Complaint filed on  16.09.2013

                                                                                                          Compliant disposed on  10.11.2014 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::AT:: KARIMNAGAR, TELANGANA STATE

PRESENT: HON'BLE SRI B.SURESH, B.A., LL.M., Ist ADDL. DIST. & SESSIONS JUDGE AND PRESIDENT (FAC)
AND

SRI G.SREENIVASRAO, M.Sc.,B.Ed.,LL.B., PGADR (NALSAR), MEMBER

MONDAY, THE 10^TH DAY OF NOVEMBER, TWO THOUSAND FOURTEEN

CONSUMER COMPLAINT  NO. 120 OF 2013

Between:-

Takur Kamala Bai, W/o.Late Rajendar Singh, Age 40 years, Occu: Household R/o. H.No.77/214, III Zone, Near Ramalayam, Post & Mdl: Mandamarri Dist: Adilabad – 504 213.

                                                                                                                              ... Complainant  

                                              AND

1.Life Insurance Corporation of India, Mancheiral Branch, Near Bus Stand, PO: Mancherial Proper & Mdl, Dist. Adilabad R/by its Manager.

2.Life Insurance Corporation of India, Divisional Office, Karimnagar # 2-7-105, Jeevan Prakash, Near: Ambedkar Stadium, Karimnagar, R/by its Divisional Manager.

                                                                                                                        … Opposite Parties

                This complaint is coming up before us for hearing on  15-10-2014, in the presence of Sri B.Srnivas Advocate, counsel for complainant and J.Sriramulu Advocate, counsel for opposite party and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:

                                                                                              ::O R D E R::

This complaint is filed U/s.12 of C.P.Act to direct the opposite parties to pay Rs.12.50 lakh with bonus & other entitled benefits along with 18% interest p.a. from the date of claim and further to pay Rs.1 lakh for the mental agony and costs of the litigation.

Brief averments of the complaint:

1.       The complainant is the wife and nominee of deceased Rajendar Singh who was an employee of Singareni Collieries Co. Ltd., obtained seven LIC policies amounting to Rs.6.25 lakhs (Sum Assured) by way of salary deductions with the opposite party no.1. On 01.06.2009, the deceased accidentally fell at his residence and succumbed to fracture in the right femur (thigh bone) and during long course of treatment after operation, he died on 11.05.2010.

          The complainant submitted all the requisite documents to opposite party no.2 who is the claim settler, who promised to process the same in near future as it required enquiry. Even after two long years the opposite parties have not settled the claim. So the opposite parties were served Legal Notice Dt: 23.08.2013. Even then, they have not opted to reply. Hence the nominee/complainant filed this complaint for the careless and negligent attitude of the opposite parties, amounting to deficiency in service. Finally, she prayed to direct the opposite parties to pay Rs.12.50 lakhs (Sum Assured plus bonus and other entitled benefits on account of accident) with interest, compensation for the mental agony and costs of the litigation. 

2.       The opposite party no.1 & 2 combinedly submitted the written version stating that the complaint is barred by limitation period of two years under Sec 24A of C.P.Act. Further submitted that the life assured died on 11.05.2010 and all the seven policies projected in the complaint were in lapsed condition due to non-payment of premiums. The recovery of premiums were not done from the salary and not remitted to their account. They also submitted that Salary Saving Scheme (SSS) provision not operative and not applicable to the policies of the deceased. Therefore, the payment of Basic Sum Assured, bonus and accident benefit does not arise. The opposite party finally submitted that there was neither delay nor deficiency in service on their part. Hence, prayed to dismiss the complaint with costs.

3.       The complainant filed documentary evidence from Ex.A1 to A24 and the opposite parties evidence was marked from Ex.B1 to B7. The respective counsels argued before the bench. Heard both the counsels.

4.       Now the point for consideration is, Whether the opposite parties are liable to pay the Sum Assured on the lapsed policies under salary saving scheme of the deceased to the complainant, if so, To What relief?

