—Order— 1. By this appeal under S. 15 of the Consumer Protection Act, 1986 (68 of 1986) ("the Act") opposite Party No. 3—appellant questions the legality and correctness of the order dt. 8-6-89 passed in Complaint Case No. 45/89 by the District Forum, Udaipur. 2. The facts leading to this appeal may briefly be stated. The com-plainant respondent is father of Shri Dilip Gupta now dead. Shri Dilip Gupta obtained policy No. 180151215 for Rs. 20,000/- dt. 18.7.86. The date of risk mentioned in the Policy is 27-6-86 and the date of maturity is 27-6-2006. Shri Dilip Gupta was born on 18.11.58 and the age entered in the policy is 28 years. The complainant is father of Shri Dilip Gupta now dead has been mentioned as nominee under S. 39 of the Insurance Act, 1938 (4 of 1938) ("the Insurance Act" herein). The policy was for 20 years money back policy with profits (With Accident Benefit). The annual premium was to be paid in four quarterly instalments stipulated due dates being in March, June, September and December of every year. Shri Dilip Gupta died in a road accident on Nov. 15, 1988. The premium upto June 27, 1988 had already been paid and after that no premium was paid. Before his death premium of September 88 became due which was not paid. After the death of Shri Dilip Gupta the complainant who is nominee lodged claim on the prescribed form along with the original policy with opposite-party No. 2 but the insurance amount was not paid. Thereafter, the complainant addressed several letters and sent a telegram and requested opposite-party No. 1 & 2 make the payment but opposite-party No. 2 vide letter dt: 11.2.89 intimated the complainant that Smt. Deepali Gupta widow of the deceased Shri Dilip Gupta had disputed the payment of policy money under the policy being made to the complainant as a nominee and so, if the complainant was still interested to receive the policy money, he may obtain a succession certificate in his favour from a competent court of law authorising him to receive the policy money. The stand taken by the complainant was that succession certificate asked for by opposite-party No. 2 is not necessary, in view of S. 39 of the Insurance Act, for, as a nominee he can give a valid discharge to the Corporation. The stand taken by the complainant was that succession certificate asked for by opposite-party No. 2 is not necessary, in view of S. 39 of the Insurance Act, for, as a nominee he can give a valid discharge to the Corporation. As the amount was not paid to him, he filed this complaint before the District Forum, Udaipur on 28-2-89 claiming insurance amount of Rs. 20,000/-, bonus and accidental benefit. He also claimed interest @ 18% p.a. on the aforesaid amounts from the date of death of Shri Dilip Gupta i.e. 15.11.88. A prayer was made for award of compensation on account of mental agony and family distress as the Life Insurance Corporation of India (LIC) failed to make payment by adopting unreasonable attitude. Along with the complaint, photostat copy of the part of the policy and photostat copy of the order dt: 16-1-89 of the Civil Judge, Udaipur in Suit No. 90/88 (Miscellaneous Case No. 40) filed by Smt. Deepali Gupta against the complainant, Life Insurance Corporation etc. passed on the application for issue of temporary injunction dt. 16.1.89, photostat copy of the letter dt. 7.2.89 and photostat copy of letter dt: 11.2.89 sent by Senior Divisional Manager to the complainant and the cutting from the newspaper were filed. Notice of the complaint was issued to the opposite-parties. Opposite-parties submitted the version of the case dt: 8-5-89. The defence taken was that the widow of the deceased Shri Dilip Gupta has instituted a suit in the Court of Civil Judge, Udaipur for permanent prohibitory injunction against the LIC and has prayed that the insurance amount, should not be paid as according to the Hindu Succession Act, 1956, she is the legal heir and her father-in-law (complainant) is merely an agent and when there is dispute between the agent and the legal heir, the amount should not be paid. An objection was taken that the complaint is not maintainable under the Act specially when a suit in respect of the subject matter is pending in the Civil Court. When there is a dispute between the trustee and the heir insurance amount cannot be claimed by the nominee. The District Forum heard the arguments on May 15, 1989. An objection was taken that the complaint is not maintainable under the Act specially when a suit in respect of the subject matter is pending in the Civil Court. When there is a dispute between the trustee and the heir insurance amount cannot be claimed by the nominee. The District Forum heard the arguments on May 15, 1989. It recorded the following findings in its order dated 8-6-89 under appeal : (1) that the complaint can be entertained, heard and adjudicated upon by the District Forum under the Act; (2) that the complainant being the nominee of the policy issued