BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.39/2009 Order dated this the 30th day of July 2009 COMPLAINANT/S Smt.Sakamma W/o Late Thimmaiah, R/o D.No.432, 1st Cross, Karasavadi Road, Mandya City. (By Sri.K.M.Basavaraju., Advocate) -Vs- OPPOSITE PARTY/S The Branch Manager, L.I.C. of India, Mandya Branch, M.C.Road, Mandya. (By Sri.S.Sudarshan., Advocate) Date of complaint 09.04.2009 Date of service of notice to Opposite party 22.04.2009 Date of order 30.07.2009 Total Period 3 Months 8 Days Result The complaint is dismissed. However, the Opposite party is directed to consider the claim of policy No.610254145, if the complainant furnishes the details of premium paid by the employer of her husband Thimmaiah in respect of this policy. There is no order as to costs. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 claiming LIC claim of Rs.80,000/- with compensation of Rs.20,000/- against the Opposite party. 2. The case of the complainant is that late Thimmaiah, the husband of the complainant was working in K.E.B. Mandya and during his life time he had taken 3 insurance policies bearing No.610254145, 721603466 and 721662019 under salary saving scheme from the Opposite party. The employer of deceased Thimmaiah was deducting the salary towards the insurance premium and credited to the LIC through cheques. The assured Thimmaiah died on 03.01.2007 leaving behind the complainant. Then the complainant gave representation on 23.04.2007 to settle the insurance claim. But the Opposite party have not settle the full claim towards the two policies and policy amount of first policy is not yet settled so far. The Opposite party issued a letter on 26.07.2007 in respect of the policy no.2 and send cheque for Rs.19,454/-. But, the amount is not correct and Opposite party has to pay Rs.49,125/- and the Opposite party is liable to pay balance amount of Rs.21,106/-. The policy no.3 was assigned to LIC Housing Finance, in which loan was taken during his life time. After his death, the complainant discharged the loan of LIC Housing Finance. Since, the policy was assigned by the deceased Thimmaiah, after his death the claim due under the said policy Rs.46,487/- was sent to LIC Housing Finance by the Opposite party, but the amount sent is not correct. The Opposite party have to send sum assured + vested bonus and interim bonus, approximately, more than Rs.80,000/-, but the Opposite party sent lesser amount. Therefore, the Opposite party is liable to pay more than Rs.80,000/-. Hence, the Opposite party is liable to pay the remaining amount under the said LIC policy. In spite of several approaches and legal notice dated 24.12.2008, the Opposite party has not settled the claim nor replied the legal notice. Therefore, the Opposite party has committed deficiency in service. The Opposite party is also liable to pay compensation. On these grounds, the complaint is filed claiming Rs.80,000/- towards LIC claim and compensation of Rs.20,000/-. 3. The Opposite party has filed version, contending that the LIC Housing Finance Ltd., is separate entity and the policy no.3 is absolutely assigned in favour of it and therefore, it is a necessary party and the complaint is liable to be dismissed for non-joinder of necessary party and hence, the complainant cannot claim in respect of policy No.721662019. Admitting that policy no.2 & 3 are obtained by Thimmaiah, the policy no.1 mentioned is disputed. When the complainant approached for settlement of the death claim of the policy, the Opposite party has settled Rs.19,454/- in respect of policy no.721603466 and only reduced paid up value is paid, because the deceased life assured was on leave without pay for 19 months and as such the employer could not deduct the premium. Further, with regard to the policy no.721662019, the Opposite party has settled the death claim to LIC Housing Finance Ltd., and it was assigned in its favour. In respect of this policy also, the deceased was on leave without pay for 17 months and the policy is in a lapsed condition, only paid up value of Rs.46,488/- has been settled to the assignee i.e., LIC Housing Finance Ltd., The above two policies were in lapsed condition. The deceased had given a letter of authorization to the employer for deduction of the premiums from the salary, but was on leave without pay for 19 months and 17 months respectively. In fact, those two policies are Money Back policies and survival benefits were paid at regular intervals to the deceased. The Opposite party has settled the eligible claim amount as per rules. There is no delay or deficiency in service. Further, the Opposite party has filed additional version, stating that the first policy was obtained by the deceased, but the policy stood in a lapsed state since inception as no premium was received from the deceased life assured and hence, nothing becomes payable under the policy. If the complainant is able to produce the details of payment of premium amount, the Opposite party is prepared to consider the claim of said policy. On these grounds, the Opposite party has sought for dismissal of the complaint. 