BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, EAST SIKKIM AT GANGTOK
                              Date of institution: 06.10.20221                             Date of final hearing:                                                                                                                                                                                      Date of Pronouncement: 24.09.2022
CONSUMER COMPLAINT CASE NO.08 OF 2021
       
Smt. Poonam Pradhan
W/o Shri Mandeep Pradhan
Mother of Late Taran Pradhan 
R/o Bardang, Singtam,
East Sikkim 
  (Through:- Ld. Counsel Shri Aditya Makkhim)
                                                                                      …....Complainant                                           
                                                     
-Versus-
1. The Manager,
Life Corporation of India,
General Insurance Company Ltd.,
Gangtok branch
M.G. Marg, Gangtok
East Sikkim

2. The Divisional Manager     
Life Insurance Corporation of India,
Jalpaiguri Divisional Office,
West Bengal
(Through Ld. Counsel Ms. K.D.Bhutia                           and Shri Ranjit Prasad)

                          ......Opposite Parties
CORAM:
1) K.C.Barphungpa, President
2) Anita Shilal, Member
3) Rohit Kumar Pradhan, Member
PER: K.C.Barphungpa, President
                                                   
         
J-U-D-G-M-E-N-T
The present complaint has been filed before this Commission under Section 12 of the Consumer Protection Act, 1986, alleging that the OP No.2 company has rejected the claim of the complainant who is the nominee of her deceased son late Taran Pradhan. She has prayed for the following reliefs:-
  (i) The accrued amount (whatsoever arises) i.e., the due amount insured against policy bearing No. 400993483 of Late Taran Pradhan;
  (ii) An amount of Rs. 1,00,000(Rupees One lakh) as compensation for deficiency in service by the Opposite Parties as against the compensation;
  (iii) An amount of Rs. 1,00,000(Rupees One lakh) as compensation for causing immense mental tension, pain, agony and harassment to the complainant;
  (iv) An amount of Rs.50,000/- (Rupees Fifty thousand) only against the cost of litigation;
  (v) Interest at the rate of 12% per annum from 07.01.2019 i.e., the date of intimation of death of Late Taran Pradhan to the Opposite Parties till its final realization;
 
Briefly stated, the case of the complainant is that she is the mother and also the “Nominee/Beneficiary” of her son Taran Pradhan who passed away on 24.12.2018 after he met with an accident at NH 10, below Bhanu Path, Gangtok, East Sikkim. The Opposite Party No.1 is the Branch Manager of the Life Corporation of India(LIC) which has its branch office at M.G.Marg, Gangtok, East Sikkim. The OP No.2 is the Divisional Manager of the Life Corporation of India (LIC).
As per the complainant, Taran Pradhan was employed in the Indian Armed Forces and was posted in Jammu but on 24.12.2018 met with a fatal accident when he had come home on leave. That during his lifetime he had insured himself with the OP No.1, a Branch directly under the OP No.2 under policy bearing No.400993483. As per the insurance policy, the monthly premium of a sum of Rs.1930/- only used to be deducted on the intimation of the OPs from the account of Late Taran Pradhan i.e., account No.20370411077 maintained at the State Bank of India, Singtam branch, in which his monthly salary used to be deposited.
According to the complainant, Taran Pradhan paid the monthly installment regularly as it was auto deducted/directly from his account. There is nothing on record to show that he had ever a defaulted in his payments at any time or that there was ever any insufficiency of funds in his account. Late Taran Pradhan had nominated the complainant(his mother) as his “Nominee/Beneficiary” in the said  insurance policy issued by the OPs. Therefore after the demise of Taran Pradhan the complainant being his nominee, she immediately intimated the OP No.1 about his death vide letter dated 07.01.2019 alongwith his death certificate and the policy bond and requested the OPs to release the claims of Late Taran Pradhan in her favour.  However, to the utter surprise of the complainant, the OPs instead of clearing the accrued amount, issued a letter (Exhibit 7)  repudiating and rejecting the claim of the complainant as it was informed that the deceased had “Died after expiry of the grace period” and as such “Nothing is payable to the complainant”. 
