Judgment :- 1. This appeal is directed against the judgment and decree passed by the first appellate court in A.S.No.65 of 2003 dated 20.10.2003 in confirming the judgment and decree passed by the trial court in O.S.No.145 of 2000 dated 30.06.2003. 2. The appellants are the defendants and the respondent is the plaintiff before the trial court. 3. The case of the plaintiff before the trial court in brief are as follows: The plaintiff is the mother of one Saravanan. Saravanan died intestate leaving behind him the plaintiff as his only heir. Saravanan was a lorry driver. He was the sole bread winner of the family. Saravanan died in a road accident on 03.02.1996. The deceased had one unmarried sister and two minor brothers. During his life time, the deceased had taken LIC Policy (Jeevan Mithra Endowment Plan with medical – Double Cover Endowment) with the second defendant. The date of commencement was 01.07.1994. The sum assured was Rs.50,000/-. The instalment of premium was Rs.646/-; the mode of payment was quarterly and the date of proposal was 28.07.1994. The plaintiff is a nominee under Section 39 of the Insurance Act, 1938. At the time of commencement of policy, the deceased was hale and healthy. Prior to the date of death, the deceased paid all the premium regularly to the second defendant. There was no dues. The deceased has lastly paid Rs.646/- on 29.01.1996 and subsequently, he died on 03.02.1996 in an accident and death intimation was sent to the second defendant. They replied on 13.02.1996 repudiating their liability. The second defendant has not paid the insured amount to the plaintiff. But on 21.03.1996, the first defendant sent a letter to the deceased informing the accrued bonus of Rs.3,450/-. The plaintiff issued legal notice on 18.07.1996 to the first and second defendants to pay the insurance amount. For that, the first defendant sent a reply on 26.08.1996 stating that the policy stands lapsed due to non-payment of quarterly premium. That averment is not correct. The deceased has paid Rs.646/- on 29.01.1996 and the second defendant received the amount and issued the receipt on that date itself. Since the defendants failed to pay the amount, the plaintiff is constrained to file this suit for recovery of amount and for other reliefs. 4. That averment is not correct. The deceased has paid Rs.646/- on 29.01.1996 and the second defendant received the amount and issued the receipt on that date itself. Since the defendants failed to pay the amount, the plaintiff is constrained to file this suit for recovery of amount and for other reliefs. 4. The objections raised in the written statement filed by the first defendant and adopted by the second defendant are briefly as follows:- Suit is not sustainable either in law or on facts. The deceased Saravanan took LIC policy from Ranipet Branch Office on 28.07.1994 for Rs.50,000/-for a term of 20 years and the plaintiff is his nominee. Saravanan died on 03.02.1996. The deceased has not paid all the premium regularly. Policy of the deceased was lapsed at the time of death i.e., on 03.02.1996 due to non-remittance of premium, which became due on 01.01.1996. The premium amount of Rs.646/-said to have been paid on 29.01.1996 was for the quarterly premium due on 01.10.1995. But the quarterly due on 01.01.1996 remained unpaid and hence the policy lapsed. Hence, the court has no jurisdiction. As per the policy bond condition No.5, if premium has not been duly paid, the policy shall be void and all claims to any benefits in virtue thereof shall cease and determine and all moneys that have been in consequence thereof shall belong to the Corporation. Hence, the defendants are not liable to pay the amount and hence, prayed for the dismissal of the suit. 5. The trial court had framed necessary issues on the pleadings and entered trial. After appraising the evidence adduced on either side, the trial court had decreed the suit as prayed for by the plaintiff. Aggrieved upon the said judgment and decree of the trial court, the defendants preferred appeal before the first appellate court in A.S.No.65 of 2003. The first appellate court heard the arguments advanced on either side and had come to the conclusion of confirming the judgment and decree passed by the trial court. Aggrieved defendants have come forward to file this present appeal against the judgment and decree passed by the first appellate court. 6. The first appellate court heard the arguments advanced on either side and had come to the conclusion of confirming the judgment and decree passed by the trial court. Aggrieved defendants have come forward to file this present appeal against the judgment and decree passed by the first appellate court. 6. At the time of admission of Second Appeal, this Court had framed the following substantial question of law for consideration in this Second Appeal:- "Whether the court below have not committed error in holding the appellant liable on the basis of receipt of a portion of premium due against which there is no legal or contractual prohibition, especially in the light of Secs.27(1) and 50 of the Insurance Act, 1938?" 7. Heard Mr.Vijayaraghavan, learned counsel appearing for the appellants and Mr.T.Dhanyakumar, learned counsel appearing for the respondent. 