BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD : THIRUVANANTHAPURAM

PRESENT:

SHRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENA KUMARI. A : MEMBER

SMT. S.K. SREELA : MEMBER

.No. 465/2004 Filed on 22/12/2004C.C

Dated: 31..07..2010

Complainant:

N.K. Prabhakaran Nair, B(153) GRA, T.C.No.6/2412, Resmi, Kurivikkad, Vattiyoorkavu – P.O., Thiruvananthapuram.

(By Adv. Davy Cherian)

Opposite parties:

1. Branch Manager, National Insurance Company Ltd., K.K.Building, Aristo Junction, Thampanoor, Thiruvananthapuram – 14.

2. The Executive Director, IRDA Complaint Cell, 3^rd Floor, Parishram Bhavanam, Basheer Bagh, Hyderabad – 500 004.

   (By Adv. M. Nizamudeen)

This O.P having been heard on 16..04..2010, the Forum on 31..07..2010 delivered the following:

ORDER

SMT. S.K.SREELA, MEMBER:

The complaint has been filed against the Insurance Company and the allegations levelled against them are as follows: The complainant is a retired KSEB employee. He has taken a Medi Claim (individual) insurance policy (revised) Policy No.570203/48/03/8501103 dated 28/8/2003 from the 1^st opposite party for the period from 28/8/2003 to midnight of 27/8/2004 by way of renewing his existing policy without any break. The complainant's wife is also covered by the said policy. The total premium remitted is Rs.6,429/- and the total sum insured is Rs.1,50,000/- to each person. The complainant is a regular customer of the 1^st opposite party for more than 6 years and had not made any claims so far against the 1^st opposite party. As per the condition 7 of the said policy, for every claim-free year, there will be cumulative bonus, of 5%. The policy holders will be eligible for such cumulative bonus only in case, they renew the policy without any break and in case of any break, the benefit is automatically lost. The complainant was thus eligible for a cumulative bonus of Rs.1,05,000/- under the said policy. The earlier policy availed by the complainant was for the period from 28/8/2003 to 27/8/2004. While so, the complainant renewed the policy and he has issued two cheques in lieu of the premium in favour of the 1^st opposite party as detailed below:

1. Cheque No. 28319 dated 25/08/2003 for Rs.50,000/-

SBT,Pattom, Thiruvananthapuram.

2. Cheque No. 887 dated 25/08/2003 for Rs.1,249/-

of Canara Bank, Anchamada Branch,Thiruvananthapuram.

To utter dismay and shock of the complainant, one of the cheques (No.28319 dated 25/08/2003) was returned for want of sufficient funds by the bank to the 1^st opposite party as the complainant was not having the upto date credit position in the bank. On hearing the above fact from his agent on the evening of 29/8/2003, the complainant immediately deposited necessary amount in the bank on the very next day itself and intimated the fact to the 1^st opposite party. With utmost sincerity, the complainant cured the defect at the earliest possible chance and time ie., on the very next day itself ie., within 5 days from the date of return of the cheque. The 1^st opposite party, instead of encashing the first cheque issued by the complainant, unilaterally and without any previous intimation to the complainant, cancelled his medi-claim policy as per letter No.8/2003/00030 dated 19/11/2003 and intimated the fact to the complainant only on 24/11/2003. Since the complainant has immediately deposited the necessary cash in the bank within 5 days on 30/8/2003 itself, the 1^st opposite party could have collected the premium amount within 7 days and in such a case, the complainant could have very well obtained the benefit of the waiver clause as per 7.1(2) by which he could have accrued the cumulative bonus benefit. But the 1^st opposite party deliberately and purposefully and with malafide intention did not intimate the fact of bouncing the cheque issued by the complainant. He has also kept the first cheque with him without encashing the same for about 11 weeks causing the cancellation of the complainant's mediclaim policy and also causing the loss of the cumulative bonus benefit accounting to Rs.1,05,000/-. Hence this complaint.

