Life Insurance Corporation vs PERMILA SINGH

THIS appeal is directed against order dated 7th July, 1992 passed by the District Forum, Hazaribagh in Complaint Case No. 16 of 1991 filed by the respondent here who was complainant against the appellant who was the opposite party before the District Forum.

THE facts of the case leading to this appeal may be briefly stated. THE complainant happens to be the widow of late B.N.P. Singh, who had secured a Life Insurance Policy No. 82129357 dated 28.3.86 for Rs. 35,000.00. THE said B.N.P. Singh died on 3.2.89. THEreafter the complainant filed insurance claim before the opposite party in its Branch Office at Giridih. THE complainant was informed by the Branch Office of the Life Insurance Corporation at Giridih vide letter dated 8.6.89 that the Policy of the deceased lapsed before his death and therefore her claim can not be honoured. On being noticed the opposite party appeared and filed written version challenging the maintainability of the case and controverting the claim of the complainant. The claim of the complainant has been challenged on the grounds mentioned hereinafter. The Policy had lapsed before the death of the deceased and hence the claim cannot be honoured. The deceased was the patient of hyper tension and he had gone on sick leave on several occasions before the revival of the Policy which had lapsed once before also. The Life Insurance Policy taken by the deceased on 28.3.86 the mode of the payment of the premium of Rs. 967.40 being quarterly payable on the 28th of the month, lapsed after the payment of first instalment of the premium which was revived on 25.5.87 on the payment of all the premium instalments dues and thereafter the Policy holder paid premium, for 28.6.87,29.9.87, 28.12.87, 28.3.88, 26.6.88 and 28.9.88. The next premium became due on 28.12.88. But the deceased gave a cheque for Rs. 937.40 only towards the payment of that instalment of the premium though the amount of premium was Rs. 967.40. Hence the cheque was returned to him and he was asked to pay the premium due. But that premium was not paid by the deceased and consequently the policy lapsed after the expiry of the grace period and it was not revived and the deceased died.

The District Forum on the basis of the materials placed before it accepted the case of the complainant and has ordered for payment of Rs. 35,000/-, the amount for which the deceased had been insured after deduction of the last premium payable by the deceased along with 12% interest and also for a compensation of Rs. 5,000/- for the mental anxiety caused to the complainant.

THE learned Counsel for the appellant has assailed the judgment of the District Forum mainly on the ground that as the Policy had already lapsed due to non-payment of the instalment of the premium by the deceased, the claim of the complainant was not maintainable and that the complainant was informed regarding that by letter dated 8.6.89, immediately after the complainant had filed the claim before the Insurance Company and hence there was no deficiency in service on the part of the Insurance Company and thus the case was not maintainable under the Consumer Protection Act. We find substance in this submission made on behalf of the appellant. It has been held in number of cases by the National Commission that if the claim of the insured is examined and repudiated within reasonable period by the Insurance Company on valid grounds, there is no deficiency in service on the part of the Insurance Company and consequently the case under the Act is not maintainable. We are fortified in our view by the decision of the National Commission in the case of Jagdish Prasad Dagar, Bangalore v. Senior Divisional Manager, Life Insurance Corporation of India Bangalore, II (1992) CPJ 493 (NC) (First Appeal No. 153 of 1991) decided on 5.3.92. It has been further submitted on behalf of the appellant that at the time of revival of the Policy the insured has suppressed facts regarding the queries about his health and with regard to the query if he has suffered from any other illness requiring treatment for more than a week he answered in negative, but the paper produced by the complainant regarding the period for which he had gone on leave, it appears that the insured had gone on leave because of his illness for the period 8.5.86 to 20.5.86, and on this ground also the claim made by the complainant can not be honoured. On examination of the papers produced before the District Forum this submission made on behalf of the appellant stands fully supported.

HENCE we find and hold that there were grounds for the Insurance Company to repudiate the claim of the complainant and it was repudiated within reasonable time. HENCE there was no deficiency in service on the part of the Insurance Company. HENCE the case was not maintainable under the Consumer Protection Act. In the result the appeal is allowed. The impugned order is set aside. There is, however, no order as to costs. Appeal allowed without costs.