HUCHHAPPA Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this Writ Petition, the petitioners have sought to declare clause 4 of the Insurance Policy as unconstitutional and ultravires and further, to declare that the condition to undergo Medical Test for getting the revival or renewal of the policy as null and void and to issue writ of mandamus or any other direction directing the respondents 2 and 3 not to forfeit the premium amount paid by the discontinued policy holders and to treat the said amount as fixed deposit till the maturity period and further to issue writ of mandamus to direct the respondent corporation to deposit all such alleged forfeited amount in any one of the scheduled bank or in the alternative, to treat the said amount as the deposit of the policy holders payable at the time of maturity of the policy along with the reasonable interest and for such other reliefs.

(2.) HEARD the Learned Counsel for the petitioner and the Learned counsel for the respondent.

(3.) THE petitioners are said to be the policy holders under the respondent No. 2 and the policy is being issued by the respondent no. 3 branch. The Petitioner No. 1 is shown to have obtained policy on the assured sum of Rs. 50,000/- for a maturity period of 20 years. As per the terms of the policy, he has to pay Rs. 1,757/- towards half yearly premium. Similarly, petitioner No. 2 had obtained a policy for an assured sum of Rs. 75,000/- vide Annexures A and B. According to the petitioners, the object under the LIC Act, 1956, is for providing regulation and Control of Business of Life Insurance. As per section 6, the object of the Act is to secure the LIC business and to develop the same to the best advantage of the community and thereby the Corporation is issuing LIC policies providing for eventualities. It is stated that to have the benefit of LIC policy, the condition precedent is that the policy holder has to undergo medical test to prove that he is medically fit on the date of issuance of policy. On the basis of the medical report, age, maturity period, normally the premium amount will be determined. According to the petitioners, the medical test undergone holds good till the date of maturity and in case of death before the maturity period, the policy holder will be entitled for the entire assured sum. The main grievances of the petitioners is that if the policy holder fails to pay the premium amount, the policy would lapse. Such a policy holder has to get the policy revived on undergoing medical test and if such a policy holder does not intend to continue the policy, then such policy holder will not be entitled for the amount already paid. If such premium is paid for less than three years, the said amount will be forfeited and the same has been questioned by the petitioner as arbitrary and unreasonable and would work out hardship on the policy holders.