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Judgment
Sl. No.,Policy No.,Policy issued Date,Policy Matured date,"Sum Assured
Rs.
1,651065453,15/7/1993,15/7/2012,"50,000/-
2,651070615,07/9/1998,20/9/2018,"50,000/-
3,841975610,20/3/2001,20/3/2016,"50,000/-
4,841976977,20/11/2002,20/11/2018,"1,00,000/-
5,841977861,15/3/2004,15/3/2020,"1,00,000/-
6,842038690,10/3/2004,10/3/2019,"1,00,000/-
,,,Total,"4,50,000/-
There shall be no order as to costs .â€,,,,
Aggrieved by the order of the District Forum, the Respondents No.1 and 2 preferred an appeal before the State Commission. The State",,,,
Commission, vide their order dated 19.06.2013, while allowing the Appeal and dismissing the Complaint, observed as under;",,,,
“ The complainant filed his salary disbursement register for the relevant period August, 2008 to August 2009 evidencing that O.P.3 that the",,,,
employer has deducted premium amounts from his salary from August 2008 to June 2009 but did not remit the same to O.Ps 1 and 2 on account of,,,,
which the policies lapsed. The salary particulars do show that the employer deducted the premiums from the complainant’s salary for the relevant,,,,
period but did not remit the same to the insurance company as per the authorization letter given under the salary savings scheme, it is the duty of the",,,,
employer not only to deduct the premiums but also to remit the same and it is because of negligence of O.P.3 that the policies lapsed. As this evidence,,,,
was not placed by the complainant before the District Forum, the Forum dismissed the complaint against O.P.3. The Forum also did not give any",,,,
direction for payment or costs and it is pertinent to note that the complainant did not prefer any appeal.,,,,
It is also not in dispute that the complainant herein suffered from chest pain as can be seen from Ex.B3 case sheet dated 23-1-2009 of SIMS hospital,",,,,
Tirupathi and he was diagnosed to be suffering from Coronary Artery disease and was advised to undergo bypass surgery. Therefore he took leave,,,,
from January, 2009 to June, 2009 and underwent bypass surgery on 21-2-2009 at Chennai. To meet the medical expenses, the complainant",,,,
approached O.P.1 for grant of loan of Rs.1,45,000/-. The first O.P. who is the appellant herein is insurer of all 6 policies and a loan of 1,45,000/-",,,,
against the six polices was given to the complainant on 05-2-2009 by collecting the policy copies but did not inform the complainant that the premium,,,,
amounts were not paid from August, 2009 and the complainant himself as disclosed that he suffered from Coronary Artery disease and that he was on",,,,
medical leave from January, 2009 to June, 2009.",,,,
The learned counsel for the appellants submitted in his grounds that based on the under write section’s report they have declined to revive the,,,,
policies. The under write section in Ex.B4 has declined the revival of all the six policies based on health requirements. It is pertinent to note that the,,,,
policies were taken in the year 1993 onwards till 10-3-2004 whereas Ex.B3 discharge summary shows that the complainant never had any history of,,,,
diabetes, Hypertension or asthma and for the first time was being operated for a coronary artery disease but the point for consideration here is",,,,
whether the opposite parties have the right not to revive the policies?,,,,
Ex.B1 under point 3 states as follows:,,,,
Revival of Discontinued Policies: If the policy has lapsed, it may be revived during the life time of the Life Assured, but within a period of 5 years",,,,
from the date of first unpaid premium and before the date of maturity on submissionof proof of continued insurability to the satisfaction of the,,,,
Corporation and the payment of all arrears of premium together with interest at such rate as may be fixed by the Corporation from time to time,,,,
compounding half yearly. The corporation reserves the right to accept or decline the revival of discontinued Policy. The revival of a discontinued,,,,
policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the Life Assured.,,,,
In the instant case the complainant had taken the six policies from 1993 to 2004 and has taken a loan on these six policies to cover the expenditure for,,,,
his medical surgery in 2009 but his employer though deducted the premiums from his salary did not deduct them in time and therefore the policies,,,,
lapsed and thereafter the employer sent both the D.Ds. which were returned by the insurance company. At that stage, the insurance company asked",,,,
for medical reports as they were in the knowledge that the complainant had taken a loan only to cover the expenses for medical surgery that he had,,,,
undergone in 2009 and based on these reports, the appellants did not revive the policies quoting that they have the right to decline. Hence there is no",,,,
deficiency in service on behalf of the appellants and the order of the District Forum directing the appellants to revive the policies is unjustified. For the,,,,
aforementioned reasons, this appeal is allowed and the order of the District Forum is set aside and consequently the complaint is dismissed. There",,,,
shall be no order as to costs. â€,,,,
Hence, this Revision Petition.",,,,
This Revision Petition has been filed with a delay of 38 days. For the reasons given in the application, the delay is condoned.",,,,
We have heard the learned counsel for the Petitioner. He contended that the State Commission has failed to appreciate that the Respondent No.3,,,,
was deducting the premium amount from the salary of the Petitioner on behalf of the Respondents No.1 and 2 and the Respondents No.1 and 2 were,,,,
collecting the premium from the Respondent No.3 and if they failed to collect the same, the Petitioner cannot be penalized for the same. He further",,,,
contended that the action of the LIC of India to decline revival of the policies of the Petitioner without any valid reason is totally arbitrary and illegal,,,,