The complainant submits that as per the bank pass book of Taran Pradhan on 05.12.2018 (due date and the date of commencement of policy) an amount of Rs.4015/-  was available  in his account, out of which the monthly installment of Rs. 1930/- could have been easily deducted. That due to the negligence and casual attitude on the part of the OPs in performing their duties in time, the complainant has been wrongly denied her dues. 
That even after waiting for a considerable amount of time to get a valid response from the OPs the complainant got no help as such she was left with no option but to issue a legal notice on 26.07.2021 (Exhibit 8) through her Counsel yet despite receipt of the legal notice both the OPs failed to pay heed to the complainant. 
The complainant in support of her claim examined herself and Ms. Shanti Thapa(CW1). She filed her evidence-on-affidavit(Exhibit 6) and relied on the documents (marked Exhibits 2 to 12). The OP on it’s part examined Shri Palas Taru Mitra, Administrative officer, LIC Jalpaiguri. After the parties closed their evidence final arguments were heard.
Ld. Counsel Shri Aditya Makkhim, appearing for the complainant, reiterated  all the contents of the claim application of the complainant above. He submits that the complainant has satisfactorily proved her case, that there has as such been gross negligence, incompetence and ineffectivness and deficiency in service  on the part of the OPs which have caused immense mental and physical harassment and agony to the complainant. The OPs were duty bound to withdraw the monthly premium for the month of December 2018 on 05.12.2018 itself. That, the complainant cannot be denied of the benefits by the OPs due to their own failure and if the complainant is denied her claims  it will results in absolute injustice. That the rejection of the claims by the OPs is vague and their claim that there was delay in payment of premium on the part of Late Taran Pradhan is false, as there was sufficient amount for deduction on the due date i.e., 05.12.2018. Hence, denying the due claims to the complainant merely on the grounds of delay in payment of the monthly installments amounts to taking advantage of its own wrong/fault by the OPs which is impermissible in law. Further, the copy of the agreement were not handed to the complainant and they were not told that the premium will be deducted by NACH. He accordingly prays that the complaint filed by the complainant may kindly be allowed.
In support of his contention, Ld. Counsel Shri Aditya Makkhim relied on the cases of Hundi Lal Jain Cold Storage and Ice Factory Pvt. Ltd, Appellant v. Oriental Insurance Co.Ltd, Respondent; and Primary Agicultural Co-operative Credit Society and Ors., Appellant v. Y.Jayamma and Anr., Respondent.
The OPs filed their written objection in the matter assailing the maintainability of the complaint. It is contended that there is no cause of action in this case to file complaint against the OPs and that the present complaint is barred by the principles of estoppel, waiver and acquiescence and the law of limitation. The averments made in the claim  are denied. It is submitted that the complainant was required to file her complaint within a period of two years from first date of cause of action which in this case arose in December 2018 and January 2019 as such the complaint filed by the complainant is time barred. It is accordingly prayed that the complaint filed by the complainant be dismissed with cost. 
Ld. Counsel Ms. K.D.Bhutia appearing for the OPs, on the other hand, submits that the complaint is not maintainable against the OPs as the insurance policy bearing No.400993483 in the name of Late Taran Pradhan had already lapsed as Taran Pradhan had already died. That no premium had been paid prior to the expiry of grace period of 15 days. That even during the grace period the monthly premium of the deceased was not paid. That the policy deed (Exhibit 12) itself reflects  the time when the premium is required to be paid and in case of failure to pay the premium, the beneficiary is given 15 days further time to pay the premium. If the policy holder fails to pay the premium even after expiry of grace period then the policy lapses.