2. The 1^st opposite party – insurance company has filed their detailed version contending as follows: The complaint is not maintainable either in law or on facts. The 1^st opposite party cancelled the policy legally on genuine grounds for the reason of nonpayment of premium due to dishonour of cheque for insufficiency of funds issued by the complainant in favour of the 1^st opposite party towards the premium amount. The 1^st opposite party issued a 'Hospitalisation and Domiciliary Hospitilisation Benefit Policy' (Medium Claim Policy) bearing No.570203/48/03/8501103 in favour of the complainant covering the period from 28/8/2003 to 27/8/2004 as per Proposal Form and Declaration dated 25/8/2003 submitted by the 1^st opposite party by accepting cheque No.28319 dated 25/8/2003 for Rs.5,000/- drawn on State Bank of Travancore, Pattom, Thiruvananthapuram and cheque No. 953887 dated 25/8/2003 for Rs.1,249/- drawn on Canara Bank, Anchamada Branch, Thiruvananthapuram towards the premium of Rs.6,249/- issued by the complainant in favour of the 1^st opposite party. In the said policy it is stated that "This policy/Endorsement is valid subject to realization of cheque in case of dishonour of cheque of the policy/Endorsement will automatically stand cancelled and void abinitio and the company will not be on risk under this Policy/Endorsement". In the Premium certificate it is endorsed that the premium of Rs.6,249/- was accepted by way of aforesaid cheques bearing Nos. 28319 and 953887. After issuing the aforesaid policy the 1^st opposite party presented the aforesaid cheques for encashment. On presentation the cheque bearing No.28319 for Rs.5,000/- was dishonoured and returned to the 1^st opposite party due to insufficiency of funds in the account of the complainant. The complainant is not entitled to get the cumulative bonus as per Condition No. 7 of Ext. B1 policy as the said policy itself became void abinitio and automatically cancelled due to nonpayment of premium for dishonour of cheque. The complainant is not entitled to claim any benefit under the said void policy. The said conditions are formulated by the 2^nd opposite party Insurance Regulatory and Development Authority (IRDA) in their general tariff organized and functioned under the supervision and control of Government of India for the General Insurance Companies in India. The said conditions are equally applicable to the complainant. The 1^st opposite party rendered service and acted only in accordance with law, as per policy conditions and not against the principles of natural justice. The 1^st opposite party is legally bound to do so. Therefore no deficiency in service or unfair trade practice has been committed by the 1^st opposite party. The complaint is liable to be dismissed with compensatory costs.

3. The 2^nd opposite party remains exparte.

Complainant has been examined as PW1 and marked Exts. P1 to P7 and opposite party's witness has been examined as DW1 and marked Exts. D1 to D4.

From the contentions raised the following issues arise for consideration:

1. Whether the act of the opposite party in cancelling his mediclaim policy amounts to deficiency in service on their part?

2. Whether the complainant is entitled for the reliefs claimed in the complaint?

4. Points (i) & (ii): There is no dispute regarding the return of complainant's cheque. No.28319 for Rs.5,000/-, for want of fund. The aspect for consideration is whether the complainant has made the alternate payment for the same in time. The complainant has pleaded in the complaint that, on getting the information regarding the return of the cheque, he had immediately deposited necessary amount in the Bank on the very next day and intimated the fact to the 1^st opposite party. At this juncture, the point for consideration is whether that would be sufficient. Though the complainant has pleaded that he had informed the opposite party, during adducing evidence as PW1, he had deposed that he had informed it through the agent. Furthermore he had deposed that അങ്ങനെ agent മുഖാന്തിരം എന്നാണ് insurance company - യെ അറിയിച്ചത് (Q) Bank - ല്‍ പണം നിക്ഷേപിച്ച ആ moment ല്‍ തന്നെ അറിയിച്ചു (A)അങ്ങനെ വിവരം അറിയിച്ചതിന് എന്തെങ്കിലും രേഖയുണ്ടോ (Q) Agent - നെ അറിയിച്ചു (A). The witness of the opposite party who has been examined as DW1 while cross examination has deposed that 'Agent വഴി വാദിയെ അറിയിച്ചത് Bank ല്‍ കുറവുള്ള തുക അടച്ചാല്‍ policy issue ചെയ്യാമെന്നാണ് (Q) Bank-ല്‍ അല്ല, Insurance Company-ല്‍ കുറവുള്ള തുക അടയ്ക്കുകയാണെങ്കില്‍ policy issue ചെയ്യുമെന്നാണ് agent നെ അറിയിച്ചത് (A) വാദി എല്ലായ്പോഴും cheque മുഖാന്തിരമെ Insuance company – ലോ.Bank ലോ remittance നടത്താറുണ്ടായിരുന്നുള്ളൂ എന്ന് പറയുന്നു (Q) ഈ case-ല്‍ അത് ബാധകമല്ല,, cheque dushonourആയാല്‍ next premium remittance cashലൂടെ മാത്രമേ പറ്റൂ (A) Dishonour ചെയ്ത cheque വീണ്ടും present ചെയ്യാറുണ്ടോ (Q) അങ്ങനെ ഒരു provision company ക്ക് ഇല്ല (A).

