BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.

F.A.No.108/2012  against C.C.No.71/2010 District Forum-I,  CHITTOOR

Between

1.   The Branch Manager, LIC of India,

Piler Cross Road, Piler Town and Mandal,

Chittoor District.

2.   The Divisional Manager,

LIC of India, Dargamitta

Nellore Town and District.                                           ..Appellants/

                                                                             Opp.parties 1 & 2

          And

1.   N.Raja Reddy S/o.N.Ramana Reddy, aged

56 Years, Hindu, Working as Junior Assistant,

Valmikipuram Gram Panchayat office,

Residing at Vayalpad Town & Mandal,

Chittoor District.

2.   The Secretary, Valmikipuram Gram Panchayat

ValmikipuramTown and Mandal,

Chittoor District.                                                          Respondents/

                                                                                      Complainant & OP3.

Counsel for the Appellants      :  Mr.N.Mohan Krishna

Counsel for the Respondents:  Mr.C.V.S.S.Sarma-R1

                                                    Mr.B.Sreehari-R2

QUORUM:  SMT.M.SHREESHA, HON’BLE Incharge President

AND

SRIT.ASHOK KUMAR, HON’BLE MEMBER.   

WEDNESDAY, THE NINETEENTH  DAY OF JUNE

TWO THOUSAND THIRTEEN

Order (Per Smt.M.Shreesha, Hon’ble Incharge President)

***

Aggrieved by the order in C.C.No.71/2010 on the file of District Forum-I, Chittoor ,  O.Ps. 1 and  2 preferred this appeal.

        The brief facts as set out in the complaint are that the complainant insured his life with the first O.P. and took six policies, the details of which are as follows:

He was paying the premium amounts for all the six policies every month from his salary through his employer i.e. the third opposite party by making an authorisation to first O.P.  Due to ill health, he applied leave in the year 2009 and went to Vijaya Hopsital, Chennia for heart operation and the third O.P recovered the premium from the complainant’s salary for the said policies and the same was not forwarded to the first O.P.  Subsequently the third O.P. sent the amount by D.D. on 18-8-2009 for a sum of Rs.15,830/- for the premium amount with a covering letter, which was returned on 22-8-2009 by the first O.P. stating that the policies have lapsed.  Thereafter another DD dated 29-8-2009 for Rs.9498 was sent which was again returned intimating the complainant to send the approved reports of the concerned doctors and the complainant sent the health declaration, ECG, FBBS issued by LIC authorities.   Thereafter the complainant was again asked to send the report from Dr.Gupta, M.D. who is a physician of LIC and the same was sent on 21-10-2009.  First O.P intimated to the complainant to send special Blood sugar test, urine test, SBT-12, haemogram test, Licidogram test, Blood sugar tolerance report and the complainant obtained all these test reports and sent them on 11-3-2010 but still the opposite party did not renew the policies. O.P.3 though deducted the salary for premiums did not send them in time to the O.Ps. 1 and 2 and therefore there is negligence on behalf of all opposite parties and the complainant has sought a direction to all the O.Ps. to renew all the 6 policies  by accepting the premium amounts from third O.P. which was deducted from his salary and also to pay compensation and costs.

        O.P.2 filed written version which was adopted by O.P.1 admitting the issuance of the six policies but denies for want of knowledge that the complainant went on leave for one year in the year 2009 but admit that the premium amounts were not received by O.P.1 from the employer i.e. O.P.3 for the month of September, 2008 and admit that they have returned the D.D. as the policies were already lapsed.  He also admits that they have asked the complainant to send the medical reports of 2D echo and CTMT and their Mumbai office stated that the complainant is not fit for revival and hence they have declined to renew the policy as per the conditions incorporated in the policies under the heading of “Revival of Discontinued Policies”, the O.P, reserves the right to accept or decline the revival of discontinued policy and hence there is no deficiency in service on their behalf. 

        O.P.3 filed written version stating that they have not received salary amounts from the Government because of which they have not recovered premium amounts from the complainant salary and hence did not forward the same to O.P.1 and therefore they deny that there is any negligence on their behalf as they did not receive any salary from the Government. 

        The District Forum based on the evidence adduced i.e. Exs.A1 to A27 and B1 to B4 and the pleadings put forward allowed the complaint in part directing

i)             The opposite parties No.1 and 2 are directed to renew the six policies bearing No.651065453, 651070615, 841975610, 841976977, 841977861 and 842038690 after taking the premium amounts within one month from the date of the order.

ii)           The complainant in so far as against the 3^rd opposite party is dismissed as there is no deficiency of service on his part.

iii)          The claim of damages as prayed for by the complainant against opposite parties 1 to 3 is dismissed.

iv)         There shall be no order as to costs.

