BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A.No.1267/2009 against C.C.No.173/2007 , District Forum, KURNOOL.
Between:
P.Sridevi
W/o.late P.Harigopal Reddy
R/o.H.No.EWS 70, Housing
Board Colony (Old),B-Camp (post)
Kurnool. Appellant/
Complainant
And
1. The Branch Manager,
Life Insurance Corporation of India
Kurnool Branch.
2. The Senior Divisional Manager
Life Insurance Corporation of India
Divisional Office, Kadapa.
3. Municipal Corporation,
Rep. by its Commissioner,
Kurnool. Respondents/
Opp.parties
Counsel for the Appellant: Mr.M.Hari Babu
Counsel for the Respondents: Mr.K.R.L.Sarma for R1 and R2
(Mr.A.Sridhar-R3)
F.A.No.1271/2009 against C.C.No.173/2007 , District Forum, KURNOOL.
Between:
1. The Branch Manager,
Life Insurance Corporation of India
Kurnool Branch.
2. The Senior Divisional Manager
Life Insurance Corporation of India
Divisional Office, Kadapa. Appellants/
Opp.parties
And
1. P.Sridevi
W/o.late P.Harigopal Reddy
R/o.H.No.EWS 70, Housing
Board Colony (Old),B-Camp (post)
Kurnool.
2. Municipal Corporation,
Rep. by its Commissioner,
Kurnool. Respondents/
Opp.parties
Counsel for the Appellants:Mr.K.R.L.Sarma
Counsel for the Respondents: Mr.M.Hari Babu-R1
Mr.A.Sridhar-R2
QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT
AND
SMT.M.SHREESHA, MEMBER
.
THURSDAY, THE SECOND DAY OF DECEMBER,
TWO THOUSAND TEN
Oral order:(Per Hon’ble Justice Sri D.Appa Rao, President)
***
These appeals viz F.A.No.1267/2009 is preferred by the complainant, while F.A.No.1271/2009 is preferred by the insurance company against the order of the District Forum, Kurnool in directing to settle the claims under the four policies and pay the assured amounts together with compensation of Rs.30,000/- and costs of Rs.20,000/-.
Since both the appeals arise out of the same order, we describe the parties as arrayed in the complaint for clarity of expression.
The case of the complainant in brief is that her husband, Harigopal Reddy, who worked as Divisional Clerk in Municipal Corporation, took five policies for Rs.50,000/-, 50,000/-, 50,000/-, 50,000/- and Rs.2,00,000/- commencing from 27-12-1999, 28-12-1999, 28-12-1999, 27-09, 1999 and 26-7-2001 respectively. While so he died in a road accident on 27-1-2003. When she claimed the amounts under the policies, the insurance company repudiated the entire claim under policy bearing No.652680354 stating that it was under lapsed condition, while agreeing to pay Rs.25,000/- each for policies bearing Nos.652347165 and 651429236, Rs.6,458/- under policy No.651429237 and Rs.14,667/- under policy No.651428763. Assailing the said repudiation, she filed the complaint claiming Rs.2,00,000/-, 150,000/-, 1,00,000/-, 1,50,000/- and Rs.6,00,000/- respectively under the above policies together with interest at 24% p.a., compensation of Rs.1,00,000/- and costs.
The opposite party insurance company resisted the case. While admitting the issuance of the policies, it alleged that on receipt of the claims, it had offered to pay ex-gratia of Rs.6,358/-, Rs.25,000/-, Rs.25,000/- and Rs.14,667/- respectively and repudiated the fifth policy as it was lapsed for non remittance of premium by 27-7-2002. He died on 27-1-2003. As per the policy conditions, it did not acquire any value. The Municipal Corporation did not pay the premia for the other four policies from the salary payable from the month of July, 2002 and offered to pay belatedly which was not in order. In the light of the fact that the policies were in lapsed condition, the amount was offered under ex-gratia basis and submitted that there was no deficiency in service and therefore prayed for dismissal of the complaint with costs.
The employer, Municipal Corporation, equally resisted the case. It alleged that it had been paying the premia of its employees including the deceased by way of consolidated amounts through cheques, details of payments were made a mention. When the claim was made, it was forwarded to the insurance company for settlement of the claims. It submitted that it was not aware of the particulars of the policy for Rs.2,00,000/- mentioned in the complaint. It was unnecessarily impleaded as a party and submitted that there was no deficiency in service on its part and prayed for dismissal of the complaint with costs.
The complainant in proof of her case, filed her affidavit evidence and Exs.A1 to A11 were marked while the opposite parties 1 and 2 filed affidavit evidence of their Manager and opposite party No.3 filed affidavit evidence of the Commissioner and got marked Exs.B1 to B23.
The District Forum after considering the evidence place on record opined since the fact of the death of the assured was not denied they were directed the insurance company to settle the claims under the four policies and pay the assured amount together with compensation of Rs.30,000/- and costs of Rs.20,000/-.
