many times in the office of opposite party and finally she sent a letter dated 07.02.2011 to the opposite party, but all went in vain.  Ultimately, the complainant sent a legal notice dated 23.06.2011 through an advocate to the opposite party, but the same was not replied till date and also not paid the insurance claim of Rs. 1,00,000/-. This led the complainant to file a consumer complaint before the District Forum, Haridwar against the opposite party-Life Insurance Corporation of India for claim of insurance policy with interest @ 12% per annum and Rs. 20,000/- for mental agony and Rs. 20,000/- towards litigation expenses.  

3.       The insurance company-opposite party filed written statement before the District Forum and pleaded that it is admitted partially that the husband of the complainant had taken insurance policies. That para Nos. 4, 5 & 6 are denied. The insurance company stated that the policy No. 272021169 was not in running condition and it stood lapsed for non-payment of premium, hence no claim was liable to be paid in this regard.  The opposite party informed vide letter dated 10.01.2011 to the complainant that her claim was repudiated as not maintainable on the above technical ground.  It is denied that the opposite party did not reply the complainant’s legal notice dated 23.06.2011.  The true fact is that the opposite party replied the said legal notice on 28.06.2011 and explained the complainant all the circumstances. The life insurance policy is a contract between the applicant and Life Insurance Corporation, which is based upon trust and faith. The claim of the complainant was rightly repudiated under the terms and conditions of the insurance policy according to law. That there was no contract between the complainant and the opposite party, therefore, the complainant is not a consumer of the opposite party.  There is no deficiency on the part of the opposite party.  Thus, the consumer complaint filed by the complainant is liable to be dismissed. 

4.       The District Forum, on an appreciation of the facts and circumstances of the case, allowed the consumer complaint vide its order dated 22.10.2013 in the above terms. Aggrieved by the said order, the opposite party-insurance company has filed the present appeal.

5.       We have heard learned counsel for the appellant-opposite party and perused the material placed on record.  None has appeared on behalf of the complainant-respondent.

6.       There is no dispute regarding the fact that the respondent’s husband, Late Sh. Umesh Rajak, had taken six insurance policies from the appellant including the policy in question, i.e. No. 272021169.  There is also no dispute that after the death of respondent’s husband out of these six insurance policies, the appellant has settled the claim of five insurance policies except the insurance policy in question. It is also not disputed that Sh. Umesh Rajak has died on 18.10.2010 in road accident while he was walking in the morning.  The dispute is with regard to the fact that whether the appellant has repudiated the claim of the policy in question on the basis that the said policy was not in running condition and was already lapsed before the date of death of the insured, i.e. 18.10.2010, rightly or not?

7.       The appellant has filed a photocopy of letter of respondent dated 07.02.2011 (paper No. 18), photocopy of notice sent by Sh. Gajendra Kumar, Advocate to the insurance company dated 23.06.2011 (paper No. 19) with a copy of registry receipt (paper No. 20).  The appellant has also filed status report of policy in question (paper No. 21) and copy of salary certificate of Late Sh. Umesh Rajak for the month of September, 2010 (paper No. 22).  The appellant has also filed a copy of an affidavit of        Sh. Narendrapal Singh, Branch Manager, L.I.C., Haridwar (paper No. 23), which was filed before the District Forum, Haridwar, photocopy of repudiation letter dated 10.01.2011 (paper No. 29) and copy of reply of legal notice dated 28.06.2011 (paper No. 30), which are annexures of an affidavit. The respondent never appeared before this Commission despite service of the notice of Commission through registered A.D. (paper No. 36) and the same is already on record.

