DISTRICT CONSUMER DISPUTES REDRESSAL FORUM
DEOGARH
Shri P.K. Dash, President and Shri P. C. Mahapatra, Member
- Susanta Kumar Mahapatra,
At/- Pradhanpat Road,
P.O./ Dist.- Deogarh. … Complainant.
- The Branch Manager,
Life Insurance Corporation of India,
Kuchinda Branch,
At/PO – Kuchinda,
Dist. - Sambalpur. … Opposite Party
CD Case No.15/2015
Date of Hearing : 04.11.2015 , Decided on 04.11.2015.
Counsel for the parties :
For the Complainant : Nemo For the Opposite Party : Shri Pramathesh Guru, Advocate
O R D E R
PRABHAT KANT DASH, PRESIDENT – The genus of the case lies in the fact of non settlement of the claim of the complainant by the OP who happens to be the Branch Manager of Life Insurance Corporation of India ,Kuchinda Branch, At/PO-Kuchinda having official jurisdiction over Deogarh Revenue District, in relation to an Insurance Policy issued in favour of the complainant.
Succistinctly the factual matrix of this case as contended by the complainant, are:
2. As contended by the complainant, a permanent resident of Pradhanpat Road, PO/PS/Dist-Deogarh, he had entered in to an agrrement/contract for an Life Insurance Policy marketed under the Brand name BIMA GOLD by the OP’s Company i.e. Life Insurance Corporation of India bearing Policy No.593021648 with date of commencement of the policy and Risk being 28.03.2006 and 31.03.2006 respectively for a Sum Assured(Under Basic Plan) amount of Rs.5,00,000/- and Accident Benefit Rider Sum Assured amount of Rs.5,00,000/- on payment of Rs.34,984/- as first premium for the purpose. The maturity date of the policy was 28.03.2022 and unfortunately the complainant owing to his own ill-health could not make payment of any yearly premium further which he states to be not intentional and was due to the fact that it was beyond his control to pay the premiums. It has been contended further that due to the exigency of medical treatment of his wife, the complainant requested the OP to refund the premium amount paid earlier and approached OP who in response remained silent resulting in financial loss to him. As a result of such deficient service complainant has contended to have sustained financial loss and to have suffered from mental pain and agony. Hence the complaint praying therein for relief in the shape of order OP after hearing both the sides to (i) refund the premium amount of Rs.34,984/- with interest @12%, (ii) pay Rs.50,000/- towards compensation for mental agony & harassment and (iii) pay Rs.10,000/- towards cost of litigation.
3. In the Counter filed by the Opposite Party through the authorized official, the Administrative Officer, LIC of India, L & HPF Department, Divisional Office, Sambalpur, submissions made therein are as follows:
i) The OP, Life Insurance Corporation of India is a Statutory creation viz. Section(3) of the Life Insurance Corporation Act,1956. Sub-Section (3) of Section 6 of LIC Act,1956 stipulates that in the discharge of its functions, the Corporation shall act so far as may be on business principle. Further the Corporation has framed rules, regulations and has issued instructions in the form of circulars, manuals etc. which uniformly apply to all its offices. Also the Policy Bond, which is the document of contract between the Life assured and Insurer has the force of law and the conditions and previlleges contained there in are binding on both the parties to the contract. So in the event, when either party fails to observe his contractual obligation, the other party is absolved from his legal liability under the contract.
ii) OP challenging filing of such a complaint before this Forum by the complainant has stated that he has not approached with clean hands rather the instant complaint is false, malicious, incorrect, malafide and is nothing but an abuse of the process of law. It is an attempt to waste the precious time of this Forum as it has been filed just to avail undue advantage. The complaint is liable to be dismissed – it has been urged by OP, u/s-26 of the CP Act,1986.
iii) Admitting the averment made in Para 3 of the complaint, OP has stated that a policy bearing No.593021648 for sum assured of Rs.5,00,000/- under Table and Term – 174/16/16, DOC – 28/03/2006 with instalment premium of Rs. 35,484/- instead of Rs.34,984/- as stated in the complaint petition.
iv) While denying to have knowledge about contents of the averments made in para-4, OP has admitted the fact that the policy issued was to be matured on 28.03.2022.
v) While preferring not to make any comment on averments made in para-5 of the complaint petition, OP has stated that the policy in question is under yearly mode of premium payment. Complainant had deposited the the risk-premium only at the time of inception of the policy and after that not a single premium had been deposited and as such the First Unpaid Premium (in short FUP) was due on March 2007. As per rules prevailing the life assured has to pay the premium due within the days of grace i.e.30 days of FUP.However within six months of FUP, if the policy holder desires, he can pay the unpaid premium with interest without any evidence of health and after which the policy shall be lapsed. The lapsed policy can be revived within five years from the date of FUP only as per existing rules of the Corporation. In the instant case, if the policy holder would have been interested to revive the lapsed policy, he could have done so within March 2012. But the policy holder have not taken any initiative to do the same.
vi) Averment made in Paras – 6,8 & 9 in the complaint being denied it has been submitted by OP that by virtue of sub-section(1) of Section 113 of the Insurance Act. 1938, a policy of life insurance under which premiums have been paid for at least 3 full years, policy will be eligible for guaranted surrender value along with cash value of bonus, if any. In the instant case policy holder has deposited premium for one year only. OP has also citing Non-forfeiture Regulations mentioned in Para – 4 of the issued Policy document have prudently denied to have committed any deficiency in Service and there being no valid cause of action, no dispute, the complaint is liable to be dismissed.
