LIC OF INDIA & ANR ; BRANCH MANAGER vs MANIKAPPA N BHANDARI

K.S. Chaudhari, Presiding Member

[1] This revision petition has been filed by the petitioners against the order dated 17.03.2010 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (in short, ''the State Commission'') in Appeal No. 2728/2009 The Div. Manager, LIC & Anr. Vs. Mr. Manikappa N. Bhandari by which, while dismissing appeal, order of District forum allowing complaint was upheld.

[2] Brief facts of the case are that complainant/respondent had taken two insurance policies in the name of his son Dinesh Kumar Bhandari. Policy No. 630589748 for Rs.1,50,000/- and Policy No. 630589747 was for Rs.20,000/-. Maturity date of both the policies was on 1.2.2026. The policies were commenced from the year 1996. The complainant is the nominee under both the policies. Since whereabouts of the insured was not known he is presumed to be dead. Therefore, he made claim before the OPs. On the direction of the OPs to provide proof of death of insured he filed a suit in Civil Court wherein a decree was passed on 29.8.2006. He produced the order of the Court before the OPs but the OPs sent a cheque for Rs.11,258/- as paid up value. As per the terms and conditions of the policies on the death of the insured the Insurance company has to pay the full insured amount and accident death benefit of Rs.3,00,000/-. Since the OPs did not settle his claim he got issued legal notice to them. Thereafter, he approached the insurance Ombudsman on 19.2.2007. The Ombudsman also did not settle the claim of the complainant. Thereafter, he made application before the Zonal Office Consumer Relation Manager (claims) of the OP which has also not given any reply to him. Alleging deficiency on the part of OP, complainant filed complaint before District Forum. OP resisted complaint, admitted issuance of policies and submitted that complainant had approached the OP Corporation by writing letters on 4.2.1999 and 27.2.1999 to Dharwad branch office informing about the disappearance of his son Dinieshkumar. The OPs office after receiving the letters from the complainant gave reply informing him to keep the policies in force by paying the premiums regularly failing which the policy will be lapsed. Complainant has kept the policies in force till February, 2004 and he requested the OPs to adjust the premium due from the amount payable to him by the OPs under policy no. 630589747. It is very evident from this that the complainant was well within his knowledge to keep the policies in force till he obtains a declaration from the court of law with regard to the missing complaint of his son. It is further stated in the written statement that OPs have requested the complainant by writing letter on 19.4.2005, 1.6.2005 and 11.7.2005 to provide the proof of death of the insured Dineshkumar Bhandari from the competent authority to process the claim on merit. The complainant has produced the copy of the judgment of Civil Court for presumption of death of life assured. After receiving the said order OPs processed the claim and found that said policies were in lapsed condition due to non-payment of premium from February, 2005. It was further stated that as polices stood lapsed, complainant was entitled to get paid up value which has been paid by OP and has been received by complainant without any protest. OP denied any deficiency and prayed for dismissal of complaint. Learned District Forum after hearing both the parties allowed complaint and directed to OP to pay Rs.1,50,000/- and Rs.20,000/- under the policies, but were directed to deduct amount already paid and further directed OP to pay Rs.3,000/- as compensation. Appeal filed by OP was dismissed by learned State Commission vide impugned order against which, this revision petition has been filed.

[3] Heard learned Counsel for the parties and perused.

[4] Learned Counsel for the petitioner submitted that inspite of non-applicability of claim concession clause, learned District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal; hence, revision petition be allowed and impugned order be set aside and complaint be dismissed. On the other hand, learned Counsel for the respondent submitted that order passed by learned State commission is in accordance with law; hence, revision petition be dismissed.

[5] It is not disputed that complainant obtained two insurance policies for his son and his son disappeared. It is also not disputed that complainant intimated to OP and OP asked complainant to keep policies alive by making payment of premium. It is also not disputed that complainant obtained order dated 29.8.2006 declaring insured as dead in civil suit filed on 22.10.2005 meaning thereby, death was presumed from 22.10.2005. OP pleaded that premium has not been paid for the month of February, 2005 and so policy stood lapsed on 22.10.2005. Learned Counsel for the respondent submitted that as per circular issued by appellant, respondent was entitled to claim whereas learned Counsel for the petitioner submitted that aforesaid circular was not applicable to the policy obtained by insured.

[6] Admittedly, Bima Kiran Policy (without profits) was issued by OP in favour of insured. As per terms and conditions of this policy, grace period of one month was allowed for payment of defaulted premium and if premium is not paid before expiry of the dates of grace, policy lapses. Admittedly, no payment of premium was made which was due in February, 2005 and policy stood lapsed before his death presumed to be on 22.10.2005.

[7] Now, the core question to be decided is whether claim concession rules were applicable to this policy. This Bima Kiran Policy (without profits) was introduced on 15.7.1994 and was withdrawn on 18,2,2002 and in this policy reference has been given to circular dated 27.6.1994 and 19.7.1994. As per circular dated 27.6.1995 claim concession clause was not made applicable to this policy and payment of basic sum assured together with loyalty addition on death of life assured was payable only when policy was in full force on the date of death. It has specifically been mentioned in this policy that basic/extended claim concessions are not applicable to this policy and after expiry of dates of grace, policy will be treated as lapsed and full death sum assured is not payable as death claim and payment of lapsed policy is to be made as mentioned in this circular. Learned District forum allowed complaint on the basis of aforesaid claim concessions and learned State Commission also upheld order of District forum on the basis of aforesaid claim concessions as they were issued by OP. When aforesaid claim concessions were not made applicable to Bima Kiran Policy (without profits) and were excluded specifically, complainant was not entitled to get maturity amount on the basis of aforesaid concessions clause and learned District forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal and impugned order is liable to set aside.

[8] OP has already made payment of paid up value as payable under the lapsed policy and complainant is not entitled to any more amount in the policy.

[9] Consequently, revision petition filed by the petitioner is allowed and impugned order dated 17.03.2010 passed by State Commission in Appeal No. 2728/2009 The Div. Manager, LIC & Anr. Vs. Mr. Manikappa N. Bhandari and order of District forum dated 15.7.2009 passed in Complaint No.180/2007 - Mr. Manikappa N. Bhandari Vs. The Div. Manager, LIC & Anr. is set aside and complaint stands dismissed with no order as to costs.