- 1 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE JAYANT BANERJI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA WRIT PETITION NO. 14986 OF 2025 (GM-CON) BETWEEN: 1. CHIEF OPERATING OFFICER, SBI LIFE INSURANCE CO. LTD., CLIENT RELATIONSHIP DEPARTMENT, CENTRAL PROCESSING CENTRE, 7TH LEVEL (D WING) & 8TH LEVEL, SEAWOODS GRAND CENTRAL, TOWER 2, PLOT NO.R-1, SECTOR-40, SEAWOODS, NERUL NODE, DIST.THANE, NAVI MUMBAI-400 706. 2. MANAGER, SBI LIFE INSURANCE CO.LTD., NO.119, 1ST FLOOR, JP ARCADE, 5TH MAIN, SIR PUTTANA CHETTY ROAD, CHAMARAJPET, BANGALORE 560 018. PETITIONERS REPRESENTED IN THIS PETITION BY ITS ASSISTANT MANAGER, SBI LIFE INSURANCE CO. LTD., NO.24, II FLOOR, SRI SAIRAM TOWERS, 5TH MAIN, SRI PUTTANNA CHETTY ROAD, CHAMARAJPET, BANGALORE-560 018. …PETITIONERS (BY SRI.THRIMURTHY.K.P., ADVOCATE) Digitally signed by K G RENUKAMBA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 AND: 1. SMT.BHANUMURTHY.V, LATE MS.LATHA GOPALAN, NO.83, 3RD MAIN ROAD, INCOME TAX LAYOUT, VIJAYANAGAR, BENGALURU-560 040. 2. KUM. SHEFALI N.KOUSHIK, D/O LATE LATHA GOPALAN, NO.83, 3RD MAIN ROAD, INCOME TAX LAYOUT, VIJAYANAGAR, BENGALURU-560 040. MINOR BY GUARDIAN BHANUMURTHY.V. 3. CHIEF MANAGER AND AUTHORISED OFFICER, RETAIL ASSETS CENTRAL PROCESSING CENTRE (RACPC), NO.13/1, BULL TEMPLE ROAD, BASAVANAGUDI, BENGALURU-560 004. 4. CHIEF MANAGER, STATE BANK OF INDIA, NAGARBHAVI 2ND STAGE, BDA SITE 188, 80 FT. RING ROAD, 2ND BLOCK, NAGARBHAVI, BENGALURU-560 072. …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO (I) ISSUE A WRIT OF CERTIORARI QUASHING THE ORDER DATED 13.03.2025 PASSED BY THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION AT NEW DELHI IN NC/FA/82/2025 (ANNEXURE-A) AND SET ASIDE THE ORDER DATED 30.11.2024 PASSED BY THE KARNATAKA CONSUMER DISPUTES REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH) IN CC NO.333/2019 FILED BY RESPONDENTS 1 AND 2, IN THE ENDS OF JUSTICE. II) ISSUE SUCH OTHER WRIT/ORDER/DIRECTION AS DEEMED FIT, WITH COSTS, IN THE INTEREST OF JUSTICE. - 3 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE JAYANT BANERJI AND HON'BLE MR. JUSTICE UMESH M ADIGA ORAL ORDER (PER: HON'BLE MR. JUSTICE JAYANT BANERJI) Heard learned counsel for the petitioners. 2. This petition has been filed seeking the following reliefs: i. "Issue a Writ of Certiorari quashing the order dated 13/3/25 passed by the Hon'ble National Consumer Disputes Redressal Commission at New Delhi in NC/FA/82/2025 (Annexure-A) and set aside the order dated 30/11/24 passed by the Hon'ble Karnataka Consumer Disputes Redressal Commission, Bengaluru (Principal Bench) in C.C.no.333/2019 (Annexure B) and dismiss CC no.333/2019 filed by respondents 1 and 2, in the ends of justice ii. Issue such other writ/ order/ direction as deemed fit, with costs, in the interest of justice." 3. It appears that one Ms.Latha Gopalan had submitted a proposal form dated 16.11.2013 with initial - 4 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 deposit of Rs.7,734/- opting for annual frequency for payment of premium. A policy No.45006059010 was issued with date of commencement as 02.12.2013, for a basic sum assured of Rs.51,00,000/-. The premium paying term was 15 years. The petitioners received notice of assignment under the policies which was registered in their records. The renewal premium was payable on December of every year during the term of the policy. However, the petitioners received the renewal premium due upto 02.12.2015 and the renewal premium due on 02.12.2016 was not received. Hence, the policy lapsed with effect from 02.12.2016. Accordingly, all benefits payable under the policy ceased. 4. It has been submitted that as per the proposal form, the insured Ms.Latha Gopalan, had opted for deduction of premium through SI-EFT (Standing Instruction-Electronic Fund Transfer). However, the attempt to debit the renewal premium on 02.12.2016 failed for a reason that "DP NOT AVAILABLE ACCT CANNOT - 5 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 BE OVERDRAWN". The petitioners duly communicated the failure of transaction vide letter dated 12.12.2016. The entitled grace period for payment of premium was one month. The policy holder/insured Ms.Latha Gopalan reportedly died on 23.07.2017. The petitioners received the death claim intimation dated 15.09.2017 on 20.09.2017. However, it is stated by the petitioners that on the date of death of the deceased that is on 23.07.2017, the policy was in lapsed status. Since the sum assured was not payable, hence the claim was repudiated and the decision taken was intimated to the assignee that is State Bank of India, vide letter dated 15.01.2018. 