AHMEDUNNISA BEGUM Vs. LIFE INSURANCE CORPORATION OF INDIA

JUDGEMENT

(1.) The plaintiff in the suit for recovery of money on the basis of the multi-purpose Life Insurance Policy, Ex. A-4, is the appellant. The Life Insurance Corporation of India is the sole defendant in the suit. The plaintiff is the widow of late Mohd. Jafar Ali, a practicing advocate at Warangal. He was the holder of a multipurpose policy, Ex. A-4, issued by the defendant for an assured amount of Rs. 5,000. The policy commenced on 28/03/1962. Payment of premiums was in quarterly installments. Each quarterly premium was Rs. 79.06. Jafar Ali paid the premiums regularly up to 28/06/1972. But owing to some unforeseen circumstance, he could not pay the premium due on 28/09/1972, in time. He, however, paid this premium as well as the quarterly premium payable on 28/12/1972, on 2/04/1973, at the Warangal branch office of the defendant-Corporation. The premium due on 28/03/1973, was paid on 5/04/1973. The insured offered to give a personal declaration on health on 2/04/1973. But D.W. 2, the branch manager, did not entertain the said request. On 9/04/1973, the policyholder was requested by the defendant by the letter, Ex. B-3, to pay interest of Rs. 4.60 on the arrears of the premium and to appear before Dr. K. P. Reddy and submit a short medical report to consider the revival of the policy and adjust the amount in deposit. A short medical report, Ex. B-4, was sent by Dr. K. P. Reddy to the branch manager on 17/04/1973. It appears that Dr. K. P. Reddy certified that the life of the policyholder was "first class". He also paid the interest of Rs. 4.60 on 18/04/1973, under the receipt, Ex. B-5. On 14/05/1973, the insured was directed by the letter, Ex. B-1, to appear and get himself examined by Dr. K. Damodar Reddy, Assistant Professor of Ophthalmology, as some additional information was required for consideration and revival of the policy. Dr. K. Damodar Reddy examined the insured on 29/05/1973, and submitted his report, Ex. B-2, on the same day. The defendents agent also wrote a letter to the branch manager, D.W. 1, informing him that the formalities were completed and the policy may be revived. The policyholder was under the impression that the policy had been revived. The policyholder died on 1/06/1973, in an accident. The defendents agent wrote a letter dated 15/06/1973, to the branch manager, D.W. 1, informing him of the death of Mohd. Jafar Ali. The plaintiff is the nominee under the policy, Ex. A-4. Therefore, she submitted an application, Ex. A-6, on 20/08/1973, to the defendant for the payment of the full amount due under the policy. But the defendant replied under Ex. A-7 that the policy was treated as paid-up for the non-payment of the premium due on 28/09/1972. Thereupon, the plaintiff issued a notice, Ex. A-8, on 28/11/1973, claiming the full amount of insurance covered by the policy. The defendant replied under Ex. A-9 to the effect that the plaintiff was entitled to the paid-up value only. Therefore, the plaintiff filed the suit on 17/06/1975, for recovery of the amount due under the policy, Ex. A-4.

(2.) The suit was resisted by the defendant mainly contending, inter alia, that the question of revival of the policy did not arise as the policyholder died on 1/06/1973, even before the receipt of the medical report for consideration of the revival of the policy from Dr. Damodar Reddy of the M. G. M. Hospital, Warangal, and that the revival was not a matter of right vested in the policyholder and it would not automatically follow even after the receipt of the medical report. It was further averred that at the time of the revival of the policy the defendant could place restrictions or extra premiums and it could even refuse to revive it. It was asserted that the mere payment of premium and submission of a declaration or medical report do not automatically revive a lapsed policy, nor do they clothe the policyholder to claim any revival, much less to deem the policy as revived. It was, therefore, contended that the plaintiff was not entitled to the amounts under the policy as the policy was not in force on the date of the death of the policyholder and was only entitled to the paid-up value and the bonus accrued on the policy after the date of the lapse of the policy which the defendent had offered to pay and ready to pay in full discharge of the obligation under the lapsed policy in question.

(3.) The learned subordinate judge, Warangal, on an effective evaluation of the entire evidence in the case, held that the lapsed policy Ex. P-4, was not revived and, therefore, the policy was not in force, nor the policy could be deemed to have been in force on the date of death of the policyholder. Accordingly, the learned subordinate judge granted a decree in respect of the paid-up value and bonus accrued on the policy after the date of lapse of the policy and dismissed the claim of the plaintiff in other respects. Hence this appeal by the aggrieved plaintiff.