Heard Sri G Nataraj, Learned counsel appearing for

the petitioner and Sri N Vageesh, learned counsel

appearing for the respondent.

2. The controversy lies in a narrow compass. The

respondent of this petition had subscribed to Life

Insurance Company policy issued by Life Insurance

Corporation of India (Hereinafter referred to as 'LIC' for

short) which is the petitioner in this case. The

subscriber of the policy claims that he had issued

cheque

bearing

No.306135

dated

02.12.2010

for

Rs.6514/- which was the premium amount due in

3

respect of the policy issued by the LIC. It appears that

the cheque was not honoured as the bank found that the

signature was not tallying with the recorded signature of

the drawer. Accordingly, the premium was not paid.

LIC claims that it has intimated the subscriber of the

policy, about the dishonour of the cheque by issuing a

letter through speed post. According to LIC, despite

intimating there was no payment of premium by the

policy holder. Accordingly, the policy stood lapsed.

3. The policy holder was under the impression

that the policy was in force and when he had tried to

pay premium, the following year, he was informed that

the policy had lapsed on account of non-payment of

premium for the previous year. The policy holder claims

that he was not intimated by the LIC. Accordingly, the

respondent/policy holder filed a petition before the

Permanent Lok Adalath, Mysuru. On receipt of notice by

4

the Permanent Lok Adalath, Mysuru, LIC appeared.

Attempt to reconcile failed. Thereafter, the matter was

adjudicated by the Permanent Lok Adalath, Mysuru. On

going through the records, Permanent Lok Adalath,

Mysuru noticed that there was no proof relating to

service of intimation by LIC regarding dishonour of

cheque issued by the policy holder/respondent.

4. Primarily, on this basis, Permanent Lok

Adalath, Mysuru has concluded that LIC was negligent in

not informing the petitioner relating to dishonour of

cheque and accordingly, the petition filed by the policy

holder/respondent was allowed. LIC was directed to pay

Rs.20,000/- towards damages and was also directed not

to recover default fee of Rs.431/-. This order of the

Permanent Lok Adalath, Mysuru, dated 21.03.2014 is

called in question by the LIC in this petition.

5

5. Learned counsel for the petitioner Sri G

Nataraj would submit that LIC has intimated the

dishonour of cheque through speed post and the

materials are placed before Permanent Lok Adalath,

Mysuru by the Corporation relating to the dispatch of

intimation through speed post. It is also his submission

that the notice was sent to the registered address of the

policy holder, as such it can be safely concluded that the

intimation

is

duly

served

on

the

policy

holder.

Alternatively, he would also submit that assuming that

the intimation was not sent by the LIC, the duty was

also cast on the petitioner to ensure that the cheque is

honoured and the payment is made. Further, there is

lapse on the part of the petitioner in not cross checking

as to whether premium was paid or not. He would

further submit that there is no lapse on the part of the

petitioner/Corporation and policy has lapsed because of

6

non-payment of premium which was one of the terms

and conditions of the policy issued by LIC.

6. Learned counsel for the respondent would

submit that intimation said to have been sent by LIC is

not served on the respondent of this petition. Learned

counsel would further submit that LIC had an obligation

to inform that the cheque is dishonoured and the policy

holder bonafide carried the impression that the cheque

is honoured, as such, there was no occasion for LIC to

cancel the policy.

7. This Court has considered the contentions

raised by the learned counsel for the petitioner as well

as the respondent and perused the impugned order. In

paragraph 60 of the impugned judgment, Permanent

Lok Adalath, Mysuru has noticed that LIC has lodged a

complaint before the postal authorities afte