LIFE INSURANCE CORPORATION OF INDIA vs Shankravva

THIS revision is directed against the order dated 05.06.2012 in appeal no.862/2012 passed by District Consumer Disputes Redressal Commission Bangalore.

BRIEFLY put, relevant facts for the disposal of this revision petition are that daughter of respondent complainant had taken an insurance policy for assured sum of Rs.30,000/ - alongwith other consequential benefits on payment of first premium of Rs.1522/ - in October 2005. The premium was to be paid on yearly basis. Though the complainant ''s daughter was married, she nominated the complainant as beneficiary under the insurance policy. On 08.06.2006, daughter of the complainant respondent was murdered. The deceased assured left behind a minor female child aged about seven years who is in the custody of the complainant. The complainant preferred an insurance claim but the petitioner opposite party declined to honour the insurance policy. This led to filing of the complaint. The petitioner opposite party resisted the complaint. In the written statement, petitioner admitted issuance of the insurance policy on receipt of premium of Rs.1522/ -. The opposite party, however, pleaded ignorance regarding cause of death of the assured and pleaded that as per clause 4 (B) of the insurance policy, the nominee is entitled only to the return of the premium.

THE District Forum on consideration of evidence held the petitioner opposite party to be deficient in service and allowed the complaint with following directions: ''''Complainant ''s complaint is allowed in part as follows: 1. OP shall pay an amount of Rs.30,000/ - ( Rupees Thirty Thousand only) to complainant as assured sum alongwith benefits i.e. vested bonus. 2. OPs shall pay a sum of Rs.15,000 (Rupees fifteen thousand only) towards mental agony caused to the complainant. 3. Cost of complaint is Rs.500/ - (Rupees five hundred only) 4. OP shall comply this order within a month from the date of receipt of order failing which the amount shall carry interest @ 12% p.a. from the date of order till payment is made. 5. Copy of this order be sent to the parties immediately.

BEING aggrieved of the order of the District Forum, the petitioner opposite party preferred an appeal which was dismissed by the State Commission in limine with following observations: ''''Of -course, the appellant herein who appeared before the District Forum filed its version admitted the insurance of the policy and receipt of the premium of Rs.1522/ - but pleaded with regard to the death of Dyamavva. As per clause 4 (b), nominee is entitled only for refund of premium amount paid. The plain reading of clause 4 (b) from the insurance policy, it reads below: ''''Notwithstanding anything within mentioned to the ... ... ..... accident other than an accident in a public place or murder at any time on, or after the date on which the risk under the policy has commenced but before the expiry or three years from the date of this policy, corporation ''s liability shall be limited to the sum equal to the total amount of premiums ''''.

Therefore, considering the fact that the policy holder late Dyamavva met with a homicidal death within eight months from the date of taking of policy, the murder is to be considered as an accident. Therefore, the District Forum is right in allowing the complaint filed by the respondent directing this appellant to pay sum assured within benefits and Rs.15000/ - towards mental agony and Rs.500/ - towards litigation expenses. Failure to comply the said order, the District Forum rightly directed the appellant to pay interest as ordered. Therefore, viewed from any angle, we don ''t notice any prima -facie case to entertain this appeal. Since we are dismissing the appeal on merits, the question of considering I.A. I to condone the delay does not arise. Hence, appeal is liable to be dismissed. Accordingly, we pass the following: ORDER: Appeal is dismissed at the stage of admission. No order as to costs ''''.

Ms. Jaya Tomar, learned counsel for the petitioner has contended that the orders of the foras below are not sustainable being against the facts. Expanding on the argument, Ms. Jaya Tomar, Advocate has contended that the impugned orders have been passed on incorrect interpretation of clause 4 (B) of the insurance contract. Therefore, the impugned orders are liable to be set aside.

MR . Manish Gupta, Advocate, learned counsel for the respondent on the contrary has argued in support of the impugned orders and submitted that the foras below have rightly allowed the consumer complaint.

ONLY controversy for consideration in this revision petition is whether the petitioner opposite party has rightly repudiated the claim in view of clause 4 (B) of the insurance contract. In order to find answer to the aforesaid question, it is worthwhile to have a look on clause 4 (B) which is reproduced thus: ''''Notwithstanding anything within mentioned to the contrary it is hereby declared and agreed that in the event of death of the life assured occurring as a result of intentional self -injury, suicide or attempted suicide, insanity, accident other than an accident in a public place or murder at any time on, or after, the date on which the risk under this policy has commenced but before the expiry or three years from the date of this policy, the Corporation ''s liability shall be limited to the sum equal of the total amount of premiums (exclusive of extra premiums, if any) paid under this policy without interest. Provided that in case of life assured shall commit suicide before the expiry of one year reckoned from the date of his policy then provisions of the case under the heading ''SUICIDE '' on the back of this policy shall apply. ''''

On bare reading of clause 4 (B) of the insurance policy it is clear that if the life assured dies as a result of an accident, other than an accident in a public place or murder within three years from the date of commence of the insurance policy the liability of the petitioner Corporation is limited to the amount paid by the assured by way of premium under the policy. In the instant case admittedly life assured died homicidal death on 8.6.2006 i.e. within one year of the date of commencement of insurance policy. Thus, in our view foras below were wrong in allowing the complaint of the respondent to the extent of the amount for which the assured insured her life. The liability of the petitioner Insurance Company in view of Clause 4 (B) of the insurance contract was restricted only upto the amount of premium paid by the assured. Therefore, to that extent the impugned order cannot be sustained. However, the fact remains that the petitioner Insurance Company as per the terms and conditions of the policy was required to pay to the respondent the premium amount of Rs.1,522/ - paid on 4th October, 2005. From para -7 of the written statement filed by the petitioner before the Consumer Court it is seen that the petitioner Company offered to pay to the amount of premium vide its letter dated 14.1.2011. There is no cogent explanation as to why the petitioner took almost five years to offer the return of the premium paid by the assured. This delay in making offer to refund the money in our considered opinion is deficiency in service for which the petitioner is required to compensate the respondent/complainant.

IN view of the discussion above, the impugned order cannot be sustained. Revision petition is partly allowed and impugned order is modified as under: - ''''Petitioner is directed to pay Rs.1,522/ - alongwith compensation of Rs.10,000/ - for mental trauma and harassment caused. Petitioner is directed to comply with this order within one month. ''''