Kumaran Pangajam Vs. the Branch Manager Lic of India and Another - Court Judgment

Oral Order (As per Sri R.Lakshminarasimha Rao, Honble Member)

1. The unsuccessful complainant is the appellant. She has filed the appeal challenging the legality of the order passed by the District Forum in C.C.No.89 of 2009.

2. VERSION OF THE APPELLANT

The appellants husband during his life time obtained life insurance policy bearing No. 84153683 from the first respondent for sum assured of `1,00,000/- with accident benefit for a period of 16 years with the commencement of the policy from 28-07-2005. The appellants husband appointed her as his nominee for the benefits conferred on her by the insurance policy. The appellants husband died on 30-09-2007 when he fell down on the road while proceeding to his friends house. After the death of her husband, the appellant submitted claim with relevant documents enclosed thereto. The respondent corporation had repudiated the claim on 18-07-2008 on the ground that the insurance policy was in lapsed condition on the date of death of the appellants husband.

3. The appellant sought for payment of the sum assured, `1,00,000/-. Plus accident benefit, and other benefits, `1,00,,000/- towards compensation for deficiency in service on the part of the respondent corporation, and costs of Rs.2,000/-.

4. VERSION OF THE RESPONDENT

The complaint is filed against two respondents, who are a single entity, i.e., Life Insurance Corporation of India. The issuance of the policy in favour of the appellants husband, the terms and conditions incorporated in the policy and the sum assured etc, are admitted. The death of the insured occurred within one year from the date of commencement of the policy. The quarterly premium @ `751/- is payable up to 28-04-2021 which is the last due date. It is not mandatory to send the premium notice to the insured and it is only an additional service provided by the Insurance Company. Grace period allowed is for 30 days and a lapsed insurance policy can be revived during the life time of the insured within five years from the due date of the first unpaid premium and before the date of maturity. The appellants husband did not pay the premium for 4/07, and 7/07 and he had sent a cheque for a sum of `2,238/- trough DTDC courier on 29-09-2007 by 2.00 p.m. after closure of the cash hours. The Insurance company could not adjust the cheque amount since it was received after completion of cash hours and the insured died the next day, i.e., on 30-09-2007 due to nonpayment of quarterly premiums for 28-04-2007 and 28-07-2007.

5. EVIDENCE ON RECORD

In support of her claim, the appellant had filed her affidavit and the documents, ExA1 to A15. On behalf of the Insurance Corporation, its Manager, T.Pal Sudhakar of the respondent no.2 had filed his affidavit and got marked ExB1 to B10.

6. FINDINGS OF THE DISTRICT FORUM

The insurance policy was in lapsed condition on the date of death of the insured. The appellants husband did not make any effort to revive the lapsed insurance policy.

7. GROUNDS OF APPEAL

Feeling aggrieved by the order of the District Forum, the complainant filed the appeal contending that respondent corporation committed material irregularity and illegality in repudiating the claim; The respondents issued demand notice on 4-09-2007 to pay `1,502/- and if needed to contact them on telephone 085778-222426 for any clarification. The telephone number proved to be incorrect and after finding the correct telephone number, the appellants husband contacted the respondent no.1 and paid the sum of `1,502/- plus `35/- interest and the premium due on 28-10-2007 totaling `2,288/-. The insured died at 8 p.m. on 30-09-2007.

8. The counsel for the appellant has filed his written arguments

9. THE POINTS FOR CONSIDERATION

I) Whether the appellants husband paid the premium as per Section 64VB of the Insurance Act?

II) Whether the respondents had committed deficiency in service in repudiating the claim of the appellant?

III) To what relief?

10. APPERICIATION OF THE FACTS

POINTS NO.1 and2:The discussion under one point is intrinsically interrelated to the discussion under the other point. As such they have been taken up for common discussion as it would answer both the points. The appellants husband The respondent corporation accepted the proposal submitted by the appellants husband and issued the insurance policy. The insurance policy was to take effect from from 28-07-2005 and would expire on28-04-2021. The quarterly premium @ `751/- is payable up to 28-04-2021 which is the last due date. The appellants husband died on 30-09-2007 at Community Health Centre, Satyavedu. The insured did not pay the premium for 4/07 and 7/07. At this juncture, the appellants husband issued cheque for Rs. `2,288/- on 29-09-2007 and he died the next day i.e., 30-09-2007.

