The main legal point established in the judgment is that the insurance company and its agent cannot be held liable for accepting insurance premiums after the death of the insured, as per the specific provisions of the Consumer Protection Act, 1986 and previous case law.

ORDER :

1. Baldev Singh/Complainant filed a Consumer Complaint under Section 12 of the Consumer Protection Act, 1986 (for short, ‘Act’) against Life Insurance Corporation of India/O.P No. 1 and its agent Ashwani Kumar/O.P. No. 2 on the allegations that his son Rajnish Rohal got himself insured with Life Insurance Corporation of India (for short, ‘L.I.C.’) on 22.6.2001 through their Agent Ashwani Kumar and Policy Bond was issued on 28.6.2001. It is further stated that complainant used to deposit the premium through that Agent and he had already paid the instalments of March, 2002 in the same month and for June, 2002 in the month of July.

2. On 12.7.2002, Rajnish Rohal (since deceased) met with an accident and consequently he died. When the Agent came to know about the death, he went to Branch Office of L.I.C. and deposited the premium at 10.30 a.m. along with late fee. Thus, the Agent did not deposit the premium for month of March and June, in time. Later on, complainant wrote letter to the Branch Manager of LIC to settle the Claim. However, complainant could not produce the original receipt as it was with the Agent. Consequently, complainant was informed by the LIC that quarterly premium of March, 2002 has been received by them on 12.7.2002, that is, after the death of the deceased. Thus, loss has been caused to the complainant due to the act of Ashwani Kumar, Agent, LIC is also liable for negligence of its Agent. Thereafter, a Consumer Complaint was filed in which Complainant had claimed a sum of Rs. 1 lac along with Rs. 2,500 as litigation cost.

3. L.I.C. contested the complaint and raised preliminary objections. On merits, it is stated that policy of the deceased had lapsed since the amount of premium was deposited after the death of deceased on 12.7.2002. It is further stated that answering respondent never authorized Ashwani Kumar to receive the premium. Even otherwise, as per rules, the Agents are not authorized to collect the premium on behalf of the answering respondent. It is further stated that intimation regarding the death of life assured was received in the office of answering respondent only on 7.8.2002. Further, at the time of death of the life assured, the policy in question was lying in lapsed condition and thereafter claims of the complainant was repudiated.

4. Ashwani Kumar-Agent in its reply has stated that he works for L.I.C. to guide the public at large about salient features of the insurance. It is further stated that payment of premium is the sole responsibility of the insured and as such no duty was ever cast by L.I.C. on the answering respondent. Thus, no cause of action has accrued against him.

5. District Consumer Disputes Redressal Forum, Shimla (for short, ‘District Forum’) vide order dated 2.4.2007, dismissed the complaint.

6. Being aggrieved, complainant filed an appeal before the State Commission which vide impugned order 25.6.2008, allowed the appeal and quashed the order of the District Forum and allowed the Complaint.

7. State Commission in its order held:

“In view of the aforesaid discussion, we are of the considered view that the District Forum below has erred while dismissing the complaint and passing the impugned order and as such this appeal deserves to be allowed. Ordered accordingly. Consequently the order dated 2.4.2007 passed by District Forum below in Complaint No. 43/2004 is hereby quashed and set aside. And the said complaint is allowed. Since admittedly the insurance policy in question was double accident benefit policy, and the insured late Sh Rajnish Lal has died as a result of accident, it is held that the appellant is entitled to Rs. one lac along with other admissible benefits like bonus and interest, etc., as per law. Sum of Rs. one lac shall carry interest at the rate of 9% per annum from the date of filing of the complaint i.e. 24.2.2004 till the date of payment/deposit whichever is earlier. Both the respondents are held liable jointly and severally for payment of this amount. H