Tamil Nadu

South Chennai

CC/127/2005

B.Rajamani - Complainant(s)

Versus

L.I.C of India - Opp.Party(s)

S.Venkateshwaran

12 Jan 2017

ORDER

                                                                        Date of Filing :   09.10.2003

                                                                        Date of Order :   12.01.2017

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI (SOUTH)

     2^nd Floor, Frazer Bridge Road, V.O.C. Nagar, Park Town, Chennai-3

 

PRESENT: THIRU. S. PANDIAN, B.Sc., L.L.M.                       : PRESIDENT            

                  TMT. K.AMALA, M.A. L.L.B.,                                 : MEMBER I

            DR. T.PAUL RAJASEKARAN, M.A ,D.Min.PGDHRDI, AIII,BCS : MEMBER II          

C.C.NO.127/2005

THURSDAY THIS  12^th DAY OF JANUARY 2017

Mrs. B. Rajamani,

W/o. R. Balakrishnan,

Near Peria Pavadi,

12/144, Athanur Post,

Namakkal District 636 301.                                       .. Complainant.

 

                        ..Vs..

The Branch Manager,

LIC of India,

C.P.O. 29, South India Co./op. buildings,

38, Anna Salai,

Chennai 600 002.                                       ..Opposite party.

 

Counsel for the Complainant           : M/s. K.Ganesan

Counsel for the opposite party         : M/s. S.Vendateswaran

ORDER

THIRU. S. PANDIAN, PRESIDENT

          This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act 1986 seeking direction to pay a sum of Rs.4,87,645/- with interest and to pay compensation for causing mental agony and to pay cost of the complaint.

1. The averment of the complaint are brief as follows:

        The complainant’s son B.Sivakumar took out a policy with the opposite party for Rs.5 lakhs on 12.8.1999 under policy No.712575459.  The said B.Sivakumar had also nominated the complainant as nominee under the said policy.  At first, the premium payable in quarterly installment was of Rs.6,369/-.  The complainant’s son permanent address is only at Athanur, Rasipuram Taluk, but he had given the address at Chennai as he was temporarily employed  at that time, which is the address of his close friend Mr. Elango and had been making the quarterly payment regularly without any default upto the period ending 10.6.2008.   Thereafter the quarterly installment was converted into half yearly installment due in August 2000 for a sum of Rs.12,535/- under dated 30.8.2000.  In the same receipt the next installment due was mentioned as 2/2001 i.e. February 2001.  

2.     Meanwhile, the complainant’s son Mr.B.Sivakumar being a qualified Software Engineer, obtained a job at California, USA and flew to USA and was working there from March 2000 onwards.   But the premium under the above said policy was remitted without fail, through the said Mr.Elango.   It is submitted that complainant’s son suddenly developed head ache and died due to extensive Intracerebral bleeding and cardiorespiratory arrest in USA itself on 7.7.2001.  His final rites were performed at the complainant’s place.

3.     The opposite party is allowing the policy holders to make the payment of the yearly, half yearly and quarterly installment till one month after the due date without charging interest.   Thereafter the opposite party charging interest on the installment amounts upto six months.   After six months only, the policy lapses for not paying the installment amounts of premium.  Even then, the opposite party adopting the condition to send the insured for medical check and renew the policy.   Unfortunately he died during July 2001 itself.   Hence it  cannot be said the policy lapsed in not paying the premium.   The opposite party could deduct the premium due for the last of the installments and the balance of policy amount to the nominee as the opposite party has been doing in all the cases.  

4.     The complainant’s husband Mr. Balakrishnan also lodged the complaint with the opposite party on 17.7.2001.   But the opposite party have sent a letter dated 23.8.2001 informing the complainant’s husband that the policy amount cannot be paid because the premium amount were not paid regularly and they were taken recently and infact there is absolutely no condition which restricts the claim and not to pay the amount for the policies taken recently.   The opposite party cannot deny the payment on the above said reasons, the reason given by the opposite party is quite unwarranted, illegal and deceptive.    As such, the act of the opposite party amounts to deficiency in service which caused mental agony and hardship to the complainant.     Hence the complaint.

5. Written Version of  opposite party is  in brief as follows:

           All the allegations made in the complaint except such of those that are specifically admitted herein are denied and the complainant is put to strict proof of the same.   The deceased Sri. B. Sivakumar has taken a policy bearing NO.712575459 with us  for a sum assured of Rs.5,00,000/-  The deceased life assured B.Sivakuamr has defaulted in his payment of premium by not paying the premium which fell due on 15^th February 2001.  The nonpayment of premium for February 2001 due is also admitted by the complainant.  