in favour of Shri Dilip Gupta (deceased) is entitled to obtain the amount from LIC. 3. In view of the aforesaid findings the District Forum ordered that the complainant will be paid the insurance amount, bonus and accidental benefit within one month from the date of order i.e. 8-6-89 and further that LIC should pay interest @ 12 % p.a. from 1-12-88 until realization. A direction was also given that in case the above order was not complied with, the opposite-parties will have to face imprisonment and fine as provided in S. 27 of the Act. 4. Aggrieved, Life Insurance Corporation of India (opposite-party No. 3) has filed this appeal in which opposite-party No. 1 & 2 have been arrayed as respondents No. 2 & 3 as proforma respondents. Written submissions (reply of the appeal) have been filed by the complainant-respondent on 24-7-89 supported by affidavit of the complainant. Photostat copy of the order dt. 16-1-89 passed by Civil Judge, Udaipur refusing temporary injunction to Smt. Deepali Gupta widow of Shri Dilip Gupta, First Information Report dt: 15-11-88, Report of the Post Mortem Examination, Certificates of Death issued by the Registrar, Death and Births and also the doctor and cutting of the newspaper containing "By nomination claims are settled at the earliest." (English translation of Hindi version) issued by the LIC were filed by the complainant-respondent No. 1. We directed the appellant to submit copies of the policy bond, circular No. Claims/13/87 dt: 10.11.87 issued by Divisional Office, Ajmer quoting the Central Office Circular Ref: 281/23 dt. 16-10-87 in regard to relaxation in the matter of settlement of death claims and pages 34 and 35 of LIC Divisional Office Manual—Volume II of claims as the learned counsel of the appellant referred them during the course of arguments. 16-10-87 in regard to relaxation in the matter of settlement of death claims and pages 34 and 35 of LIC Divisional Office Manual—Volume II of claims as the learned counsel of the appellant referred them during the course of arguments. The photostat copies have been filed. 5. We heard Mr. M. D. Agarwal, Advocate for the appellant and Mr. N.K. Maloo for respondent No. 1 at some length. We have carefully considered the record as well as the order under appeal. Learned counsel appearing for the appellant has raised three contentions before us: (1) that the order under appeal passed by the District Forum, Udaipur is without jurisdiction in as much as the complaint filed by the complainant against the opposite-parties could not be entertainment, heard and decided by the District Forum under the provisions of the Act; (2) that the policy issued to the deceased Dilip Gupta had lapsed on account of the non-payment of the quarterly premium of Sept. 1988, for, the death had occurred on 15.11.88 in a road accident and so no amount of policy inclusive of accident benefit can be paid and if it is payable the whole amount with accidental benefit is not payable, and (3) that there were two rival claimants of the amount, namely, the complainant and Smt. Deepali Gupta widow of Shri Dilip Gupta (deceased) as legal heir under the Hindu Succession Act, 1956 and as there was a dispute between the two rival claimants, until and unless the dispute was settled or decided by a competent Civil Court in which the litigation is already going on, order passed by the District Forum for the payment of the insurance amount, bonus and accidental benefit and interest from 1-12-88 is infirm and bad in law. 6. We propose to examine the aforesaid contentions ad seriatim. Re: (1) "Complainant", "complaint", "consumer", "consumer dispute", "deficiency" and "service" have been defined in S. 2(l)(b), (c), (d), (e), (g), and (o) of the Act. Provision of facilities in connection with amongst others insurance has been mentioned in the definition of the service. 6. We propose to examine the aforesaid contentions ad seriatim. Re: (1) "Complainant", "complaint", "consumer", "consumer dispute", "deficiency" and "service" have been defined in S. 2(l)(b), (c), (d), (e), (g), and (o) of the Act. Provision of facilities in connection with amongst others insurance has been mentioned in the definition of the service. It is an agreement between two persons (insurer and the assured) that in consideration of comparatively small payment (the premium) by the assured, the insurer will, on a certain event happening during a specified time pay to the assured either an agreed sum or the amount of the loss caused to assured by the event. The amount of the premium is calculated with reference to the risk incurred by the insurer. Insurance is a contract. When the insurer fails to abide by the undertaking given by it in pursuance of a contract or otherwise there is deficiency in relation to service. Having considered the aforesaid definitions referred to hereinabove, we are unhesitatingly of the opinion that the Life Insurance Corporation when it failed to make payment to the