Ld. Counsel contends as per terms and conditions of the policy, the demand invoice for the premium was due on December 2018 which was raised on 07.12.2018 but the banker could not deduct the premium for the reason “Not Arranged For” and dishonoured the demand. Moreover, in the month of November 2018, the same thing had happened and the demand invoice was raised on 07.11.2018 but dishonoured by the banker of the policy  holder for same reason “Not Arranged For”. The policy holder was therefore aware of the fact that premium for December 2018 was due and had been raised on 07.12.2018 but it remained unpaid. Ld. Counsel therefore contends there has been no deficiency in service on the part of the OPs and the OPs have failed to show due diligence before expiry of the grace period of the life of the policy holder, Late Taran Pradhan.
Ld. Counsel also contends that the cause of action of this case first arose in December 2018 and latest by January 2019 and the complainant filed the complaint in this case on 26th October, 2021. That it should have been filed within a period of two years from first date of cause of action i.e., December 2020/January 2021. Hence, it is prayed that the complaint be dismissed. 
Ld. Counsel relies on the case of Rahul Singh v. Hdfc Standard Life Insurance Co.; Sapient Corporation Employees vs. Hdfc Bank Ltd. & Ors., Oriental Insurance  Co. v. A And K State Consumer Protection.
We have perused the materials available on the record. The following issues were framed: -
1)Whether the complaint is maintainable?(opc)
2)Whether any premium amount(s) towards the concerned insurance policy was due on the date of the demise of deceased Taran Pradhan?(opr)
3)Whether the OPs(insurer) were required to automatically deduct/auto debit the monthly premium amount towards the concerned insurance policy from the savings bank account of deceased Taran Pradhan maintained with the State Bank of India(SBI), Singtam branch, East Sikkim?(opc)
4)Whether the OPs were justified in repudiating the insurance claims made by the complainant on account of the demise of the above deceased/insured?(opr)
5)Whether there has been any deficiency in service on the part of the OPs?(opc) and 
6) Whether the complainant is entitled to the reliefs prayed for by her?(opc)
Taking the first issue into consideration. The instant complainant has been filed by the mother of deceased Taran Pradhan who during his life time had insured himself with the OP No.1 under policy bearing No.4000993483 and for which he had been paying the requisite monthly installments/premium which was automatically deducted from his salary account to the OPs. The complaint Mrs. Poonam Pradhan, mother of Taran Pradhan is also named as the Nominee/Beneficiary by the insured late Taran Pradhan in the insurance policy (Exhibit 12). The insurance commenced from 05.01.2018. The OP has its branch office at Gangtok. The cause of action allegedly arose in the year 2018 when late Taran Pradhan got himself insured with the OP Company vide Exhibit 12 and after he passed away when the company refused to pay the claim amount to the complainant in October 2020 and after the complainant issued the legal notice dated 26.07.2021. The complaint was thereafter lodged on 16.10.2021 when the OP company failed to  honour the claim. As such having been filed within time and as the complainant is the mother/legal heir/nominee of deceased Taran Pradhan, we find the complaint is maintainable. Issue stands decided accordingly. 
Issue No.3 is taken up now:- 
“3)Whether the OPs(insurer) were required to automatically deduct/auto debit the monthly premium amount towards the concerned insurance policy from the savings bank account of deceased Taran Pradhan maintained with the State Bank of India(SBI), Singtam branch, East Sikkim?(opc)
  It is the case of the complainant that the premium used to be deducted automatically from the account of late Taran Pradhan being account No.20370411077 maintained at the State Bank of Inbdia, Singtam Branch in which his monthly salary was directly deposited. Late Taran Pradhan was serving in the Indian Arm Forces at the time. He had obtained a life insurance from the OP company(Exhibit 12) for which the monthly installment of Rs.1930/- was directly deducted on the initiation of the OPs from the account of the deceased and which was paid regularly without any default on his part at any time. As such there was no negligence whatsoever from the part of late Taran Pradhan. Unfortunately, when he came on leave to Sikkim from Jammu where he was posted at the time, late Taran Pradhan met with an accident on the National Highway 10 and passed away on 24.12.2018. The complainant as the Nominee/Beneficiary in the policy of her son immediately intimated the Branch Manager, Gangtok branch, OP No.1 about the demise of late Taran Pradhan vide a letter dated 07.01.2018 (Exhibit 5), enclosing therewith a copy of the Death Certificate(Exhibit 11)  and the policy bond (Exhibit 12) with a request to release the claims of late Taran Pradhan. However, despite several requests to the officials of the OP and despite furnishing the documents sought by the OPs the OPs failed to comply to her requests. The complainant then once again wrote a letter dated 06.10.2020 (Exhibit 6)  to the OP furnishing all the details requesting that the invested amount of her deceased son be released. However, her request was declined and rejected by the OP on the ground that nothing is payable to the complainant as he had “died after expiry of the grace period”.
