A lapsed insurance policy cannot be revived post-death, and the Insurance Ombudsman lacks authority to bypass contract terms based on equity.

JUDGMENT

Anil K. Narendran, J.

The appellant filed W.P.(C)No.7748 of 2025, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India , seeking a writ of certiorari to quash Ext.P6 award dated 21.11.2014 of the 1^st respondent Insurance Ombudsman, Kochi, and for a declaration that the reason stated by the 1^st respondent in allowing the claim made by the 2^nd respondent is unsustainable and vitiated by arbitrariness.

2. Going by the averments in the writ petition, on 21.06.2010, the life assured (wife of the 2^nd respondent) had taken Ext.P1 LIC Policy No.785033533 on her life from the Attingal Branch of the Life Insurance Corporation of India for an assured sum of Rs.2,50,000/- with quarterly premiums of Rs.3,062/-, payable on the 21^st day of March, June, September and December of every year from 21.06.2010, maturing on 21.06.2026. The policy lapsed with effect from 22.04.2012, as the life assured (wife of the 2^nd respondent) defaulted the quarterly premium of Rs.3,062/-, payable on 21.03.2012, and after the expiry of the grace period of 30 days from 21.03.2012. On 25.04.2012, before 12.05 p.m., the life assured died due to Aneurysm as per Ext.P3 postmortem certificate. The postmortem commenced at 12.05 p.m. and concluded by 1.05 p.m., on 25.04.2012. As on the date of death of the life assured, the policy was in a lapsed condition. The 2^nd respondent-complainant (husband of the life assured), paid the defaulted quarterly premium only after the death of the life assured on 25.04.2012 at 14.51 hrs., i.e., four days after the grace period of 30 days that expired on 21.04.2012.

3. In the writ petition, it was stated that in the event of the death of the policyholder (life assured) before the expiry of the policy term, the contract between LIC and the policyholder ceases. A policy cannot be revived after the death of the life assured and expiry of the grace period, and hence, the petitioner rightly rejected the claim made by the 2ndrespondent. Feeling aggrieved, the 2ndrespondent filed Ext.P5 complaint before the 1strespondent, through his power of attorney holder, for directing LIC to allow the death claim of the policyholder and disburse the amount to the nominee, Navami Krishna, minor daughter of the deceased policyholder. The 1strespondent Insurance Ombudsman, by Ext.P6 award dated 21.11.2014, allowed the claim, directing LIC to condone the delay and pay the claim, without a speaking order, while admitting that, technically, the policy had lapsed. In the writ petition, it was contended that Rule 12 of the Redressal of Public Grievances Rules, 1998 , does not empower the 1strespondent Insurance Ombudsman to condone the delay or direct the insurer to condone the delay, after expiry of the grace period, in breach of policy conditions 2 and 4.

4. In the writ petition, the 2^nd respondent filed a counter affidavit dated 17.06.2015, opposing the reliefs sought for, producing therewith Ext.R2(a) premium reminder letter received on 12.01.2013. Paragraphs 4 to 7 of that counter affidavit read thus;

“4. The averment made in Para 3 of the writ petition is unjustifiable and against the facts. The life assured Smt.Jessy, wife of the 2^nd respondent, had taken a LIC policy bearing Policy No.785033533 on her life from the Attingal Branch of the petitioner, Life Insurance Corporation of India, for the assured sum of Rs.2.5 lakhs, with a quarterly premium of Rs.3,062/- with effect from 21.06.2010.

4. My wife, the life assured, remitted the quarterly premium of Rs.3,062/- regularly till March, 2012 (30 days grace period) until she expired on 25.04.2012. The premium of Rs.3,062/- for the quarter