4. During trial, the complainant is examined and witness is from K.E.B. is examined and the documents Ex.C.1 to C.7 are produced. On behalf of the Opposite party, one witness is examined and Ex.R.1 to R.12 are produced. 5. Both sides have filed written arguments. We have perused the records. 6. Now the points that arise for our considerations are:- 1. Whether the Opposite party has committed deficiency in service in not settling the claim of the policies for the total sum assured? 2. Whether the complainant is entitled to the amount claimed? 7. Our findings and reasons are as here under:- 8. It is undisputed facts that Thimmaiah, working in K.E.B. Mandya, had obtained the three policies mentioned in the complaint as per Ex.R.1, R.7 and R.8. It is an admitted fact that when the claim was made, the complainant has settled the insurance claim of Ex.R.1, R.7 policy. But, according to the Opposite party, the complainant has not submitted the first policy mentioned in the complaint claiming the insurance amount, but the Opposite party has produced the copy of the said policy as per Ex.R.8. The complainant has not produced any document for having submitted the first policy as per Ex.R.8 and it is admitted fact that the Opposite party has not settled the policy. According to the Opposite party, this policy as per Ex.R.8 was lapsed at the first instance and so could not settle the claim and nothing is payable and the Opposite party has contended that if the complainant is able to furnish the details of deduction of premium for this policy by the employer i.e., K.E.B. and submit the same it will consider the claim. It is the burden of the complainant to prove that policy as per Ex.R.8 was not in a lapsed condition and it was in force when the assured died. Therefore, in respect of the first policy, we cannot attribute any deficiency in service and only a direction to the Opposite party can be given to consider the claim if the complainant furnish the payment of premiums by the employer and establish that she is entitled to the full insurance claim or paid up value as per the conditions of the policy. 9. Now, in respect of policy Ex.R.1 bearing No.721662019, this policy is assigned by the assured in favour of LIC Housing Finance Ltd., since the deceased had obtained loan of Rs.4,00,000/- and this assignment was in the year 2004. The policy was obtained on 15.03.1995 and it is a Money back policy under the salary saving scheme. Now according to the Opposite party, when the claim was made, paid up value of Rs.46,487/- was paid to the LIC Housing Finance Ltd., because it was assigned in favour of it. According to the complainant, admitting the assignment of this policy in favour of LIC Housing Finance Ltd., for loan deduction, she has discharged the loan of LIC Housing Finance Ltd., but Opposite party has sent only Rs.46,487/-, though Opposite party ought to have sent sum assured with bonus approximately more than Rs.80,000/-. The complainant in her evidence has admitted that the Opposite party has paid the housing loan. As per the policy on the death of life assured before the date of maturity, the sum assured with accrued bonuses should be paid, the policy is for Rs.50,000/- for a period of 15 years and date of maturity is 15.03.2010. Though, as per the policy, the complainant is entitled to the accrued amount with assured bonus, but according to the Opposite party, the policy was lapsed condition and the paid-up value with bonus was sent to the LIC Housing Finance Ltd., as the policy was assigned in its favour as per Ex.R.5 & R.6. The complainant has pleaded that the employer of the deceased assured was deducting the salary towards insurance premium and credited to the LIC through cheques. The complainant examined CW.2 an Official from K.E.B. and has produced Ex.C.6 stating, it is a statement showing the amount recovered towards LIC premium of Sri.Thimmaiah from April 2000 to December 2006. As per this document, monthly Rs.1,836/- was being deducted from the salary of Thimmaiah, but for so many months often and often the deduction was not made as salary not claimed due to leave without allowances. In fact, the Opposite party sought for details from the K.E.B. and as per Ex.R.4 the K.E.B. has written that in respect of the policy Ex.R.1 for 17 months, the premiums were not paid, as salary was not claimed due to leave without wages. The contention of the learned counsel for the complainant is that in spite of non-payment of 1, 2 or 5 premiums through salary deductions, further, the deductions are made and Opposite party has received the same even without getting lapsed policy and so policy was in force by automatic renewal and relied upon the decision of 1991 (2) CPR page 254 by Honble National