Geeta Devi vs Life Insurance Corporation of India

THIS case has been filed by Smt. Geeta Devi, widow of Late Bhagwati Prasad Jalan alleging negligence against the Life Insurance Corporation of India in the settlement of her claim amounting to Rs. 1,02,000/- the amount for which her husband had got his life insured by the LIC - opposite party on the payment of rest quarterly premium on 28.3.89 under LIC Policy No. 510086636 and she has also claimed compensation against the O.P. for the harassment which she has to undergo due to negligence on the part of the LIC.

THE complainant present her complaint petition on a printed Performa accompanied by statement of facts on a separate sheet of papers before this Commission claiming one lack and fifty thousand rupees as compensation for the harassment she had to undergo due to the alleged negligence on the part of the LIC. Her case is that her husband paid all the quarterly premium due under the Policy and he died on 2.8.90 and she filed her claim before the Insurance Company in respect of that Policy by an application addressed to the LIC which was received by the L.I.C. on 29.8.90 and that she also produced all the papers before the LIC on 2.9.91. But in spite of that the amount covered by that Policy has not been paid to her as a result of which she had to file the present case. Notice was sent to the LIC on the basis of that complaint and in response thereof a letter was sent by the Sr. Branch Manager of the LIC, addressed to the Secretary, State Commission setting forth the counter version of the case. It has been stated on behalf of the Insurance Company that the quarterly premium due for 28.3.90 in respect of the Policy was paid on 23.7.90. But due to heavy rush at the counter it was written as 28.6.90 instead of 28.3.90 against the column "Premium Due Date". It has been averred on behalf of the LIC that the quarterly premium due on 28th June, 90, remained unpaid and as per provisions of the contract prevailing between the insurers and insured, the death risk terminated after expiry of 30 days from that due date as death had taken place with in three years from the date of the commencement of the Policy; and thus the death risk had already terminated from 28.7.90 and that the husband of the complainant died on 2.8.90 and as such the claim of the complainant was not entertain able and nothing was payable in respect of that Policy. It has been further mentioned in that counter version that the complainant had already been informed with regard thereto by letter dated 30.7.91 addressed to her by the LIC. A rejoinder was also filed on behalf of the O.P. stating the facts mentioned above. Thereafter affidavit of the complainant was filed stating that all the premium due under that Policy had been paid by her husband on due dates and that the averments made by the LIC in their counter version to the contrary are false and incorrect. There after a supplementary statement was filed on behalf of the O.P. in which there is the maintainability of the complaint petition has been challenged. It has been stated that nominee of the deceased is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986, as there was no agreement of contract to render any service by the LIC to the nominee nor such a right can be delegated or inherited by an heir or legal representative or a nominee of a consumer, we are not inclined to accept this plea taken on behalf of the O.P. We are supported in our view by a decision of National Commission in M/s. Cosmopolitan Hospitals & Anr. v. Vasantha P. Nair I (1992) CPJ 302 (NC) in which case the National Commission after referring to a passage from Salmond''s Jurisprudence (12th Addition Page-443) have held "It is true that in the definition of the expression "consumer", there are no express words indicating that his legal representative is also included within its scope. But as pointed out by the eminent author in the above passage, by operation of law, the legal representative gets clothed with the rights, status and personality of the deceased for the purpose of enforcing the cause of action which has developed on him. In our opinion, it is consistent with the object and Scheme of the Act and conducive for the achievement and promotion of the legislative purpose underlying the statute to give an extended meaning to the expression "consumer" defined in Sec. 2(1)(d) of the Act so as to include legal representatives of deceased consumers." The National Commission has further observed in this decision that we have to apply the well established principle of interpretation that provisions of a social welfare legislation are to be liberally construed so as to suppress the mischief and advance the remedy. That apart the complainant is beneficiary of the Insurance Policy. The Section 2(1)(d)(ii) which defines consumer with regard to hiring of any service runs as follows : - "2(1)(d). "consumer" means any person who - (i) . (ii) hires any services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires the services for consideration paid or promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person. Now under the Policy this complainant who is the widow of the deceased is the nominee and a beneficiary. Thus she becomes a consumer under this Act. In the case of Jagdish Prasad Dagar v. Senior Divisional Manager, Life Insurance Corporation II (1992) CPJ 493 (NC) the question whether a nominee under a Policy of LIC is a consumer within the meaning of Section 2(1)(d) of the Act was for consideration" before the National Commission and the Commission has observed as follows : - "..there is substance in the contention raised by the appellant that the State Commission was in error in holding that the appellant who had filed the complaint before it in his capacity as ''nominee'' under a policy of Life Insurance will not be a ''consumer'' within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and hence his complaint could not be entertained by the State Commission"

Hence this objection on be half of the LIC cannot be accepted.