nominee appointed under S. 39 of the Insurance Act, it committed default in the performance of the undertaking in pursuance of the contract of insurance and when such is the case in the matter on hand, a complaint could be made by the nominee. The District Forum under the Consumer Protection Act had jurisdiction to entertain, hear and decide the complaint. We entirely agree with the reasons given by the District Forum, in this regard. Contention No. 1 raised by the learned counsel for the appellant is, therefore, repelled. Re: (2) Learned counsel for the appellant has argued that as the quarterly premium which fell due in Sept. 88 was not paid by the assured as the death had occurred on 15.11.88, the policy lapsed and on this basis full amount is not payable. We have gone through the version of the case filed by the opposite-parties before the District Forum. It is surprising that no such plea was taken by the opposite-parties in the version of the case filed before it. Apart from that, we may usefully refer to Condition No. 2 of the policy which deals with the payment of premium. We have gone through the version of the case filed by the opposite-parties before the District Forum. It is surprising that no such plea was taken by the opposite-parties in the version of the case filed before it. Apart from that, we may usefully refer to Condition No. 2 of the policy which deals with the payment of premium. It reads as under : "(2) Payment of Premium: A grace of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the sum assured paid after deduction of the said premium as also the unpaid premiums falling due before the next anniversary of the policy. If the premium is not paid before the expiry of the days of grace, the policy lapses. If the policy has not lapsed and the claim is admitted in case of death under a policy where the mode of payment of premium is other than yearly, unpaid premium if any falling due before the next policy anniversary shall be deducted from the claim amount." According to condition No. 2 a grace period of one month but not less than 30 days is allowed for the payment of yearly, half-yearly or quarterly premiums. If death occurs within this period and before the payment of the premium then the policy still remains valid and the sum assured is paid by the insurer after deduction of the said premium as also be unpaid premiums falling due before the next anniversary of the policy. If the premium is not paid before the expiry of the days of grace, the policy lapses. It also provides that if the policy has not lapsed and the claim is admitted in case of death under a policy where the mode of payment of premium is other than yearly unpaid premium falling due before next policy anniversary shall be deducted from the claim amount. This is a new point which opposite-party No. 3 has raised in the appeal which was not taken before the District Forum. Here we may refer to Central Office Circular Ref./281/23 dt: 16-10-87 regarding relaxations in the matter of settlement of Death claims. This is a new point which opposite-party No. 3 has raised in the appeal which was not taken before the District Forum. Here we may refer to Central Office Circular Ref./281/23 dt: 16-10-87 regarding relaxations in the matter of settlement of Death claims. The material part is as follows: "At present the policies which have run for three years acquire Surrender value with a corresponding vested right to paid up value. Consequently, within a period of three years from the date of commencement of risk, if the premiums are not paid within the days of grace of the due premium, the policy lapses and nothing is payable thereunder. The matter has been reviewed and in order to provide relief to the claimants in cases where death takes place after the days of grace in the third year after payment of two full years premiums, it has now been decided to give the following relaxations in the matter of settlement of Death claims arising by the death of the Life Assured on or after 1-10-87. After atleast two full years premiums have been paid under a policy :— (a) if the death of the life assured were to occur after expiry of days of grace but within three months of the due date of the first unpaid premium, consideration of claim to the extent of the full Sum Assured together with the declared bonuses subject to recovery of the unpaid premiums." Admittedly the quarterly premium of Sept. 88 which fell due on Sept. 27 was not paid, 30 days period of grace is allowed. The insured had died in the road accident on 15.11.88. More than two years and less than three years premium had already been paid. The claim was entertained and admitted. The conditions laid down in cl. (a) are satisfied. In these circumstances we find it difficult to accept the argument of the learned counsel for the appellant that the policy has lapsed and so amount is not payable to the nominee. Reading condition No. 2 and the above quoted circular we