Life Insurance Corporation of India vs ASHA GARG

AGAINST Double Benefit Accident Policy of Rs. 50,000, the District Forum has vide impugned order dated 18.8.1998 directed the appellant Insurance Company to pay Rs. 1,00,000 to the widow of the deceased with 12% interest and Rs. 1,000 as cost of litigation. Feeling aggrieved the appellant has preferred this appeal.

THE policy was taken on 28.8.1989. Admittedly the half-yearly premium was due on 28.8.1990. THEre was also provisions of 30 days grace period to pay the premium as per terms of the policy and if the premium is not paid in the grace period policy lapses. At the same time it was also term of the contract that lapsed policy can be got renewed within five years with the consent of the appellant Insurance Company but during the lifetime of assured after the premium notice of schedule of late fees is given and the policy stands renewed automatically and automatic renewal takes place if the premium with late fees is paid within six months of the due date of the premium. It is undisputed that assured Mr. Yogender Garg died on 7.1.1991 and half-yearly premium was due on 28.8.1990. According to the respondent the deceased sent the amount of premium along with late fees through letter sent under UPC on 2.1.1991. But according to the appellant the said payment was made on 10.1.1991 on cash counter, which was accepted by the clerk concerned as the clerk concerned did not know about the death of the assured. Question whether premium was paid within stipulated period including the grace period and also during the period when the lapsed policy can be renewed was gone into by the District Forum in extensive details. After perusing the various documents, register of the appellant, proofs with regard to the letters sent through UPC along with premium, the District Forum also took into consideration the plea of the widow of the deceased that it was not possible for her to tender a cheque at the cash counter on 10.1.1991 because it was the third day of the death of the deceased and his ashes were to be taken to Haridwar and on the same evening Uthavani/Chautha of the deceased was to take place at his residence. The plea of the appellant that the story of tendering the cash at the counter on 10.1.1991 was fabricated one, the District Forum repelled it by observing that if the widow of the deceased had sent somebody to deliver the cheque at the counter on 10.1.1991 to create evidence the said person would have ensured that receipt of the payment of the premium is taken by him but the copy of the premium paid on behalf of the deceased shows that the receipt was sent by post on 7.1.1991 and this circumstance confirms the correctness of the version of the respondent.

In view of the nature of the facts and the dispute as to whether the premium which was due was sent on 2.1.1991 through UPC or was tendered in cash after the lapse of the policy or the death of the insured, we do not feel persuaded to interfere with the finding of facts returned by the District Forum as the District Forum has gone into each and every possible aspect, but feel inclined to quash the interest awarded by the District Forum as interest is awarded only where there are strong equitable grounds or where there is term of contract between the parties. Otherwise in terms of Section 14(i) of the Consumer Protection Act, 1986 an amount of compensation is payable to the consumer as to the loss or injury suffered by him due to the negligence of the opposite party.

IN the given facts and circumstances of the case we award compensation of Rs. 15,000 inclusive of cost of litigation over and above the insurance amount of Rs. 1,00,000. The payment shall be made within one month. The appeal is partly allowed and disposed of in above terms. Bank Guarantee/FDR, if any, furnished by the appellant be returned forthwith.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room. Appeal partly allowed.