8. The learned counsel for the appellants would submit in his argument that the judgment and decree of the courts below are based purely upon sympathetic ground instead of application of law. He would further submit that the courts below have perversely appreciated the pleadings and misapplied the evidence to the facts and circumstances of the case. He would further submit that the policy taken by the insured was lapsed on the date of death of the insured person even though the premium was paid on 29.01.1996, which was only for the quarterly premium due on 01.10.1995. He would further submit that the premium payable on 01.01.1996 is payable on or before one month's grace time from the said date i.e., 01.01.1996 and the same was not paid by the insured on the date of his death i.e., on 03.02.1996 and therefore, the policy had lapsed as per condition No.5 of the contract of insurance. He would further submit that the said vital and fundamental aspect was not appreciated by both the courts below and therefore, the judgments even though concurrent should have been set aside. He would further submit in his argument that there is no notice necessary for informing about the lapse of policy for non-payment of premium in time, since condition No.5 as entered in the policy would automatically lapse the policy on non-payment. He would further submit in his argument that there is no notice necessary for informing about the lapse of policy for non-payment of premium in time, since condition No.5 as entered in the policy would automatically lapse the policy on non-payment. He would further submit that the findings of the first appellate court, that the intimation given by the insurer through Ex.A7 to the deceased regarding the accrual of Rs.3,450/-towards bonus amount on 21.03.1996 would cumulatively extend the policy and Ex.A1 policy has not been lapsed, are not in accordance with law. He would also submit that the payment of premium on 29.01.1996 for the quarterly premium payable on 01.10.1995 would not extend the grace period for payment of subsequent premium payable on 01.01.1996 and the evidence of DW.1 that Ex.A4 receipt issued for the quarterly payment due on 01.10.1995 does not contain the condition that the policy lapsed or the said payment was received to revive the policy would not in any way make the policy alive. He would further submit that whenever the premium has not been paid within the grace period allowed in the scheme of payment, the policy would automatically lapse and during the said period of lapse, no question of any payment of the policy amount if the contingent event had taken place. He would also cite a judgment of the Hon'ble Apex Court reported in AIR 2005 Supreme Court 3349 (Life Insurance Corporation of India ..vs.. Mani Ram) in support of his argument. He would also draw the attention of this Court to yet another judgment of the Hon'ble Apex Court reported in "I (2008) CPJ 81 (SC) (Life Insurance Corporation of India ..vs.. Jaya Chandel)" in support of his argument. Therefore, he would request the Court that the judgment of the trial court without applying the principles of law ought to have been set aside and corrected by the first appellate court, but the first appellate court failed to interfere and set aside the said judgment, but confirmed it, which is also not in accordance with law. Therefore, he would request the court to interfere and set aside the judgments of both the courts below and to dismiss the suit filed by the plaintiff with costs, and thus, the Second Appeal may be allowed. 9. Therefore, he would request the court to interfere and set aside the judgments of both the courts below and to dismiss the suit filed by the plaintiff with costs, and thus, the Second Appeal may be allowed. 9. The learned counsel for the respondent / plaintiff would submit in his argument that the payment of premium for the policy taken by the insured was received by the Insurance Company on 29.01.1996 and the insured was unfortunately dead on 03.02.1996 and it is for the Insurance Company to ask for to pay the premium due towards the policy whenever the premium was paid by the insured on 29.01.1996. He would also submit that the failure on the part of the Insurance Company to demand for the remaining premium while one of the premiums was paid by the insurer would give right to the insured to have the policy alive. He would further submit that on 29.01.1996 admittedly two quarterly premiums were liable to be paid namely the premium due on 01.10.1995 and the premium due on 01.01.1996 and the payment made on 29.01.1996 towards one of the quarter premiums would make the policy alive and therefore, the non-payment of another premium would not disqualify the policy. He would further submit that if really, the case of the Insurance Company that the policy was lapsed as per condition No.5 of the Insurance contract, it should not have intimated the accrual of bonus at Rs.3,450/- to the deceased/insured on the subsequent day as if the policy was alive. He would further submit that the act of Insurance Company would be amounting to the renewal of policy or contract in between the parties. He would, therefore, submit that the judgment and decree passed by the first appellate court in confirming the judgment and decree of the trial court are not perverse, but on well considered principles and therefore, there is no necessity to interfere with the findings of the first appellate court or the trial court. Therefore, he would request the Court to dismiss the appeal filed by the appellants and to confirm the judgment and decree passed by the trial court in favour of the respondent / plaintiff. 