4. Heard both the parties on 05.10.2015 & 04.11.2015.Having heard and on perusal of records the following are the findings :
(a) Beyond any doubt It is established that :
(i) There was an Insurance contract between both the parties vide Life Insurance Policy marketed under the Brand name BIMA GOLD by the OP’s Company i.e. Life Insurance Corporation of India bearing Policy No.593021648 with date of commencement of the policy and Risk being 28.03.2006 and 31.03.2006 respectively for a Sum Assured(Under Basic Plan) amount of Rs.5,00,000/- and Accident Benefit Rider Sum Assured amount of Rs.5,00,000/- on payment of Rs.34,984/- as first premium for the purpose. The maturity date of the policy was 28.03.2022
(ii) The complainant had only deposited the first installment/Premium of Rs.35,484/-There after no premium has been paid by the complainant.
(b) It is undisputed fact that both the Life assured and Insurer have agrred to abide by conditions and previlleges of this Insurance Contract, which has been made available on the body of the Policy Document.
(c) Para 2 of the Conditions and Previlleges of the executed Bond states as under:
“Payment of Premium - A grace period of one month but not less than 30 days will be allowed for payment of yearly, half yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the policy will be valid and the sum assured paid after deduction of the said premium as also the unpaid premiums falling due before the next anniversary of the policy. If the premium is not paid before the expiry of days of grace, the policy lapses.
The premium payble will be “total installment premium” which is inclusive of
(i) Installment of premium for basic plan;
(ii) Installment of accident benefit rider premium, if opted for.”
In the instant case Complainant had deposited the risk-premium/First Premium only at the time of inception of the policy in March 2006 and as such the next Yearly Premium/ First Unpaid Premium (in short FUP) was due on March 2007. As per Conditions & Previlleges, the life assured had to pay the premium due within one month of grace which shall not be less than 30 days of FUP i.e. April 2007, which had not been done. As such the Policy No. 593021648 deemed to have been lapsed.
However within six months of FUP, if the policy holder desires, he can pay the unpaid premium with interest without any evidence of health and after which the policy shall be lapsed. The lapsed policy can be revived within five years from the date of FUP only as per existing rules of the Corporation. In the instant case, if the policy holder would have been interested to revive the lapsed policy, he could have done so within March 2012. But the policy holder have not taken any initiative to do the same.
(d) Para - 3 of the Conditions and Previlleges of the executed Bond states as under:
“Revival of Discontinued Policies: If the policy has lapsed, and the period of Auto-cover, if applicable, as defined in(4) below is over, it may be revived during the life-time of the life-assured, but within a period of five years from the date of 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 the arrears of premium together with interest( compounding half yearly) at such rate as may be prevailing at the time of the payment. The Corporation reserves the right to accept at original terms or accept at revised terms or decline the revival of discontinued policy. The revival of the discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the life assured. Revival of of Accident Benefit Rider will only be considered along with revival of the Basic Policy and not in isolation.”
While Para – 4 of the Conditions and Previlleges of the executed Bond states as under:
“Non-forfeiture Regulations: If after atleast two full years premium 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 FUP. This period of two years from FUP shall be Auto Cover Period. During the Auto Cover Period, the life assured can pay one or more installments of premium 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 the term of the Policy.
Notwithstanding what is stated above, if after at least three full year’s premium 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 FUP, but shall subsist as a paid up policy for an amount equal to the total premium paid (excluding any extra/optional premium) less the survival benefits paid earlier, if any. This amount shall be called as Paid Up Value. The Paid Up Value shall be payble on the date of maturity or at Life Assured’s prior death. No survival benefits shall be payble under Paid Up Policies. The policy thereafter be free from all liabilities for payment of 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.”
On conjoint reading both the Paras, in the instant case, as only a single/first premium is paid and no subsequent premiums are paid either two full years or three full years, the Policy has not attained/qualified to attain the status of Paid Up Policy. Therefore claim of any description does not accrues upon the OP strictly in consideration of the Conditions and Previlleges agreed upon by both the Life Assured and the Insurer.
(e) In the case of United India Insurance Company Ltd. Vrs Harchand rai Chandanlal [IV(2004) CPJ 15] Hon’ble Court have held as here under:
“……. Held, the terms of the policy shall be govern the contract between the parties and they have to abide by the definition given therein, and all these expressions appearing in the policy have to be construed as it is and something cannot be added, subtracted or substituted……..”
(f) Similar view has also been taken by the Hon’ble Apex Court in the case of Surajmal Ramniwas Oil Mills (P) Ltd Vrs. United India Insurance Company & Anr, which reads as hereunder:
We arrive from above factual matrix and findings that OP suffers from no deficiency of service and no liability can be cast upon him. Since contract between the Life assured and Insurer has the force of law and the conditions and previlleges contained therein are binding on both the parties to the contract. So in the event, when either party fails to observe his contractual obligation, the other party is absolved from his legal liability under the contract. As in the instant case the complainant has failed in complying to the Conditions and Previlleges agreed upon, the other party i.e. Life Insurance Corporation of India is absolved automatically from any of legal liabilities arising out of the instant contract of insurance.
Under the aforesaid premises, I order as below:
O R D E R
The complaint is dismissed. No relief is awarded.
Office is directed to supply the first copies of the order to the parties free of costs receiving acknowledgement of the receipt thereof.
Order pronounced in the open court today i.e. on 4th. day of November, 2015 under my hand and seal of this forum.
I agree,
( P.C. Mahapatra) ( P.K. Dash)
MEMBER PRESIDENT
Dictated and Corrected by me.
