LIC could not be asked to make Payment of Claim under the Policy, if the same was lying in a Lapsed Condition at the time of Death of the Policy-Holder [Case Law]

Consumer Protection Act, 1986 -  S. 21(b) - Revision Petition - Life Insurance - LIC could not be asked to make payment of claim under the policy, if the same was lying in a lapsed condition at the time of death of the policy-holder. 

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI

BEFORE: HON'BLE MR. DR. B.C. GUPTA,PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR,MEMBER

REVISION PETITION NO. 3180 OF 2008

(Against the Order dated 28/01/2008 in Appeal No. 848/2007 of the State Commission Delhi)

17 May, 2018 

Life Insurance Corporation of India Vs. Hemlata Garg

For the Petitioner : Mr. Ashok Kashyap, Advocate 

For the Respondent : Mr. Pratap Shanker, Advocate Ms. A. Shivani, Advocate 

O R D E R 

PER DR. B.C. GUPTA, PRESIDING MEMBER 

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 28.01.2008, passed by the Delhi State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission') in First Appeal No. 848/2007, "LIC of India versus Hem Lata Garg", vide which, while dismissing the said appeal, the order dated 26.09.2007, passed by the District Forum in consumer complaint No. 589/2004, filed by the present respondent Hem Lata Garg, allowing the said complaint, was upheld. 

2. Briefly stated, the facts of the case are that Late Ravi Kumar Garg, husband of complainant/present respondent Hem Lata Garg was the holder of LIC Bima Kiran Policy No. 112835384 in his name for a sum of ₹3 lakhs, with date of commencement as 14.08.2000. The said Ravi Kumar Garg died in an accident on 11.01.2003 at 6:30/7:00 PM at Kaithal (Haryana). The complainant/respondent lodged claim in respect of the policy with the LIC, but the same was repudiated on the ground that the said policy had lapsed in August 2002 and had not been got revived till his death. The premium for revival of the policy was received through cheque on 13.01.2003, that is after his death and hence, the claim was not payable. The complainant filed the consumer complaint in question, saying that the cheque for a sum of ₹3,143/- as premium for the policy was sent on 08.01.2003 and alongwith that, three more cheques towards the policies taken by the wife and children of the deceased were also sent. It is stated in the consumer complaint that the cheque was received by the LIC on 11.01.2003, i.e., before the death of the policy holder. The complainant filed the consumer complaint, seeking directions to the LIC to pay the claim in terms of the policy alongwith interest @18% p.a. and also to pay ₹2 lakhs as compensation for damages and ₹11,000/- as litigation cost. 

3. The complaint was resisted by the opposite party (OP) LIC by filing a written version before the District Forum, in which they stated that the premium against the policy, which was due in August 2002, was received in their office on 13.01.2003, whereas the policy holder had already died on 11.01.2003. The said policy was lying in a lapsed condition since 14.08.2002, due to non-payment of premium. The District Forum vide their order dated 26.09.2007, allowed the consumer complaint and directed the LIC to make payment of a sum of ₹3 lakhs with simple interest @9% p.a. from 18.11.2004 and also to pay a compensation of ₹5,000/- in addition to ₹2,000/- as litigation cost. The District Forum observed in their order that the premium receipt dated 13.01.2003 proved that the said cheque was duly encashed on 13.01.2003, after having been received on 11.01.2003. Being aggrieved against the order of the District Forum, the LIC challenged the same by way of an appeal before the State Commission, which was dismissed vide impugned order. The State Commission observed that the cheque in question was got encashed on 13.01.2003 and hence, it must have been received on 11.01.2003, that is before the death of the policy holder. Being aggrieved against the order of the State Commission, the OP LIC is before this Commission by way of the present revision petition. 

4. During proceedings before this Commission, the petitioner LIC was asked to file an affidavit, indicating clearly whether the premium cheque was received in their office on 13.01.2003 or 11.01.2003. In response, the LIC has filed their affidavit, saying that the premium cheque for the policy was deposited in their office on 13.01.2003 at 13:58 hrs as per their official record. The LIC stated that 13.01.2003 was not the date of encashment of cheque, but it was the date of presentation of the cheque at the counter of the LIC. The said cheque was got encashed thereafter, as per the usual procedure. Since the policy holder had already died on 11.01.2003 at about 6:30/7:00PM, the claim was not payable, as the policy was in lapsed condition at that time. 

