Complaint is filed on 11-8-2009

                                                                                                                                             Compliant disposed on 17-5-2010  

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM::AT:: KARIMNAGAR

PRESENT: HON’BLE SRI K. DEVI PRASAD, B.Sc., LL.B., PRESIDENT

SMT. E. LAXMI, M.A.,LL.M.,PGDCA (CONSUMER AWARENESS), MEMBER

SRI. K. CHANDRA MOHAN RAO, B.Com ., LL.B.,  MEMBER

MONDAY, THE SEVENTEENTH DAY OF MAY, TWO THOUSAND TEN

CONSUMER COMPLAINT  NO.  129 OF  2009

Between: 

Rudrarapu Laxmi, @ Rudrapu Laxmi, W/o. Late Rudrapu @ Rudrarapu Hanmaiah, Age 40 years, Occ: Household, R/o. Qr.No.2417 ST-2, 8^th Incline Colony, Godavarikhani village of Ramagundam mandal of Karimnagar district.

                                                                                                                  … Complainant

                                      AND

Life Insurance Corporation of India, Ramagundam branch, R/by it’s Branch Manager, Ramagundam proper and mandal, Karimnagar district.

                                                                                …Opposite Party

This complaint is coming up before us for final hearing on 5-5-2010, in the presence of Sri B.Srinivas and Smt. B. Geetharani,  Advocates for complainant and Sri P.Ashok, Advocate for opposite party, and on perusing the material papers on record, and having stood over for consideration this day, the Forum passed the following:

:: ORDER::

1.       This complaint is filed under Section 12 of C.P. Act, 1986 seeking direction to the opposite party to pay an amount of Rs.1,80,000/- towards the sum assured under the policies with bonus, interest, compensation and costs.

2.       The brief averments of the complaint are that the husband of the complainant R.Hanmaiah was an employee in Singareni Collaries Company Ltd. During his life time he obtained several insurance policies from the opposite party on his life. The policies issued by opposite party are mentioned below:

As per the terms and conditions of the policy the monthly premiums shall be deducted from the salary of the policy holder and the Singareni Collaries Company Ltd. is authorized to deduct the same and send it to the opposite party. The policy holder nominated the complainant as his nominee under the policy. As per the terms and conditions of the policy the opposite party undertook to pay sum assured with accident benefit coverage in case of accidental death of the policy holder. The complainant submits that her husband died on 30.5.2008 on account of Sunstroke and a case is also registered by P.S. Godavarikhani II Town in Crime No.66 of 2008. Within one month of his death the complainant submitted a claim to the opposite party to pay a sum of Rs.1,80,000/- towards the amounts payable under the three policies by enclosing all the documents. But the opposite party paid Rs.13,580/- Rs.15,590/- and Rs.14,920/- towards the above said policies, but failed to pay the sum assured under the policies. The complainant got issued a Legal Notice on 23.7.2009 demanding the opposite party to pay Rs.1,80,000/-. Having received the Legal Notice the opposite party sent a reply denying the claim of the complainant and stated that the policies are in lapsed conditions. It is submitted that when the opposite party issued Insurance policies he is bound to pay the sum assured and failure to pay the same constitutes deficiency of service. Therefore, the complainant sought direction for payment of the said amount.

3.       The opposite party filed counter denying the averments of the complaint but admitted that the husband of the complainant obtained three policies for Rs.30,000/- each. On receipt of the claim for payment of the assured sum the opposite party verified the policies. It is revealed that the said policies were in lapsed condition as on the date of death of the policy holder and they have further stated that the monthly premiums were not received from June 2006. Hence, the death claim is settled for paid up value with eligible bonus and as per the settlement paid a sum of Rs.13,580/- for policy no.683816307, Rs.15,990/- for policy no.683811138 and Rs.14,920/- for policy no.683812257 through cheques Dt: 9.9.2008. Since the policies were not in force as on the date of death of the policy holder opposite party claimed that they are not liable to pay any amount under the policies and there is no deficiency of service on their part, hence prayed for dismissal of the complaint.

