BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY

PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President

              Smt. Meena Ramanathan, B.Com., Lady Member

    Sri G.Sreenivas Rao, M.Sc., B.Ed.,LL.B.,PGADR (NALSAR), Member

Wednesday, the 6^th day of February, 2013

CC.No. 17 of 2012

Between:

K. Raghavendra Rao S/o Manik Rao,

Aged about 60 years, Occ: Retd, HM APHS Rejinthal,

Presently residing at Plot No. 168, Srinagar Colony,

Beside Oxford High School, Zaheerabad, Medak District.

                                                                                   …..Complainant

And

1. Auditor,

Andhra Pradesh Government Life Insurance,

Branch at Sangareddy.

2. Director of Insurance,

Government of A.P.                

                                     ...Opposite parties

This case came up for final hearing before us on 04.02.2013 in the presence of Sri Anantha Rao Kulkarni, Advocate for complainant and Sri. V. Hanumantha Reddy, Govt. Pleader for opposite parties No. 1 & 2 and heard the arguments of both sides, on perusing the record and having stood over for consideration till this day, this Forum delivered the following:

O R D E R

(Per Se Sri Patil Vithal Rao, President)

                   The petitioner, who is a retired head master of ZPHS, has approached this Forum under Section 12 of the Consumer Protection Act, 1986 alleging deficiency of service on the part of the opposite parties in making payment of insurance amount with ancillary benefit to him. His contention, in brief, is that in terms of G.O.Ms.No. 212, FINANCE & PLANNING (FIN.WING.ADMN.II) DEPARTMENT Dated 17.12.1997 he availed the benefits of the scheme under APGLIC by subscribing monthly premium of Rs. 150/- from his salary being in the age group of 21 to 48 years. He has further contended that on attaining age of super annuation on 31.05.2010 he approached the opposite parties for the matured policy amount but to his surprise he was told that he was not eligible for any bonus amount on the accumulated premium amount. Despite several representations, as per the complainant, the opposite parties did not respond positively. Therefore he seeks the reliefs of payment of accumulated policy amount of Rs. 24,000/- with bonus of about Rs. 40,000/- there on and also compensation of Rs. 2,10,000/- towards his physical stress and mental agony and also costs of Rs. 5,000/-.

2.                The opposite parties resisted the complainant’s claim by way of filing a counter on the grounds, inter alia, that no doubt he has subscribed the monthly premiums of Rs. 150/- but his requisite proposal form through his drawing and disbursing officer with certification was never received by the insurance department. Therefore, as per the procedure, the said amount was treated as “unauthorized” and as such the policy bond was not issued to the complainant and that only on receipt of a letter from head master concerned the total quantum of deduction amount was traced out. The opposite parties have further asserted that as no policy bond was issued, there did not exist a contract of risk covered or monetary benefit. When such type of cases,  as of the present one, were bought to the notice of the government, a memo was issued by the government on 22.08.1992 clarifying that the payment of insurance amounts did not arise. Further, as per the opposite parties, the complainant even did not submit requisite refund form to the department seeking payment of accumulated amounts. It is also noted in the counter that the complainant is not a consumer since his services were never utilized by the department as per the provisions of Act 1986, as such the present case is not maintainable in the eye of law. Hence they prayed to dismiss the same with costs.

3.                The complainant got examined himself as PW.1 and marked Ex. A1 to A6 to substantiate his claim. The opposite parties have filed evidence affidavit of the District Insurance Officer, as RW.1, in defence. Both the learned counsel for the contending parties have submitted memos to treat their respective evidence on record as their written arguments and the same were made part of the record.

4.                Heard both the parties.

5.                Now the point for consideration is that whether the complainant is entitled for the reliefs as prayed for on the ground of deficiency of service?

Point:

6.                 It is evident from the record that the complainant was born on 17.05.1952 and retired on 31.05.2010 as Head Master of ZPHS. As per G.O.Ms.No. 212 FINANCE & PLANNING (FIN.WING.ADMN.II) DEPARTMENT Dated 17.12.1997 it was compulsory to avail the benefits of APGLIC scheme extended by the Government of Andhra Pradesh to all the employees working in Panchayat Raj Institutions between the age group of 21 to 48 years. The procedure for obtaining the policy has been stated in the said G.O. which is part of the record. No doubt the complainant has subscribed a policy by getting deducted his salary @ Rs. 150/-per month from 01.01.1998 till the date of retirement to the tune of Rs. 24,000/- but unfortunately the said mandatory procedure was not followed in his case, that is to say, no proposal was submitted by the Drawing and Disbursement officer to the insurance department  in the requisite proposal form. Therefore the department did not issue the policy bond. In fact as per G.O.Ms. No. 368, FINANCE & PLANNING (FIN.:ADMN.II) DEPARTMENT Dated. 15.11.1994 a government servant has to submit requisite proposal form, for enrollment under the above said scheme, after recovery of first premium from his salary and take an insurance policy from the department. It seems when several such instances were brought to the notice of the government, wherein monthly premiums were deducted without sending proposal forms after due verification by the Drawing and Disbursement office to the department, the government issued guidelines in the memo No. 19921-A/356/Admn.III/91, GOVERNMENT OF ANDHRA PRADESH FINANCE AND PLANNING (FINANCE WING.ADMN.III) DEPARTMENT Dated. 22.08.1992. As per the said memo, in such cases insurance amounts were not to be paid to the insurer. The opposite parties have clearly noted in the counter that on receipt of a letter dated. 03.02.2011 vide Ex.A3 from the Head Master, ZPHS, Rejinthal, they traced out the accumulated amount of the complainant and treated it as “unauthorized”, in view of not following the prescribed mandatory procedure. However they have under taken to refund the same to him by allotting separate number. It seems so for the complainant did not submit a refund form to the department for payment of accumulated amounts.

