NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
(From the order dated 6.5.1998 in Appeal No.1346 of 1997 of the State Commission, Maharashtra)
Smt. Pramila Vikram Khillare … Petitioner
The Branch Manager,
Life Insurance Corporation of
HON’BLE MR. JUSTICE M.B.SHAH, PRESIDENT.
DR. P.D.SHENOY, MEMBER.
For the Petitioners : Ms. Anjani Ayagari &
Ms. K. Radha Rao, Advocates.
For the Respondents : Mr. Mahinder Singh, Advocate.
M.B.SHAH, J. PRESIDENT.
Pramila Vikaram Khilare, filed complaint No. 67 of 1995 before the Consumer
Disputes Redressal Forum, Aurangabad,
against the L.I.C. (Life Insurance Corporation of India), contending that the
husband of the Complainant had taken an insurance policy for a sum of Rs.25,000/- on 30th March, 1993
by depositing the first premium amount. At that time the age of the deceased
was 43 years. Initial premium was paid on
is admitted that the deceased paid the first premium on
The District Forum by its judgment and order dated 5.9.1997 allowed the complaint by holding that the first premium was paid on 30th March, 1993 in a routine manner; counting the 30 days grace period for paying the premium of 30th June, the deceased was required to pay the premium before 30th July and the person had expired before 30th July; and, therefore, the heirs were entitled to the benefit of the insurance. The District Forum observed that there is nothing on record to show that the deceased had given any option for issuing back-dated policy. No consent letter of the deceased to that effect was produced by the LIC. The District Forum also observed that the life insurance policies are obtained by persons for benefit of their family members and if the claims are going to be refused on such technical ground, public at large would suffer; and, there was no reason for not taking a sympathetic view. The District Forum, therefore, directed the LIC to pay the amount with interest at the rate of 18% p.a. from the date of the death of the deceased.
that order the Insurance Company preferred Appeal No.1346 of 1997 before the
Against that judgment and order, the Complainant has preferred this Revision Petition. Learned Counsel for the Petitioner submitted that there was no justifiable ground for back-dating the insurance policy; and for doing so no consent was given by the deceased. In such circumstances, for illiterate persons, no such adverse inference could be drawn that the deceased was knowing about the back-dating.
against this, learned Counsel for the LIC submitted that as the amount was not
stated above, undisputedly, the husband of the Complainant obtained the LIC
policy for a sum of Rs.25,000/- by submitting the
proposal form dated 29.3.1993. It is also mentioned in the reply filed by the
LIC to the Revision Petition
that the date of birth of the proposer was given as
In our view, the submissions made by the learned Counsel for the Petitioner requires to be accepted. There is nothing on record to indicate that the deceased has given any consent or has applied for back-dating the policy. In such circumstances there was no justifiable reason for the Insurance Company to back date the policy. In a similar matter this Commission, in the case of Life Insurance Corporation of India & Ors. Vs. Miss Anu Mohanot & Ors. First Appeal No. 620 of 1993 decided on 29th May, 1997 reported as 1986-99 NC & SC on Consumer Cases (Part III) 4272 (NS), has observed that back-dating is not permissible without the consent of the parties. For this purpose, reliance was placed on the guidelines issued by the LIC which are mentioned in para 8, as under:
“I. Commencement of Risk and Dating Back of Policies. The risk under the Corporation’s Policies commences on the date of receipt of the first premium in full or the date of Acceptance whichever is the later, but if the acceptance of a Proposal is conditional upon the proposer’s compliance with any requirements, then the risk under the Policy will commence on the date on which all the requirements are satisfactorily complied with or on the date of receipt of the first Premium in full, whichever is the later”.
There are certain other conditions
which are referred to in the said judgment. The Commission has observed that
back-dating of the insurance policy could be done at the request of insured, in
accordance with the principles and terms of the back dating a policy
irrespective of the commencement of a scheme of insurance. As stated above, there is nothing on record
to establish that the Complainant, an illiterate person, at any point of time
requested for back-dating the policy. Suo
motu the LIC back-dated the same as the date
of birth of the deceased was
Further, in the present case, it is a hard case. The deceased was regularly depositing the quarterly premium. On occasion, he paid it beyond the grace period by paying interest on the amount on the premium payable. But for his death, it is apparent that he would have paid the premium. Secondly, it is not that the grace period cannot be extended by one or two days. If the LIC had taken humanitarian view, it would not have repudiated the claim.
In the present case, Clause (2) of the Policy reads thus:
“2. Payment of premiums: A grace period 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 unpaid premium/s 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.”
The aforesaid clause specifically provides that grace period of one month shall not be less than 30 days. One month can extend upto 31 days. And, therefore, in the present case, during the grace period the deceased expired. Hence, as per the aforesaid clause the policy would be valid and the heirs are entitled to the sum assured after deduction of the premium payable.
in the present case, the receipts issued to the deceased for payment of premium
nowhere say that it shall be paid on or before a particular date. It only
mentions that premium would become due in ‘JUN 1994’ without any specific date.
Same is the position with regard to the previous receipts. Therefore, it will
be difficult to hold that insurance premium was to be paid before
In the result, the Revision Petition is allowed. The impugned order of the State Commission is set aside. The order passed by the District Forum is confirmed. It would be open to the Insurance Company to deduct the premium which was payable by the deceased as per Clause (2) quoted above. However, with the modification that the LIC shall pay interest at 9% p.a. instead of 18% p.a. as directed by the District Forum. There shall be no order as to costs.