Strict enforcement of insurance policy conditions and lack of entitlement to revival or return of premiums after policy lapse.

Venkatasubba Rao, J.

1. By a policy of insurance, dated 14th April 1910, the defendants insured the life of the plaintiff for the sum of Rs. 3,000. The policy was what is generally known as an Endowment Policy. In return for the payment of Rs. 71-13-3 as a premium paid each half-year on 30th March and 30th September for 21 years, the defendants agreed to pay the plaintiffs heirs the sum of Rupees 3,000 if death should take place before the expiration of the period, and the like sum of Rs. 3,000 to the plaintiff himself it ho should survive it. The policy was inter alia subject to the following "privileges and conditions":

Condition No. 3.--Thirty days of grace are allowed for payment of yearly and half-yearly premuims, and 15 days of grace for quarterly and monthly premiums. If payment is not made before expiration of the days of grace, the policy becomes void, and all premiums paid in respect of it will bo forfeited. If any life assured should die within the days of grace and before the payment of the premium, the policy is valid subject to payment of the premium due.

"Condition No. 5.--A policy which has lapsed by nonpayment of the premium may he revived within 12 calendar months from the date on which the unpaid premium became due, if the life assured is still alive, without evidence of health, on payment of the overdue premium or premiums with interest thereon at the rate of eight annas per cent per month or part of a month (with a minimum of 4 annas) and fine of Re. 1 per month or part thereof, on each Rupees 1,000 sum assured, or portion hereof.

"Condition No. 6.--After payment of premiums for two years policies may be surrendered to the company for a cash payment (based on the number of annual premiums paid) on application being made while the policy is in force or within 12 months from the date on which the last unpaid premium became due, if the life assured is still alive, and on payment of all premiums up to the date of application.

"Condition No. 7.--In the case of whole life assurances with a limited number of premiums and of endowment of assurances, after premiums for not less than two years have been paid and on application being made while the policies are in force or within 12 months from the date on which the last unpaid premium became due, if the life assured is still alive, and on payment of all premiums up to the receipt of such application and of interest thereon, the policies will be made paid up for amounts proportionate to the number of annual premuims paid.

2. The plaintiff paid all the premiums payable up to 30th September 1921 and on that date, under the conditions, the policy had not only acquired a surrender value but the plaintiff had in the alternative become entitled to a fully paid-up policy for a proportion of the original sum assured. The plaintiff made default in payment of the premium due on 30th March 1922, and thereupon the defendants wrote to him stating that the policy had lapsed by non-payment of the premium due on 30th March and that it could not under any circumstances be revived after the expiry of 12 months from that date. They then drew his attention to the term of the contract bearing on the point and said that it was still open to him to revive the policy by acting in accordance with that term. There was no reply. The company sent reminders on 31st. August 1922, and on 28th February 1923 with no better result. I may also mention that on 1st November 1922, the defendants forwarded to the plaintiff bonus certificate for Rs. 75 being the bonus allotted to his policy at the companys valuation on 28th February of that, year. It will be seen that all the four letters to which I have referred were written before the expiry of 12 months from the date of default in payment of premium. The plaintiff, who till then evinced no interest, wrote on 25th October 1924, (about 31 months after default) requesting the company to inform him what the most favourable terms were for reviving the poli