Commission in the case of Smt.Rajni Patwari Vs- LIC of India. In that case, the insurance claim was repudiated on the ground that policy lapsed because of default in payment of premium from November 1987 to May 1988, but the Honble National Commission has held, though the policy lapsed, why did the LIC of India accept the premiums from June 1988 to December 1988 for the period of six months and why did they not inform either the insured or his employer that the policy had lapsed and without its revival these premiums are not of any use and therefore, are returned. Had the LIC informed the deceased assured any time in between June 1988 to December 1988 about the status of the policy as lapsed, he might have taken steps to revive it. In the absence of any evidence that he authorized the payment only from June 1988, it is only fair to accept the assertion of the LIC that they had sent the authorization letter signed by the deceased. On the other hand, the learned counsel for the Opposite party has relied upon judgement of Appeal No.4492/2000 in the case of LIC Vs- Smt.S.Sindhu dated 04.05.2006, wherein it is observed that in case of lapsed policy as per condition no.4 of the policy (Non-forfeiture Regulation) paid-up value of the policy is payable. In that case, there was lapsed of the policy at certain times, but again it was renewal by paying the premiums and lapsed again lastly on 04.03.1997 and assured died on 05.12.1997. The order of the District Forum granting only paid-up value. Further, directed to LIC to pay interest at 15% p.a. from the respective dates of receipt of the amounts of premium to the date of settlement. The Honble Supreme Court concurring with the payment of settlement of the claim on paid-up value rejected the grant of interest. Further, the Honble National Commission in the case of 1(1992) CPJ 58 has held the insurer is bound to recognize the assignee as the only person entitled to the benefit under the policy. In the present case, the complainant has not established the regular deduction of premiums from the salary of the deceased assured by production of Ex.C.6 through the witness. But, the Opposite party itself has taken a document from the employer of the deceased and totally for 17 months from the commencement of the policy till his death, in between some months the premium up to death was received by the Opposite party. The decision relied upon by the learned counsel for the complainant is not applicable to the facts of the case. It is very clear that under the salary saving scheme a consent was given for the deduction of premiums from the salary and the Opposite party has sent the said letter to the employer for deduction of the premiums from the salary and though, it is the duty of the employer to deduct the premiums from the salary, but when the employee remains absent on leave for so many months and salary not disbursed, there is no question of deduction of the premiums towards the policy and in spite of it, the assured had not taken steps to see that the premiums for the months during which he did not draw the salary due to absence ought to have taken care to deduct the premiums in the next months and therefore, naturally the policy lapses and though Opposite party has received the further premiums, but it has settled the claim under forfeiture clause by paying paid-up value to assignee who is entitled to policy amount. Therefore, the case of the complaint that she has discharged the loan and the Opposite party ought to have paid the sum assured with entire profit accrued cannot be accepted. 10. Even with regard to the policy as per Ex.R.7 also it is a money back policy and as per Ex.R.4, for 19 months totally there was no premium payment on several months and therefore, the policy has lapsed and the Opposite party has settled by paid-up value and the complainant has executed discharge voucher in full and final satisfaction of the claim as per Ex.R.10. The complainant has failed to prove that there is regular deduction of premiums every month from the salary of her husband and the policies were in force. In Ex.C.6 it reveals that the policy numbers mentioned in this document Ex.C.6 is not pertaining to the policies mentioned in the complaint. Under these circumstances, it cannot be said and accepted that Opposite party has committed deficiency in service in settling the claims of two policies by way of paid-up value. Therefore, the complainant is not entitled to the amount claimed. 11. In the result, we proceed to pass the following order; ORDER The complaint is dismissed. However, the Opposite party is directed to consider the claim of policy No.610254145, if the complainant furnishes the details of premium paid by the employer of her husband Thimmaiah in respect of this policy. There is no order as to costs. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 30th day of July 2009). (PRESIDENT) (MEMBER) (MEMBER)
