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2009(2) CPR 18 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
Ashok Bhan, President and B.K. Taimni, Member
L.I.C. of India —Petitioner
versus
Ram Narayan Yadav —Respondent
Revision Petition No. 2273 of 2004
Decided on 2.3.2009
Counsel for the Parties:
For the Petitioner:Mr. Ashok Kashyap, Advocate.
For the Respondent:Mr. V.K. Biju, Advocate.
IMPORTANT POINT
The Policy would have subsisted as a paid-up Policy for a reduced sum payable on the date of maturity or at the life assured’s death.
Headnote:Consumer Protection Act, 1986—Section 21(b)—Complainant took the life assured Policy of Rs. 5,00,000/-.—Complainant paid premium for two years, for the third year, the life assured had issued a cheque, which stood dishonoured and returned with the remark “signing partner reported dead”.—Insured died on 27.8.1992—Policy lapsed — Insurance Company allowed 50% of the sum assured—Clause 4.2 (b) of the Policy Servicing Manual No. 11—Complainant received a sum of Rs. 2,18,000/- —Insurnace Company had agreed before the State Commission to pay the balance amount of Rs. 31,440/- which had been wrongly deducted to make it to 50% of the assured amount—Payment of 50% of the assured amount was an ex-gratia payment under the policy— Complainant dissatisfied and filed a complaint—District Forum allowed the complaint and directed the petitioner to pay a sum of Rs. 2,50,000/- along with the bonus —Consumer Foras had erred in allowing the claim—Complainant had paid three premiums—Policy would have subsisted as a paid-up policy for a reduced sum payable on the date of maturity or at the life assured’s death—Insurance Company had received premium only for two years and third premium was received—Non-forfeiture Regulations will not apply—Default could be on behalf of bank unfortunately, the complainant/respondent did not implead the State Bank of India as party—Revision dismissed—Complainant may proceed against the State Bank of India, if permissible under law.
Result: Revision petition dismissed.
Ashok Bhan, President—Life Insurance Corporation of India (hereinafter referred to as ‘petitioner’ for short) and Another, have filed this Revision Petition against the Order dated 14.05.2004, passed by the State Consumer Disputes Redressal Commission, Patna, Bihar (hereinafter referred to as ‘the State Commission’ for short) by which the State Commission has dismissed the Appeal filed by the petitioner, thus, upholding the Order passed by the District Consumer Disputes Redressal Forum, Katihar (hereinafter referred to as ‘the District Forum’ for short).
2. Shortly stated, the facts of the case are:
One Anil Kumar Yadav, submitted a proposal form at Madhepura Branch Office of L.I.C. on 31.03.1990 for taking life insurance policy in the sum of Rs. 5,00,000/- under table and terms 75-20. Proposer was the resident of Madhepura, Katihar. He was 26 years of age. Yearly premium was Rs.31,440. The premium was to be paid on or before 28th of March every year. The Proposer opted to secure double accident benefit and extended premium permanent disability benefit. He nominated his father-respondent herein, to receive the payment in case he died prematurely. The policy commenced from 28.03.1990. The life insured paid premium for the next year on 28.03.1991. Next premium was due on 28.03.1992. The policyholder sent a cheque dated 24.04.1992 for the premium due for the third year. The said cheque was issued under the seal of
M/s Chanchal Construction Pvt. Ltd. and the same was drawn on State Bank of India, Katihar. The petitioner sent the said cheque for collection on 25.04.1992. The said cheque was returned to the petitioner’s Madhepura Branch by the Bank in the month of September, 1992 with the remark “signing partner reported dead”. It was revealed that the life assured was killed on 27.08.1992 due to fire arm injuries at Katihar. The news of killing was reported in various newspapers. Respondent being the nominee of the life assured submitted the claim under the policy. Petitioner made inquiries and found that the bank account No. 13/43881 of M/s Chanchal Constructions and Company in the State Bank of India, Katihar from which cheque No. 766579 dated 24.4.1992 for the premium due on 28.03.1992, was issued, did not have sufficient funds in the said account between 24.02.1992 to 25.02.1993. According to the respondent, the cheque could not even otherwise be not encashed, as the life assured had issued the cheque knowing well that the said cheque could not be honoured because of insufficiency of funds. In these circumstances, as no valid payment of due premium was offered by the life assured, the policy had lapsed on 28.04.1992. As per Non-Forfeiture Regulation, if premium for three years had been paid, then, the policy would not have been wholly valid but would have subsisted as paid-up policy for a reduced sum payable on the date of maturity or on the life assured’s premature death. That under the terms of the policy, the respondent was not entitled to the payment of any amount but keeping in view the relaxation Clause 4.2 of the Policy Servicing Manual No.11, the respondent was entitled to payment of half of the amount assured and, accordingly, petitioner sent a cheque of Rs. 2,18,000/- which was duly encashed.
3. Respondent, being dissatisfied with the settlement made by the petitioner, filed a complaint before the District Forum. District Forum allowed the complaint and directed the petitioner to pay a sum of Rs. 2,50,000/- along with the bonus due to the respondent and further directed to pay a sum of Rs. 31,440/- which was earlier wrongly deducted at the time of part payment.
4. Petitioner being dissatisfied with the Order passed by the District Forum filed an Appeal before the State Commission. The State Commission dismissed the Appeal and affirmed the Order passed by the District Forum and directed the petitioner to pay the remaining amount of Rs. 2,50,000/- to the complainant with bonus as admissible.
5. Being dissati
