IMPORTANT POINT
Where insured was not heard of alive or dead for seven years and till his presumed death was declared by court under Section 108 Evidence Act, it policy was not kept alive by nominee or claimant, insurer was justified in repudiating its claim.

Irshad Hussain, President—This is insurer’s appeal against the order dated 16.5.2007 passed by the District Forum, Rudraprayag, allowing the Consumer Complaint No.31/2006 and directing the insurer to pay a sum of Rs.2,00,000 to the complainant through the District Forum upto 20.6.2007, failing which the insurer shall be liable to pay the amount together with interest @ 6% per annum.

2. The facts of the case, in brief, are that the husband of the complainant late Sh. Bijender Singh has taken a 15 years Money Back Insurance Policy on his own life for a sum of Rs.1,00,000 with accident benefits. The policy was effective from 15.7.1997 to 14.7.2012. The insured Sh. Bijender Singh on 9.7.1998, had gone away from his house and did not come back. Smt. Sunita Devi, the wife of insured, was the nominee in the aforesaid policy. A First Information Report was lodged with the Police Station, Kirti Nagar, Tehri Garhwal by the mother of the insured. It was feared that either the insured had drowned in the river or was murdered. Two persons were named as suspects, but they were acquitted by the District and Sessions Judge, Rudraprayag vide judgment dated 8.11.2001 passed in Sessions Trial No.21/2001. However, the insured was presumed to be dead vide an order dated 25.5.2006 passed by Civil Judge (Junior Division), Rudraprayag in Suit No.18/2005 under the provisions of Section 108 of the Evidence Act. The complainant per letter dated 7.6.2006 (Paper No.16), requested the Life Insurance Corporation of India (for short “LIC”) to send the claim form, so that the claim for the insured sum with accident benefit, could be submitted. The LIC vide its letter dated 13.6.2006 (Paper No.17), informed the complainant that the policy was not in currency and had lapsed and no amount is payable to her. It is also stated in the said letter that she had already been advised by the LIC vide letter dated 6.10.1998 to keep the policy in currency by paying the premium for a period of 7 years, but she had not paid the premium. Upon this, the complainant filed a consumer complaint before the District Forum, Rudraprayag, which was allowed by the District Forum per impugned order in the above terms. Aggrieved by the said order, the LIC has filed this appeal.

3. We have heard the learned Counsel for the parties and perused the material placed on record in the light of the legal aspects of the case.

4. The insured person, the husband of the complainant had disappeared on 9.7.1998. It was also not confirmed whether he had died or was still alive. Someone told the complainant that her husband had drowned in the river. Others told that he was murdered. However, the dead body of the insured person could not be recovered. The Court acquitted the suspects alleged to have murdered the insured vide judgment dated 8.11.2001 (Paper Nos. 31 to 32). In such a case, the provisions of Section 108 of the Evidence Act are attracted and accordingly the Court vide its decision dated 25.5.2006 (Paper Nos. 25 to 28), declared the insured person as presumed to be dead.

5. The appellant had advised the complainant, as stated in its letter dated 13.6.2006, referred above that the complainant should keep the policy alive by paying the premium, unless her husband is declared dead by a Court of Law or upto a period of 7 years. The complainant did not adhere to this advice and as a result, the policy got lapsed. On 7.6.2006, she submitted an application (Paper No.16), to the appellant along with the photocopies of the Court’s decision dated 25.5.2006, requesting therein to send the claim form. The appellant replied to her letter on 13.6.2006, informing her that the policy had lapsed and, thus, no claim is payable.

6. A question, which underlies in such cases, is whether the policy should be treated as lapsed due to non-payment of premium after the date of disappearance of the insured person, particularly when the insured person was declared presumed to be dead by a Court of Law under the p