LIFE INSURANCE CORPORATION OF INDIA Vs. S SINDHU
LAWS(SC)-2006-5-91
SUPREME COURT OF INDIA
Decided on May 04,2006

LIFE INSURANCE CORPORATION OF INDIA Appellant
VERSUS
S. SINDHU Respondents


Referred Judgements :-

HIRACHAND KOTHARI (D) BY LRS. V. STATE OF RAJASTHAN AND ANR. [REFERRED TO]
SATINDER SINGH UMRAO SINGH SARDARNI GURDIAL KAUR VS. UMRAO SINGH THE STATE OF PUNJAB THE STATE OF PUNJAB [REFERRED TO]
HARSHAD J SHAH VS. L I C OF INDIA [REFERRED TO]
BENGAL NAGPUR RAILWAY CO LTD VS. RUTTANJI RAMJI [REFERRED TO]



Cited Judgements :-

PUNJAB & SIND BANK VS. NACHATTER SINGH [LAWS(NCD)-2023-11-58] [REFERRED TO]
THE BOARD OF TRUSTEES OF V.O. CHIDAMBARANAR PORT TRUST VS. M/S PSA SOCIAL TERMINALS LIMITED [LAWS(MAD)-2017-11-343] [REFERRED TO]
BABULAL K SHAH VS. NEW INDIA ASSURANCE COMPANY LTD [LAWS(BOM)-2014-12-278] [REFERRED]
SUNDARAM MOTORS VS. B. LALITHA [LAWS(MAD)-2007-12-508] [REFERRED TO]
COL AMULYA KUMAR PANDA VS. UNION OF INDIA & OTHERS [LAWS(ORI)-2018-5-26] [REFERRED TO]
BIMALENDU CHATTOPADHYAY VS. STATE BANK OF INDIA [LAWS(CAL)-2011-11-35] [REFERRED TO]
ABHISHEK KUMAR RAI VS. INDIAN INSTITUTE OF TECHNOLOGY, BHUBANESWAR, KHURD [LAWS(ORI)-2018-5-27] [REFERRED TO]
DUSHYANT N. DALAL VS. SECURITIES AND EXCHANGE BOARD OF INDIA [LAWS(SC)-2017-10-67] [REFERRED TO]
LARSEN AND TOUBRO LTD. VS. STATE OF ANDHRA PRADESH AND ORS. [LAWS(APH)-2015-9-16] [REFERRED TO]
SANTOSH KUMAR KEJRIWAL VS. LIFE INSURANCE CORPORATION OF INDIA [LAWS(NCD)-2019-7-28] [REFERRED TO]
MARWAH STEELS PVT LTD VS. UNION OF INDIA [LAWS(BOM)-2007-10-92] [REFERRED TO]
HATSUN AGRO PRODUCTS LTD VS. INDUCTRIAL DEVLOPMENT BANK OF INDIA [LAWS(MAD)-2009-10-19] [REFERRED TO]
HATSUN AGRO PRODUCTS LTD CHENNAI VS. INDUSTRIAL DEVELOPMENT BANK OF INDIA SOUTHERN REGIONAL CHENNAI [LAWS(MAD)-2009-10-542] [REFERRED TO]
FEDERAL BANK LTD VS. REGIONAL PROVIDENT FUND COMMISSIONER EPFO [LAWS(KER)-2011-8-115] [REFERRED TO]
INDO RAMA SYNTHETICS (I) LTD VS. MAHARASHTRA INDUSTRIAL DEVELOPMENT [LAWS(BOM)-2023-6-1120] [REFERRED TO]
SOMA ENTERPRISES LTD. VS. ROTEC INDUSTRIES INC [LAWS(DLH)-2021-12-262] [REFERRED TO]
M RAJESWAR RAO & OTHERS VS. CHITLURI SATYAM (DIED) & OTHERS [LAWS(APH)-2013-12-195] [REFERRED]
MELLACHERUVU RAJESWAR RAO VS. CHITLURI SATYAM [LAWS(APH)-2013-12-179] [REFERRED TO]


JUDGEMENT

Raveendran, J. - (1.)The short question that arises for consideration in this appeal is whether in the case of a lapsed life insurance policy, the Life Insurance Corporation of India (the LIC for short) while paying the reduced sum payable by treating it as a paid-up policy is liable to pay interest in regard to premiums paid from the respective dates of payment of premiums to date of settlement.
(2.)A policy of insurance dated 11-3-1994 for an assured sum of Rs. 5 lakhs with risk commencing from 4-12-1993 was issued in regard to the life of K. Thankachan under the money-back policy scheme for a period of 20 years. The premium payable was Rs. 8,306/- every quarter. The conditions of the policy made it clear that the policy will be in force only if the premiums were paid regularly, every quarter, and that if the premium was not paid before the expiry of the grace period provided, the policy will lapse. K. Thankachan paid the premiums till 4-6-1994 and did not pay the premiums thereafter. In August, 1996, he opted for revival of the policy by paying the arrears of premium from 4-9-1994 to 4-6-1996 with interest. Accordingly, the policy was revived and he paid the premium till 4-12-1996. Thereafter, the policy again lapsed from 4-3-1997 as premium was not paid. K. Thankachan died on 5-12-1997 and his widow/nominee (the respondent herein) made a claim for payment of the amount under the policy, by letter dated 1-1-1968.
(3.)Condition No. 4 of the policy contains the exceptions to lapsing of the policy. The portion of the said condition relevant for our purpose, is extracted below :-
"4. Non-forfeiture Regulations: If, after at least three full years premiums have been paid in respect of this Policy, any subsequent premium be not duly paid this policy shall not be wholly void, but shall subsist as a paid-up policy for a reduced sum payable on the Date of Maturity or at the Life Assureds prior death provided the paid-up sum assured is not less than Rs. 250. The amount of paid-up assurance for integral number of years premiums paid will be calculated as per Table given below. The policy so reduced shall thereafter be free from all liability for payment of within mentioned premium but shall not be entitled to participate in future profits. The existing bonus additions, if any, will remain attached to the reduced paid-up policy. (Emphasis supplied)



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