Rajasthan

StateCommission

FA/1246/2013

Life Ins. Co. of India - Complainant(s)

Versus

Sumitra Mathur w/o Late Ashok Kumar Mathur - Opp.Party(s)

Vizzy Agarawal

08 Apr 2015

ORDER

BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1

 

APPEAL NO: 1246/2013

 

Life Insurance Corporation of India,Divisional Office “Jeevan Prakash” Bhawani Singh Road, Jaipur.

Vs.

Sumitra Mathur w/o Late Ashok Kumar Mathur r/o near Rai ji ka Kuan, Yojna Nagar, Salasar Bus Stand,Ward No. 15, Sikar.

 

Date of Order 8.4.2015

 

Before:

 

Hon'ble Mr.Vinay Kumar Chawla-Presiding Member

Mrs. Sunita Ranka- Member

 

Mr. Vizzy Agarwal counsel for the appellant

Mr.Rajesh Mathur counsel for the respondent

 

BY THE STATE COMMISSION

 

This appeal has been filed against the judgment of learned

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DCF Sikar dated 9.10.2013 by which it allowed the complaint.

 

Brief facts giving rise to this dispute are that the son of the complainant took a policy under Jeevan Saral Plan from the appellant company for a sum assured of Rs. 2,50,000/-. The premium was to be paid quarterly w.e.f. 28.2.2010. The complainant's son had not paid the quarterly instalment of premium due in February 2011 and May 2011. However, the instalment due in February 2011 was paid by him on 26.8.2011 and the complainant's son died on the same day. The complainant, his mother filed a death claim with the company which was repudiated on the ground that this policy had lapsed for non-payment of two premiums due in February 2011 and May 2011. A complaint was filed before the learned DCF who rejected the contention of the appellant company on the ground that complainant's son was never informed of the due premiums and the last premium was paid by the complainant even on the date of his death and that was accepted by the insurance company and the policy was automatically revived.

 

The learned counsel for the appellant has drawn our attention to the non-forfeiture regulations and conditions of the policy. He has specifically drawn our attention to the revival of

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discontinued policies. He has submitted that this is not in dispute that premium due in February 2011 and May 2011 were not paid, hence the policy had lapsed. He further submits that the policy can be revived during the life time of the life assured within a period of five years from the due date first unpaid premium and before the date of maturity on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all arrears of premium. The learned counsel argues that though the deceased had paid premium due in February 2011 on 26.8.2011 but policy was not revived since there was another premium over due. As per the condition the policy can be revived only if all the arrears of premium together with interest are paid and the Corporation also reserve the right to accept or decline the revival of discontinued policy. He has also submitted that the learned DCF has erred in awarding the sum assured at Rs.5,29,930/- as the death benefit under this policy is 250 times of the monthly basic premium excluding term rider, DAB premium and any extra premium. In this case monthly premium comes to around Rs. 1000/- and 250 times of monthly premium will come to Rs. 2,50,000/-. He has also argued that if erroneously there was mention of Rs. 5,29,930/-, the complainant cannot take benefit of this error and on this point he has relied on a judgment of Hon'ble National Commission in RP

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No. 3833/2011 ( Virupaxappa Vs. LIC of India ) in which it was held that the complainant cannot take benefit of typographical error. The learned counsel for the appellant has also cited the judgment of Hon'ble Supreme Court in Appeal No. 1089/2008 ( LIC of India Vs. Jaya Chandel). In this matter the different question was under consideration of the Hon'ble Supreme Court and this was regarding grace period during which the premium can be paid.

 

The learned counsel for the complainant has supported the judgment of learned DCF and has cited I (2012) CPJ 318 ( LIC of India Vs. Shanthinath Suresh), IV ( 2011) CPJ 545 (NC) ( ICICI Prudential Life Insurance Co. Vs. Gurmeet Singh).

 

We have heard the learned counsels for the parties and have perused the record.

 

This is not in dispute that premium due in the month of February 2011 and May 2011 was unpaid. It is also admitted that premium due in February 2011 was paid and accepted by the appellant company on 26.8.2011. It is also not in dispute that the policy can be revived within five years from the date of first unpaid premium.

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During arguments it was also conceded by the learned counsel for the appellant company that in case unpaid premium is paid within six months, then no declaration of health and proof of insurability is necessary. In the present case first unpaid premium was due in February 2011 and the premium was accepted by the LIC on 26.8.2011 within six months which means the deceased was not required to submit any declaration of good health or any proof of continued insurability. Since the premium had been accepted by the appellant company with interest, the policy is deemed to have revived devoid and it was no longer a lapsed policy. So our perception is that if unpaid premium is paid within six months then no declaration of health or proof of insurability is required and the policy automatically gets revived. So the policy was revived though the premium due in May 2011 was remained unpaid, incidently the deceased died after few hours of the payment of premium on 26.8.2011.

 

In LIC of India Vs. Shanthinath Suresh case the Karnataka State Commission held that when once the order of revival of policy has been made without collecting arrears of premium together with interest it cannot be argued that revival of policy is void. The learned counsel for the appellant company has argued that since all arrears were not paid, hence the policy

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cannot be revived whereas the argument of the learned counsel for the complainant is that LIC has accepted the premium due in February 2011 and the deceased was not asked to pay the whole amount of arrear on 26.8.2011, hence in view of the principle laid down in this judgment the claim cannot be repudiated.

 

We are also of the view that once the premium due in February 2011 was accepted within six months from the date of unpaid premium, the policy should be deemed to have been revived and the LIC was not justified in repudiating the claim.

 

We do not want to delve on the argument whether it was the duty of the insurance company to inform the complainant of due premiums or it is the duty of the insurer to deposit the premium on due dates without receiving any intimation from the company. This argument is not relevant in the present circumstances.

 

Now the next question is what will be the amount of death claim. The deceased had taken policy under Table 165 Term 35 and the date of commencement of the policy was 28.2.2010 and the maturity date was 28.2.2045. The policy provided the maturity sum assured was Rs. 2,50,000/- and death benefit sum

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assured under main plan was Rs. 5,29,930/-. As per chart attached with the appeal memo, for a person of 23 years with the term of 35 years, the maturity sum comes to Rs. 52933/- per Rs.100/- of monthly premium. The monthly basic premium in the instant case comes to around Rs. 1000/- and therefore, the maturity sum will come to Rs. 5,29,930/-. The appellant company has never pleaded before the learned DCF or in the appeal memo that Rs. 5,29,930/- was erroneously entered in the policy bond and it was a typographical error, so this argument cannot be accepted.

 

In view of the above discussions, we do not wish to interfere with the judgment passed by the learned DCF Sikar and the appeal filed by the appellant is dismissed.

 

 

(Sunita Ranka) (Vinay Kumar Chawla)

Member Presiding Member

 

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