5. Being aggrieved, the respondent No.1, being the mother of the policy holder filed complaint before the State Commission alleging deficiency of service. It was contended in the complaint that the policy holder had credited Rs.20,000/- into her account on 08.12.2016 and the same could have been deducted, within the grace period of one month that is till 02.01.2017 and as such, - 6 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 the repudiation of claim is not correct. However, the claim was allowed by the State Commission. Against the impugned order of the State Commission, dated 30.11.2024, an appeal was filed before the National Commission by the petitioners, which came to be dismissed by the judgment impugned dated 13.03.2025. 6. Learned counsel for the petitioners have referred to the provisions of the policy relating to 'premiums' and the general terms with respect to the 'grace period', to contend that the liability was on the policy holder to make the payments of the annual premiums and once there was a clear default, the policy stood automatically lapsed. 7. It is contended that provisions for revival of the policy was available, but the same was not opted for by the policy holder and hence, the insurance company cannot be saddled with the liability of payment of the sum assured. The learned counsel has also stated that the grace period of 30 days from the due dates for premium - 7 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 frequencies was available and therefore, it was for the policy holder to have ensured that the premium amount was duly deposited during the grace period. 8. Learned counsel has referred to a judgment of the Supreme Court in the case of Life Insurance Corporation of India V. Mani Ram reported in 2005(6) SCC 274. Our attention has been particularly drawn to paragraph Nos.11 and 17 of the aforesaid judgment which read as follows: "11. So far as the factual position is concerned, there is no dispute between the parties. Deceased Ashok Kumar was insured by the Insurance Company and the first premium was paid on August 21, 1995. At the request of the insured, however, the policy was back- dated with effect from April 28, 1995. In our opinion, therefore, the learned counsel for the Insurance Company is right in submitting that one year came to an end on April 28, 1996 and the insured was liable to pay premium on that date as it became due and payable. Taking into account grace period of one month, premium amount ought to have been paid latest by May 28, 1996. Admittedly, no such payment was made either in April, 1996 or in May, 1996. We are impressed by the argument of the learned counsel for the Insurance Company that in the circumstances, the policy lapsed on May 28, 1996. XXXX XXXX XXXX - 8 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 17. In the instant case, Condition 2 expressly provided the period during which the payment was to be made. It also in no uncertain terms stated that if premium was not paid before the expiry of grace period, the policy would lapse. In our view, the ratio in Dharam Vir Anand would support the Insurance Company rather than the complainant. If all the terms and conditions of the policy (contract between the parties) have to be kept in mind and given effect to, acceptance of argument on behalf of the complainant would make the last part of Condition 2 redundant, otiose and inoperative; and a court of law cannot construe a document in the manner suggested by the counsel for the complainant. As the premium was due on April 28, 1996 and was not paid till May 28, 1996, the policy lapsed. The fora below hence, committed an error of law in allowing the complaint of the respondent herein and the orders are liable to be set aside." 9. We have perused the orders passed by the State Commission as well as by the National Commission. While rejecting the appeal of the petitioners, the National Commission noticed the provisions relating to grace period, which was a period of 30 days. After considering the submissions raised, the National Commission found that the auto debit instructions for realization of premium from the bank account of the insured was admitted to the parties, sufficient balance was not available in the bank account on 02.12.2016. Admittedly, an amount of Rs.20,000/- was credited in the account on 08.12.2016. It - 9 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 was therefore, observed that there was no occasion for the appellants to have sent a letter 4 days thereafter on 12.12.2016 without attempting to debit the amount when the credit balance of Rs.20,000/- was available on 08.12.2016. 