The main legal point established in the judgment is that an insurance policy is a binding contract between the parties, and the terms and conditions of the policy, once accepted, govern the rights and obligations of both parties.

ORDER

Mrs. Vineeta Rai, Member - The Petitioner (LIC of India) has filed the present revision petition against the order of the State Commission which dismissed their Appeal No. 1007/2004 wherein Abdul Salim was the Respondent.

2. The facts of the case according to the Respondent are that he had obtained an insurance policy called "Asha Deep" with accident benefits for a sum of Rs. 50,000 for a period of 15 years w.e.f. 28.11.1993 and for which the quarterly payable premium was Rs. 1,009. Respondent had been regularly paying the required premium. During the policy period on 3.9.1997, Respondent suffered acute chest pain and on medical advice he approached a medical expert, Dr. Sudheer Nayak at Medical Hospitals, Hyderabad who after examining him admitted him in the hospital for further medical examination at the end of which he was informed that he is suffering from Coronary Artery Disease and an emergency coronary angiogram was conducted 3.9.1997. Thereafter, as advised, Respondent underwent Angioplasty with stent for which he had to pay a total amount of Rs. 1,15,000. Respondent filed a claim along with relevant documents including all the medical reports with the Petitioner/Insurance Corporation on 18.11.1997. In response, the Petitioner/Insurance Corporation informed the Respondent that the disease for which the Respondent had filed a claim was not under the said policy and, therefore, the claim could not be entertained. Since, according to the Respondent, he was entitled to the claim within the scope of Para 11(i) of the Policy and therefore the repudiation of his policy amounted to deficiency in service, he filed a complaint before the District Forum requesting that the Petitioner be directed to pay the Respondent Rs. 50,000 under the Policy. Rs. 5,000 for mental agony and Rs. 2,000 as litigation costs.

3. Petitioner denied any deficiency in service and stated that as per the Policy taken by the Respondent, Angioplasty is specifically excluded and in respect of Coronary Artery Disease, the benefit is applicable only for open heart by-pass surgery. Therefore, the claim of the Respondent was rightly repudiated.

4. The District Forum after hearing both parties partly allowed the complaint and as per its interpretation of the policy, the District Forum concluded that the Respondent was entitled to 50% of the claim which amounts to Rs. 25,000. The District Forum, therefore, directed the Petitioner to pay the Respondent this amount along with 9% interest from December, 1997 till realization, Rs. 3,000 was awarded as compensation and Rs. 500 as costs.

5. Petitioner filed an appeal against this order before the State Commission which dismissed the same by upholding the order of the District Forum in toto. The operative part of the order of the State Commission reads as follows:

"Ex. A.4 (Conditions and Privileges under the said policy) clearly shows that the policy holder would be eligible for the benefits (i) Immediate payment of 50% of the sum assured (ii) Waiver of subsequent premiums falling due from the Policy anniversary immediately following the date on which the conditions for the eligibility to the benefits are established; (iii) Payment of an amount equal to 10% of the sum assured, every year commencing from the Policy anniversary falling on or after the date of affliction and ending with the Policy anniversary preceding the date of maturity or the date of death of the life assured, whichever is earlier; (iv) Payment of balance 50% of the sum assured and vested bonuses on the date of maturity or on death of the life assured, whichever is earlier. The bonuses will be calculated on the full sum assured even though 50% of the sum assured would have been paid earlier. Admittedly in this case the risk is commenced from 28.11.1993 and the complainant underwent operation on 3.9.1997 i.e. after more than three years. So the complainant is entitled to claim the benefit as per the above mentioned benefits. The complainant is entitled