ARVIND KAUR vs Life Insurance Corporation of India

WE have heard Mr. Rohit Ahuja, Advocate for the appellant Smt. Arvind Kaur in this appeal filed against judgment and perused order dated 21.4.2004 passed in Complaint Case No. 1013 of 2002 by District Consumer Disputes Redressal Forum-I, U.T., Chandigarh [for short hereinafter referred to as the District Forum] and have perused the certified copy of the impugned judgment and order as also the documents placed on record of the appeal file.

THE appellant filed claims under the LIC Policy Nos. 160892213, 160892214 and 160892215 issued by the Life Insurance Corporation of India (for short hereinafter referred to as the LIC of India), the respondents on 28.1.1997. THE aforesaid policies were issued under Table No. 111 for a period of 30 years and the policy was known as Bima Kiran Policy having been in circulation since 27.6.1994. THEse policies had been taken by Shri Jasjit Singh son of the appellant who had in all the three policies nominated his mother Smt. Arvind Kaur, the appellant/complainant. THE premium under the said policies were paid except for the last two instalments prior to the death of Shri Jasjit Singh, which took place on 25.2.2002 due to cardiac arrest. THE claims filed by the appellant under the three policies aforesaid were repudiated on the ground that the last two premiums remained unpaid and the policies were paidup policies. The learned Counsel for the appellant contended that the case was covered by Clause (b) of circular dated 1.10.1987 (Copy Annexure R-1) as the insured Shri Jasjit Singh had died between three and six months of the due date of the first unpaid premium and claimed benefit of Clause (b) aforesaid of the circular, which provided as under: "(b) if the death of the Life Assured were to occur between three and six months of the due date of the first unpaid premium, consideration of claim to the extent of a proportionate notional paidup value on the basis of actual premiums paid."

The learned Counsel for the appellant also drew our attention to Annexure R-2 issued by the LIC of India, Central Office on 12.6.1989 on the subject "Relaxation in the matter of settlement of Death Claims" and referred to the third paragraph of this letter, which reads as under: "The matter was, therefore, considered and it has been decided that the concessions offered by our circular mentioned above vide items (a), (b) and (c) should be given in respect of all policies where the premiums have been paid for two years or more (but less than three years), even when the death has taken place in the fourth year."

THE defence taken by the respondents - LIC of India before the District Forum was that none of these circulars (Annexures R-1 and R-2) were applicable to the policies taken by the deceased Shri Jasjit Singh, the insured inasmuch as the circulars were applicable to the policies, which were already in existence as on 16.10.1987 while the Bima Kiran Policy shown at Table No. 111 came into existence subsequently on 27.6.1994. Since the Bima Kiran Policy being a term insurance plan did not fall under the relaxation clause, no benefit could be extended to the appellant/complainant, which was mentioned in the circulars (Annexures R-1 and R-2). The District forum upheld the contention raised on behalf of the respondents/O.Ps. and held that as the policy was of lapsed status as on the date of death of life insured due to non-payment of premium in the grace period or later and that as the policy was of lapsed status as on the date of death of life insured due to non-payment of premium in the grace period or later and that as the policy was not revived during the life-time of the insured and further the relaxation clauses did not apply to the Bima Kiran Policy being term insurance plan, no relief could be granted to the complainant. The District Forum was, however, of the opinion that the O.Ps. could consider the case of the complainant on compassionate ground. The complainant felt aggrieved and filed this appeal.

THE learned Counsel for the appellant vehemently argued that the circulars providing relaxation in case of death of the insured i.e., annexures R-1 and R-2 were applicable to the policies shown at Table No. 111 i.e., Bima Kiran Policy and benefit of the same ought to have been extended to the complainant. THE learned Counsel for the appellant submitted that the District Forum fell in eror in upholding the contention raised on behalf of the respondent-LIC of India. After carefully considering the two circulars (R-1 and R-2) referred to above, placed on the file of appeal, we are of the considered opinion that the reference to all the policies appearing in the third paragraph of circular dated 12.6.1989 (Annexure R-1) meant all the policies, which were in existence at the time of issuance of the circular and the circular and the circular would not automatically be made applicable to the policies, which were brought in existence subsequently like the Bima Kiran Policy, which came into existence subsequently on 27.6.1994 unless and until the LIC of India issued another circular specifically applying the circulars dated 16.10.1987 and 12.6.1989 (Annexures R-1 and R-2) to the Bima Kiran Policy. We find no error in the finding recorded by the District Forum. There is thus no merit in this appeal insofar as the impugned judgment and order is concerned. However, the appellant may, if so advised, seek remedy by way of filing an appropriate civil suit before the Court of competent jurisdiction. The appeal is disposed of accordingly leaving the parties to bear their own cost of appeal. Copies of this order be sent to the parties free of charge. Appeal dismissed.