LIC OF INDIA Vs. R. VENKATRAMAIAH

JUDGEMENT

(1.) The present Revision Petition, under Section 21 (b) of the Consumer Protection Act, 1986 (for short "the Act") has been filed by the Petitioner against order dated 01.11.2010 of the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (for short "State Commission") in First Appeal No. 1143 of 2008 wherein the Appeal filed by the Petitioner was dismissed.

(2.) The case of the Complainant is that the Opposite Party Insurance Company issued a Policy for Rs. 50 Lakhs covering a period of 12 years from 11.10.2000 by collecting an annual premium of Rs. 5,48,427. The Complainant stated that he underwent angiogram during April, 1986 for coronary artery disease class-II angina atypical with hyperlipidaemia. In the year 2002 he could not pay the premium due to financial difficulties but subsequently sought revival of the Policy in March 2005. The Insurance Company sought medical examination as a pre-condition for revival of the Policy and the Complainant accordingly furnished his medical reports, wherein there was no variation. The Insurance Company agreed to revive the Policy on payment of penalty of Rs. 2,37,111/- in addition to the regular annual premium with arrears. Though the Complainant had agreed to their proposal, the Opposite Party later, vide letter dated 08.04.2000 intimated rejection of revival of the Policy to the Complainant. The Complainant, therefore, filed a complaint before the District Forum with the following prayer: -

(3.) The case of the Complainant was contested by the Opposite Parties who stated that the Complainant had expressed his desire for taking an Insurance Policy. A Policy was issued on 11.10.2000 to the Complainant curtailing the coverage period to 12 years as against 15 years, on payment of extra premium at 7.5% over and above the regular premium, since potential health risk surfaced from his medical reports. As the Complainant defaulted and did not pay premium for full three years, he was not entitled for revival of the Policy or surrender value. The expert committee of the Insurance Company considered the case of the Complainant and found that his Policy could not be revived in view of his medical health record. The Insurance Company had every right to either accept or reject revival of an Insurance Policy. They relied on Condition 4 of the Insurance Policy which stipulated that "If after at least three full years premium have been paid in respect of the policy, any subsequent premium be not duly paid, the policy shall not be wholly void, but the sum assured by it shall be reduced to such a sum as shall bear the same ratio with the full sum assured."