Life Insurance Corporation of India vs Rattan Singh

THIS appeal is directed against the order of the District Forum, Mandi, dated 27.7.1999 whereby the District Forum has ordered the appellant/ opposite party to pay a sum of Rs. 1,00,000/- with bonus to the respondent/complainant alongwith interest @ 12% per annum from the date of repudiation of the claim till actual payment. In addition, appellant/opposite party has also been ordered to pay Rs. 2,000/- as compensation and costs.

THE facts which are not in dispute are that respondent/complainant (hereinafter to be referred to as the complainant) assured his daughter Miss Raj Deep Kaur under "Jeevan Sukanya Policy" for a sum of Rs. 1,00,000/- by paying premium of Rs. 9,772/- per year. After the premium was paid upto April, 1997, his daughter unfortunately died in an accident on 9.1.1998 and the F.I.R. was lodged and the claim was also preferred with the appellant/opposite party (hereinafter to be referred to as the L.I.C.), but unfortunately the assured amount was not settled and paid by the L.I.C. so far. Hence complaint. The L.I.C. by relying upon the Special Provision No. 2 in the Life Insurance policv - Jeevan Sukanya, has tried to repudiate the claim. Special provision is quoted as under : "This policy shall stand cancelled in case the Life Assured shall die before the deferred date and in such event, provided the policy is than in full force, a sum of money equal to all the premiums paid towards premium waiver benefit if any, shall become payable to the person entitled to the policy money."

There is no dispute between the parties that the policy was in force at the relevant time of death of Miss Raj Deep Kaur in the accident. However, according to the L.I.C. the risk will commence after two years of the date of commencement of the policy and in this case, the proposal was given on 16.1.1996 and the deferred date should be two years after the date of proposal i.e. 16.1.1998 and the life assured has died within two years i.e. on9.1.1998 well before the deferred date i.e. 16.1.1998 and the complainant is only entitled to the sum of money equal to all the premiums paid towards premium waiver benefit if any, in terms of the policy.

THIS stand of the L.I.C. is wholly without any basis. The L.I.C. has tried to show that the policy commences from the date of proposal which in this case is 16.1.1996 and if two years of deferment is reckoned from 16.1.1996, the risk will commence after 16.1.1998, whereas the life assured has died before 16.1.1998 i.e. on 9.1.1998. We are afraid the date of proposal has nothing to do with the commencement of the policy. The very perusal of the policy will show that the date of commencement of the policy has been given as 28.4.1995 in the contract of insurance and as per own showing of the L.I.C., the risk will commence after two years of the commencement of the policy which in this case strictly in terms of the policy will start from 28.4.1995 and the deferred date after two years would be 28.4.1997 and the life assured has admittedly died after two years of deferred period. Since the liability of insurance arise under the contract of insurance, the date of commencement as given in the policy itself has to be taken into consideration, although the life assured has proposed for assurance on 16.1.1996. Moreover, the premium admittedly has been paid from 28.4.1995 and by the time the death of the life assured took place, as already stated, three yearly instalments of premium had been paid. The learned Counsel for the L.I.C. has tried to make out his case from certain guidelines/ instructions placed on record regarding the Jeevan Sukanya Policy.

AT the very outset we may notice that these instructions/guidelines are not part of the contract of insurance as would be discussed hereinafter, and the parties are essentially governed by the terms and conditions of contract of insurance and as such they are wholly inapplicable. Even otherwise, these instructions cannot advance the case of the L.I.C, as in accordance with instruction No. 5, the risk will be covered two years after the date of commencement of the policy which in this case would be 28.4.1997, as the commencement of the policy dates back and starts from 28.4.1995. We have examined the terms of !he policy in depth and we do not find anything in the Life Insurance policy which stipulates the deferred date or the period for which the risk of insurance will not be covered. Since the liability of insurance is governed by the terms of the contract of insurance and there is no mention of the deferred date and no period of deferment has been stipulated, the complainant is legitimately entitled to the claim and it cannot be defeated on this ground. It is settled position in law that the purpose of the Life Insurance Policy is to compensate the life assured and if resort is made to certain instructions which are not part of the contract, the very purpose of the Life Insurance Policy is defeated. While pursuing the policy of insurance which is nothing but an agreement between the parties, commercial practice cannot be ignored.

WE are in agreement with the findings of the District Forum.

THERE is no force in this appeal and is accordingly dismissed with no order as to costs. Appeal dismissed.