Delhi

StateCommission

FA/13/312

GAYATRI DEVI JAISWAL - Complainant(s)

Versus

LIC OF INDIA & ANR. - Opp.Party(s)

13 Jan 2017

ORDER

 

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

 

Date of Decision: 13.01.2017

 

First Appeal- 312/2013

 

(Arising out of the order dated 20.02.2013 passed in Complainant Case No. 243/2009 by the District Consumer Disputes Redressal Forum (North), Tis Hazari, Delhi)

Smt. Gayatri Devi Jaiswal,

W/o Shri Satya Narayan Choudhary

(Deceased’s Mother & Nominee),

R/o House No.A-137, Gali No.4,

Block A, Pocket 5,

Near C.R.P.F. Water Tank,

P.S. Khaajuri Khas,

District North East, Delhi

Through its AR, Shyam Sunder Chaudhary

•  

Versus

1. Life Insurance Corporation of India Ltd.,

Through its Manager,

LIC Branch Office

at 12-P, Roop Nagar,

Delhi-110007.

 

2. Ranjan Kumar (Agent),

LIC Code No.0004012P,

1^st Branch, Roop Nagar,

Delhi-110007.

 

                ….Respondents

 

 

 

 

 

 

CORAM

Justice Veena Birbal, President

Salma Noor, Member

 

1.       Whether reporters of local newspaper be allowed to see the judgment?

2.        To be referred to the reporter or not?

 

Justice Veena Birbal, President

 

1. This is an appeal under Section 15 of the Consumer Protection Act, 1986 (in short, the “Act”) wherein challenge is made to order dated 20.2.13 passed by the Consumer Disputes Redressal Forum (North), Tis Hazari, Delhi in CC No.243/2009 whereby the complaint case has been dismissed.
2. Briefly the facts relevant for the disposal of present appeal are as under:

 

A complaint under Section 12 of the Act was filed by the appellant/complainant stating therein that she is the mother and nominee of deseased Jyan Bhushan who had taken a policy bearing No.121584815 for Rs.2 lacs from respondent/OP on 28.2.01.  Initially the premium was paid quarterly but thereafter it was converted into yearly, thus the premium was to be paid in the month of February every calendar year.  It was alleged that the deceased had paid the premium regularly up to 2007.  On 30.3.08, the insured had met with an accident and died on the said date.  The appellant/complainant filed a claim with respondent/OP.  However, it was repudiated on the ground that the premium on the policy due and payable in February, 2008 had not been paid by the policy holder and as such the policy stood lapsed.  It was alleged that the respondent/OP issued a cheque of Rs.14,730/- only as amount due under the policy.  Since the insured amount was not paid, the appellant/complainant filed the aforesaid complaint against respondent/OP seeking directions to respondent/OP to pay balance amount after deducting amount already paid from the policy amount with interest.  The appellant/complainant also prayed for the grant of compensation and litigation cost.

3. The complaint was opposed by the respondent/OP by filing written statement wherein it was admitted that the aforesaid policy was taken by the insured Jyan Bhushan and the appellant/complainant was the nominee of the policy holder.  It was also not disputed that the appellant/complainant had lodged a complaint which was repudiated by respondent/OP.  It was stated that the policy holder had died on 30.3.08, the premium of the policy was due on 28.2.08.  It was alleged that the year 2008 was a leap year, so the grace period of 30 days ended on 29.3.08 and till then no premium was paid by the policy holder during his life time whereas he died on 30.3.08 and by that time, the policy had lapsed.  Under the lapsed policy, a sum of Rs.14,730 had already been paid to the appellant/complainant and no other amount was due. 
4. A replication was filed on behalf of the appellant/complainant wherein it was alleged that agent had collected the premium from the deceased/policy holder in the beginning of March, 2008.  The said agent had kept the amount with him and ultimately deposited the same with respondent/OP on 15.5.08.  It was alleged that there was lapse on the part of the agent, as such the respondent/OP was liable to pay the insured amount to appellant/complainant.
5. On behalf of appellant/complainant, Shri Shyam Sunder Chaudhary, AR had filed his affidavit and exihibited documents as Ex. CW-1/1 to CW-1/4.  On behalf of respondent/OP-1, Shri G.P. Pandey, Legal Manager had filed an affidavit to justify the facts alleged in the written statement.  Parties also filed written aguments.
6. After hearing both the parties, Ld. District Forum held that the appellant/complainant had nowhere alleged in the complaint that the premium was given to the agent.  No evidence in the form of receipt of agent having received the amount was also placed on record.  It was held that the premium was alleged to have been paid by agent on 15.5.08 whereas it ought to have been paid by 29.3.08 and by that time, the grace period had ended and the policy stood lapsed.  It was also held that the story set up by the appellant/complainant about having made premium to agent was an afterthought.  It was further held that since the appellant/complainant had not filed affidavit of herself and by filing affidavit of AR about the alleged payment, no value can be attributed to the said affidavit.  Ld. District Forum held that the policy had already lapsed on the date of the death of the insured/policy holder due to non-payment of premium.  It was held that the premium was not paid within the grace period of 30 days, as such the policy stood lapsed.  Accordingly the complaint was dismissed.  
7. Aggrieved with the aforesaid order, present appeal is filed.
8. Ld. Counsel for the appellant/complainant has submitted that it is admitted position that the deceased had taken the policy on 28.02.2001 and initially the premium was being paid quarterly and thereafter it was converted into yearly payment of premium and the due date of premium was in the month of February every year.  It is submitted that the premium was due on 28.2.08 whereas the deceased died on 30.3.08.  Ld. Counsel for the appellant/complainant has submitted that the premium was collected by the agent from the deceased in the month of February, 2008 and the agent did not deposit the premium before due date, as such for the lapse on the part of agent, the appellant/complaint be not allowed to suffer.  It is further submitted that the insured had died on 30.3.08 at 4.30 a.m., as such the death of the policy holder is within grace period and the policy was alive during the grace period, as such the appellant/complainant is entitled for the benefit under the policy.  Ld. Counsel for appellant/complainant has relied upon judgement of National Commission in LIC of India vs Rupali Mondal in RP No. 1338 of 2011 decided on 22.05.2012 wherein it is held that period of one month can be extended to 31 days.  It is contended that there is deficiency in service on the part of respondent/OP in repudiating the claim as such decision rendered by the Ld. District Forum is liable to be set aside.  
9. On the other hand, Ld. Counsel for the respondent/OP has submitted that no ground for interference with the impugned order is made out by the appellant/complainant.  It is contended that the premium was due on 28.02.2008.  The year 2008 was a leap year so the grace period of 30 days had ended on 29.03.2008 whereas the insured had died on 30.03.2008 and by then the policy had already lapsed, as such the appellant/complainant is not entitled for the claim amount.
10. We have heard the Counsel for the parties and perused the material on record. 
11. It is admitted position that the deceased had obtained life insurance policy for a sum of Rs.2 lacs on 28.02.2001.  It is also admitted position that the policy holder deposited the premium amount from 2001 to 2007 in the month of February every year regularly.  It is also admitted position that the policy holder died in road accident on 30.03.2008.  It is also not disputed that the premium on the policy was due on 28.02.2008.  As per the terms and conditions of the policy, the premium which was to be paid on 28.02.2008 could have been paid within the grace period of 30 days after 28.02.2008.  The year 2008 was a leap year.   According to respondent/OP, the period of 30 days had come to an end on 29.03.2008 and since the premium was not paid in the grace period, the policy had lapsed on 30.3.2008.  Ld. Counsel for appellant/complainant has argued to the contrary.
12.   The relevant term and condition of the policy, as is quoted in the written statement, is reproduced as under:

