The agent's collection of the premium on behalf of the Corporation constituted legal liability upon the Corporation to pay the assured under the policy.

JUDGMENT :

Sanjay K. Agrawal, J.

1. This appeal has been preferred by the Defendants/Life Insurance Corporation of India (hereinafter referred to as 'the Corporation') under Section 100 of the Code of Civil Procedure, 1908 questioning the legality and propriety of the judgment and decree dated 18.01.2008 passed by the 1st Additional District Judge, Manendragarh, Koriya (C.G.) in Civil Appeal No. 30-A/2007, whereby, the lower appellate Court, while reversing the judgment and decree dated 23.07.2007 passed by Civil Judge, Class I, Manendragarh, District Koriya (C.G.) in Civil Suit No. 3A/2005 has decreed the Plaintiff's claim.

2. Briefly stated the facts of the case are that one Smt. Girijadevi, the predecessor-in-interest of the Plaintiff had taken a life insurance policy on 28.03.2001 for a sum of Rs. 50,000/- and had nominated her son, the Plaintiff Rajkumar, as her nominee. After the death of Smt. Girijadevi on 23.03.2003, her son approached the authorities of the Corporation for availing the benefit of the said policy, but it was refused giving rise to the institution of the suit seeking declaration to the effect that he is entitled to avail the benefit of the said policy. According to the Plaintiff, the third installment of the premium amount payable by 28.12.2002 was received by Defendant No. 3 Vineshwar Kumar, the agent of the Corporation, on 12.01.2003 from his mother Smt. Girijadevi and after collecting the same, it was deposited with the Corporation on 29.03.2003. Therefore, being a nominee of his mother, he is entitled to avail the benefit of the same which was, however, refused by the Corporation on the ground that the third installment of the said policy payable by 28.12.2002 was not paid within a grace period of 30 days, as such, the policy has lapsed. The Plaintiff has, therefore, been constrained to institute the suit in the instant nature.

3. While contesting the aforesaid claim, it was pleaded by the Corporation that since the third installment of the premium amount payable under the said policy was neither paid nor got it renewed under the terms and conditions of the policy during the lifetime of the said policy holder, namely, Smt. Girijadevi, therefore, the alleged policy has lapsed. While, Defendant No. 3, the agent of the Corporation, pleaded in his written statement that after collecting the premium amount, he deposited the same with the Corporation and the receipt thereafter has been given to the Plaintiff.

4. After considering the evidence led by the parties, it has been held by the trial Court that the third installment of the premium amount payable by 28.12.2002 was not deposited by the policy holder Smt. Girijadevi within a grace period of 30 days nor was it got renewed during her lifetime. In consequence, the alleged policy has lapsed and the claim has, thus, been refused vide judgment and decree dated 23.07.2007.

5. The aforesaid judgment and decree of the trial court has been reversed by the appellate Court in appeal preferred by the Plaintiff on finding that the agent of the Corporation, after collecting the premium amount of Rs. 1,112/- payable by 28.12.2002 from Smt. Girijadevi, the policy holder, deposited the same with the Corporation on 29.03.2003. It, therefore, cannot be held that the policy holder has violated the terms and conditions of the policy nor the alleged policy could be treated to be lapsed on account of her death. As a consequence, the claim has been decreed.

6. Being aggrieved, the Corporation has preferred this appeal, which has been admitted vide order dated 01.09.2008 on following substantial question of law:-

"Whether payment of premium to the agent of the insurer after the death of insured, constitutes legal liability against the insurer to pay the sum assured under the policy?"

7. Shri H.B. Agrawal, learned senior counsel appearing along with Shri G V. K: Rao for the Appellants/Corporation, while referring to conditions No. 2 and 3 of the policy, submits that since the third in