Aggrieved by the said order, opposite parties 1 and 2 preferred this appeal

        Both sides filed written arguments and the respondent/complainant filed additional evidence which was marked as Exs.A27 to A32

        The facts not in dispute are that the complainant had taken six policies evidenced under Ex.A1 which is the status report of the policy copies.  It is the complainant’s case that this is a salary savings scheme and the premiums were deducted from his salary and sent by O.P.3 to O.P.1 and only after he returned from his leave in the year 2009 and after joining duty, he realized that O.P.3 did not sent premiums and subsequently O.P.3 sent D.D. for Rs.15,830/- on 18-8-2009 (Ex.A2) which was returned on the ground that the policies were lapsed.  Ex.A4 is the office copy of the letter issued by O.P.3 to O.P.1 enclosing the D.D. Once again on 29-8-2009 evidenced under Ex.A6 letter, O.P.3 sent a D.D. dated 29-8-2009 (Ex.A3) for Rs.9,498/- which was also returned with an intimation to the complainant to send the medical reports of ECG FBBS and declaration of health. 
The complainant submits in his affidavit that on the advice of second O.P. the medical report as demanded from Dr.Srinivas Gupta who is the LIC physician and the same was sent on 21-10-2009 evidenced under Ex.A12.  Thereafter 2 D echo and CTMT reports were taken on 29-1-2010 evidenced under Ex.A14 and sent to the opposite parties.  Ex.A22 is dated 11-3-2010  and is the letter addressed by the complainant to O.P.1 with respect to blood sugar test, urine test, SBT-12, hemogram test, Licedogram, blood sugar tolerance test from the authorized persons of LIC but on 04-6-2010 evidenced under Ex.A24, first O.P. denied the revival of the policies for which the complainant replied stating that he was in good health and that the opposite parties have not revived the polices in an unjustified manner.

It is the case of appellants/O.Ps. that the complainant should make arrangement for remitting of policy amount and that he is solely responsible for any consequence for non-payment of premiums and that in the conditions and privileges incorporated under the policies under the heading “Revival of discontinued policies”, the corporation reserves the right to accept or decline the revival of lapsed polices.  The policies of the complainant were not revived only as per the opinion of the under-write section who assess the risk and submit that there is no deficiency in service on their behalf.

The complainant filed his salary disbursement register for the relevant period August, 2008 to August 2009 evidencing that O.P.3 that the employer has deducted premium amounts from his salary from August 2008 to June 2009 but did not remit the same to O.Ps 1 and 2 on account of which the policies lapsed.  The salary particulars do show that the employer deducted the premiums from the complainant’s salary for the relevant period but did not remit the same to the insurance company as per the authorization letter given under the salary savings scheme, it is the duty of the employer not only to deduct the premiums but also to remit the same and it is because of negligence of O.P.3 that the policies lapsed.  As this evidence was not placed by the complainant before the District Forum, the Forum dismissed the complaint against O.P.3.  The Forum also did not give any direction for payment or costs and it is pertinent to note that the complainant did not prefer any appeal. 

It is also not in dispute that the complainant herein suffered from chest pain as can be seen from Ex.B3 case sheet dated 23-1-2009 of SIMS hospital, Tirupathi and he was diagnosed to be suffering from Coronary Artery disease and was advised to undergo bypass surgery. Therefore he took leave from January, 2009 to June, 2009 and underwent bypass surgery on 21-2-2009 at Chennai.  To meet the medical expenses, the complainant approached O.P.1 for grant of loan of Rs.1,45,000/-.  The first O.P. who is the appellant herein is insurer of all 6 policies and a loan of 1,45,000/- against the six polices was given to the complainant on 05-2-2009 by collecting the policy copies but did not inform the complainant that the premium amounts were not paid from August, 2009 and the complainant himself as disclosed that he suffered from Coronary Artery disease and that he was on medical leave from January, 2009 to June, 2009.

 The learned counsel for the appellants submitted in his grounds that based on the under write section’s report they have declined to revive the policies.  The under write section in Ex.B4 has  declined the revival of all the six policies based on health requirements. It is pertinent to note that the policies were taken in the year 1993 onwards till 10-3-2004 whereas Ex.B3 discharge summary shows that the complainant never had any history of diabetes, Hypertension or asthma and for the first time was being operated for a coronary artery disease but the point for consideration here is whether the opposite parties have the right  not  to revive the policies?

Ex.B1 under point 3 states as follows:

Revival of Discontinued Policies:  If the policy has lapsed, it may be revived during the life time of the Life Assured, but within a period of 5 years from the date of first unpaid premium and before the date of maturity on submissionof proof of continued insurability to the satisfaction of the Corporation and the payment of all arrears of premium together with inertest at such rate as may be fixed by the Corporation from time to time compounding half yearly.  The corporation reserves the right to accept or decline the revival of discontinued Policy.  The revival of a discontinued  policy shall take effect only after the same  is approved by the Corporation and is specifically communicated to the Life Assured.

In the instant case the complainant had taken the six policies from 1993 to 2004 and has taken a loan on these six policies to cover the expenditure for his medical surgery in 2009 but his employer though deducted the premiums from his salary did not deduct them in time and therefore the policies lapsed and thereafter the employer sent both the D.Ds. which were returned by the insurance company.  At that stage, the insurance company asked for medical reports as they were in the knowledge that the complainant had taken a loan only to cover the expenses for medical surgery that he had undergone in 2009 and based on these reports, the appellants did not revive the policies quoting that they have the right to decline.  Hence there is no deficiency in service on behalf of the appellants and the order of the District Forum directing the appellants to revive the policies is unjustified.

For the aforementioned reasons, this appeal is allowed and the order of the District Forum is set aside and consequently the complaint is dismissed.  There shall be no order as to costs.

INCHARGE PRESIDENT.

                                                                MEMBER.

JM                                                             Dt. 19-6-2013.