BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri.K.V.H. Prasad, B.A., LL.B President
And
Smt. C.Preethi, M.A.LL.B., Lady Member
Tuesday the 30th day of September, 2008
C.C.No. 173/07
Between:
P. Sridevi, W/o. Late P. Harigopal Reddy,
R/o.H.No.EWS 70, Housing Board Colony (old) B-camp (post) Kurnool. … Complainant
Versus
- LIC of India, Represented by its Branch Manager,
Kurnool.
- LIC of India, Represented by its Senior Divisional Manager,
Kadapa.
- Municipal Corporation, Represented by its Commissioner,
Kurnool. … Opposite parties
This complaint is coming on this day for orders in the presence of Sri.K.Lokeswara Reddy, Advocate, for the complainant, and Sri.A.V.Subramanyam, Advocate for opposite party No.1 and 2 and Sri.D.Yella Reddy, Advocate for opposite party No.3 and upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Sri. K.V.H.Prasad, President)
C.C.No.173/07
1. This case of the complainant is filed U/S 12 of C.P.Act seeking direction on the opposite parties to pay to the complainant the assured amount of policy Nos. 651429237 , 651429236 , 652345165 , 651428763 and 652680354 with accident benefits they are carrying with 24% interest p.a , Rs.l lakh as compensation for mental agony suffered at the deficient conduct of the opposite party and Rs.10,000/- as cost of this case alleging that the complainant as wife and nominee of P. Hari Gopal Reddy – holder of the above policies – made the claim on 16-5-2003 under the said policies consequent to the demise of her husband in road accident occurred on 27-3-2003 and from among the above polices , except the policy No. 652347165 , were under salary saving scheme and their premium was paid through opposite party No.3 without any default and the opposite parties procrastinating the settlement of claim on one pretext or other on 12-12-2006 alleged the policy No.652680354 lapsed for non payment of the first premium and except alleging the other policies under consideration did not settle the amount under said policies and in reply to legal notice dated 24-7-2007 replied to pay Rs.25,000/- each under policy No.652347165, 651429236 and Rs.6,458/- and Rs.14,667/- under policy No. 651429237 and 651428763 and repudiation of claim under policy No.652680354 alleging it in lapsed condition and the said evasive conduct of the opposite parties not only caused mental agony but also constrained to file this case.
2. In pursuance of the receipt of the notice of this forum as to this case of the complainant the opposite parties caused their appearance through their counsels and contested the case filling their written version denying their liability to the complainants claim and seeking dismissal of the complainants case.
3. The counter (written version) of the opposite party No.2, adopted by opposite party No.1 , even though admit the deceased
P. Hari Gopal Reddy as holder of the five policies alleged in complaint – alleges the lapse of said policies for non payment of premium by paying authority ( i.e opposite party No.3) and for non payment of quarterly premium for policy No.652347165 on 28-9-2007 and the premium paid for revival of lapsed policies by paying authority not of any avail as those premiums were received subject to exclusion of coverage risk under such policies , which resulted into death claims , as on date of revival of decision and during the total period of lapse as confirmed / informed to paying authority ( PA) by 2-7-2004 in which the demise of the said policy holder was confirmed by paying authority and the final unpaid premium ( FUP) paid for keeping in force after death cannot be treated as bonafide remittances and does not change the lapsed status of the policies by the time of demise of policy holder . It further alleges no deficiency on its part in the light of its offering the amounts as for ex-gratia provision and as the assured amounts are not payable under the said policies for reasons stated above , seeks dismissal of the case.
4. The counter ( written version ) of opposite party No.3 not only admits the status of the deceased P. Hari Gopal Reddy as holder of the policy Nos. 651429237 , 651429236 and 654428769 for Rs.50,000/- each and policy No.652680354 for Rs.2 lakhs but also says the payment of the premium due under them by it as they are policies under salary saving scheme and the opposite party No.3 as its paying authority of said deceased as their employee and it processed the claim of the complainant and submitted to opposite parties 1 and 2 and their by allege any of its deficiency for holding any liability of it to the complainants claim and so seeks the dismissal of the complainants case with costs.
5. In substantiation of the contentions while the complainant side has taken reliance on documentary record in Ex.A1 to A 11 and the sworn affidavit of the complainant in support of its case the opposite parties side has taken reliance on documentary record in Ex.B1 to B23 and the sworn affidavit of the opposite parties in support of its defence.