It is the complainant’s claim that the monthly installments was deducted automatically from his account and not by any other means from 05.10.2018 till 24.12.2018 and that any default in payment thereafter was not due to any fault or lapse on the part of the deceased but was solely due to the concerned bank and their delay in depositing/deducting the requisite amount in favour of the OP company as it was the responsibility of the concerned institution to automatically make the deduction from the account of the deceased as agreed. The complainant has relied on Exhibit 4 which is the State Bank of  India Passbook of Taran Pradhan bearing Account No.20370411077. The complainant in her evidence proved Exhibit 4 as the original bank passbook of her son and Exhibit 5 and 6 as her letters and Exhibit 8 as the copy of the notice issued to the OPs. She also proved Exhibit 12 as the insurance policy. In her cross-examination she has stated that sometimes she used to hand over the amount of Rs.1930/- in cash to MS. Shanti Thapa, agent of LIC in advance so that  it is duly deposited or when Taran Pradhan was present in Sikkim he used to hand over the amount in cash to the agent to be deposited before the 5th of the month. 
The witness of the OPs Shri Palas Taru the Administrative Officer, Jalpaiguri Division himself has admitted that “it is true that as per the documentary knowledge the due date of payment is 7th of each month. However, as per Exhibit 12 which was issued to late Taran Pradhan the due date is 5th each month. It is true that mode of payment of premium is monthly. It is directly debited from the account of the policy holder through ECS (Electronic Clearance System) presently NACH. It is true that as per my documentary knowledge the date of commencement of policy is 05.01.2018” “It is true that the policy was issued with premium paying mode under NACH. It is true as per Exhibit 4 the balance amount of late Taran Pradhan on 06.12.2018 was Rs.2,015/-. As per NACH guidelines, the debit date shall be 7th, 15th and 28th of every month. It is true that we have not filed any documentary evidence to prove to my above statement regarding the NACH guidelines.” Moreover he himself has admitted that “it is not a fact that the grace period of the premium is not 15 days.” Thus from the evidence of t his witness himself it is evident that they provided a grace period of 15 days and that the witness himself had volunteered to state that “the mode of payment of premium was monthly and directly debited from the account of the policy  holder through electronic clearance system presently NACH.”
There is nothing else in the evidence to show that the monthly installments were paid by either the complainant or the deceased in any other manner. Hence from the evidence it is found that although two occasions where payments have been made by the deceased and his mother to the LIC agents, yet from the evidence it is an admitted position that the OPs were required to automatically deduct the monthly premium amount from the account of the deceased on or by 7th of each month.  Issue No.4 hence decided accordingly. 
