RADHEY SHAM GUPTA vs LIC of India

THE revision petition arises out of the order of the State Consumer Disputes Redressal Commission whereby the State Commission set aside the order of the District Forum.

THE facts in brief which lead the complainant to approach the District Forum are as under : The complainant had a Money Back Policy from the opposite party, Life Insurance Corporation of India, for Rs. 1,25,000/- in the year 1990. The yearly instalment of premium was Rs. 10,878.40. According to the terms of the policy, the complainant had to get Rs. 32,150/-, the amount of maturity value after five years. Since the complainant was expecting transfer from the place of work, he had requested the opposite party by way of a letter to deduct the instalment permium which was due in August, 1995 and remit him the balance amount. According to him, he had written the letter much before the premium was due. He states that he had received a cheque from the LIC for Rs. 32,150/- without deduction of the instalment premium due. As the premium was not deducted, the policy had lapsed. Then he had written letter to the opposite party for payment of Rs. 54,492/- being along with interest at the rate of 19% as damages. He had also prayed for payment of the entire amount of Rs. 1,25,000/- after deducting the amount which has already been paid. Since the opposite parties did not respond, he moved the District Forum with the above mentioned prayers.

In the written version before the District Forum, the opposite party took the stand that it was the responsibility of the complainant to deposit the premium and no amount could be deducted from the amount which was to be paid to the complainant.

THE District Forum upon hearing the parties held the Insurance Company guilty of deficiency in service and directed them to pay to the appellant Rs. 54,492/- with interest at the rate of 12% from 21.11.1995. A sum of Rs. 5,000/- was also awarded towards compensation. Aggrieved by the order of the District Forum the Insurance Company went in appeal to the State Commission.

THE State Commission upon relying upon the decision of the National Commission in Life Insurance Corporation of India v. Anil P. Tadkalkar, I (1996) CPJ 159 (NC), wherein we had held that if the premium had not been paid on account of which the policy had lapsed then the only benefit to which the complainant is entitled is that he can get the surrender value and not the refund of the premium paid by him. In view of this, the State Commission directed the Life Insurance Corporation of India to pay to the complainant the surrender value of the policy within a period of two months from the date of the order. Feeling aggrieved by the order of the State Commission, the complainant has come in revision before us. Heard the learned Counsel for the parties. We have also perused the orders of the State Commission and the District Forum. The only question that arises for consideration in this case is that the policy had lapsed as no amount was paid and on the amount of Rs. 32,150/- being paid, a discharge voucher was signed by the complainant without giving any authority to deduct the susbsequent instalments of the premiums out of the amount of Rs. 32,150/-. Mr. S.K. Sharma, learned Counsel for the petitioner states that such instructions had earlier been given. But, on that date there was no amount due and in any event, the complainant collected the full amount under that policy without raising the question that why the instalment of the premium had not been deducted as per the instructions. In that view of the matter, the policy had lapsed and no amount other than the surrender value could be paid. We have been informed that even the surrender value has not been paid. Accordingly, we direct that the same, i.e. the surrender value be paid together with interest from the date on which the policy had lapsed till the date of payment at the rate of 12% p.a. The revision petition is disposed of in the above terms. Revision Petition disposed of.