Chief Operating Officer v. Smt Bhanumurthy v
Case brief
What is this about?
Insurance — life insurance policy — lapse for non-payment of renewal premium — auto-debit / SI-EFT standing instruction — grace period of 30 days — funds credited within grace period — insurer's duty to verify and re-attempt debit — deficiency of service — death claim repudiation — consumer complaint allowed by State Commission, appeal dismissed by NCDRC — writ of certiorari under Articles 226 and 227 — Life Insurance Corporation of India v. Mani Ram, 2005(6) SCC 274 distinguished — SBI Life Insurance Co. Ltd. — policy assigned to State Bank of India — writ petition dismissed.
What did the court decide?
Although the policy terms on payment of premiums and the grace period were self-evident, the policy stood assigned to the State Bank of India with auto-debit enabled by standing instructions; with a credit of Rs.20,000/- in the account on 08.12.2016 and a 30-day grace period, it was incumbent on the insurance company (petitioners) to verify whether the amount existed in the policy holder's account, and the letter dated 12.12.2016 allegedly sent by the petitioners was found not proved.