6.     The opposite party has received a letter from Sri. R.Balakrishnan, father of life assured about the death of his son and requesting the branch office to issue necessary claims forms for two polices vide his letter dated 27.7.2001 which was received by our office on 21.8.2001.   As both the policies were lapsed and informed  Sri R.Balakrishnan that nothing was payable under the two policies because of non-payment of premium amount as per the policy conditions vide its letter dated 23.8.2001.    The policy conditions 2 & 4 (II Para) printed overleaf, according to their present requirements, according to the complainant a policy lapses after six months only, for not paying the installment amount of premium.   The policy condition No.2 printed on the policy bond prescribes that “A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums.  If death occurs within this period and before the payment of the premium due, the policy will still be valid and the sum assured paid after deduction of the said premium as also unpaid premium falling due before the next anniversary of the policy.   If the premium is not paid before the expiry of the days of grace, the policy lapses.  

7.     The life assured had paid premium only till August 2000 which is an admitted fact.  He had not paid February 2001 due even on the due date or even during the grace period of 30 days.   Hence the policy had lapsed and we had rightly rejected the claim for the policy amount.  The opposite party has rightly rejected the claim and was communicated to the complainant in time.  There is no deficiency in service on their part.  Hence the complaint is liable to be dismissed.

8.    In order to prove the averments of the complaint, the complainant has filed proof affidavit along with for evidence and documents Ex.A1 to Ex.A10 marked.  Proof affidavit of opposite party filed and Ex.B1 to Ex.B4  marked on the side of the opposite party. 4

9.   At this juncture, the point for the consideration before this

        Forum is:  

 

1.  Whether there is any deficiency of service on the part of the 

     Opposite party as alleged in the complaint?

 

2. Whether the complainant is entitled to any relief as prayed for?

10. Point No.1

         It is admitted case that the deceased  B.Siva Kumar took out a policy with the opposite party for a sum of Rs.5 lakhs on 12.8.1999 under policy No.712575459 and nominated the complainant as nominee under the said policy.   Similarly it is not disputed that the premium amount regularly without any default paid upto the period ending 10.6.2000.   Thereafter,  the quarterly installment was converted into half yearly installments and premium amount paid towards half yearly installment due in August 2000 for a sum of Rs.12,535/- under receipt dated 30.8.2000 and in the receipt it was mentioned that the next installment due was as 2/2001 i.e. February 2001.   The receipt of the premium is marked as Ex.A1.     The renewal premium receipts for the subsequent installments are marked as Ex.A2 to Ex.A5. While so, unfortunately the deceased Siva Kumar died on 7.7.2001 at California and in this connection Ex.A7 the death certificate and Ex.A6 is the transit permit issued by the Consulate General of India San Francisco are marked.  

11.    Further it is seen that after the death of the said Siva Kumar son of the complainant and the complainant’s husband Mr. Balakrishnan lodged the complaint with the opposite party on 17.7.2001 and in turn the opposite party sent a letter dated 23.8.2001.  Both the letters are marked as Ex.A8 & Ex.A9 respectively.   It is informed through Ex.A9 that the policy amount cannot be paid because the premium amount were not paid regularly.  It is pertinent to note that the above facts are all admitted one.   Further it is not disputed that the deceased has not paid the premium due for February 2001.  In such circumstances only the contention raised by the opposite party is that as per the condition No.2 & 4  printed overleaf, on the policy Bond that if the premium is not paid before the expiry of the days of grace, the policy lapses.   It is not correct to say that the policy lapses after six months only but not paid the installment amount of premium has collected by the complainant and therefore the policy had lapsed on the expiry of grace period of 30 days and thereby the opposite party rightly rejected the claim of the policy amount.  The policy with conditions is marked as Ex.B1.   The letter dated 27.7.2001 and the reply sent by the opposite party to the complainant’s husband are marked as Ex.B2 & Ex.B3 respectively.  

12.    At this juncture, on careful perusal of the rival submissions put forth on either side the vital point before this forum is as to whether the complainant is entitled for the relief as prayed for in the complaint.   At the outset, the learned counsel for the complainant submitted that only due to ultimate death of complainant’s son, the policy period 2/2001 has not been paid by the complainant and therefore it cannot be said the policy lapse in non-payment of premium.  It is further submitted that in the above said situation, the opposite party deduct the premium due for the last installment and to pay the balance amount to the nominee, as the opposite party is doing in all the cases and therefore the repudiation of the claim made by the complainant is quite unwarranted and illegal.  In order to substantiate his view, the learned counsel for the complainant replied upon the following decision :

2009 (3) CPJ P-25

Life Insurance Corporation of India & another

..Vs..

