LIFE INSURANCE CORPN.OF INDIA vs S. SINDHU

The Supreme Court held that in the case of a lapsed life insurance policy, the Life Insurance Corporation of India (LIC) is not liable to pay interest on the premiums paid prior to the settlement of the reduced sum assured. The Court interpreted Condition No.4 of the policy, which allows for a paid-up policy after three full years of premium payments, affirming that the respondent was entitled only to the paid-up value of Rs.1,13,750/- and not the full assured sum of Rs.5 lakhs or any bonus. The appeal was dismissed, upholding the lower court's decision.