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PETITIONER: LIFE INSURANCE CORPORATION OF INDIA & ANR.

       Vs.

RESPONDENT: SHRI DHARAM VIR ANAND

DATE OF JUDGMENT:       09/10/1998

BENCH: M.M. PUNCHHI, G.B. PATTANAIK, A.P. MISRA

ACT:

HEADNOTE:

JUDGMENT: J U D G M E N T G.B.PATTANAIK, J. Leave granted. This appeal by special leave is directed against  the Order   of   the   National   Consumer   Disputers  Redressal Commission, New Delhi dated 30th of March,  1998,  dismissing the  revision  filed  by  the  appellant  and  confirming the decision of  the  State  Forum,  who  in  turn  affirmed  the decision of  District  Forum.    The question that arises for consideration in this appeal is whether under  Clause  4B  of the  policy  the  date of the policy is the date on which the policy was issued or the date on which  the  risk  under  the policy has  commenced.    The aforesaid question arises under the following circumstances. The respondent took a policy of life Insurance on the life of  his minor daughter Kumari Rajan Anand.  The proposal was submitted  on  25.3.90  and  the  policy  was  issued  on 31.3.90.   The  policy  contained  a  Clause, Clause 4B which reeds as follows :         Claused 4-B         "Notwithstanding  anything  mentioned  to         the  contrary,  it  is hereby declared and agreed         that in  the  event  of  death  of  Life  assured         occuring  as  a result of intentional selfinjury,         suicide or attempted suicide, insanity,  accident         other  than  an  accident  in  a  public place or         murder at any time on or after the date on  which         the  risk  under  the  policy  has  commenced but         before the expiry of three years from the date of         this policy, the Corporation’s liability shall be         Limited to the sum equal to the total  amount  of         premiums  (exclusive  extra of premiums, if any),         paid under the policy without Interest.  Provided         that  in  case  the  Life  Assured  shall  commit         suicide  before  the  expiry of one year reckoned         from the date of this policy, the  provisions  of         the Clause under the heading "Suicide" printed on         the back of the policy." The  insurer  called  upon  the  insured  to indicate whether the policy is to be backdated and  if  so,  the  date

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from which  it  should  be dated back.  The Insured indicated that the policy should be  dated  back  to  10.5.89  and  the premium for the period 10.5.89 till 25.3.1990 was accordingly paid.  The  policy was issued to the Insured on 25.3.90.  The minor girl whose life  had  been  insured  under  the  policy committed suicide  on  15.11.1992.  The respondent thereafter lodged a claim for payment of the entire sum for  which  life of the  deceased  had  been  insured.  The Corporation gave a reply to the respondent that  his  claim  for  the  full  sum assured could not be entertained as the assured had committed suicide within three years of the date of the issue of policy and Clause  4B  of  the  policy  would  be  attracted.    The respondent then filed a complaint under  Section  12  of  the Consumer  Disputers  Act  contending inter alia that the risk under the policy having commences w.e.f.    10.5.89  and  the assured having committed suicide on 15.11.92, Clause 4-B will not apply and therefore, the entire sum for which the life of the  minor  girl  had  been  insured  should  be  paid to the respondent together with the Bonus and interest which accrued due.  The appellant took the stand before the District  Forum contending  that  though  risk under the policy has commenced w.e.f.  10.5.89 but the date of the  policy  is  31.3.90  and therefore, death of the assured having occurred before expiry of  three years from the date of the policy, the liability of the Corporation shall be limited to  the  sum  equal  to  the total  amount  of premium paid under the policy as per Clause 4-B of the terms of  policy.    The  District  Forum  however rejected  the  contention  of  the appellant and being of the view that the policy in  the  eye  of  law  having  commenced w.e.f.   10.5.89,  the three years period under Clause 4_B of the policy would run from the said date and not from the date of issuance of the policy  and,  therefore,  the  Corporation cannot  have  a  limited  liability  as per Clause 4-B of the policy.  The said view of the District Forum  was  upheld  in appeal  by  the  State  Forum  as  well as in revision by the National Forum and hence the present appeal. Mr.  Salve, the learned Senior Counsel appearing  for the  appellant  submitted that Clause 4-B itself has used the two expressions namely "the date on which the risk under  the policy  has  commenced"  and  "the  date  of the policy" and, therefore, the said two expressions cannot have the  one  and the same meaning.    According to Mr.  Salve, the date of the policy is the date on which the policy is issued  though  for the  purpose  for  given  certain  tax relief the Insurer has allowed the proposal to have  the  policy  dated  back  w.e.f 10.5.89  and  on  such  an interpretation being given and the assured having committed suicide before the expiry  of  three years  of  the  date  of  the  policy, Clause 4-B is squarely attracted and, therefore, the Corporation will have a limited liability.  Mr.  Salve, the learned  Senior  Counsel  further contended  that if the expression the date of the policy" and the expression "the date on which the risk under  the  policy has  commenced"  is  given one and the same meaning then in a case where a policy is dated back, the proviso in Clause  4-B will  not  operate  and  such a situation would not have been intended by the parties to the agreement.  According  to  Mr. Salve,  while  construing  a  policy  of  insurance  which is nothing but an agreement between the parties  the  commercial practice cannot be ignored and, therefore, the dating back of the  policy  being  merely  to  confer  certain in tax to the insured, the date of the dating back cannot be held to be the date of the policy itself. Mr.   Chadha,  the  learned counsel appearing for the respondent on the  other  hand  submitted  that  the  insured having being called upon to indicate as to whether the policy

