BEFORE THE PRESIDENT, DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SAMBALPUR

C.C NO-27/2020

Present-Sri Dipak Kumar Mahapatra, President, Smt. Smita Tripathy,Member (W).

Shakuntala Devi Agrawal,aged about 68 years,

W/O- Late  Rakikesh Agrawal,

R/O- Poddar Colony of Khetrajpur,Sambalpur.                                     …..Complainant

Vrs.

The Branch Manager,

Life Insurance Corporation of India,

Sambalpur, Branch-1,

At/P.o/P.S-Ainthapali,Dist-Sambalpur                                                   ....O.P.

Counsels:-

1. For the Complainant:-  Sri S.K.Mahapatra, Advocate & Associates.
2. For the O.P-        :-         Sri A.K. Sharma, Advocate & Associates.

DATE OF HEARING : 03.03.2021, DATE OF ORDER : 22.03.2021

SRI DIPAK KUMAR MAHAPATRA,PRESIDENT:-Brief facts of the case is that the son the Complainant named Ajay Kumar Agarwal had availed four numbers of  LIC policy during his lifetime  including the policy no-591723949 dtd. 28.03.2002 for the insured amount of Rs.40,000/-.In the above policy he has nominated one Nikhil Agarwal as his nominee. After the death of the policy holder his parents found the said policy kept with their deceased son on dtd. 06.02.2019. as the where about of the nominee Nikhil Agawal was known to the parents of the deceased Life Assured(DLA) the complainant  i.e Shkuntala Agarwal(W/O- Late Rekikesh Agarwal) filed a claim for settlement of death claim and payment of insured amount with other benefits of the said policy. As per the claim of the Complainant being a Class-1 legal heir and beneficiary of the deceased she is entitled to get the Insured amount on behalf of her deceased son and relied the provision of Section 38 of Insurance Act-1938. The Complainant has submitted Death certificate of her husband and son and legal heir certificate of her husband and a guideline of section 39 of insurance act with this petition. But the O.P on dtd. 08.09.2020 sent a letter to the Complainant and intimated that the claim will be paid to the nominee after receiving all the necessary documents from the nominee. Hence the O.P denied to give the claim amount to the Complainant for which the Complainant became harassed by visiting the office of the O.P several time and developed mental pain and agony due to the deficiency in service committed by him.

The O.P admitting the fact of availing a LIC policy by the life assured  on dtd.28.03.2022  for a sum of Rs.40,000/- vide policy no- 591723949. Also he admits that the nominee was one Nikhil Agarwal who is the minor son of Sanjay Kumar Agarwal. At the time of taking the Insurance policy the nominee Nikhil Agarwal was only 2 years old. As the policy holder Ajay Kumar Agarwal was died during the consistence of the policy as per the policy terms the nominee should get the claim amounts from the O.P. The policy plan was Plan-90 for 20 years with accident benefit and on the death of the Insured it is the nominee who is entitled to get maturity benefits. The O.P denied the claim as he cannot go beyond the provisions of relevant rules and guidelines laid down by the O.P. The petition does not contain any cause of action and the O.Ps have not committed any deficiency in services and prayed to dismiss the Complaint petition with cost.

POINTS OF DETERMINATION:-

1. Whether the Complainant is comes under the purview of Consumer Protection Act-2019?
2. Whether the O.Ps has committed any Deficiency in Service to the Complainant?

From the above discussion and materials available on records we inferred that the Complainant comes under the purview of Consumers as the son of the Complainant had availed a Life Insurance from the O.P and being the mother of her deceased son she has filed a Consumer Complaint before this Commission. It is seen that  after the death of the Insured policy holder his mother Shakuntala Devi Agrawal had applied to the O.P for release of the maturity amount in the said policy as after several searches she could not ascertain the where about of the nominee Nikhil Kumar Agrwal. As per the Sec-39 sub-section 5 of Insurance Act-1938, it is stated that, where the policy matures for payment during the ⁴²⁴ [lifetime of the person whose life is insured] or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policy-holder or his heirs or legal representatives or the holder of a succession certificate, as the case may be. This matter has been well settled in the case of “Smt. Sarabati Devi & Anr vs Smt. Usha Devi”  on 6 December, 1983 by Supreme Court of India. It is held that A mere      nomination made under Section 39 of the  Insurance Act, 1938  does  not  have  the  effect  of conferring on  the nominee  any beneficial  interest in     the amount payable under the life insurance policy on the death of the accused. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them. An  analysis of the provisions of Section 39 of the Act clearly  established that the policy holder continues to hold interest  in the  policy during  his life time and the nominee acquires  no sort  of interest in the policy during the life  time of the holder. If that is so, on the death of the policyholder the amount payable under the policy becomes part  of  his  estate  which  is  governed  by the  law  of succession  applicable  to  him,  such succession  may  be testamentary or  intestate. The tenuous character of the right of   a  nominee becomes  more  pronounced  when  one contrasts the provisions of Section 39 with that of Section 38.  So it inferred from the above that the Complainant being the mother of the Insured/deceased son is entitled to receive the maturity amount in that policy and by denying the payment the O.P has committed deficiency in service as well as unfair trade practice as per the Consumer Protection Act-2019. Hence we order as under:

ORDER

The Complaint petition is allowed. The O.P directed to refund the Insured amount of Rs.40,000/- along with other benefits  of the said policy. The O.P is further directed to pay Rs. 3,000/-(Rupees Three Thousand) as compensation and Rs.2,000/- (Rupees Two Thousand) towards the cost of litigation. All the orders are to be carried out within 30 (Thirty) days of receiving of this order, failing which, failing which the O.P this amount of Rs.45,000/- ( Rs.40,000 + Rs.3,000 +Rs.2,000) will carry an interest at the rate of 9% p.a. from the date of this order till realization. 

Order pronounced in the open Court today i.e, on 22^nd day of March 2021 under my hand and seal of this Commission.

Office is directed to supply copies of the Order to the parties free of costs receiving acknowledgement of the delivery thereof.

            I agree,

        -sd/-(22.03.2021)                                                                           -sd/-(22.03.2021)

        Smt. S.Tripathy                                                                             Sri. D.K. Mahapatra

        MEMBER.(W)                                                                             PRESIDENT

                                                                 Dictated and Corrected

                                                                             by me.

                                                                        -sd/-(22.03.2021)

                                                                      Sri. D.K. Mahapatra

                                                                         PRESIDENT