8.       Learned counsel for the appellant has submitted before this Commission that the policy bearing No. 272021169 stood lapsed for non-payment of premium of the life assured during his lifetime itself and, hence, no amount is liable to be paid to the respondent. The policy impugned being in a lapsed condition, nothing is liable to be paid and in view thereof the appellant vide its letter dated 10.01.2011 had rightly informed the said position to the respondent and had also replied vide letter dated 28.06.2011 to the notice dated 23.06.2011 of the said position.  The respondent vide annexure No. 4 to her affidavit of evidence has herself filed status report details of impugned policy, wherein it clearly reflects the first unpaid premium due in the month of September, 2010 and, thus, she is estopped from claiming any amount. The finding of the District Forum that the impugned policy was taken on 09.07.2010 and since life assured died on 18.10.2010 and premium was to be paid by 9^th of every month, hence, since life assured died he could not have paid the premium after his death, is a wrong conclusion arrived, because the premium was to be paid every month. The life assured died on 18.10.2010 and he had not paid two premiums due on 09.09.2010 and 09.10.2010 and, thus, finding that since life assured died, he was prevented from paying premium is a wrong conclusion.  During the life time of life assured, he failed to pay premium due on 09.09.2010 and 09.10.2010.  Further, the finding of the District Forum that Life Insurance Corporation is a welfare organization and is duty bound to help the dependents of deceased and since five policies, payment has been paid and, hence, on technical ground the payment under the impugned policy could not be defeated, is completely wrong conclusion. Due to non-payment of premium due within the stipulated period, the policy lapsed and, thus, the privileges of the impugned policy ceased and the policy had become invalid during the life time of life assured itself.  Thus, nothing is payable in terms of the impugned policy’s terms and conditions.  It is well settled law that if the insurance policy stands lapsed on account of default in payment of installment due, the insurance company can rightly repudiate the claim.  As per Clause-4 of the impugned policy bond, which provides for forfeiture, it is clearly mentioned that if the premiums are not paid, as per terms and the policy lapses, then in such eventuality no payment/benefits can be claimed.   Learned counsel has also argued that it was the responsibility of the life assured to pay premium within the stipulated time period.  Since, the policy stood lapsed, during the lifetime of deceased itself, the respondent is not a “consumer”.  There is no deficiency in service on the part of the appellant.  The District Forum has exceeded its jurisdiction as vested by law and has not exercised its jurisdiction in correct manner, as required by law. 

9.       As none has appeared on behalf of the respondent-complainant, therefore, no oral or written submission have been made by respondent before this Commission.

10.     We have gone through the documents filed by the appellant.  The respondent had applied for settlement of claim of policy No. 272021169 to the Branch Office of Life Insurance Corporation of India, Haridwar on 07.02.2011 (paper No. 18), but prior to this letter of respondent, the appellant had already repudiated the claim of the respondent vide its letter dated 10.01.2011 (paper No. 29) with a note that the policy No. 272021169 stood lapsed for non-payment of premium of life assured and the same is not in a running condition, therefore, no amount is liable to be paid to the respondent regarding this policy. We have also gone through the legal notice dated 23.06.2011 sent by respondent to the appellant (paper No. 19) alongwith postal receipt (paper No. 20) and also reply dated 28.06.2011 against this legal notice by the Branch Manager of the opposite party (paper       No. 30).  The Branch Manager again replied the notice given by advocate that this policy was not in running condition and the claim of the respondent has been rightly repudiated according to the terms and conditions of the Life Insurance Corporation.  The respondent has filed status report of policy No. 272021169 before the District Forum and the copy of this status report had been filed by the appellant in the record of this appeal.  From the perusal of the status report, it is evident that the policy in question was taken by respondent’s husband, Sh. Umesh Rajak S/o Sh. Kishan Rajak, from the Life Insurance Corporation on 09.07.2010 for seven years for sum assured Rs. 1,00,000/- and the premiums for this policy were to be paid on 9^th of every month.  The life assured had not deposited the premium of the months of September and October, 2010, i.e. 09.09.2010 and 09.10.2010. Mode of payment of premium was monthly.  The statement of monthly salary of respondent’s husband for September, 2010 also indicates that no amount of premium of policy in question, i.e. Rs. 1,334/- was never deducted from salary and never deposited the same with the appellant.  This insurance policy stood lapsed for non-payment of premium for the months of September and October, 2010, therefore, the appellant has rightly repudiated the claim of the respondent on the basis of terms and conditions of the insurance policy. 

11.     The District Forum has not properly considered the facts and circumstances of the case and has wrongly allowed the consumer complaint per impugned order, which cannot legally be sustained and is liable to be set aside and the consumer complaint is liable to be dismissed. As such, the appeal is fit to be allowed.

12.     For the reasons aforesaid, the appeal is allowed.  The impugned judgment and order dated 22.10.2013 passed by the District Forum, Haridwar is set aside and the consumer complaint No. 307 of 2011 is dismissed.  No order as to costs.