Life Insurance Corporation of India & Anr v. Rajiv Khosla & Anr

SANJIV KHANNA, J. kapil/dk

* IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment Reserved on: 5th April, 2011 % Judgment Pronounced on: July 04, 2011 + Life Insurance Corporation of India & Anr. ..... Appellants Through: Mr.Sandeep Sethi along with Mr.B.B. Sawhney, Sr. Advocates with Ms.Indira Sawhney, Mr.Lakshay Sawhney & Mr.Sunil Kumar, Advs. Versus Shri Rajiv Khosla & Anr. ..... Respondents Through: Mr.Rakesh Tiku, Sr.Advocate with Mr.Vivek Ojha, Adv. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA Whether reporters of the local papers be allowed to see the judgment? Yes To be referred to the Reporter or not? Yes Whether the judgment should be reported in the Digest? Yes DIPAK MISRA, CJ The present intra-Court appeal is directed against the order dated 7th April, 2010 passed by the learned Single Judge in WP (C) No. 5702/1999. 2. The facts leading to the filing of the writ petition are that the appellant-petitioner (hereinafter referred to as "the appellant") took "Jeevan Kishor Policy" for his daughter, Aprajita, for a sum of Rs.1 lakh by Policy No. 120312578 dated 14th October, 1994. The yearly premium of Rs.5,533/- was payable for the policy. The appellant paid the premium for two consequent years, that is, 1994-95 and 1995-96. The daughter of the appellant expired on 11th September, 1996 in unfortunate circumstances and thereafter no further premium was paid. After the death of the daughter, the appellant sent a letter on 20th December, 1996 to the Life Insurance Corporation of India (LIC) informing them about the death of his daughter and asking for the claim under the policy to be settled. When no response was received, he was compelled to knock at the doors of this Court under Article 226 of the Constitution of India. 3. It was contended in the writ petition that no payment was made in view of the stipulation in the policy to the effect that the policy shall stand cancelled in case the life assured dies before the deferred date. Be it noted, the said clause of the policy was assailed on the foundation that LIC is obliged to make the payment and cannot take shelter under the said policy on the ground that it is not obliged to make any payment if the assured dies prior to the deferred date. It was urged that such a clause was arbitrary, unilateral and unfair. 4. The LIC combated the averments made in writ petition on the ground that the petitioner could have filed a civil suit as he was seeking enforcement of a contractual obligation; that the claim put forth by the petitioner has been repudiated in terms of the conditions of the insurance policy, which is basically a contract; that the stipulation in the policy is neither arbitrary nor unreasonable; and that the deferred payment clause is unassailable as the parties to the policy are bound by the terms of the policy. 5. A rejoinder affidavit was filed stating, inter alia, that as long as the premium was paid, it is not open to the LIC to repudiate the claim and deny payment. That apart, the deferred date in the instant case was 14th October, 1996 and the assured died on 11th September, 1996. It is also put forth that the classification of life insurance policies into those payable only after the deferred date and those without such limitation was arbitrary and discriminatory. 6. An additional affidavit was filed by the LIC contending, inter alia, that "Jeevan Kishor Policy" was made only for the middle income/higher income class. It was a flexible policy where the minimum and maximum amount that could be insured was Rs.20,000/- and Rs.5 lakhs respectively. The premium is a multiple of the tabular rate paid depending upon the desired sum assured and the age of the assured. It was also explained that in the case of children, it is not practically possible to obtain any medical report for a child which would indicate the future expected mortality in respect of life and any medical examination is unlikely to reveal an authentic and reliable insight into the health status of a child.