4.       The complainant filed Proof Affidavit reiterating the averments made in the complaint and filed documents which are marked as Ex.A1 to A9. Ex.A1 is the claim settlement letter of policy no.683816307 Dt; 8.9.2008. Ex.A2 is the claim settlement letter of policy no.683811138 Dt: 8.9.2008. Ex.A3 is the claim settlement letter of policy no.683812257 Dt: 8.9.2008. Ex.A4 is the Xerox copy of F.I.R. Dt; 30.5.2008. Ex.A5 is the Xerox copy of Inquest Report Dt: 30.5.2008. Ex.A6 is the Xerox copy of P.M.E. Report Dt: 30.5.2008. Ex.A7 is the office copy of Legal Notice got issued by complainant Dt: 23.7.2009. Ex.A8 is the receipt of professional courier Dt: 27.7.2009. Ex.A9 is the reply issued by the opposite party Dt: 28.7.2008.

5.       The opposite party filed Proof Affidavit of it’s Administrative Officer reiterating the averments made in the counter and filed documents which are marked as Ex.B1 to B6. Ex.B1 to B3 are the original policy bonds. Ex.B4 to B6 are the Status Reports of policy no. 683816307,683811138 and 683812257.

6.       Heard both sides.

7.       The points for consideration are:

1. Whether there is any deficiency of service on the part of opposite party?
2. If so, to what relief the complainant is entitled?

8.       It is contended by the complainant that her husband obtained three Life Insurance Policies from the opposite party which are Ex.B1 to B3. The policy holder died on 30.5.2008 due to Sunstroke. Regarding his death a case is registered by Police, Godavarikhani II Town in Crime No.66 of 2008. F.I.R. and P.M.R. are filed as Ex.A4 and Ex.A5. After receipt of death claim the opposite party did not pay the assured sum under the policies, but paid only paid-up value with eligible bonus. It is contended that the opposite party can’t take the plea that the premiums were not received from the employer due to which the policies were lapsed as on the date of death of the policy holder. It is contended that when the employer agreed to deduct the premiums from the salary of the employee and the same is accepted by the opposite party, it is for the opposite party to inform the policy holder about non-receipt of the premiums. On that ground the opposite party can’t escape from their liability and they are bound to pay the sum assured.

9.       It is contended by the opposite party that the monthly premiums for the three policies were not received after June 2006 and as the premium was not paid the three policies lapsed as on the date of death of the policy holder they were not in force. After receipt of the death claim the opposite party settled by paying the paid up value with eligible bonus as per the terms and conditions of the policy through cheque on 9.9.2008. When the policies were not in force there is no liability on the part of the opposite party to pay the sum assured under the policies. After service of Legal Notice the opposite party sent a reply under Ex.A9 informing the same to the complainant. The complainant is not entitled for the assured sum as there is no liability on their part.

10.     It is an admitted fact that the husband of the complainant obtained three insurance policies for Rs.30,000/- each under Ex.B1 to B3. It is also an admitted fact that the policy holder nominated the complainant as his nominee to receive the sum assured in case of his death. A perusal of the Status Reports under Ex.B4, B5 and B6 discloses that the monthly premium for the said policies were not received by the opposite party from June 2006 due to non-payment of the premiums the policies were lapsed as on the date of death of the policy holder. The said Ex.B4, B5 and B6 reveals that under Policy no.683816307 a total premium of Rs.2,910/- is received upto June 2006. Under policy no.683811138 a total premium of Rs.2,619/- is received upto June 2006 and under policy no.683812257 a total premium of Rs.2,910/- is received upto June 2006. After receipt of the claim from the complainant the opposite party paid Rs.13,580/-, Rs.15,590/- and Rs.14,920/- respectively towards paid up value with bonus on all the three policies.