                   It is now well settled proposition of law that the contract of insurance is deemed to be concluded only on completion of due offer and acceptance by the parties to the contract. This aspect has been clarified by the Hon’ble Apex Court in, “LIC of India vs. R. Vasireddy”, AIR 1984 SC 1014, in which it is held as under:

                   “ 14. Though in certain human relationships silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. Mere delay in giving an answer cannot be construed as an acceptance, as, prima facie, acceptance must be communicated to the offeror. The general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer. Whether the final acceptance is that of the assured or insurers, however, depends simply on the way in which negotiations for an insurance have progressed.”                

In the present case the complainant has alleged that he submitted the proposal form, for the second time, in the month of February, 2005 through the O/o ZPHS, Digwal, (M) Koheer,  where he was working and that though he approached several times to the department, he was not given the policy bond. In this regard no doubt he has filed a copy of proposal form vide Ex. A2 and copies of letters vide Ex.A1, A3, A4 & A6 but it is to be noted that the opposite parties did not admit the said allegation except receipt of the letter Ex. A3 (letter from Head master, ZPHS, Rejinthal). When this being the fact the complainant did not take any steps to prove the said documents. Virtually there is neither any acknowledgement from the offices of the opposite parties nor any proof of sending them. Therefore the said allegation of the complainant cannot be countenanced. Ex/ A5 is a copy of retirement proceedings of the complainant, which fact is not in dispute. Thus this document is only is of a formal nature. The opposite parties have specifically stated that since the proposal form was not received by the department, the policy bond was not issued. Thus the contract of insurance was never concluded between the parties. Therefore the above cited ruling is perfectly applicable to this case.  

7.                It is also to be noted that undisputedly the other colleagues of the complainant have received their respective policy bonds from the department. The opposite parties have clearly noted in their counter that since due procedure was followed in their cases, their policy bonds were issued. It is surprising to note that the complainant being a senior teacher, kept quite for more than 13 years and did not pursue the matter with the department when his colleagues received the policy bonds shortly after their subscribing of the scheme. The complainant did not attribute any ill feeling on the part of officials of the opposite parties in non issuance of the policy bond. The cumulative effect of the surrounding circumstances simply leads to the presumption that the complainant himself was negligent in the matter and as such he cannot blame the opposite parties.

8.                The opposite parties have taken a specific defence that the complainant is not a consumer since he never availed any services of the department for a consideration under Section 2(1)(d) of the Consumer Protection Act, 1986. In support of the said defence they have relied on the order dated. 23.07.2001 passed by the Hon’ble A.P. State Consumer Disputes Redressal Commission, Hyderabad in F.A. No. 197/2001 in “The Deputy Director of Insurance, Hyderabad vs. B. Rajanna”.  In this case it was held that the respondent/complainant was not a consumer. This finding was based on earlier decision of our Hon’ble Commission passed in F.A. No. 160/1996 which was upheld by the Hon’ble National Commission in R.P. No. 604/1996. In the said case an employee of the O/o the Commissioner of Excise, Government of Andhra Pradesh sought direction against the department of insurance seeking release of the amounts covered by his insurance policy which was already matured. It was observed in the said case that being an employee in accordance with the Rules & Regulations his monthly premium were deducted from the salary towards insurance and that the opposite party simply discharged it’s official functions in sending the amount due and as such there was no question of payment of the consideration by the complainant to the opposite party and hiring of the services of it for consideration. The complainant had also claimed for compensation with interest in the said case. But it was dismissed by holding that he was not a consumer and the District Forum has no jurisdiction to deal with the matter. The ratio laid therein is aptly applicable to the present case also and as such we are bound by it. The learned counsel for the complainant did not bring to our notice any latest case law with a contra view than the view taken in the said judgments. Therefore we have no option but to follow the same in holding that the complainant is not a consumer under the provisions of the Consumer Protection Act, 1986 and as such the complaint is not maintainable and it must fail. In this view of the matter there is no need to specifically examine the aspect of deficiency of service on the part of the opposite parties as alleged by the complainant.

9.                In view of the aforesaid discussion we hold that the complaint is liable to be dismissed. The point is answered accordingly against the complainant.

10.              In the result, the complaint is dismissed but in the peculiar circumstances without costs.

         Dictated to Stenographer, after correction the orders pronounced by us in the open court this the 6^th day of February, 2013.

 Sd/-                                         Sd/-                                       Sd/-     

  MALE MEMBER                  LADY MEMBER                      PRESIDENT

    APPENDIX OF EVIDENCE

                              WITNESS EXAMINED

For the complainant:                                            For the opposite parties:-

PW.1 – K. Raghavendra Rao                                 RW.1 Y. Rajya lakshmi, DIO

DOCUMENTS MARKED

For the complainant:                                                    For the opposite parties:-

      Sd/-                                                Sd/-                                          Sd/-

MALE MEMBER                         LADY MEMBER                        PRESIDENT

Copy to

1. The Complainant
2. The Opp.Parties
3. Spare copy