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HARYANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
R.S. Madan, President and B.M. Bedi, Judicial Member
LIFE INSURANCE CORPORATION OF INDIA AND ORS. - Appellants
Versus
KIRAN RAM DEV AND ORS. - Respondents
First Appeal No. 2019 of 2005
Decided on : 16-05-2012
Mr. Rohit Goswami, Advocate, for the Appellant; Mr. Banni Thomas, Advocate, Mr. Saurabh Bajaj, Advocate, for the Respondent
The court emphasized the importance of strict adherence to the terms and conditions of the insurance policy, as well as the legal precedent set by relevant judgments, in determining the liability of the opposite parties to pay insurable benefits.
Headnote:
Life Insurance Policy - Insurable Benefits - Clause 2 of the conditions and privileges of the Insurance Policy - Life Insurance Corporation of India v. Mani Ram, 2005 (2) CPC 422 (SC) - L.I.C. of India v. Ramesh Chandra, 1997 (2) Con.LT 474 (NC)
Fact of the Case:
The appellant-opposite parties repudiated the claim submitted by the complainants for insurable benefits from a Life Insurance Policy, stating that the policy had lapsed due to non-payment of premium and that nothing was payable to the claimants. The District Consumer Forum granted relief to the complainant, directing the opposite parties to pay the insurable benefits, compensation, and litigation expenses. The opposite parties appealed against this order.
Finding of the Court:
The court found that the policy had lapsed due to non-payment of premium within the grace period, and relied on the judgment in Life Insurance Corporation of India v. Mani Ram to support this finding. It also cited L.I.C. of India v. Ramesh Chandra to emphasize that the terms and conditions of the policy bond are the basis of the contract of insurance, and the District Forum has no jurisdiction to go beyond them. As a result, the court set aside the impugned order and dismissed the complaint.
Issues: The main issue was whether the opposite parties were liable to pay insurable benefits to the claimants despite the policy lapsing due to non-payment of premium.
Ratio Decidendi: The court's decision was based on the interpretation of Clause 2 of the conditions and privileges of the Insurance Policy, as well as the legal principles established in the judgments of Life Insurance Corporation of India v. Mani Ram and L.I.C. of India v. Ramesh Chandra.
Final Decision: The appeal was accepted, the impugned order was set aside, and the complaint was dismissed. The statutory amount deposited at the time of filing the appeal was ordered to be refunded to the appellants.
ORDER
R.S. Madan, President - Challenge in this appeal is to the order dated 23.8.2005 passed by the District Consumer Disputes Redressal Forum, Panipat in complaint No. 331/2003 wherein the respondent-complainant sought payment of the insurable benefits from the appellant-opposite parties in respect of the Life Insurance Policy obtained by the life assured Pritam Singh, since deceased, husband of the respondent-complainant No. l and father of the respondent-complainant Nos. 2 and 3.
2. The brief facts not disputed between the parties are that the life assured Pritam Singh was insured with the appellant-opposite parties for Rupees five lacs vide Life Insurance Policy bearing No. 172876123 dated 28.1.2002. The premium of the above said policy which was due on 28.4.2003 was not paid in time and the life assured issued a cheque No. 946656 dated 22.5.2003 for Rs. 8,150 i.e. the premium which was to be paid upto 28.4.2003. The opposite parties sent the above said cheque for collection of the amount from the Bank where the account of the life assured was opened by him i.e. Syndicate Bank, Panipat but the same was dishonoured by the bank on 27.5.2003 with the remarks "Exceeds arrangements". Thus, the policy lapsed on 28.5.2003 due to non-payment of premium i.e. after the expiry of grace period of 30 days. Unfortunately, the life assured died on 10.6.2003. Thus, the claim submitted by the complainants with respect to the above said policy was repudiated on the ground that the policy was lapsed on the date of death of the life assured and also that till the date of death, the policy had not completed three years and for that reason nothing was payable to the claimants. Aggrieved against the action of the opposite parties, the complainants filed complaint before the District Consumer Forum seeking direction to the opposite parties to pay the insurable benefits.
3. Upon notice, the opposite parties appeared and contested the complainant by filling written statement. In their written statement, the opposite party Nos. 1 to 3 (appellants herein) justified repudiation of complainants' claim on the ground stated in the preceding para of this order. Opposite Party No. 4 - Syndicate Bank, Panipat in its separate written statement stated that the life assured was the proprietor of the firm M/s. Simran Fab., Panipat and he had availed a cash credit limit of Rupees two lacs from the Bank. It was stated that the life assured had deposited two cheques in his account worth Rs. 49,000 and Rs. 28.000 for collection of the funds of the said cheques through clearing and the same were sent for clearing on the next day i.e. on 3.4.2003 as per rules of the Bank but the life assured had requested to the Manager of the Bank for temporary over draft of Rs. 5.000 only through the cheque as he was in dire need at that time. One draft of Rs. 28,000 was honoured whereas the other cheque of Rs. 49,000 was dishonoured and under these circumstances the above said account of the firm had become below the sanctioned limit of Rs. 2,00,000 and the balance amount of Rs. 1,76,432 had been shown as a debit balance in the said account of the firm. Thus, there was no sufficient amount in cash credit limits in the said account to honour the cheque in question and thus the cheque which was for paying the premium amount of the Life Insurance Policy was rightly dishonoured.
4. On appraisal of the pleadings of the parties and the evidence adduced on the record, District Consumer Forum held the opposite party Nos. l to 3 deficient in service and while accepting the complaint granted following relief to the complainant:
".....we accept the present complaint and direct the respondent Nos. 1 to 3 to pay an amount of Rupees 5,00,000 (Rupees five lacs only) together with the interest at the rate of twelve per cent from 10.9.2003, (because life assured had died on 10.6.2003 and three months time was sufficient to settle the claim) till the date of realization, with all the other admissible b
