Life Insurance Corporation of India vs RAMESH JAIN

LIFE Insurance Corporation challenges order of District Forum, Mansa dated October 18, 1996 whereby direction was given to the Corporation to pay the full amount of insurance policy with benefits of bonus to all the legal heirs of the insured P.K. Jain alongwith Rs. 10,000/- as compensation and costs. It was further observed that the amount of compensation and costs could be recovered by the Corporation from the erring officials of the Corporation found guilty.

AFTER going through the pleadings of the parties and the evidence produced, we find that there is no dispute with respect to certain facts, which can briefly be summarised. P.K. Jain obtained a Life Insurance Policy in the sum of Rs 10,000/- on March 26,1965. The premium payable was yearly. He is alleged to have left his house on February 12, 1973 and thereafter did not return. Report of his disappearance was made to the police on October 3, 1973. The Life Insurance Corporation was informed about his disappearance on August 25, 1988. A civil suitwas filed by the relations of P.K. Jain for a declaration that P.K. Jain should be declared to have died on account of being not heard of for a period of seven years. The said suit was decreed on November 4,1991. The civil suit as aforesaid was filed as the Corporation had declined to make payment of the amount insured.

On the facts as stated above, the question for consideration before the FORA was as to whether there was deficiency in rendering service on the part of the Corporation in not making payment of the entire amount of the insurance policy of Rs. 10,000/- with bonus etc. As would appear, the District Forum held in favour of the complainant-Dr. Ramesh Jain, brother of P.K. Jain. At the outset, it may be stated that in order to claim the entire amount of the insurance policy, it was necessary for the complainant to establish that the policy had not lapsed at the time of death of the insured. This question thus, depends upon the factum of proof of death of the insured. No doubt, if a person is un-heard of for a period of seven years by the persons, who were expected to meet him, however, there cannot be any presumption about the actual date of death. Even in the decree obtained on November 4, 1991, no finding has been recorded about the actual date of death. Learned Counsel for the Corporation relies upon the two decisions of the Punjab & Haryana High Court on the subject where the previous decisions were also referred to, Surjit Kaur v. Jhujhar Singh, AIR 1980 Punjab and Haryana 274 and Har Nand v. The Commissioner, Ambala Division, Ambala Cantt. and Others, AIR 1972 Punjab & Haryana 14. In both these decisions, it was held that only presumption of death can be raised and not with respect to any particular date of death in the case of a person not heard of for a period of seven years.

LAST premium was paid on March 28, 1973 and the next premium was due to be paid on March 28,1974. No doubt, P.K. Jain is stated to have left his house on February 12,1973 when the policy was in force as last premium was paid on March 28, 1973. The policy lapsed for non- payment of premium of March, 1974. Since no presumption of any particular date of death can be raised, it cannot be held that on the date P.K. Jain left his house, he died or in other words, it cannot be held that he died before March 28, 1973, In such circumstances, only paid up value of the insurance policy with bonus as due on March 28, 1974, the day the policy lapsed was payable to the legal heirs of P.K. Jain. For the reasons recorded above, this appeal is allowed. Order of the District Forum is modified with the direction to the Corporation to pay the paid up value of the policy alongwith bonus etc. as payable on March 28, 1974 to the complainant, which would discharge the Corporation of its liability under the policy. The Corporation would pay interest on the aforesaid amount to be determined by the Corporation @ 18% p.a. till payment. The amount if already paid would be adjusted. In case, excess amount stands paid, the Corporation could get it back in restitution proceedings to be initiated before the District Forum. Appeal allowed. _______________