11. It is not disputed that the respondent corporation issued demand notice on 4-09-2007 to the appellants husband to pay `1,502/- and if needed to contact them on telephone 085778-222426 for any clarification. The telephone number proved to be incorrect and after finding the correct telephone number, the appellants husband contacted the respondent no.1 and paid the sum of `1,502/- plus `35/- interest and the premium due on 28-10-2007 totaling `2,288/-. The status of the insurance policy when the respondent no.1 had received and after the cheque was received but after the death of the insured would determine whether the respondents are liable or not liable to pay the amount claimed by the appellant.

12. The appellants husband had sent a cheque for a sum of `2,238/- trough DTDC courier on 29-09-2007 by 2.00 p.m. According to the respondents the cheque was received after closure of the cash hours and as such they could not adjust the cheque amount . At this stage to know the exact condition of the insurance policy, the aid of the contents of the repudiation letter would be essential and the repudiation letter dated 18-07-2008 reads as under:

“In this connection, we may inform you that the cheque in payment of interval premium on the above said policy was received by us at 2.00p.m. on 29-09-2007 by which time the cash action was closed since it was Saturday. As such we could not adjust the cheque on the same day. On the next working day is October,2007. We have received the information regarding the death of the policy holder and as such we have not adjusted the amount”

“Since the policy was in lapsed condition as on the date of death and as per the policy condition, nothing is payable under the policy”.

13. The respondents issued demand notice dated-4-09-2007 and informed him the amount due towards the premium for 4/07 and interest thereon as also the premium together with interest for 7/07 and as per the information, he had issued the cheque for `2,238/- on 29-09-2007 and on the same day the first respondent had received the cheque. As on the date of receipt of the cheque, the insured was alive. The respondents sending demand notice, informing the insured on his enquiry on phone as to the amounts payable and acting upon the advice of the respondents the deceased insured sending cheque in discharge of the premiums due together with interest thereon would manifest the status of the policy to be in force.

14. First premium was paid in cash on 28-07-2005 for which the first respondent had issued the receipt. Thereafter, three premiums for 1/06, 4/06 and 7/06 were paid through cheque dated 19-07-2006. The cheque was issued for `2298/- which includes the premium amount @ `751/- per premium and late fee of `45/-. On that occasion also the respondents had not raised any objection as to the lapsing of the insurance policy on failure of the insured to pay the premium even after the grace period. The respondents had issued notice dated 4-09-2007 requesting the insured to pay the premium together with interest thereon calculated till the date of actual payment. Thus, at any point of time the question of the policy sinking into lapsed condition did not arise. The respondents consciously waived the condition no.2 of the policy by permitting the insured to pay the premium as per his convenience subject to payment of the late fee or interest on the delayed payment of the premium. The insurance policy for all practical purposes was operative as on the date of the death of the insured.

15. The receipt of the cheque a day prior to the date of death of the insured is not disputed. The only objection raised by the respondents as to why the amount covered under the cheque was not “adjusted” is the cheque being received at 2p.m. The respondents had not placed any evidence in regard to their working hours in a week or on a particular day on which day the cheque was received. The plea of the receipt of the cheque after closure of the cash hours is not supported by the entry in the “Delivery Run Sheet” wherein the first respondent had not written the time nor the date on which the cheque in question along with two consignments from M.Venkata Subbaiah were received. Therefore, it cannot be believed that the cheque was received on 29-09-2007 after closure of the cash section of the first respondent. The nonpayment of the amount covered under the insurance policy constitutes deficiency in service on the part of the respondents.

16. The first respondent issued the insurance policy for the sum assured of `1,00,000/- and with the accident benefit for the equal sum as also the other maturity benefits. The respondents had not denied the death of the insured on 30-09-2007 while he was proceeding to his friends house when he fell on the ground and sustained injury to which he succumbed while being shifted to the community health centre. The O.P. Ticked dated 30.09.2007 issued by the Community Health Centre , Sathevedu supports the plea of the appellant that her husband died due to accidental fall and in the O.P. Ticket, the doctor has stated that the deceased was brought dead with injury on his forehead 2x2 cm muscle deep and he opined that the cause of death was “cerebral concussion shock and cardio respiratory failure”. The death of the deceased in the accident is found mention in the Agents Confidential Report submitted to the first respondent. In fact, the respondents had not denied the accidental death of the appellants husband. Therefore, the accident benefit along with other benefits ,i.e., the death benefit of `1,00,000/ and extended term benefit of `30,000/- totaling `2,30,000/- with interest @9%p.a. from 1-09-2008 i.e., the date of filing of the complaint thereon is payable to the appellant.

17. In the result, the appeal is allowed by setting aside the order of the District Forum. Consequently the complaint is allowed directing respondent no. 1 and 2 to pay a sum of `2,30,000/- with interest @ 9% per annum from 1-09-2008 till payment together with costs of `3,000/-. Time for compliance four weeks.