6. Hence, the point for consideration is whether the complainant has made out alleged deficiency of the opposite parties so as to hold them liable for complainants claim.
7. While the opposite parties 1 and 2 allege no liability of theirs under said policies under which claim is made by the complainant , the opposite party No.3 alleges of its discharge of its liability under said policies remitting the due premium under four policies covered under salary saving scheme.
8. The Ex.A1 is letter dated 16-5-2003 addressed by the complainant to the opposite party No.1 intimating the demise of her husband –
P. Hari Gopal Reddy – holder of policy Nos. 651429237 , 651429236 , 652345165 , 651428763 and 652680354 and so requesting for settling the claim made under said policies . The Ex.A1 is not being disputed by the opposite parties it is not requiring any further appreciation of its contents and the fact of belated intimation of death of the policy holder to the opposite parties about four and half months after to occurrence.
9. The Ex.A11 is letter dated 12-12-2006 addressed by opposite party No.1 to complainant informing the status of policy No.652680354 ( Ex.A10) as lapsed on account of default of payment of final unpaid premium (FUP) of 4 / 2002 with two gap premiums of 9 /01 and 10/01 as on 27-1-2003 i.e, date of death of the policy holder . The said was not responded by the complainant and any cogent material such as premium payment receipts of alleged period being even placed by the complainants side contradicting the said fact.
10. The Ex.A2 is the legal notice dated 31-7-2007 merely claming the settlement of claim under policies of deceased Hari Gopal Reddy made by complainant as his nominee and not taking any reference to Ex.A11 .
11. The Ex.A3 is letter dated 2-8-2007 of opposite party No.1 informing the complainants counsel as to forwarding of claim under the policies to its divisional office for their decision consequent to Ex.A2 notice and the said being not in dispute between the parties to this case it requires any further consideration as to its contents.
12. The Ex.A4 letter dated 9-8-2007 of the opposite party No.1 addressed to the complainant requiring for consideration of claims from the complainant , the discharge forms duly completed as the same time informing further as to the lapse of the policy No.652680354 and no amount payable there under .
13. The Ex.A5 is the bunch of four discharge forms said to have been sent to the complainant for executing its due discharge for making ex-gratia payment of Rs. 5,000/- , Rs.5,000/- , Rs.6,458/- and Rs.14,667/- under policy Nos. 652347165 , ( Ex.A8) , 651429236 ( Ex.A7) , 651429237 ( Ex.A6) , and 65142873 ( Ex.A9) respectively. They remain of any worthy consideration and to find any justifiability in them in the absence of any material on which said ex-gratia was worked out .
14. The Ex.B1 to B5 are the status reports pertaining to the five polices concerned in this case i.e, 651429237 , 651429236 , 652347165 , 651428763 and 652680354 and envisages the final unpaid premium from 2/2003 , 2/2003 , 9/2002 , 2/2003, 2/2003 respectively. The Ex. B6 to B9 are letters of authorization executed by the policy holder in favour of the Commissioner Municipal Corporation , Kurnool ( opposite party No.3) under paying authority No.422 authorizing the later to cause necessary deductions of premium amounts of the said policies from his salary and transmit the deducted premium amounts stated therein to the LIC, subject to certain conditions embedded therein , towards the premium for policy Nos 651429236 , 651429237 , 651428763 , 652680354. The Ex.B10 to 13 are the statement of particulars of deductions effected by the opposite party No.3 from the salary of policy holder under above said four policies covered under salary saving scheme .
15. The Ex.B10 envisages the deductions effected from 12 /01 to 1/03 @ Rs.996/- as prescribed in Ex.B9 towards the policy No.652680354 . The counter / written version of the opposite party alleges the lapse of said policy on account of non remittance of monthly premium due on 26-4-2002 and conveying of its information to the complainant vide its letter dated 12-12-2006 – which is not filed into this case for its appreciation . The Ex.B5 status report as to policy No.652680354 shows the final unpaid premium from 2/03 . Even though the Ex.B10 indicates the premium was sent under this policy up to the month of 1/03 but from the perusal of contents of Ex.B10 it appears that the premium amount for the months of 12/01 to 4/02 concerned in cheque N0.142695 and 142895 dated 13-11-2002 and 28-11-2002 respectively from the months 12/01 to 4/02 were sent belatedly in the month of November, 2002 and there by it remains clear the premiums of the months mentioned therein towards the policy of deceased policy holder were highly belated and hence there appears every possibility for the LIC to hold the policy as lapsed for non payment of due monthly premium as alleged by the opposite parties 1 and 2. The belated sending of premium by opposite party No.3 (paying authority of the complainants husband) appears to be usual and habitual from the perusal of the particulars of entries of said Ex.B10 pertaining to the payment of premium of 5/02 to 1/03 as the said monthly due premiums were paid on 17-9-2003 with a belatedness of 8 to 16 months vide cheque No.176920 dated 17-9-2003.
