LIFE INSURANCE CORPORATION OF INDIA vs Sujata Mahabal Punja

THE Life Insurance Corporation of India, who was the opposite party before the Maharasthra State Commission in Complaint No. 147 of 1992 on its file is the appellant before us. The complainant No. 1 in the case is the widow of one Shri Mahabal Narayan Punja. Complainant No. 2 is the All India Life Insurance Policy Holder Association, which had sponsored the case of complainant.

THE deceased Shri Mahabal Narayan Punja had obtained an insurance policy on his life from the Life Insurance Corporation of India in 1990. He had duly paid the first half -yearly premium of Rs. 3855.20 for the period 28.3.1990 to 27.9.90. The second half -yearly premium which fell due on 28.9.90 was not paid by him. Similarly, the insured had defaulted in the payment of the third half -yearly premium which fell due on 28.3.91 also. He died on 11.7.91. On a claim being lodged with the Life Insurance Corporation of India by the widow of the deceased for payment of an insurance amount, the Life Insurance Corporation of India repudiated the claim on the ground that the policy had lapsed without acquiring any value since even during the grace period the second and third half -yearly premia had not been paid by the deceased. Aggrieved by the said repudiation the widow jointly alongwith the second respondent filed the complaint before the State Commission seeking to recover from the Life Insurance Corporation of India the full amount insured with interest and costs. In response to a notice issued by the State Commission, the Life Insurance Corporation of India filed its detailed written version setting out the aforesaid details relating to the nonpayment of premium and pleaded that it had no liability since the policy had lapsed without acquiring any value. The case was posted before the State Commission on 13.7.92 when the opposite party (L.I.C.) was represented by its Advocate, Mr. V.W. Bapat. However, the case was adjourned on that day to 13.8.92. It would seem that on 13th August, 1992, the Counsel engaged by the Life Insurance Corporation of India did not appear. Thereupon the State Commission passed an order allowing the Complaint Petition and directing the Life Insurance Corporation of India to pay to the complainant Rs. 1,50,000/ - with all accrued bonus and interest at 18 percent per annum from 1.1.92. In passing the said order the defences raised by the Life Insurance Corporation of India in its written statement have not at all been adverted to or considered by the State Commission and the whole reasoning of the Tribunal was contained in the following paragraph extracted from its order : - ''However, we find that the complainants claim has not been opposed by the L.I.C. at the time of the hearing of this complaint. The complainant has filed her affidavit, dated 25.10.91, in which she has affirmed the allegations made in the complaint. As against this, the opposite party remained absent and did not file any affidavit in support of their contentions raised in the written version, except stating that the policy had lapsed, nothing more has been elaborated in its defence. Under the circumstances, we find that the complainants claim stands proved. We, therefore, pass the following order : - ORDER The opposite party is directed to pay to the complainant Rs. 1,50,000/ - with all accrued bonus as regards Insurance Policy No. 917142939 on the life of Mahabal Narayan Punja. The complainant be also paid Rs. 500/ - as cost. The complainant be also paid interest at the rate of 18 per cent per annum towards compensation on the amount of Rs. 1,50,000/ - from 1.1.92, till realisation. All the aforesaid amount well be paid to the complainant by the opposite party within 30 days from the date of receipt of this order.''

THIS Commission has observed, time and again, that in the consumer jurisdiction when the opposite party in a case has filed its written statement putting forward its objections to the complainants claim, it is obligatory for the Forum to consider those objections on the merits before disposing of the case even if on the date of hearing of the case the opposite party does not actually appear before the Forum. Hence, the fact that the Counsel for the Life Insurance Corporation of India had not appeared before the Forum on the date of hearing namely, 13.8.92 did not justify the case being decided ex -parte without considering the contentions put forward by the opposite party in its written statement. It is significant that on the side of the complainants no documentary evidence had been produced to establish that the premium amounts due on the policy had been duly paid. In the circumstances we are clearly of the opinion that the disposal of the case by the State Commission in such a summary fashion was not in accordance with law. We are, therefore, constrained to remand the case to the State Commission for de novo disposal after affording an opportunity to both sides to produce their evidence and put forward their respective contentions before the State Commission.

SINCE the case is a fairly old one, we feel confident that the State Commission would give the maximum priority to its disposal after this remand. This appeal is disposed of on the above terms. The parties will bear the respective costs. Appeal disposed of.