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should  be  dated  back  and if so, to indicate the date with effect form which such dating back  is  ti  operate  and  the Insured  having  indicated the same and thereafter the entire premium from the date form which the policy commenced  having been  paid  by the Insured and accepted by the Insurer, there is no reason to construe the date of the  policy  to  be  the date on  which  the  policy  was  issued.    According to Mr. Chadha, the date of the policy must be held to be the date on which the policy has commenced and on being construed in this manner the death of the  assured  having  taken  place  after three  years from the date of the policy, Clause 4-B will not be attracted and, therefore, the appellant  Company  will  be liable  to  pay  the  entire  sum for which the life has been insured together with interest thereon and the  Forums  under the Act did not commit any error in allowing the claim of the respondent. Having examined  the  rival  submissions  and  having examined  the  policy  of  insurance  which  is nothing but a contract  between   parties   and   having   considered   the expressions  used in Clause 4-B of the terms of policy we are persuaded to accept the submissions made by Mr.   Salve,  the learned Senior  Counsel  appearing  for  the  appellant.   In construing a particular Clause of the  Contract  it  is  only reasonable  to  construe  that  the  word  and the terms used therein must be given effect to.  In other words one part  of the Contract cannot be made otiose by giving a meaning to the policy of the contract.  Then again when the same Clause of a contract  uses  two  different  expressions, ordinarily those different expressions conveying one  and  the  same  meaning. Bearing  in  mind the aforesaid principle of construction, if Clause 4-B of the terms of policy is scrutinized,  it  become crystal  clear  that  the  date  on  which the risk under the policy has commenced  is  different  from  the  date  of  the policy.   In  the  case in hand undoubtedly the date on which the risk under the policy has commenced is  10.5.89  but  the date  of the policy is 31st of March, 19990 on which date the policy had been issued.  Even though the  Insurer  had  given the option to the Insured indicated that the policy should be dated  back  to  10.5.89  and  did  pay  the premium for that period, thereby the risk under the policy can be said to have commenced with effect from 10.5.89 but the date of the policy still remains the date on which the policy  was  issued  i.e. 31st of  March,  1990.   The death of the life assured having occurred as a result of  suicide  committed  by  the  assured before the expiry of three years from the date of the policy, the  terms  contained  in  Clause  4-B of the policy would be attracted and, therefore, the liability  of  the  Corporation would  be  limited  to  the  sum equal to the total amount of premium paid under the policy without interest  and  not  the entire sum  for  which the life had been insured.  The Forums under the Consumer Protection Act committed  gross  error  in construing  Clause  4-B  of  the  policy  and  given the same meaning to the two expressions in the  aforesaid  Clause  4-B namely  "the  date  on  which  the  risk under the policy has commenced" and the date of the  policy".    The  construction given  by  us  to  the provisions contained in Clause 4-B get support, if the proviso to Clause 4-B is looked into.   Under the proviso if the life assured commits suicide before expiry of  one  year  reckoned  from the date of the policy then the provisions of the Clause under the heading "suicide"  printed on the back of the policy would apply.  In a case therefore a policy  is  dated  back for one year prior to the date of the issue of the policy  the  proviso  contained  in  Clause  4-B cannot be  operated  at  all.  When parties had agreed to the terms of the contract it is  impermissible  to  hold  that  a

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particular term  was  never  intended  to be acted upon.  The proviso to  Clause  4-B  will  have  its  full  play  if  the expression  "the  date  of the policy" is interpreted to mean the date on which the policy was issued and not the  date  on which the  risk  under  the  policy  has  commenced.   In the aforesaid premises we are  of  the  considered  opinion  that under  Clause 4-B of the policy the date of the policy is the date on which the policy had been issued and not the date  on which  the  risk  under  the  policy  had commenced by way of allowing dated back.  In view of our  aforesaid  construction to  Clause  4-B,  in  the  case in hand the respondent in law would be entitled to only the sum equal to the  total  amount of  premium  paid  under  the  policy  without  any  interest inasmuch as the death of the life assured has occurred before the expiry of three years from the date of  the  policy  i.e. 31.3.1990.   Even  though we have construed the provisions of Clause 4-B as aforesaid but so far the amount of compensation payable to the respondent  is  concerned  we  find  from  the letter  of  the  Corporation  dated  2.2.1995 that the Claims Review Committee has examined the facts of the case  and  had decided  to  pay  a sum of Rupees two lacs on ex-gratia basis and we see  no  reason  why  the  respondent  should  not  be entitled  to  receive  the  said  amount  together  with  the interest thereon.  The said offer of the  Corporation  having been  made  on  2nd of February, 1995 and more than three and half year having been elapsed since then, we think  that  the Corporation-appellant should pay a total sum of three lacs to the  respondent-claimant in full satisfaction of the claim of the respondent and this amount should be  paid  within  eight weeks from today.  This appeal is disposed of accordingly.