10. I have given anxious thoughts to the arguments advanced on either side. 11. Therefore, he would request the Court to dismiss the appeal filed by the appellants and to confirm the judgment and decree passed by the trial court in favour of the respondent / plaintiff. 10. I have given anxious thoughts to the arguments advanced on either side. 11. The admitted facts are that the respondent / plaintiff was the mother of the deceased/insured and the insured had taken a life insurance policy for a sum of Rs.50,000/- and the premium payable towards the policy was fixed at Rs.646/-per quarter and the quarterly premium should have been paid on or before the dates fixed for that purpose and a grace period of one month has been given for paying the premium. It is also not disputed that the insured has paid the quarterly premium payable towards the policy till 01.07.1995. The premium payable for the quarter ending with 01.10.1995 was not paid within the grace period allowed and therefore, the policy lapsed as per condition No.5. However, the insured has paid the said amount with interest and other charges etc., and had revived the policy on 29.01.1996. Thereafter, the premium payable on 01.01.1996 was yet to be paid. But, the insured was dead on 03.02.1996 and the plaintiff/mother as nominee has claimed the insurance money from the said policy. The Insurance Company had also sent a letter to the deceased/insured regarding the accrual of bonus at Rs.3,450/-. 12. In the said circumstances, whether the policy was alive to grant a decree as prayed for by the plaintiff before the trial court or no policy was in existence to fasten the liability against the defendants/Insurance Company is the question to be decided. Condition No.5 runs as follows:- "5. 12. In the said circumstances, whether the policy was alive to grant a decree as prayed for by the plaintiff before the trial court or no policy was in existence to fasten the liability against the defendants/Insurance Company is the question to be decided. Condition No.5 runs as follows:- "5. Forfeiture in certain events: In case the premiums shall not be duly paid or in case any condition herein contained or endorsed hereon shall be contravened or in case, it is found that any untrue or incorrect statements is contained in the proposal, personal statement, declaration and connected documents or any material information is withheld, then and in every such case, but subject to the provisions of Section 45 of the Insurance Act, 1938, wherever applicable, this policy shall be void and all claims to any benefit in virtue hereof shall cease and determine and all moneys that have been paid in consequence hereof shall belong to the Corporation, excepting always insofar as relief is provided in terms of the Privileges herein contained or may be lawfully granted by the Corporation." 13. As per the said condition, if premium has not been paid within the grace period the policy taken by the insured became lapsed and it can be revived by paying the premium, while the insurer was alive. On a careful perusal of the factual scenario, it is an admitted fact that the quarterly premium payable for 01.10.1995 and the next quarterly premium payable on 01.01.1996 were not paid by the insured. However, the quarterly premium ending with 01.10.1995 was elected to be paid by the insured on 29.01.1996 with interest and other charges. The receipt issued for the said policy was produced as Ex.A4. However, the premium payable on 01.01.1996 was not paid on that day. Even though, the said premium payable on 01.01.1996 was not paid along with the quarterly premium ending with 01.10.1995, the policy was revived due to the payment of earlier quarterly premium ending with 01.10.1995. As per the provisions of condition No.5, the premium should have been paid within one month grace period and if it was not paid, the policy is deemed to have been lapsed. As regards the quarterly premium payable on 01.01.1996, the grace period of one month was ending with 01.02.1996. Admittedly, the said payment of quarterly premium was not paid by the insured. As regards the quarterly premium payable on 01.01.1996, the grace period of one month was ending with 01.02.1996. Admittedly, the said payment of quarterly premium was not paid by the insured. Unfortunately, the insured died on 03.02.1996. On the death of the insured, the policy taken by him was surely a lapsed one as per the provisions of condition No.5 of the Insurance Contract. The judgment of the Hon'ble Apex Court as reported in AIR 2005 Supreme Court 3349 (Life Insurance Corporation of India ..vs.. Mani Ram) would also enlighten us with the principle to be followed in the facts and circumstances of the present case. The relevant passage at paragraph Nos.13 and 14 would run as follows:- "13. In this connection, it may be profitable to refer to the terms and conditions of the policy. The policy stated that the date of commencement was April 28, 1995 and the date of maturity would be April 28, 2010 as it was for a period of fifteen years. It is further stated that the policy of assurance "shall be subject to the conditions and privileges" printed on the back of the policy. On the back of the policy, those conditions and privileges have been printed. Condition 2 thereof, is material for our purpose and reads thus:- 2. "Payment of premium: A grace period of one month i.e., 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 be valid and the sum assured paid after deduction of the premium as also the unpaid premium/s falling due before the next anniversary of this policy. It the premium is not paid before the expiry of the days of