ORIENTAL INSURANCE COMPANY LTD Vs. ARTI PURSETH

JUDGEMENT

(1.) Petitioner, Smt. Pramila Vikram Khillare, filed Complaint No. 67 of 1995 before the Consumer Disputes Redressal Forum, Aurangabad, against the L.I.C. (Life Insurance Corporation of India), contending that the husband of the complainant had taken an insurance policy for a sum of Rs. 25,000/- on 30th March, 1993 by depositing the first premium amount. At that time the age of the deceased was 43 years. Initial premium was paid on 30th March, 1993; and, thereafter, the subsequent quarterly premiums were also payable on 30th September, 30th December and so on. The husband of the complainant died on 30th July, 1994 leaving behind the applicant (complainant), five daughters and one son. The LIC repudiated the claim on the ground that the deceased had failed to pay the premium for the last quarter which was payable on 12th June, 1994, adding the grace period of 30 days, the deceased was required to pay the premium before 12th July, 1994. As he had expired on 13th July, 1994, the heirs were not entitled to the benefit of the insurance.

(2.) It is admitted that the deceased paid the first premium on 30th June, 1993. However, it is contended by the LIC that the policy was issued with back date commencing from 12th March, 1993; and, therefore, the premium was payable on 12th June, 1994. The deceased expired after the expiry of the grace period of one month and, therefore, the policy had lapsed, and, hence, the complainant was not entitled for the policy amount in view of the Rules 4 and 5 printed on the overleaf of the policy. The claim for compensation of Rs. 10,000/- was also denied.

(3.) The District Forum by its judgment and order dated 5.9.1997 allowed the complaint by holding that the first premium was paid on 30th March, 1993 in a routine manner; counting the 30 days grace period for paying the premium of 30th June, the deceased was required to pay the premium before 30th July and the person had expired before 30th July; and, therefore, the heirs were entitled to the benefit of the insurance. The District Forum observed that there is nothing on record to show that the deceased had given any option for issuing back-dated policy. No consent letter of the deceased to that effect was produced by the LIC. The District Forum also observed that the life insurance policies are obtained by persons for benefit of their family members and if the claims are going to be refused on such technical ground, public at large would suffer; and, there was no reason for not taking a sympathetic view. The District Forum, therefore, directed the LIC to pay the amount with interest at the rate of 18% p.a. from the date of the death of the deceased.