“A grace period of one month but not less than 30 days will be allowed for payment of yearly, half yearly or quarterly premium and 15 days for monthly premium.  If death occurs within this period and before the payment of the Premium then due, the policy will still be valid and and the Sum Assured paid after deduction of the said premium as also unpaid premiums falling due before the next Anniversary of the policy.  If the premium is not paid before the expiry of the days of grace the policy lapses.

 

      If the policy has not lapsed and the claim is admitted in case of death under a policy where the mode of payment of premium is other than yearly, unpaid premiums, if any, falling due before the next policy anniversary shall be deducted from the claim amount.”

 

13. In LIC of India vs Rupali Mondal, R.P. No. 1338/2011, the question involved was whether the grace period of payment of premium under condition 2 of the insurance policy should be taken as 30 days or 31 days.  The National Commission, for deciding the aforesaid question, had relied upon its earlier judgement i.e. Smt. Pramila Vikram Khillare vs Life Insurance Corporation of India, R.P. No. 1268/1998 decided on 25.7.2005 wherein it is held as under:

          “This point has been considered in detail in this Commission decision relied upon by the State Commission and cited above.  It is useful to reproduce the relevant paragraphs of the said judgement: Further, in the present case, it is a hard case.  The deceased was regularly depositing the quarterly premium.  On occasion, he paid it beyond the grace period by paying interest on the amount of the premium payable.  But for his death, it is apparent that he would have paid the premium.  Secondly, it is not that the grace period cannot be extended by one or two days.  If the LIC had taken humanitarian view, it would not have repudiated the claim.  In the present case, Clause (2) of the Policy reads thus: Payment of premiums A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums.  If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the sum assured paid after deduction of the said premium as also unpaid premium/s falling due before the next anniversary of the policy.  If the premium is not paid before the expiry of the days of grace, the policy lapses. The aforesaid extend up to 31 days.  And, therefore, in the present case, during the grace period the deceased expired.  Hence, as per the aforesaid clause the policy would be valid and the heirs are entitled to the sum assured after deduction of the premium payable.”

 

    Relying upon the aforesaid judgement, the National Commission in LIC of India (supra) has held that grace period of 30 days for payment of premium has to be taken as 31 days.

14.  Relying upon the aforesaid judgements, in the present case too the grace period of premium is taken as 31 days i.e. up to 30.3.08 in which event the insurance policy was valid and subsisting at the time of death of the insured and the sum assured would be payable to appellant/OP. 
15. As regards the contention of payment of premium to agent is concerned, we find no error in the reasoning given by Ld. District Forum. 
16. In view of above discussion, we accept the appeal and set aside the impugned order and allow the complaint case i.e. CC No.243/2009 and direct the respondent/OP to pay insurance amount after deducting Rs.14,730/- which has already been paid to the appellant/complainant with interest @ 9% per annum from the date of filing of the complaint along with cost of Rs.10,000/-.
17. A copy of this order as per the statutory requirement be forwarded to the parties free of charge and also to the concerned District Forum.  The record of the District Forum be sent back forthwith.  Thereafter, the file be consigned to Record Room.

 

(Justice Veena Birbal)

President

 

 

(Salma Noor)

Member