16. The Ex.B11 is the statement of LIC premium recovery particulars pertaining to policy No.651428763 for the recoveries effected @ Rs.412/- per month from 4/2002 to 1/2003 , as stipulated in Ex.B8 as the said policy is also covered under salary saving scheme vide several cheques of several dates mentioned therein . The written version of opposite party No.2 alleges that the said policy lapsed for non-remittance of premium due on 27-7-2002 . The Ex.B4 status report of policy No.651428763 envisages the final un paid premium is of 2/2003 . The perusal of Ex.B11 indicates that the premium of 7/2002 to 1/2003 were sent together vide cheque No.176920 dated 17-9-2003 and there by envisages the belated remittance of the premium concerned and hence there appears every possibility for the LIC to hold the policy as lapsed for non payment of due monthly premium alleged by the opposite parties 1 and 2 for non payment of due monthly premiums by complainants paying authority who was authorized under Ex.B8 for causing necessary deductions from the salary of the complainant and caused their remittance to the LIC policy of complainant . The above circumstances indicates that it is usual and habitual to the opposite party No.3 ( paying authority of the complainants husband ) to make belated remittances unmindful of the lapsity of the policies concerned under salary saving scheme despite being authorize to make payments properly to the policies from being not lapsed .
17. The Ex.B12 is the statement of LIC premium recovery particulars pertaining to policy No.65142937 for the monthly premiums from 12/99 to 1/2003 made by opposite party No.3 @ Rs.265/- per month as authorized in Ex.B7 as the said policy is covered under salary saving scheme and payment of premium was authorized. The written version of opposite party No.2 allege the said policy lapsed , without giving particulars of monthly premium which default attracted the said lapse to the said policy. While such is so the Ex.B2 status report pertaining to said policy mentions as to the final unpaid premium as of 2/03 . The perusal of the Ex.B12 indicates the payment of premium up to 1/03 only . While such is so the written version of the opposite party No.3 says of the payment of all the premiums of said policy which implies the deduction of the premium amount from the salary of the policy holder.
18. The Ex.B13 is the is the statement of LIC premium recovery particulars made by opposite party No.3 pertaining to policy No. 651429236 for the months from 12/99 to 1/03 @ Rs. 253 /- per month as authorized under Ex.B6 , under several cheques of several dates . The written version of opposite party No.2 allege that the said policy lapsed on account of non-remittance of monthly premium due on 27-1-2003 . The perusal of Ex.B1 – status report of policy No.651429236 indicates the final unpaid premium was of 2/03 . The perusal of Ex.B13 indicates the payment of premium up to 1/03 only. While such is so the written version of the opposite party No.3 says of the payment of all the premiums of said policy which implies the deduction of the premium amount from the salary of the policy holder.
19. The Ex.B3 is the status report of policy No.652347165 of complainants husband P. Hari Gopal Reddy. It envisages the final unpaid premium was of 9/02 and the mode of payment quarterly premium of Rs.1,413/- for the assured amount Rs.50,000/- . The written version of the opposite party No.2 says this policy not covered under any salary saving scheme and the mode of its premium payment was quarterly . There appears any authorization of said policy holder in favour of his paying authority ( opposite party No.3) to feel any obligation of the opposite party No.3 for payment of the premium there under to the LIC. Hence for lapse of said policy there appears any liability of the opposite party No.3 . While such is so no receipt envisaging the payment of premium of said policy for the month of 9/02 is placed by complainant side to feel any untruth in the lapse of said policy alleged by the opposite party No.2. When there is any material to feel the said policy holder was paying the premiums prescribed for said policy regularly without fail from policy being not lapsed, there appears any liability of the opposite parties 1 and 2 even under said policy to the complainants claim on account of lapse of said policy sufficiently earlier to demise of policy holder.