grace, the Policy lapses." (Emphasis supplied) 14. From the above condition, it is abundantly clear that payment of premium due had to be made within a grace period of one month. If such payment was made within the said period, the policy would be treated as valid and the assured would be paid the amount to which he was entitled after deducting the premium amount. But, it was also made clear that if the premium was not paid before the expiry of the days of grace, the policy would lapse. If such payment was made within the said period, the policy would be treated as valid and the assured would be paid the amount to which he was entitled after deducting the premium amount. But, it was also made clear that if the premium was not paid before the expiry of the days of grace, the policy would lapse. As we have already observed herein above, the material date was not the date of deposit / payment of premium amount which was August 21, 1995, but the date of policy which was April 28, 1995. Since it was yearly, the payment was due on April 28, 1996, but the assured was entitled to grace period of one month upto May 28, 1996. Neither the premium was paid on April 28, 1996 nor on May 28, 1996. As per condition No.2, policy lapsed on May 28, 1996. In the eye of law, there was no subsisting policy, on August 2, 1996. Insurance Company was, therefore, wholly justified in rejecting the claim of the complainant and no exception can be taken against such a decision." 14. Similar dictum has been laid down by the Hon'ble Apex Court in its judgment reported in "I (2008) CPJ 81 (SC) (Life Insurance Corporation of India ..vs.. Jaya Chandel)". The relevant passage at paragraph No.6 would run as follows:- "6. The grace period is one month and therefore, the State Commission was not justified in holding that the payment was made within the grace period. Condition 3 relates to revival of discontinued policy. A bare reading of the condition shows that it can be revived during the life time of the assured. In the instant case, the cheque was admittedly received after the death of the assured. Further, the revival takes effect only after the same is approved by the Corporation and is specifically communicated to the life insured. ...... ...... " 15. The dictum laid down by the Hon'ble Apex Court in the aforesaid judgments would go to show that if one premium, whether monthly, quarterly or annually, has not been paid within the grace period, the policy would be deemed to have been lapsed subject to the condition of contract of Insurance. ...... ...... " 15. The dictum laid down by the Hon'ble Apex Court in the aforesaid judgments would go to show that if one premium, whether monthly, quarterly or annually, has not been paid within the grace period, the policy would be deemed to have been lapsed subject to the condition of contract of Insurance. In the said circumstances, when we applied the principles laid down by the Hon'ble Apex Court to the present case, the payment of premium paid on 29.01.1996 would certainly revive the policy, but as the subsequent default to pay the quarterly premium payable on 01.01.1996 was not paid on or before 01.02.1996, the policy was again considered to be lapsed. There was no payment of quarterly premium payable on 01.01.1996 within the grace period of one month from 01.01.1996. In the said circumstances, the principles laid down by the Hon'ble Apex Court are squarely applicable to the present case and the policy in this case was a lapsed one on the date of death of the insured viz., 03.02.1996. The reasons put forth by the trial court as well as the first appellate court that the policy has been extended due to the non-information by the Insurance Company regarding the lapse of policy would not apply in view of the presence of condition No.5 in the Insurance contract. Similarly, the view taken by the first appellate court that the accrual of bonus to the extent of Rs.3,450/-was intimated subsequent to the death of the insured, dated 21.03.1996 and that would extend the policy of insurance can not also be correct since the policy would come to an end, even otherwise, on the date of death of the insured. Therefore, the cumulative view taken by the first appellate court is also not in accordance with law. Moreover, the judgments of the Hon'ble Apex Court as cited by the learned counsel for the appellants are clear and in accordance with the aforesaid judgments of the Hon'ble Apex Court, the policy lapsed when the last quarterly was not paid and during the said period the insured also died and therefore, there would not be any valid policy in existence to bind the Insurance Company. Therefore, both the courts below have committed error in law in coming to the conclusion of decreeing the suit on the basis of the lapsed policy. Therefore, both the courts below have committed error in law in coming to the conclusion of decreeing the suit on the basis of the lapsed policy. Therefore, the question of law framed by this Court is decided in favour of the appellants. Accordingly, the judgment and decree passed by the courts below are set aside and the Second Appeal is allowed and consequently, the suit filed by the plaintiff before the trial court is dismissed. 16. In the result, the Second Appeal is allowed and the judgment and decree passed by the courts below are set aside and consequently, the suit filed by the plaintiff before the trial court in O.S.No.145 of 2000 is dismissed. In the peculiar circumstances of the case, no order as to costs throughout.