LAWS(NCD)-2007-3-74

J KUMUDHAM Vs. LIFE INSURANCE CORPORATION

Decided On March 09, 2007
J KUMUDHAM Appellant
V/S
LIFE INSURANCE CORPORATION Respondents

JUDGEMENT

(1.) -THE complainant in COP No. 86 of 2001 on the file of the District Consumer Disputes Redressal Forum, Namakkal is the appellant herein. The facts material for the disposal of the appeal are as under : On 28. 1. 1993, the complainant's husband Mr. V. N. Chandrasekaran who was working as Manager in the 2nd opposite party Society, took an insurance for Rs. 50,000 under Jeevan Mitra, Double cover Endowment Plan, with the 1st opposite party w. e. f. 29. 1. 1993. The annual premium amount was to be deducted from his salary by the 2nd opposite party and paid to the 1st opposite party. The complainant's husband suffered a paralytic attack on 27. 7. 1995 and since then he was on medical leave. According to the complainant, due to the lapse on the part of the employees of the 2nd opposite party, the premia for over two years for a number of employees including the complainant's husband was not remitted by them to the 1st opposite party. On 19. 12. 1998 there was a reslution passed by the 2nd opposite party for payment of premium for two years for three employees and cheque was drawn and sent to the 1st opposite party. The 1st opposite party rejected and returned the cheque on the ground that the policy of the complainant's husband had lapsed in July 1996. The complainant's husband passed away on 24. 7. 1997. The complainant notified his death on 29. 7. 1997 with a request to send the claim form. On 1. 12. 1997 the same was sent by the 1st opposite party with a covering letter. On 3. 1. 1998, 19. 3. 1998 and 30. 6. 1998 reminders were sent by the 1st opposite party. On 4. 5. 2000 a Lawyer's notice was issued. On 26. 2. 2000 the complaint came to be filed.

(2.) THE case of the Ist opposite party was as follows: The complainant's husband had submitted a copy of his application to the Commissioner, Employes' Provident Fund Scheme whereby an authorization was given to the PF Commissioner to withdraw a sum of Rs. 3,808 from his P. F. account and remit the same to the LIC towards initial payment in respect of his insurance premium. The said authorization contained some very important conditions such as the premium withdrawn from the PF account should be forwarded to the 1st opposite party within the time allowed for such payment. The above provision would be effective only if the insurance policy was duly assigned to the Central Board of Trustees, Employees' Provident Fund Organisation and received by the Comissioner after proper registration and assignment in the books of the Corporation. It was also to be noted that at least three full years' premium had been paid in respect of the policy, any subequent premium be not duly paid, the policy should not be wholly void but the sum assured by it should be reduced to such a sum as would bear the same ratio to the full sum assured as the number of premium actually paid would bear to the total number originally. The complainant did not return the claim forms. The policy was not in force for the full sum assured. The value of the policy stood reduced to Rs. 9,375 as per the policy condition which the deceased had accepted. As a matter of business courtesy the 1st opposite party reminded the policy holders about the payment of premium to be made as and when it fell due although there was no contractual obligation. Similarly, when the premium was not paid within a period of six months, default notice was paid. LIC had sent a notice when the premium fell due for payment. Thereafter, a default notice was sent during July 1996 and a final lapse notice was also sent. The nominee, without returning the discharge forms, sent a letter dated 10. 9. 1998 stating that she had filed a petition to the employer of the life assured and requested the 1st opposite party to temporarily suspend the processing of the claim. Thereafter, the complaint came to be filed. The LIC had no records to support the facts that the policy was assigned in favour of the P. F. authorites and sent a notice for January 1996 premium due and when the premium was not paid within a period of six months, default notice was sent. There was no response from the life assured. In such circumstances, there was no deficiency in service.

(3.) THE 2nd opposite party took a stand that the life assured had taken medical leave from 27. 7. 1995 because of paralytic attack. When the 2nd opposite party had sent a cheque to revive the policy, LIC rejected the same and returned the cheque for want of medical certificate of the life assured. As the life assured failed to produce the same, the 2nd opposite party said that they were not liable to pay any amount.