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2024 DIGILAW 772 (RAJ)

Life Insurance Corporation of India v. Vimla

2024-05-08

NUPUR BHATI

body2024
ORDER : (Nupur Bhati, J.) Though the matter is listed in the 'fresh category' however, on the joint request of the parties it is being heard today itself. 2. This writ petition has been filed under Article 226 and 227 of the Constitution of India with the prayer to quash and set aside impugned order dated 08.11.2023 (Annex.1) passed by Permanent Lok Adalat, Pali. 3. Brief facts of the case are that the petitioner Life Insurance Corporation (LIC for short) is a Corporation established under the Life Insurance Corporation Act 1956. On 04.01.2017 Shri. Kantilal procured one 'New Jeevan Anand' life insurance policy (Annex.2) bearing No. 101953691 having plan No. 815 (New No. 915) from LIC for sum of Rs 2,00,000/- qua which a monthly premium of Rs 1,005/- was to be directly deducted from his salary. The policy holder gave an authorisation letter (Annex.3) to his employer i.e. Nagar Palika Jaitaran, District Pali to deduct the premium amount from his salary and deposit the same with the LIC. 4. The premium qua the insurance policy for the months of March 2017 to July 2017 was not paid by the policy holder's employer, which is fortified by the letter written by the Municipality, Jaitaran to the LIC. As the Premium for 5 months was not paid by the policy holder thus, the said dues had to be set off from the premiums so made qua the later months. The period of unpaid premium was adjusted till June 2019 and the policy expired/lapsed in June 2019 and thereafter on 21st November 2019 the policy holder expired and thereafter, his wife/respondent filed for the claim from the insurer petitioner. After due enquiry the claim was refuted through a letter dated 28.12.2020 (Annex. 5) by LIC stating the reasons that the policy has already lapsed. 5. An application (Annex.6) under section 22 of the Legal Services Authorities Act 1987 was preferred by the respondent before Permanent Lok Adalat stating therein that the insurance has been denied wrongly and further prayed to grant relief by way of claim of Rs 3 lacs and 1 lac for mental agony at the rate of interest of 18% and Rs1000 as costs. 6. The petitioners filed reply (Annex.7) stating therein that the policy has already expired and lapsed. Thereafter the respondent filed a rejoinder(Annex.8). 7. 6. The petitioners filed reply (Annex.7) stating therein that the policy has already expired and lapsed. Thereafter the respondent filed a rejoinder(Annex.8). 7. The Permanent Lok Adalat Pali vide order dated 8.11.2023 (Annex.1) allowed the claim filed by the respondent and ordered to pay Rs 2.50 lacs along with 6% interest and also ordered to pay Rs.5000/- against legal costs to the claimant w.e.f 13.12.2020 i.e. from the date of the submitting the application before PLA. Petitioners aggrieved by the order dated 8.11.2023 (Annex.1) hve preferred this writ petition. 8. Learned counsel for the petitioners submits that the impugned order is arbitrary, perverse and illegal as the Permanent Lok Adalat Pali has not taken into consideration the documentary evidence submitted by the petitioner and has also not considered the terms and conditions of the policy and therefore, the order passed by the Permanent Lok Adalat deserves to be dismissed. 9. The learned counsel for the petitioners further submits that the Permanent Lok Adalat Pali has not appreciated the fact that the policy holder did not pay the premium for 5 months as per the conditions and stipulations of the insurance policy and, therefore, due premium has been already adjusted by the LIC and the adjustment of the unpaid premium is correct. He also submits that the premium of 5 months i.e. March 2017 to July 2017 remained unpaid due to the policy holder, the said dues were rightfully set off from the payments of premium so already made for the months from June 2019 to November 2019 and thereafter, the adjustment of the premium, the period of months for which premium still remains due begins from June 2019 and as the policy holder expired in November 2019 without making the payments of the premium hence, the policy lapsed in June 2019 as the payment was due from the month June 2019. Thus, the order passed by the PLA Pali allowing the claim of the respondent is bad in the eyes of law. 10. Thus, the order passed by the PLA Pali allowing the claim of the respondent is bad in the eyes of law. 10. Learned counsel for the petitioners also submits that the PLA, Pali has wrongly observed that even if the petitioners did not receive the premium for five months, however the policy cannot be said to be lapsed and that the petitioners received the premium after July 2017 till the death of the deceased/policy holder and thus the respondent deserves to avail the claim, where as the PLA Pali, failed to observe that the policy stood lapsed from the Month of June 2019 itself when the payment of premium remained due. 11. Per Contra, learned counsel for the respondent submits that the respondent claimed policy holder i.e. her husband's insurance from the petitioner Corporation, which was denied by the petitioners stating that there were various discrepancies in the claim filed by the respondent viz. the premium was not duly paid by the policy holder, despite the fact that the premium has been duly paid by the policy holder and the respondent has also supplied all the documents required by the petitioner Corporation to avail the claim. 12. Learned counsel for the respondent further submits that the policy holder was a Safai Karmchari under Nagar Palika Jaiataran and his premiums are duly deducted by the employer Nagar Palika and the policy holder is not directly associated with depositing amount with the LIC Jaitaran and the department/employer is responsible for the same and thus, in any case if the amount was not paid for a certain time period then the petitioners cannot terminate the policy. He also submits that though the deduction of the amount from March 2017 to July 2017 has not been made, however, the amount for February 2019 has been deducted for the premium as also mentioned in the letter dated 28.09.2020 sent by the Nagar Palika Jaitaran to the insurer and thus, the action of the respondents in not providing the claim is arbitrary and against the law. 13. Heard learned counsel for the parties and perused the material available on record. 14. 13. Heard learned counsel for the parties and perused the material available on record. 14. This Court finds that it is an admitted fact that the premium for the months March - July 2017 was not deducted from the salary of the policy holder by his employer i.e. Nagar Palika, Jaitaran, as mentioned in communication dated 28.09.2020 (Annex.4) for the reason that the employee remained absent from the duties and obtained loan. Further, the policy holder has thereafter not defaulted in the payment of the premiums and has regularly paid the same up till November 2019 and thereafter died on 21.11.2019. The petitioner has itself submitted that default of payment of premium for 5 months was adjusted by them by accepting the premiums that was subsequently paid by the policy holder. It is seen that the premium was paid up till November 2019 but after adjusting the premiums for 5 months, the petitioner Corporation did not declare the policy to be lapsed. However, if the submission of the petitioner is accepted that the policy stood lapsed on account of non-payment of premium by the policy holder than the petitioner ought to have treated the policy as lapsed w.e.f. July 2019 itself, but the petitioner continued to accept the premiums up till November 2019. Thus the petitioner did not treat the policy to be lapsed and it is only when the respondent after the death of her husband filed a claim, the petitioner Corporation has taken the stand that policy had lapsed. 15. In the considered opinion of this Court, the learned PLA, Pali has not committed any error in passing the order impugned, inasmuch as even after lapses in payment of insurance premium for five months, the premium after July 2017 was regularly deducted, deposited with LIC by the employer of deceased i.e. policy holder and the same was duly accepted, which fact remained un-rebutted by the petitioner Corporation, and this goes to show that in fact the policy never lapsed, inasmuch as the amount of unpaid premium was adjusted and re-scheduled by the petitioner Corporation itself. Thus, the order impugned passed by the learned PLA, Pali does not call for any interference by this Court. 16. The upshot of above discussion is that the writ petition lacks merit, the same is, therefore, dismissed. Stay Petition also stands dismissed.