20. Therefore , from the above discussed state of circumstances , what remains clear is that among the afore said five policies except the policy No.652347165 , the other four policies lapsed at the conduct of either irregular or non payment in time of premiums due on them by the opposite party No.3 as paying authority of policy holder .
21. Further it is submitted by the opposite parties 1 and 2 taking reference to the covering letter in Ex.B14 and B18 that at no time the due premiums were paid for those policies in time and so constrained to lapse them and to take that into the notice of the opposite party No.3 vide Ex.B15 and informing further for their revival if the due premiums were paid with revival interest and returning the cheque for Rs. 4,90,916/-, Rs.1,35,616/- , Rs.1,35,706/- , Rs.1,37, 631/- and Rs.8,37,649/- vide cheques Nos. 598532, 52271, 178035, 177275, and 176920 dated 23-3-2003 , 3-1-2004 , 19-1-2004, 27-10-2003, and 17-9—2003 dues pertaining to 7/02 to 5/03 , 11/03 , 9/03, 7/03, 7/02 as sent without mandatory requirements necessary for revival , making it further no that any death claims arising during the defaulted period will not be considered and the liability of the LIC is restricted to the extent of premiums actually received by it and the opposite party No.3 shall be solely responsible for any loss sustained by opposite parties employees or by the corporation on account of the default in premium remittances. The responsive trend of the opposite party No.3 vide Ex.B6 and B20 for the above is a request to waive the interest and receive the amounts on account of various financial stringencies of the opposite party No.3 institution in collection of property tax as otherwise they were regular and making timely payment of premium due and the Ex.B21 letter dated 25-6-2006 further indicates the opposite party No.3 sending vide bankers cheques mentioned in said letter an amount of Rs.85,000/- towards interest and total amount of Rs.15,26,796/- towards the due premium of policies for the months of 7/02 to 6/03 , 7/03 to 12/03 , 1/04 to 4/04 . From the Ex.B22 and 23 it remains clear further that there is any regularity in transmission of premium due amounts by opposite party No.3 to opposite party No.1. From the correspondence that lasted in between the opposite party No.1 and 3 one thing is remaining clear that the necessary deductions of premium amount of the policies were effected from the concerned employees of opposite party No.3 who were the policy holders .
22. Hence, the further point for consideration is whether the opposite parties 1 and 2 are obsolved of their liability under the said four polices on account of lapsity of those occurred at the irregular and defaultive conduct of the opposite party No.3 in payment of the premiums due on them and the liability of opposite party No.3 for such lapsive conduct .
23. The decision of Hon’ble Supreme Court in Delhi Electric Supply undertaking ( DESU) Vs. Basanthi Devi reported in AIR 2000 SC 43 besides holding the privy of the employer to the LIC in case of transmission of collected premium of policies under salary saving scheme as of the agent of the latter and not of the employee as mode of collection of premium has been indicated in the scheme itself and the employer has been assigned the role of collecting the premium and remitting the same to LIC and thus as for as the employee as such is concerned the employer will be the agent of LIC, further holds the liability of the employer , who defaulted in not remitting the premium to LIC regularly , to costs of the proceedings of the employee .
24. The decision of Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Central Bank of India and another Vs. Smt. Hera Sony and others reported in 2005 (1 ) ALT 28 (NC) (CPA) holds that the movement amount is deducted from salary it would be deemed to have been paid to LIC and so failure to deposit amount would not lead to lapse of policy and there by would not absolve LIC from its liability to pay the amount insured and so the plea of LIC that policy lapsed due to non payment of premium is not tenable .
25. As there is any liability of any of the opposite parties to the claim under policy No.652347165 being it an individual policy and not a policy covered under salary saving scheme and being it lapsed for non payment of premium there under as mentioned in Ex. A8 and in the status report in Ex.B3 and there being any contradicting material to it from the complainant side by way of any receipts evidencing the payment of the alleged defaulted premium, and as no liability of LIC is for the claim under the policy on default of necessary premium the claim of the complainant under Ex.A8 is dismissed on account of any of its liability on the opposite parties 1 to 3 .