Here there is no dispute that the complainant has not made the payment of the returned cheque amount at the insurance office, but the complainant pleads that he has deposited the same in his bank. Further, the complainant has stated that since the complainant has immediately deposited the necessary cash in the bank within 5 days ie., on 30/8/2003 itself, the 1^st opposite party could have collected the premium amount within 7 days and in such a case, the complainant could have very well obtained the benefit of the waiver clause as per 7.1(2) by which he could have accrued the cumulative bonus benefit. We have gone through Clause 7 of the policy. As per it, waiver reads as follows: In exceptional circumstances the seven days extension in period of renewal is permissible to be entitled for cumulative bonus although the policy is renewed only subject to Medical Examination and exclusion of diseases during the break period. Further under the head 'Important' it has been stated as : For Cumulative Bonus and Health Check-up Provisions as aforesaid. Both Health Check-up and Cumulative Bonus Provisions are applicable only in respect of continuous insurance without break excepting however, where in exceptional circumstances, the break in period for a maximum of seven days is approved as a special case subject to medical examination and exclusion of disease during the break period. Health check-up benefit will be accrued after completion of four years continuous claim free insurance'.

PW1 while cross examination has admitted that in policy it has been stated that medical test is required and once if the cheque bounces the policy will be cancelled. In the deposition of DW1, while cross examination, she had deposed that complainant bank -ല്‍ കുറവു വന്ന തുക 7 ദിവസത്തിനകം bankല്‍ അടച്ചിട്ടുണ്ട് എന്ന് പറയുന്നു (Q) Bank ല്‍ അടച്ചു കാണും പക്ഷെ ടി തുക Insurance Companyക്ക് കിട്ടിയിട്ടില്ല . (A).

From the above discussions, considering the evidence and documents, we find that there is no deficiency in service on the part of the opposite parties and no negligence can be attributed on the part of the opposite parties in cancelling the mediclaim policy of the complainant and hence the complaint is liable to be dismissed.

In the result, complaint is dismissed. No order as to costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, on this the 31^st day of July, 2009.

S.K. SREELA, MEMBER.

G. SIVAPRASAD,

PRESIDENT.

BEENA KUMARI.A, ad. MEMBER.

C.C.No.465/2004

APPENDIX

I. Complainant's witness:

PW1 : N.K. Prabhakaran Nair

II. Complainant's documents:

P1 : Copy of policy schedule

P2 : " letter dated 19/11/2003 addressed to complainant.

P3 : " letter dated 12/06/2004 from complainant

P4 : " letter dated 22/06/2004 from complainant

P5 : " letter dated 12/07/2004 from complainant

P6 : " letter dated 06/12/2003 from complainant

P7 : " Savings bank pass book Account No.410/- dated 13/5/1995.

III. Opposite parties' witness:

DW1 : Susheela Ibraham

IV. Opposite parties' documents:

D1 : Series of policy schedule

D2 : Copy of letter dated 19/11/03 addressed to complainant.

D3 : " duplicate schedule

D4 : " collection details.

PRESIDENT