LIC OF INDIA Vs. M ANJALI

JUDGEMENT

(1.) We have no hesitation in holding that this appeal is entitled to acceptance. The facts in this case are not in controversy. Here, admittedly, the proposal was given by the employees of the Stores under the E. P. F. Scheme. The premium has to be sent by the Commisisoner, Employees' Provident Fund, to the Life Insurance Corporation within the time stipulated. Thus there is an understanding or agreement between the E. P. F. and the LIC with regard to the same. The first premium in this case was paid by the authorities on 16.2.1996 and the commencement of the policy was on 20.4.1995. The Provident Fund office was bound to send the premiums in time. It is not a policy under Salary Savings Scheme in which case, the LIC can be held liable if ever there is an omission by the employer to remit the premium deducted from the salary on time. But this is altogether a different case under which the Provident Fund Department is involved and which is authorized to withdraw the premium amount and remit it to the LIC. They have also authorized the Commissioner to make periodical withdrawal of premium and pay the same whenever it falls due. Therefore, it is the sole and exclusive responsibility of the EPF Commissioner. There is no liability attached to the LIC nor they have any control over the payment. In this case, it is not a Group Policy but one issued to the life assured under the Provident Fund whereas the premiums are funded from the P. F. account of the employee and the policy has to be assigned by the policy holder in favour of the P. F. Commissioner as per the Rules. The policy concerned was under Jeevan Mitra Plan. The proposal was submitted on 1.9.1995 and it was accepted on 13.9.1995. The first premium had to be paid within 30 days. The first premium was remitted by the authorities only on 16.2.1996 whereupon the proposal was accepted on the strength of the declaration of good health submitted with the proposal. The commencement of the policy was dated back to 20.4.1995 so that the policy holder will have the benefit of lesser premium applicable to them. The second yearly premium fell due on 20.2.1996 and was not remitted within the grace period of one month as a result of which the policy had lapsed. On the date of death of the life assured, viz. , 17.2.1997, the policy was in a lapsed condition. The appellant received the premium relating to the said policy along with 37 other policies on 4.4.1997 viz. , after the death of the life assured. The conditions of the policy make it clear that a lapsed policy can be revived provided there is a declaration of good health and the premiums are paid in full. The mere acceptance of premium by the insurer cannot amount to a revival of the policy. Here in this case, the premium was paid only on 4.4.1997 whereas the policy had lapsed already and on the date of death of the life assured viz. , 17.2.1997, the policy had stood lapsed. Therefore, any subsequent payment of premium cannot revive the policy. More so, when the condition is that for revival of the lapsed policy, there must be an accompanying declaration of good health. Therefore, in such circumstances, it is apparent that the policy had lapsed. But the appellant had not accepted or indicated either directly or indirectly the renewal of the policy. Therefore, there cannot be a revival of the policy since the revival is not automatic on the mere payment of the premium. The National Commission has held in its decision reported in 2004 (1) CPR 3 (NC) that when a policy lapsed due to non-payment of premium within the period it does not stand revived automatically just on receipt of the premium by the insurer which was paid after the death of the insured. Therefore, in such circumstances, it is obvious that this appeal has to be accepted.

(2.) In the result, therefore, this appeal is allowed, but in the circumstances, without costs. The order passed by the Lower Forum is hereby set aside. The complaint as against the 3rd opposite party will stand dismissed. In the circumstances, the parties are directed to bear their own costs. Appeal allowed.