hold that full insurance amount is payable under the policy minus the unpaid premiums. Condition No. 10 of the Policy provides for accident benefit. For our purpose relevant part is as under: "10. Reading condition No. 2 and the above quoted circular we hold that full insurance amount is payable under the policy minus the unpaid premiums. Condition No. 10 of the Policy provides for accident benefit. For our purpose relevant part is as under: "10. Accident Benefit: If at any time when this policy is in force for the full sum assured, the Life Assured, before the expiry of the period for which the premium is payable or before the policy anniversary on which the age nearer birthday of Life Assured is 65, whichever is earlier, is involved in an accident resulting in either permanent disability as hereinafter defined or death and the same is proved to the satisfaction of the Corporation, the Corporation agrees in the case of: (a) ... ... ... ... ... (b) Death of the Life Assured: to pay as additional sum equal to the Sum Assured under this policy if the Life Assured shall sustain any bodily injury resulting solely and directly from the accident caused by outward, violent and visible means and such injury shall within 90 days of its occurrence solely, directly and independently of all other causes result in the death of the Life Assured. However, such additional sum payable in respect of this policy, together with any such additional sums payable under other policies on the life of the Life Assured shall not exceed Rs. 1,00,000/-." 7. The District Forum has ordered for the payment of insurance amount, bonus and accident benefit. The complainant as nominee is entitled to get the insurance amount and the declared bonus subject to the recovery of unpaid premiums in accordance with the Central office circular Ref: 281/23 dt: 16-10-87 as referred above. As regards accident benefit it may be mentioned that no specific objection was taken by the opposite-party-appellant in the version of the case. As such, the complainant did not file the documents which could throw light on this point. Here the complainant has submitted the photostat copies of the First Information Report, Report of the Post-Mor-tem Examination, Certificate of Deaths deated 19.11.88 and Medical Attendants Certificate which are required to be filed for getting the policy amount. The death was caused due to brain hemorrhage as a result of head injury. Here the complainant has submitted the photostat copies of the First Information Report, Report of the Post-Mor-tem Examination, Certificate of Deaths deated 19.11.88 and Medical Attendants Certificate which are required to be filed for getting the policy amount. The death was caused due to brain hemorrhage as a result of head injury. From these documents which are not disputed by the opposite-party we are of opinion that the complainant should be paid the additional sum as accident benefit equal to the sum assured under the Policy as the conditions of condition No. 10 are fulfilled. Contention No. 2 is, therefore, overruled. Re: (3) It is not in dispute that the complainant respondent is the nominee. It is also at this stage not in dispute, as stated in the complaint, that the deceased Dilip Gupta was married at the time of his death and his widow is Smt. Deepali Gupta and she had instituted a Civil Suit in the Court of Civil Judge, Udaipur against the complainant and his two sons and the appellant and others for permanent prohibitory injunction restraining the LIC from making any payment to the complainant. An Application for temporary injunction was filed in the suit. The learned Civil Judge after examining the prima facie case, balance of convenience and irreparable loss declined to issue temporary injunction in favour of Smt. Deepali Gupta. It appears from the perusal of the order that Shri Bhanwarlal Vyas who appeared for the Life Insurance Corporation, without filing a reply stated that the deceased Dilip Gupta had nominated Chatur Behari Lal Gupta as the Nominee in the policy and, therefore the insurer is bound to pay the insurance amount to him. It may be stated here that Life Insurance Corporation was opposite-party No. 4 in the Civil Suit and the complainant was opposite-party No. 3. Reference in this connection may be made to para 3 of the order passed in the Civil Suit. The District Forum has in the order under appeal stated that there is no dispute that the complainant as nominee is entitled to receive the insurance amount in. pursuance of the policy issued to Dilip Gupta by the appellant. S. 39 of the Insurance Act deals with the nomination of policy-holder. The District Forum has in the order under appeal stated that there is no dispute that the complainant as nominee is entitled to receive the insurance amount in. pursuance of the policy issued to Dilip Gupta by the appellant. S. 39 of the Insurance Act deals with the nomination of policy-holder. Sub-seotion (1) of S. 39 lays