Next it has been averred in the supplementary statement on behalf of the O.P. that the Policy of the deceased lapsed before the date of the death of the husband of the complainant because he had failed to pay the premium due within the grace period and the Policy was never revived and hence the complainant was not entitled to any relief under the Act. It has been averred that the 4th premium of the Policy was payable on or before 28th December, 1989 but the premium was paid on 18th April, 1990 i.e. much after the expiry of the grace period for the payment of the 4th quarterly premium and hence the policy lapsed and it was never revived.

NOW this plea was not taken in the counter version sent to this office by the L.I.C., by its letter dated 21st November, 91 addressed to the Secretary of this Commission and its rejoinder and it is for the first time being raised in this supplementary statement which has been filed before this Commission on 1.10.92. It has been mentioned in this supplementary statement that the fact that the 4th quarterly premium for December was not paid during the grace period and was paid on 18.4.90 is borne out by the Photostat copy of the ledger book in respect of that policy which is marked as Annexure-A. But we are not inclined to accept this plea on behalf of the L.I.C. because there is discrepancy between the plea taken on behalf of the L.I.C. in its letter dated 21.11.91 addressed to the Secretary, State Commission and the rejoinder filed on its behalf on the one hand and the statement made in its supplementary statement. In its letter and the rejoinder it is mentioned that the quarterly premium due for 28.3.90 was not paid during the grace period and it was paid on 23.7.90 but due to heavy rush at counter it was written as 28.6.90 instead of 28.3.90 against the column premium due date; and thus quarterly premium due on 28.6.90 remain unpaid and, therefore, the Policy lapsed during the life time of the deceased. In the letter dated 24th July, 91 sent to the complainant by the L.I.C. which has been filed by the complainant, it has been mentioned that the quarterly premium due on 2.8.3.90 had not been paid and the claim is not entertain able. NOW in this supplementary statement a quite different version is being putforth. Photostat copy of the Ledger Book has been filed its Annexure B to the supplementary statement on behalf of the O.P. to support the averment that premium due on 28th December, 89 was not paid. It has been mentioned in the affidavit to this supplementary statement that statements in the supplementary statement are based on the information derived from records. But if this Ledger Book entry was there, there appears no reason as to why it was not mentioned in the letter dated 24.7.91 sent to the complainant, the letter dated 21st November, 91 sent to Secretary of this Commission giving the counter version by and the rejoinder on behalf of the L.I.C. that the premium due on 28th Dec. 1989 had not been paid by the deceased. The complainant has filed the receipt dated 23rd July, 90 along with her complaint to prove that the deceased paid the last quarterly premium due on 28.6.90 on 23.7.90 - i.e. within the grace period. But according to the L.I.C. this payment was for quarterly premium due for 28.3.90, but due to heavy rush at counter it was written as 28.6.90 instead of 28.3.90 against "the premium due date". But no evidence either oral or documentary has been produced by the opposite party to substantiate it. The photo-stat copy of the Ledger Book Annexure-B to the supplementary statement filed on behalf of the O.P. rather indicates that the premium due in March, 90 was paid on 18.4.90 and premium due in June, 90 was paid on 23.7.90. We fail to understand as to how and why the quarterly premium due on 28th March, 1990 and 28th June, 1990 was accepted if the Policy had already lapsed. Hence we see no reason to disbelieve the complainant.

ON the discussion of the facts and circumstances mentioned above we find that the case of the complainant is fully established, and there has been negligence on the part of the L.I.C. who has failed to show any valid reason for refusing the claim of the complainant and the complainant is entitled to get Rs. 1,02,000.00 the sum covered by the Policy. There has been inordinate delay in the payment of the amount to the complainant. Hence the L.I.C. is directed to pay 18% per annum interest on this amount from the date of the filing of this case till the date of its payment to the complainant. L.I.C. is further directed to pay Rs. 10,000/- as compensation for harassment caused and Rs. 1,000/- as cost of the case to the complainant. Complaint allowed with costs.