and also contrary to the law.,,,,
On the other hand, the learned counsel Ms. Jaya Tomar, Advocate for the Respondents No.1 and 2 contended that the present Revision Petition is",,,,
not maintainable and is liable to be dismissed as the Petitioner failed to deposit the premiums regularly, so the policies cannot be revived as the policies",,,,
issued in the name of the Petitioner stood lapsed as no premium for the same was paid either by the petitioner or his employerâ€"Respondent No.3,,,,
from August, 2008. As per Condition No.2 of the insurance policy, in the case of monthly premium, a grace period of 15 days is allowed. Thereafter, if",,,,
the premiums is not paid during the period, the policy lapses. Thereafter, under Condition No. 3 of the Insurance Policy, the policy can be revived",,,,
during the life time of the life assured, but within a period of five years from the date of the first unpaid premium but before the date of maturity on",,,,
submission of proof of continued insurability to the satisfaction of the Corporation and the Corporation and the payment of all the arrears of premium,,,,
together with interest at such rate as may be fixed by the Corporation from time to time compounding half yearly. However, the Corporation reserves",,,,
the right to accept or decline the revival of discontinued policy.,,,,
The counsel for the Respondents No.1 and 2 also contended that revival means ‘Novatio’ of the contract and the underwriter has to assess,,,,
the risk of the life of the policy holder for which necessary medical reports are required to be submitted by the policy holder. In case such policy stood,,,,
lapsed, the policy had to be revived. Hence, the Petitioner was asked to undergo the necessary medical tests. The reports submitted by the policy",,,,
holder were referred to the Divisional Medial Referee and further on his advice further reports were called from the Petitioner. The said reports were,,,,
referred to the Central Underwriting Section and Underwriting and Reinsurance Department at Mumbai and the Central Underwriting and,,,,
Reinsurance Department of the Respondent No.1, Mumbai had opined that the case of the Petitioner was not fit for revival. Respondents No.1 and 2",,,,
were competent to decline to renew the said policies on the life of the Petitioner.,,,,
The State Commission in their order has also held that the refusal to revive the policies cannot be termed as deficiency in service as the,,,,
Respondents No.1 and 2 were aware that on 23.01.2009, the Petitioner had been suffering from Coronary Artery disease and had under gone a by-",,,,
pass surgery on 21.02.2009 at Chennai. To meet the medical expenses, the Complainant had approached the O.P. 1 for grant of loan of Rs.1,45,000/-.",,,,
Thus, as per Condition No.3 of the Policy, the Respondents No.1 and 2 were well within their rights to decline to revive the lapsed policies of the",,,,
Petitioner.,,,,
The counsel for the Petitioner in support of his arguments has relied upon the following judgments;,,,,
(i) Delhi Electric Supply Undertaking Vs. Basanti Devi and Anr. (1999) 8 Supreme Court Cases 229.,,,,
However, the facts of the cited case are not applicable to the case in hand, as unlike the judgement cited by the learned counsel for the Petitioner,",,,,
in the instant case, it was not that the Respondents No.1 and 2 had refused to pay out any sum due to non-payment of premium but it is a question of",,,,
right of the Respondents to decline to revive the policies, based on medical reports of the petitioner.",,,,
The counsel for the Respondents No.1 and 2 on the other hand, has relied upon the judgement titled as Chairman, L.I.C. of India Vs. Narasamma,",,,,
1 (1992) CPJ 128 (NC), in which this Commission clearly observed;",,,,
“ 10. As noticed earlier, the policy had lapsed when the Premium was not paid within the grace period. Here we may cite A. Ahmedunisa Bagum",,,,
V. L.I.C. of India, Hyderabad, AIR 1981 A.P.50 wherein it was remarked:",,,,
From the aforesaid discussion devoted to the limitations and conditions for the revival of lapsed polices and the relevant rulings on the subject, the",,,,
following principles emerge;,,,,
Revival of a lapsed policy is a privilege or concession granted to the policy holder subject to certain limitations.,,,,
The said limitations are:,,,,
the revival could only be during the life-time of the assured and not after his death;,,,,
Within a period of vie years from the due date of the first unpaid premium;,,,,
before the date of maturity; and,,,,
The conditions relating to the payment of the premium due to the payment of the premium due on the lapsed policies should be complied with.,,,,
The revival of a policy is not a matter of right and it would not automatically follow even after the fulfilment of the conditions laid down in the,,,,
policy.,,,,
the revival operates as a new contract and the rights and liabilities do not begin to run until the new terms and conditions are accepted and complied,,,,
with.â€,,,,
In view of the above discussion, we are of the view that the State Commission has rightly allowed the Appeal of the Respondentsâ€"Corporation",,,,
and dismissed the Complaint filed by the Petitioner/Complainant before the District Forum. Moreover, we do not find any jurisdictional or legal error in",,,,
the impugned order which may call for interference in the exercise of revisionary powers under Section 21(b) of the Consumer Protection Act, 1986,",,,,
nor does it suffer from any infirmity or material irregularity in allowing the Appeal preferred by the Respondents. Thus, the present Revision Petition",,,,
being devoid of any merit is hereby dismissed. Consequently, the Consumer Complaint filed by the Petitioner/Complainant before the District Forum is",,,,
also dismissed.,,,,
No order as to cost.,,,,