Gowramma

It is held that

 

Though on 28.03.2000 it the due date still it was open for the insured to pay the premium within the grace period.  If the insured fails to pay the premium even before the expiry of the grace period U/s. 50 of the Insurance Act, the Insurance Company is required to intimate whether the policy was lapsed or not.  In the instant case, there is no such intimation by the OPPOSITE PARTY.   If that is so, it is clear the Insurance Company kept the policy alive as on the date of the death of the insured.   Taking this fact into consideration, the DF is right in allowing the complaint.   The husband of the complainant, from the evidence it is seen, died on account of the cancer.   According to the  Insurance Company the fact of the suffering from cancer has not been disclosed.  In order to establish this fact, the Insurance Company had not filed any affidavit of a Doctor. 

 

It is not disputed us that the policy was not repudiated on the ground that at the time when initial policy was taken, there was any misrepresentation or initial concealment of facts by the deceased in the present case, two years had lapsed after the issuance of the policy and the burden to prove that the deceased had concealed the facts was on the Insurance Company in terms of Section 45 of the Life Insurance Act 1938.

         

13.    It is further enlightened by the learned counsel for the complainant that there is no communications or intimations regarding the lapse of the policy of the deceased either to the deceased or complainant by the opposite party. Though it is bounden duty of the opposite party to communicate about the lapse of the policy but there is no document filed to show about the same.   From these facts, it is crystal clear that no such intimation sent to the deceased or complainant.

14.    In the light of the above facts and circumstances of the case and the observation held in the above decision, it is goes without saying that  the plea taken by the opposite party holds not good.   But at the same time, the arguments adduced on the side of the complainant can be acceptable.    Therefore, the repudiation of the claim is not proper and thereby the act of the opposite party clearly amounts for deficiency of service which certainly caused much hardship and mental agony to the complainant.  Thus point No.1 is answered accordingly.

15.    POINT No.2.

As per decision arrived in point No.1 the complainant is entitled for the relief as prayed for in the complaint.   Further, considering the facts that it is pending from the year 2001 for the reason of repudiating the claim by the opposite party,  it is just and proper to award reasonable interest for the alleged policy amount and reasonable compensation with interest and also it is justifiable.  Thus point No.2 is answered accordingly. 

 

In the result, the complaint is allowed in part.   Accordingly the  opposite party is directed to pay a sum of Rs.4,87,645/- (Rupees Four lakhs eighty seven thousand six hundred and forty five only) towards policy amount under policy No.712575459 with interest at the rate of 12% p.a. from the date of this complaint i.e. 16.9.2003  to till the date of this order i.e. 12.1.2017 and also to pay a sum of Rs.15,000/- (Rupees Fifteen thousand only) towards compensation for causing mental agony and hardship due to deficiency of service on the part of the opposite party   and also to pay a sum of Rs.10,000/- (Rupees Ten Thousand only) towards cost to the complainant.    

The above amounts shall be payable within six weeks from the date of receipt of the copy of the order, failing which, the said amounts shall carry interest at the rate of 9% p.a till the date of payment.

         Dictated by the President to the Assistant, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the  12^th  day  of  January 2017.

 

MEMBER-I                        MEMBER-II                             PRESIDENT.

Complainant’s side documents:

Ex.A1-15.8.1999   - Copy of 1^st premium receipt issued by opposite party.

Ex.A2- 12.11.1999         - Copy  of renewal premium receipt issued by opposite party.

Ex.A3-      .2.2000 - Copy of renewal premium receipt issued by opposite party.

Ex.A4- 10.6.2000  - Copy of renewal premium receipt issued by opposite party.

Ex.A5- 30.8.2000  - Copy of renewal premium receipt issued by opposite party.

Ex.A6- 11.7.2001  - Copy of transit permit issued by consulate general of Indian

                                San Fancisco.

 

Ex.A7- 7.10.2001  - Copy of certificate of Death.

Ex.A8- 27.7.2001  - Copy of letter complainant’s husband to opposite party.

Ex.A9- 23.8.2001  - Copy of letter from opposite party to complainant’s

                              husband.

 

Ex.A10- 4.8.2002  - Copy of legal notice.

 

Opposite party’s side document: -   .. Nil.

Ex.B1      - Copy of policy No.712576510

Ex.B2- 21.8.2001  -  Copy of letter issued by the complainant’s husband to the

                               Opposite party.

Ex.B3- 23.8.2001  -  Copy of communication sent by the opposite party to the

                               Complainant husband.

 

Ex.B4- 23.8.1999  - Copy of policy issued by the opposite party to the

                               complainant under policy NO.712575459

 

 

 

MEMBER-I                        MEMBER-II                              PRESIDENT.