important points
Conditions for revival of a Policy have to be strictly construed.
Section 64-VB of the Insurance Act is not applicable to LIC.

judgment

Dr. Arijit Pasayat, J. —

1.Leave granted.

2.Challenge in this appeal is to the order passed by the National Consumer Disputes Redressal Commission (in short the “National Commission”) dismissing the Revision Petition filed by the appellant. Challenge before the Commission was to the order passed in appeal by the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (in short the ‘State Commission’) which in turn had upheld the order passed by the District Forum, Shimla (in short the ‘District Forum’).

Background facts in a nutshell are as follows:

One Karan Singh Chandel (hereinafter referred to as the ‘deceased’) had taken a Life Insurance Policy and was insured for a sum of Rs.1,50,000/-. The annual premium payable was Rs.12,821/-. The policy was taken on 28.3.1994. The annual premium which was to be paid on or before 28.3.1995 was not paid. In terms of the policy, the same became inoperative after one month. The insured died on 1.7.1995. A cheque drawn on Jogindra Cooperative Bank Ltd. for an amount of Rs.12,821/- purportedly on account of premium along with late fee of Rs.189/- was issued by one Prakash Chand Thakur on 27.6.1995. The same was received on 12.7.1995. According to the claimant i.e. widow of the deceased, the cheque was issued before the death of the insured and therefore, the appellant could not have repudiated the claim.

3.The stand of the present appellant was that the policy had lapsed due to non-payment of premium in time. This plea was not accepted by the District Forum on the ground that the cheque was claimed to have been issued on 12.7.1995, but is presumed to have been received earlier than that date. The State Commission held that in any event the amount was received within the grace period and therefore, the claim could not have been repudiated. Accordingly the appeal filed by the appellant was dismissed. The National Forum dismissed the Revision holding that Section 64-VB of the Insurance Act, 1938 (in short the ‘Insurance Act’) was applicable where the premium is tendered by postal money order or cheque sent by post and the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be. Therefore, it was held that there was revival. It did not accept the stand of the appellant that the revival was not a matter of right.

4.In support of the appeal, learned counsel for the appellant submitted that the District Forum, the State Commission and the National Commission failed to notice certain relevant factors. It was not explained as to why the cheque was issued by Prakash Chand Thakur and not by the insured. This is sufficient to show that subsequently a cheque was issued to regularize the policy. Further the cheque was received on 12.7.1995 much after the death and this itself is sufficient to show that the cheque was not issued prior to the death of the insured. The extract of the receipt register has been filed which shows that the cheque was received on 12.7.1995. The State Commission came to the conclusion that the cheque was issued during the grace period. This is also factually incorrect because the grace period is 30 days, the premium was due on 28.3.1995 and the cheque was issued much beyond the grace period. Additionally, Section 64-VB does not apply to the appellant. In this context Section 43 of the Life Insurance Corporation Act, 1956 (in short the ‘Act’) has relevance. Reference is also made to Condition 2 of the policy.

5.In reply learned counsel for the claimant submitted that it is not Condition 2 of the policy which is applicable, but Condition no.3 which is applicable. It is stated that no adverse inference can be drawn because the insured had not signed the cheque and merely because the cheque was received after the death of the deceased that does not entitle the appellant to refuse a genuine claim.

Conditions 2 & 3 of the policy read as follows:

“2.Payment of premium: A grace period of one month but not less than 30