5. During arguments, the learned counsel for the petitioner LIC argued on similar lines, saying that the policy in question was in lapsed condition at the time of death of the policy holder. The learned counsel has drawn attention to copies of their office documents placed on record, according to which the cheque for the amount of ₹3143/- was received in their office on 13.01.2003 only. The LIC had issued a receipt also on 13.01.2003 as proof of deposit of the said cheque. The learned counsel further stated that the cheque in question had been deposited at their counter and not received through post etc. The learned counsel has drawn attention to an order passed by this Commission in "Life Insurance Corporation of India vs. Consumer Education and Research Society & Ors." [III (1994) CPJ 32 (NC)], in support of his arguments. 

6. Per contra, the learned counsel for the respondent/complainant stated that since there were two concurrent findings in their favour, the present revision petition was liable to be dismissed, as the scope of interference in the exercise of the revisional jurisdiction was limited. The learned counsel took the stand that the cheque in question had reached the office of the LIC on 11.01.2003 and had been encashed on 13.01.2003. The learned counsel has drawn attention to the findings given in the order of the State Commission as well as the District Forum, saying that the said cheque was got encashed on 13.01.2003, meaning thereby that it was received in the office of the LIC on 11.01.2003. The learned counsel further argued that they had sent the said cheque and some other cheques on 08.01.2003 and hence, it should be presumed under section 118 of the Negotiable Instruments Act that there was a valid contract between them and the LIC. The learned counsel also argued that even if the amount in question was received by the LIC after the death of the policy holder, the said amount was in their custody only and hence, the complainant should be given benefit of the same. 

7. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us. 

8. The facts and circumstances on record make it clear that the policy taken by the deceased husband of the complainant was lying in a lapsed condition since August 2002 for non-payment of premium. It is also not in dispute that the deceased died on the evening of 11.01.2003. The main issue involved in the matter is whether the premium sent by the complainant to the LIC was received by them before the death of the policy holder, i.e., 11.01.2003 or after his death. The case of the LIC is that they received the premium cheque for ₹3143/- on 13.01.2003 at 13:58 hrs. It is made out, therefore, that the cheque must have been got encashed sometime after 13.01.2003. It is not clear from the findings given in the orders of the District Forum or State Commission, as to how these consumer fora arrived at the conclusion that the premium cheque was got encashed on 13.01.2003. In case, the cheque was got encashed on 13.01.2003, it could be presumed that it was received in the office of the LIC on or before 11.01.2003, as 12.01.2003 was a Sunday with the implication that the same was received before the death of the policy holder. However, there is nothing on record to prove that the cheque was encashed on 13.01.2003. On the other hand, the petitioner LIC have been able to prove through various documents placed on record that they received the said cheque on 13.01.2003 at their counter. Their version is duly supported by an affidavit, whereas the complainant/respondent has not been able to prove that they sent the cheque by post on 08.01.2003 and that the same was received in the office of LIC before the death of the policy holder. 

9. From the above discussion, it is clear that the orders passed by the Consumer Fora below suffer from material defect, because the LIC could not be asked to make payment of claim under the policy, if the same was lying in a lapsed condition at the time of death of the policy-holder. We do agree that as per the proposition of law laid down by the Hon'ble Supreme Court in the case, "Rubi Chandra Dutta vs United India Insurance Co. Ltd. [(2011) 11 SCC 269]", the scope of interference in the exercise of the revisional jurisdiction is limited and such powers could be used only, if there was an error of jurisdiction or material defect in the orders passed by the Consumer Fora below. In the instant case, however, both the consumer fora below have gravely erred in coming to the conclusion that the premium cheque was received before the death of the policy holder by making a wrong presumption that the cheque in question was got encashed on 13.01.2003. 

10. Based on the discussion above, this revision petition is allowed, the orders passed by the District Forum as well as the State Commission are set aside and the consumer complaint in question is ordered to be dismissed. There shall be no order as to costs.