M KANAGAVALLI Vs. DIV MANAGER LIC OF INDIA

JUDGEMENT

(1.) This First Appeal arises out of the order dated 1st June, 1994 of the State Commission, Tamil Nadu in Original Petition No. 537/1992. Brief facts of the case are :

(2.) The appellants M. Kanagavalli & Ors. are legal heirs of one Murugesan who died on 28.4.1991. The said Murugesan had taken a Life Insurance Policy from the respondent Life Insurance Corporation of India for Rs. 1,00,000/-. The premium was required to be paid quarterly. Two quarterly payments of the premium were made on time. The third premium was due on 23.2.1991 and it was not paid within the prescribed time. It was not even paid during the grace period of one month. On 27.4.1991 i.e. one day before his death the deceased Murugesan took a Pay Order for the policy note of Rs. 1,247.50 and interest of Rs. 12.50 totalling Rs. 1,260/- from the UCO Bank and sent to the 2nd respondent, the Branch Manager, LIC, by post. As mentioned, on the next day he unfortunately expired. The Pay Order was received by the opposite party on 30.4.1991 and was encashed on 3.5.1991. The claim made by the nominee, the 1st appellant was rejected by the LIC on the grounds that policy had lapsed for non-payment of the premium on the expiry of the grace period.

(3.) When the matter was taken up before the State Commission, the State Commission held the facts that policy has lapsed for non-payment of the premium on the expiry of the grace period, revival of policy is not automatic, revival takes place only on acceptance by the insurer of all arrears of premium with interest as stipulated in the rules and that the revival could only be during the life-time of the insured and not after his death. Since the amount was encashed only on 3.5.1991 i.e. about a week after the death of the insured, there can be no question of revival of the policy. On these grounds the State Commission dismissed the complaint.