down that the holder of a policy of Life Insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money shall be paid in the event of his death. We are not concerned with the proviso. It cannot be disputed that Smt. Deepali Gupta being widow of Dilip Gupta is legal heir of the deceased Dilip Gupta. The question is what is the position of the complainant as nominee and of Smt. Deepali Gupta as heir of Dilip Gupta and in these circumstances who is entitled to get the amount of this policy particularly when the Civil Suit has already been instituted in respect thereof by Smt. Deepali Gupta. Such a question directly arose in AIR 1984 S.C. 346 (1). It was held that a mere nomination made under S. 39 of the Act does not have the effect of conferring on the nominee, any beneficial interest in the amount payable under the life insurance policy on the death of the assured. It was further observed that the nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy and that the amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them. Complainant-respondent No. 1 in his reply to the memo of appeal has stated that he has filed the complaint in the capacity of nominee and not in the capacity of legal heir or successor and after the payment is made to the nominee Insurance Company will get a valid discharge. 8. Complainant-respondent No. 1 in his reply to the memo of appeal has stated that he has filed the complaint in the capacity of nominee and not in the capacity of legal heir or successor and after the payment is made to the nominee Insurance Company will get a valid discharge. 8. The complainant has rightly admitted that he "who is nominee in the insurance policy will receive the amount for and on behalf of the legal heirs and he is ready and also obliged to pay the same to the actual legal heirs according to law." The position as stated by the complainant and as laid down by the Supreme Court in the Judgement (supra) is that the nominee acquires no sort of interest in the policy during the life-time of the policy holder. If that is so, on the death of the policy holder the amount payable under the policy becomes part of his estate which is governed by the Law of Succession applicable to him. Such succession may be testamentary or intestate. The provision in S. 39(4) deals with nomination. It does not lay down that the amount shall belong to the nominee or nominees, for S. 39 cannot alter the course of succession under law. The position, thus, boils down to this that the complainant as nominee of the policy of Shri Dilip Gupta is entitled to receive the policy amount from the appellant (LIC) but the amount so received will be for and on behalf of the legal heirs of Dilip Gupta. So far as LIC is concerned there will be valid discharge but in the circumstances the question is when a Civil Suit has been filed and that is pending and the LIC is a party to that Civil Suit, how to safeguard the interest of the LIC if it makes the payment to the nominee only, for, nominee receives the amount for and on behalf of the legal heirs. The LIC will, therefore, make the payment of the amount to the complainant on his furnishing an Indemnity Bond to it that in case any claim is raised by any legal heirs including Smt. Deepali Gupta, or if any order is made by a competent court for payment in respect of the amount under the policy, the complainant will indemnify the insurer (LIC) for any loss on that account. The net result of the discussion made hereinabove is that the LIC will pay the policy amount of Rs. 20,000/- minus the unpaid premium, bonus and sum equal to the sum assured as accident benefit to the complainant within two months from the date of the receipt of this order provided the complainant furnishes an Indemnity Bond in the terms indicated above. 9. The District Forum has awarded interest @ 10% p.a. on the principal amount of Rs. 20,000/- from 1-12-88 until realization. It was contended on behalf of the opposite party-appellant that under the terms of the policy interest cannot be awarded. We have considered the submission. Having regard to the facts and circumstances of the case, we are of the opinion that interest could not have been awarded from 1-12-88 as the death of the assured occurred on 15-11-88 and sometime is required in processing the claim for sanction. In this case the dispute was raised by the widow of the deceased Dilip Gupta. In these circumstance we consider it proper that ends of justice would be met when we order that in case the LIC fails to make the payment to the complainant within two months from the date of the receipt of this order as directed by us, the complainant will be entitled to recover interest on the sum assured Rs. 20,000/- minus unpaid premium from 28-2-89 on which the complaint was filed until realization @ 12% p.a. 10. The appeal is partly allowed and the order dt. 8.6.89 passed by the District Forum, Udaipur is modified. 11. Order pronounced on September 27, 1989.