Issues No.2, 4 and 5 taken up together:-
“2)Whether any premium amount(s) towards the concerned insurance policy was due on the date of the demise of deceased Taran Pradhan?(opr)
4)Whether the OPs were justified in repudiating the insurance claims made by the complainant on account of the demise of the above deceased/insured?(opr)
5)Whether there has been any deficiency in service on the part of the OPs?(opc) and 
  It is not disputed that after deceased took the policy Exhibit 12 the monthly installment were deposited by the deceased till November 2018. There is no evidence adduced. That prior to his demise late Taran Pradhan had even defaulted in the payment of his monthly installment. Unfortunately while on vacation at home from duty in December he met with a fatal accident on 24.12.2018. Thus it is apparent that on account of his death that he himself was unable to do the needful in his policy. Even otherwise perusal of Exhibit 4 indicates “the account was opened on 30.09.2016 and the last transaction therein is dated 05.02.2019. The insurance policy commenced from 05.01.2018 the installment premium payable as per Exhibit 12 is a sum of Rs. 1900/- to be paid the due date of which is the 5th of each month. It is clear from perusal of  Exhibit 4 that the salary of the deceased was deposited in the said account.” That on 05.12.2018 the deceased had sufficient balance in his account i.e., a sum of Rs. 5870/- and 4015/-. Even after 06.12.2018 he had a sum of Rs. 2015/- in his account. Therefore, since the mode of payment was more often than not by way of auto deduction from his account it is our considered finding that it was the duty of the bank concerned to have done the needful during the relevant period. It is most unfortunate that the OP has displayed a sense of total lack of insensitivity in this matter by rejecting the claim of the deceased merely on the ground that the deceased died after expiry of the grace period. 
That as stated by the witness of the OPs Shri Palas Taru Mitra, the due date of payment was the 7th of each month. Further, he himself volunteered to state that the grace period was 15 days. Grace periods are often accorded by financial institutions/insurance Companies and may vary from 15-30 days. In the instant case, the OPs claim the EMI for the month of December 2018 could not be deducted from the complainant’s bank account on the due date as the same was allegedly “Not arranged for”. However, the equivalent amount as EMI could well have been deducted from the account of the deceased during the grace period, as it is evident from Exhibit 4 that there was sufficient fund available in the complainant's/insurer's bank account from 05.12.2018. It is the OPs who had an arrangement with the bank and under NACH, for deducting the EMI as stated by the witness of the OPs who has stated “it is true the mode of payment of premium is monthly. It is directly debited from the account of the policy holder through NACH”. There has been delay earlier in payment of EMI in the month of November 2018 but which was admittedly settled after the payment as made in cash by the complainant within the  grace period.  No reasons have been furnished as to why the OPs failed to accord such an opportunity to the complainant in December also. Under theses circumstances therefore denying the mother of a deceased serviceman the dues of her son by the OP bank seems most unjust and insensitive. One must not loose sight of the fact that the Consumer Protection Act is an act that seeks to provide for better protection of the interest of consumers and the public being a beneficial litigation. It is the duty of every Commission to ensure that the Act is liberally construed to include under its umbrella all forms of grievances of consumers. In light of all these circumstances, Issues 2, 4 and 5 thus stand decided accordingly in favour of the complainant. 
Thus based on all these circumstance, we are therefore of the unanimous view that this is a fit case for allowing the relief sought by the complainant. The actions of the OPS in our opinion grossly amounts to deficiency in service. Moreover, as held in the case of Hundi Lall Jain Cold Storage and Ice Factory (supra) when an insurance company repudiates a claim a burden is cast on the insurance company to prove that the policy has been violated where there is an admitted effective policy. The burden of proof is on the insurance company to establish that there was violation of the conditions of the insurance policy and that those conditions were known to the insured. Since the insurance company failed to establish the same and as the policy was not supplied to the insured it was held that the repudiation of the claim was not proper.
 In the case before us also it is the claim of the complainant that the copy of the agreement was not handed over to the complainant nor to her deceased son nor were they ever informed the premium would be deducted by NACH.  Thus private individuals and consumers such as the complainant and her deceased son ought not to be held accountable for failure of the electronic clearance system/NACH to clear the necessary dues within the required period. It is also the opinion of this Commission that the OP company being one of the largest institutions in the country ought not to take advantage of such a situation, over private individuals and that too concerning a deceased serviceman merely to deprive the  nominee of the deceased serviceman of her monetary dues especially considering that in Exhibit 4 there was sufficient balance (of Rs.4015/-) on 05.12.2018 as also admitted by the witness of the OPs. 