26. From the material in Ex.B10 to B13 and the correspondence in between the opposite parties vide Ex.B14 to B22 as there appears transmission of deducted amounts from the salaries of the policy holders towards the premiums of the policies covered under salary saving scheme i.e., 651429237, 651429236, 651428763 and 652680354 , and when ones the deduction amounts of premiums was caused from the salaries of the policy holders by the paying authority of the said employees , it would be deemed to have been paid to the LIC and the plea of LIC as policy lapsed and their liability ceased not tenable and the liability of the LIC , as per the supra decisions of Hon’ble Supreme Court and the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, is for assured sum under said policies and the liability of the employer ( Paying Authority) who caused deductions and defaulted in their proper remittances to the LIC is for cost of the case proceedings of the aggrieved who knocked doors of the forum for redressal at the indifferent conduct of the opposite parties – the complaint is allowed directing the opposite parties 1 and 2 jointly and severally for the payment of the assured amount under policies in Ex. A6 , A7, A9 , A10 with entitled benefits there under as the cause of demise of policy holder in road accident was not disputed by the opposite party ,and the opposite party No.3 to pay Rs.20,000/- as cost of this case to the complainant.
27. The opposite parties their deficient conduct in not settling the policies and their by depriving the entitled amounts under said Ex.A6 , A7, A9, A10 policies as ensured mental agony to the complainant the opposite parties 1 and 2 are liable to pay an amount of Rs.30,000/- as compensation for mental agony to the complainant.
28. Time of one month from the receipt of this order is granted to the opposite parties for the compliance of the above award ordered. In default the opposite parties shall pay their ordered liability with interest of 9% from the date of said default till realization of its entirety .
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 30th day of September, 2008.
Sd/- Sd/-
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant :Nil For the opposite parties :Nil
List of exhibits marked for the complainant:-
Ex.A1. Covering letter dated 16-5-2003 of complainant to
opposite party No.1
Ex.A2. Office copy of legal notice dated 31-7-2007.
addressed to OP.No.1 & 2.
Ex.A3. Letter dated 2-8-2007 of OP.No.1 to complainant
advocate in response to Ex.A2.
Ex.A4. Letter dated 9-8-2007 of OP.No.1 to complainant.
Ex.A5. Bunch of 4 vouchers to be discharged to the complainant for ex-gratia payment.
Ex.A6. Policy bond. 651429237.
Ex.A7. Policy bond 651429236.
Ex.A8. Policy bond 652347165.
Ex.A9. Policy bond 651428763.
Ex.A10. Policy bond 652680354.
Ex.A11. Attested Xerox copy of letter dated 12-12-2006.
List of exhibits marked for the opposite parties:
Ex.B1. Status report of policy.
Ex.B2. Status report of policy.
Ex.B3. Status report of policy.
Ex.B4. Status report of policy.
Ex.B5. Status report of policy.
Ex.B6. Letter of authorization as to policy No.651429736.
Ex.B7. Letter of authorization as to policy No.651429237.
Ex.B8. Letter of authorization as to policy No. 651428763.
Ex.B9. Letter of authorization as to policy No.652680354.
Ex.B10. LIC premium recovery particulars of policy
bearing No.652680354 for 12/012 to 01/03.
Ex.B11. LIC premium recovery particulars of policy
bearing No.651428763 for 4/00 to 01/03
Ex.B12. LIC premium recovery particulars of policy
bearing No.651429236 for 12/99 to 01/03.
Ex.B13. LIC premium recovery particulars of policy bearing No.651429236 for 12/99 to 01/03.
Ex.B14. Office copy of addressed to OP enclose cheque No. 598532 dated 23-3-2003 for Rs.4,90,196/- with list.
Ex.B15. Letter dated 25-3-2003 of OP.No.1 to OP.No.3.
Ex.B16. Letter dated 9-4-2003 of OP.No.3 to OP.No.1.
Ex.B17. Letter dated 5-7—2003 of OP.No.1 to OP.No.3.
Ex.B18. Letter of OP.No3 to OP.No.1 enclosing with a cheque bearing No.176920 dated 12-9-2004 for Rs.8,37,649/- along with list.
Ex.B19. Letter dated 17-3-2004 of OP.No.1 to OP.No.3.
Ex.B20. Letter dated 23-3-2004 of OP.No.3 to OP.No.1.
Ex.B21. Letter dated 25-6-2004 to OP.No.3 to OP.No.1.
Ex.B22. Letter dated 5-11-2004 of OP.No.1 to OP.No.3.
Ex.B23. Letter dated 19-11-2004 of OP.No.3 to OP.No.1.
Sd/- Sd/-
MEMBER PRESIDENT
// Certified free copy communicated under Rule 4 (10) of the
A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties
Copy was made ready on :
Copy was dispatched on :