10. It was noticed that the letter dated 12.12.2016, did not seem to have been received by the insured and the allegation is that it had been sent by normal post, that too an unsigned letter, was unacceptable as it was not understood why a mail (sic) was not sent or even otherwise dispatched by registered post. The sending and receipt of the letter dated 12.12.2016 was found to have not been proved or established. The observations of the National Commission are as follows: "18. We have considered the submissions raised and we find that the auto debit instruction for realization of premium from the Bank Account of the insured is admitted to the parties. The fact that sufficient balance was not available in the Bank account on 02.12.2016 cannot be disputed as admittedly the amount of Rs.20,000/- was credited in the account on 08.12.2016. There was however no occasion for the Appellants to have sent a letter four days thereafter on 12.12.2016 without attempting to debit the amount when the credit balance of Rs.20,000/- was available on 08.12.2016. - 10 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 The Appellants could have very appropriately done this by verifying the status of funds within the grace period which was available till 02.01.2017 before sending the letter dated 12.12.2016. The letter dated 12.12.2016 as alleged does not seem to have been received by the insured and the allegation that it had been sent by normal post, that too even an unsigned letter, is unacceptable as it is not understood why a mail was not sent or even otherwise a registered post was not dispatched. The sending and receipt of the letter dated 12.12.2016 has not been proved or established. The Complainant has categorically stated in paragraph 16 of the complaint that there was no reason for the Complainant's daughter to not have mentioned this, as, if she had received any such letter, she would have promptly responded to the same. Nonetheless, the fact remains that the bank account was replenished on 08.12.2016 with a credit of Rs.20,000/- even before the sending of the letter on 12.12.2016. We are therefore convinced that there was no default on the part of the insured in making available the funds for realization of the premium within the grace period, hence the conclusion drawn by the Fora below does not suffer from any error of fact. 19. Learned Counsel for the Appellant urged that the grace period as defined is only to benefit the insured of a coverage if an incident happens within the grace period. This is to ensure that the policy continues and the benefits accrue to the insured within the grace period but in the instant case the death has taken place almost six months after the expiry of the grace period. The submission is that had the death taken place within the grace period, the Complainants could have claimed the benefits under the policy. 20. In the instant case it is not the date of death which is in dispute but the allegation of deficiency is regarding the auto debiting of the premium amount in spite of the fact that the funds were available in the Bank account of the Insured. The sending of the letter dated 12.12.2016 has not been convincingly established and proved, and therefore the deficiency on the part of the appellant or the Bank in not debiting the amount of premium cannot be attributed to the Respondent. The contention therefore that the State Commission has - 11 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 proceeded on sympathies without considering the impact of the provisions of the policy is not correct. The deficiency is established and therefore the State Commission has not committed any error in allowing the complaint." 11. We have considered the submissions made by the learned counsel for the petitioners. The provisions as to the terms of the insurance policy with regard to payment of premiums and the grace period are self- evident. However, the aforesaid would not come in the way of the fact that the policy was assigned to the State Bank of India and auto debit function was enabled by way of standing instructions. Admittedly, the account had a credit of Rs.20,000/- on 08.12.2016. Since the grace period was of a month that is 30 days with the auto debit function being enabled, it was incumbent on the insurance company that is the petitioners who have verified whether the amount existed in the account of the policy holder. Even the letter of 12.12.2016 allegedly sent by the petitioners has found to have been not proved. - 12 - HC-KAR NC: 2025:KHC:37338-DB WP No. 14986 of 2025 12. As far as the judgment of the Supreme Court is concerned, apparently, it did not deal with a case where the auto debit function was enabled. Therefore, on facts, the instant case is distinguishable. 13. For the reasons aforesaid, we find no grounds to interfere in the order impugned, more so, for want of any further material or placing of any relevant provision of law that would assist the case of the petitioners. This petition is therefore dismissed. Sd/- (JAYANT BANERJI) JUDGE Sd/- (UMESH M ADIGA) JUDGE PK List No.: 1 Sl No.: 19