Aggrieved by the said order, the insurance company preferred F.A.No.1271/2009 contending that the District Forum did not appreciate either the facts or law in correct perspective. It ought to have seen that due to non remittance of premium due on 27-7-2002, the policy bearing No.651429237 lapsed and therefore offered Rs.6358 as notional paid up value on ex-gratia basis but settled the claim as per the order of the District Forum for an amount of Rs.1,60,900/- towards sum assured plus bonus on 13-11-2008, pertaining to policy No.652429236, it offered to pay 50% of the sum assured but settled the claim and paid Rs.77,470/-, pertaining to policy No.652347165 lapsed for non remittance of premium due on 28-9-2002, hence nothing is payable but offered 50% of the sum assured i.e. Rs.25,000/-, pertaining to policy No.651428763 it lapsed on 27-7-2002 and offered to pay Rs.14,667/- and settled the claim and paid Rs.58,842/- on 13-11-2008, pertaining to policy No.652680354 the policy lapsed for non remittance of premium due on 26-4-2002 and did not acquire any value but paid Rs.4,15,040/- on 13-11-2008 towards full and final settlement and prayed for dismissal of the complaint.
The complainant equally aggrieved by the said preferred F.A.No.1267/209 contending that the District Forum ought to have allowed the complaint in toto. It ought to have awarded interest from the date of death when it found that the repudiation was not proper. It had awarded interest at 9% p.a. from the date of default which is unjust.
The points that arise for consideration are:
1. Whether the amounts that were settled and paid by the insurance company are just or needs any modification?
2. Whether the complainant is entitled to any interest, if so, from what date and to what relief?
It is an undisputed fact that the complainant’s husband, Harigopal Reddy, had taken five policies. The details of which are mentioned while narrating the facts. It is also not in dispute that for non payment of premia due from July, 2002, the policies were in lapsed condition. The premia that was due from July, 2002 was sought to revived on 23-3-2003 by which time the assured died on 27-1-2003. The complainant alleges that he died in an accident. Admittedly the death by accident was not provided by either filing, FIR, report of the police or any documents whatsoever. Despite the fact that the insurance company had stated that they did not receive the premia and the policies lapsed, the complainant stated that for four polices, the premia were to be paid from out of salary. The Municipal Corporation wherein he was working has taken contention that these premia were paid under consolidated cheques mentioning the details of the employees and the amounts were paid by them vide Ex.B14.
We may mention herein that lot of correspondence took place between opposite party No.3 Municipal Corporation and the insurance company which reveal that the Municipal Corporation is habituated to pay the premia belatedly with interest after receiving taxes and the insurance company accepted the same. While the Municipal Corporation asserts that it had paid the amount by way of cheques covering the policies of all the employees, the insurance company by its letter dated 5-7-2003, Ex.B17, returned the cheque for Rs.4,90,916/- mentioning that the mandatory requirement necessary for revival of the policies was not made and hence the cheque amount for 11 months could not be honoured. Whatever be the reason, the complainant did not choose to file complaint against opposite party No.3 alleging deficiency in service in not remitting the premium in time. No order was passed by the District Forum against opposite party No.3, Municipal Corporation. Be that as it may. Since the complainant could not prove that her husband’s death was due to an accident, the insurance company settled the claims on ex-gratia basis. However, the complainant did not agree for it and filed the complaint and the District Forum by its order dated 30-9-2008 directed the insurance company to pay the amounts as per the terms of the policy. The insurance company settled the claims on 13-11-2008. In fact under the first policy bearing No.651429237 an amount of Rs.1,60,900/- was paid towards sum assured plus bonus. In regard to policy No.652429236 an amount Rs.47,470/- was paid. In regard to policy No.652347165 an amount of Rs.25,000/- was paid. In regard to policy No.651428763 an amount of Rs.58,842/- was paid. In regard to policy No.652680354 an amount of Rs.4,15,040/- was paid.
The only question that crops up for consideration is whether the complainant was entitled to interest from the date of death. We may state that since the insurance company complied with the order of the District Forum and paid the amounts covered under the five policies on 14-11-2008 and therefore the contention that she would be entitled to interest from the date of death is not tenable. The District Forum has awarded interest at 9% p.a. which we opine as just. However, we are of the opinion that the insurance company after determination of the amount should pay the same with interest at 9% p.a. from 30-10-2008 and the interest for the belated period from that day comes to Rs.2,315/-. The said amount is adequate in the circumstances of the case. The amount with regard to compensation was paid and the order of the District Forum with regard to costs is confirmed.
In the result the appeals are disposed of directing the insurance company to pay Rs.2,315/- within one month from the date of receipt of this order. No order as to costs.
Sd/-PRESIDENT.
Sd/-MEMBER.
JM Dt.02-12-2010