11.     The complainant claimed an amount of Rs.90,000/- + Rs.90,000/- towards basic sum assured and accident benefit coverage. As per the arrangement made between the policy holder and opposite party the monthly premiums shall be deducted from the salary of the employee by Singareni Collaries Company Ltd and the same shall be remitted to the opposite party. The mode of payment is accepted by the opposite party and the previous monthly premiums were received in the same manner. The opposite party refused to pay the sum assured on the ground that the policy was not in force at the time of his death. Infact the opposite party did not produce any document to show that the policy was repudiated on account of non-receipt of monthly premiums. Further no proof is placed before this Forum that the policy holder was informed about non-receipt of premiums from the employer of the policy holder. Admittedly the deceased obtained insurance Policies under salary saving scheme by way of salary deductions. In support of her contentions the complainant relied on the following decisions:

(i)       2009 (2) CPR 85 (NC) in a case Branch Manager & Anr Vs Smt. A.Yasodamma & Anr, wherein it is held that “Neither employer nor petitioner had informed insured about non-payment of premium-Employer and insurance Company were bound to inform insured of consequence of non-payment of premium-No reason on ground to interfere-” 

(ii).     2009(2) CPR 143 (NC) in a case Life Insurance Corporation of India Vs Smt. Ranjana Misra & Ors, wherein it is held that “Where premium for LIC policy was to be remitted from salary and failure in remittance was for no fault of insured and employer was liable for that fault, employer being agent of LIC, Corporation was liable to pay policy amount”.       

12.     A perusal of policies under ex.B1 to B3 the opposite party issued policies for Rs.30,000/- each with accident benefit coverage. The F.I.R. under Ex.A4, Inquest Report under Ex.A5 and P.M.E. Report Ex.A6 discloses that the policy holder died due to Sunstroke which is an accidental death. As per the terms and conditions of the policy the opposite party is liable to pay the sum assured with accident benefit coverage. The basic sum assured is Rs.30,000/- each under three policies and Rs.30,000/- each under accident coverage. Having issued the policies undertaking to pay sum assured the opposite party cannot refuse to pay the same on the ground of non-receipt of premiums. After receiving the claim the opposite party paid, paid up value as follows:

Since the opposite party paid the said amount it shall be deducted from the sum assured. For the above said reasons we hold, that the opposite party is liable to pay Rs.1,80,000/- towards the sum assured under the three policies with eligible bonus. The opposite party is entitled to receive unpaid premiums from July 2006 to the date of death of the policy holder.

13.     In the result the complaint is allowed directing the opposite party to pay an amount of Rs.1,80,000/- towards the sum assured under three policies with eligible bonus. Out of the said amount the amount of Rs.44,090/- already paid towards paid up value shall be deducted and also the unpaid premiums shall be deducted. The balance amount shall be paid with interest @ 9% per annum from the date of filing the complaint i.e. 11-8-2009 till the date of realization along with Rs.1,000/- towards costs of the complaint within one month from the date of receipt of this order.

Typed to my dictation by Stenographer, after correction the orders pronounced by us in the open court this the 17^th day of May, 2010.

           Sd/-                                        Sd/-                                          Sd/-

         MEMBER                                MEMBER                               PRESIDENT       

NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE

FOR COMPLAINANT:

Ex.A1 is the claim settlement letter of policy no.683816307 Dt; 8.9.2008.

Ex.A2 is the claim settlement letter of policy no.683811138 Dt: 8.9.2008.

Ex.A3 is the claim settlement letter of policy no.683812257 Dt: 8.9.2008.

Ex.A4 is the Xerox copy of F.I.R. Dt; 30.5.2008.

Ex.A5 is the Xerox copy of Inquest Report Dt: 30.5.2008.

Ex.A6 is the Xerox copy of P.M.E. Report Dt: 30.5.2008.

Ex.A7 is the office copy of Legal Notice got issued by complainant Dt:

          23.7.2009.

Ex.A8 is the receipt of professional courier Dt: 27.7.2009.

Ex.A9 is the reply issued by the opposite party Dt: 28.7.2008.

FOR OPPOSITE PARTY:

Ex.B1 to B3 are the original policy bonds.

Ex.B4 to B6 are the Status Reports of policy no. 683816307,683811138

          and 683812257.

  Sd/-                                       Sd/-                                        Sd/-

           MEMBER                                MEMBER                               PRESIDENT