Moreover there is nothing adduced by the insurance company to show that other than the failure of NACH to debit the necessary amount within the stipulated period, the insured had defaulted in any manner or violated any terms or conditions of Exhibit 12.
More importantly as held in the case of Primary Agriculture Co-operative Credit Society and Ors., (supra) non-remittance by collecting agency was held to amount to deficiency in service on the part of the agency and as such the agency as well as the insurer were held liable. Similarly in the case of LIC Of India and Another, Appellant v. Habibhunnisa Sayeed and Anr., Respondent (2007) 3 CPJ 166 when there was failure on the part of the employer(LIC) in deducting the salary of the deceased insured towards remittance for the premium to the insurance company promptly, it was held that the LIC was personally bound to make good the loss. 
 Issue No.6 is taken up:
  “6) Whether the complainant is entitled to the reliefs prayed for by her?(opc)
  In the light of our findings herein above this Commission is of the unanimous opinion that the complainant is entitled to the following reliefs:-
a) the accrued amount till the present day insured against the policy bearing no.400993483 of the deceased;
b) an amount of Rs.1,00,000/- towards deficiency in service;
c) amount of Rs.50,000/- for the mental, pain, agony  meeted out to the complainant;
d) Rs.30,000/- towards cost of litigation.
It is hereby further ordered that the OPs company shall pay the aforesaid amount with interests at the rate of 9% per annum w.e.f the date of filing of this claim petition.
  Complaint allowed to the above effect.          
             PRONOUNCED.

      (Anita Shilal)             (Rohit Kumar Pradhan) (K.C.Barphungpa)             
           Member                                Member                           President
    DCDRC(E) at Gangtok      DCDRC(E) at Gangtok                 DCDRC(E) at Gangtok 
      
                         
Pronounced on : 24.09.2022
LIST OF WITNESSES EXAMINED BY THE COMPLAINANT
01. CW1 -  Poonam  Pradhan(complainant)
02. CW2 - Shanti Thapa 
LIST OF DOCUMENTS EXHIBITED BY THE COMPLAINANT
01. Exhibit 1    - Evidence-on-affidavit of complainant
02. Exhibit 2    -  Ration card extract
03. Exhibit 3    -  Copy of voter identity card of complainant
04. Exhibit 4    - Original bank passbook of deceased 
05. Exhibit 5    -  Copy of letter dated 07.01.2019
06. Exhibit 6    -  Copy of the letter dated 06.10.2020
07. Exhibit 7    -  Copy of letter
08. Exhibit 8    - Copy of legal notice dated 26.07.2021
09. Exhibit 9    - Original postal receipt
10. Exhibit 10   - -do-
11. Exhibit 11   - Copy of death certificate of deceased
12. Exhibit 12 - Copy of insurance policy/certificate of deceased
13. Exhibit 13 -   Evidence-on-affidavit of Shanti Thapa


LIST OF WITNESSES EXAMINED BY THE OPPOSITE PARTIES
01. DW1 -  Palas Taru Mitra
LIST OF DOCUMENTS EXHIBITED BY THE OPPOSITE PARTIES
01. Exhibit A - Certified copy of history of  premium transaction details of policy No.400993483
02. Exhibit B - Letter issued by Branch Manager, LIC
03. Exhibit C - Original letter of authorization dated 02.06.2022
04. Exhibit D -    Evidence-on-affidavit of Palas Taru Mitra                


      (Anita Shilal)                (Rohit Kumar Pradhan) (K.C.Bargphungpa)             
           Member                                Member                           President
    DCDRC(E) at Gangtok      DCDRC(E) at Gangtok                 DCDRC(E) at Gangtok