LIFE INSURANCE CORPORATION OF INDIA vs DHARAMSHILA KUNWAR

K.S. Chaudhari, Presiding Member

[1] This revision petition has been filed by the petitioner against the order dated 29.01.2015 passed by the Bihar State Consumer Disputes Redressal Commission, Patna (in short, ''the State Commission'') in Appeal No. 178 of 2012 Dharamshila Kunwar Vs. Life Insurance Corporation of India by which, while dismissing appeal, order of District forum allowing complaint was upheld.

[2] Brief facts of the case are that Complainant/respondent''s son Shiv Narayan Singh obtained insurance policy of Rs.2,50,000/- for a term of 30 years from OP/petitioner on 28.1.2002. Insured deposited premium. Insured met with an accident on 8.7.2005 at 5.30 p.m. and succumbed to injuries on the same day. It was further submitted that as per policy accidental risk was Rs.5,00,000/-. Inspite of every efforts claim has not been paid by OP. Alleging deficiency on the part of OP, complainant filed complaint before District Forum. OP resisted complaint and submitted that insured deceased paid only one premium towards policy and policy was in lapsed condition. It was further submitted that accident took place at 12.30 in the noon and premium for revival of policy was deposited on the same day at 3.07 p.m. It was further submitted that policy can be revived only after furnishing D.G.H and other necessary documents. It was further submitted that fraudulently premium along with penalty has been deposited to gain benefits and prayed for dismissal of complaint. Learned District Forum after hearing both the parties allowed complaint and directed OP to determine the claim of complainant after obtaining indemnity bond. Appeal filed by OP was dismissed by learned State Commission against which, this revision petition has been filed.

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

[4] Learned Counsel for the petitioner submitted that inspite of no valid revival of insurance policy, 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''s son Shiv Narayan Singh obtained policy of Rs.2,50,000/- from OP on 28.1.2002. It is also not disputed that insured paid only one premium upto 6.7.2005 and policy lapsed. It is also not disputed that payment for revival of policy along with late fees totaling Rs.8,567/- was deposited with OP on 8.7.2005 at 3.07 p.m.

[6] Now, the core question to be decided is whether premium for revival of policy was deposited before accident or after accident. Learned Counsel for the petitioner submitted that accident took place at 12.30 noon whereas learned Counsel for the respondent submitted that accident took place at 5.30 p.m. Learned counsel for the petitioner has placed reliance on final report in which it has clearly been mentioned that Shiv Narayan Singh met with an accident at 12.30 in the noon on 8.7.2005 and report was lodged by Mr. Sanjay Kumar, LIC Development Officer on the same day at 8.15 p.m. This document also contains statement of Mr. Sanjay Kumar, LIC Development Officer in which he mentioned that on 8.7.2005, at 12.30 in the noon LIC agent Shiv Narayan Singh was going after doing work from LIC on his motor cycle and as soon as he reached near Josoiyan turn, truck hit him from back and he was seriously wounded and this information was received in LIC office. This report makes it clear that insured Shiv Narayan Singh met with an accident at 12.30 in the noon and not at 5.30 p.m. Learned Counsel for the respondent could not place any document on record to substantiate his contention that accident took place at 5.30. Thus, it becomes clear that after accident premium along with late fee was deposited by someone with OP and this amount could not have been deposited by insured himself, as he sustained injuries on account of which, he died on the same day.

[7] Condition No. 3 of the policy runs as under: "Revival of Discontinued or Lapsed Policy: When the premium is not paid within the days of grace, the policy lapses without acquiring, any paid up value, but it may be revived during the life time of the Life Assured, but within a period of 5 years from the due date of the first unpaid premium and before the date of maturity, on production of evidence of health and habits of the Life Assured (including a medical report on his life at his own expense) to the satisfaction of the corporation, and of evidence to show that there has been no adverse change in the personal or the family history or occupation and on payment of premiums in arrears with interest thereon at such rate as may be fixed by the Corporation from time to time compounding half yearly reckoning from the due date of such premium paid late. The Corporation reserves the right to accept or decline the revival of the discontinued Policy. The revival of the discontinued Policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the Life Assured.

This condition makes it clear that no doubt policy can be revived within a period of 5 years of unpaid premium along with interest, but only on production of evidence of health and habits of the life assured including medical report of his life to the satisfaction of the corporation. Admittedly, no evidence regarding health of insured was produced while depositing premium as insured sustained severe injuries before depositing unpaid premium, it cannot be presumed that his health was normal for revival of lapsed policy and in such circumstances, merely by depositing unpaid premium with late fees, policy does not stand revived.

[8] Insured himself being agent of LIC was well aware about conditions of policy. When policy stood lapsed on the date of insured''s death, complainant was not entitled to any claim on the basis of this policy and learned District forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal and revision petition is to be allowed.

[9] Consequently, revision petition filed by the petitioner is allowed and order dated 29.1.2015 passed by learned State commission in Appeal No. 178 of 2012 Dharamshila Kunwar Vs. Life Insurance Corporation of India and order of District Forum dated 24.1.2012 passed in Compalint No. 45/2008 Ms. Dhararam Shila Kunwar Vs. Branch Manager, LIC of India is set aside and complaint stands dismissed with no order as to costs.

[10] Petitioner is directed to refund Rs.8,567/- deposited on 8.7.2005 with 12% p.a. interest from the date of deposit till payment.