5.       POINT:

          The deceased Mr.Rajendar Singh obtained seven LIC policies under the Salary Saving Scheme. The copies of which were marked from Ex.A1 to A7. On keen verification all the policies were in lapsed status and all other exhibits were concerning the treatment undergone for right femur fracture. The Ex.A19 in the Death Certificate, establishing the date of death occurred on 11.05.2010. The Ex.A20 to 24 are pertaining to the legal notice and postal receipts plus acknowledgment cards.

6.       The opposite parties have filed only the copies of the policies of the deceased from Ex.B1 to B9 only.

7.       There is no dispute regarding obtaining of the seven policies, the details are mentioned below:

All the above policies were issued to the deceased under Salary Saving Scheme.

8.       The opposite parties averred in their evidence that the Salary Saving Scheme is an arrangement made among the LIC of India, Employer and Employee (Authorisation Letter). From the salary of the employee, the employer deducts the premia and remits the same to LIC to keep the policy in force. As per the Authorization Letter by employee, if the deduction of premia stops due to any reason, the employee has to make his own arrangements to pay the premia and keep the policy in force.   

9.       Finally, they stated that all the above policies were under lapsed condition as on date of death (11.05.2010) of the life assured due to non-payment of premiums. Hence, payment of basic sum assured, bonus and accident benefit does not arise, as such no deficiency in service on the part of opposite parties. They have filed enlarged version of policy conditions and Salary Saving Scheme Clause along with exhibits B1 to B9.

10.     The counsel for the complainant urged that the policies are under Salary Saving Scheme as such it is settled law that “where premium for LIC policy was to be remitted from the salary and failure in remittance of the same thereby the employer was liable for the fault, as he being the agent of LIC, the LIC is liable to pay the policy amount”. The counsel cited (Branch Manager of LIC Vs. A.Yashodamma reported in 2009 (2) CPR 85 (NC). It is settled law that “neither employer nor insurance company informed about non-payment of premium – then employer and insurance company were bound to inform insured of consequences of non-payment of premium”. In another citation (LIC Vs Smt.Ranjana Misra reported in 2009 (2) CPR 143 (NC), if the opposite party was not getting premiums from the salary, it is bounded duty of the Corporation to inform the same to the policy holder and demand for payment of premiums. In the instant case it is admitted fact that there is no such information or demand by the opposite party or employer as such the opposite party is bound to pay the basic sum assured along with bonus and other benefits.

11.     On careful verification it is found that the deceased met with an accident on 01.06.2009 which resulted in death on 11.05.2010 whereas all the seven policies were obtained during the period from 28.03.2003 to 23.03.2009 and the date of maturity for the policies are from 03/2015 to 03/2024. And the policy bearing no.683969569 (Ex.A7/B7) does not come under salary saving scheme (SSS) as the type of policy is mentioned as ORD with half yearly mode of payment. However the clause 10.2(6) under the sub-head “Death of life assured” (enlarged version of policy conditions & salary saving scheme clause filed by the opposite party) it is mentioned to pay an additional sum equal to the sum assured under the policy if the life assured met with accident resulting in the death of life assured.

12.     We infer that the deceased being an employee obtained LIC policies under the salary saving scheme (SSS) wherein the contention of opposite party emphasizing that due to non-payment of further premiums, the policies were in lapsed condition and as such the nominee is not entitled to sum assured and other related benefits on such policies needs to be examined carefully. But the view taken by the Hon’ble National Commission in similar cases cited supra has to be considered wherein it is held that the employer and insurance company were bound to inform insured of consequences of non-payment of premium. In the instant case, there is not even a single document on the opposite party side to prove that an intimation had been sent by the opposite parties regarding the consequences of non-payment of premiums. More over the deceased was a general mazdoor working in a company, such people must be informed either by the employer (who is playing the role of an agent of the company) or the insurance company.

13.     Thus we are of the considered opinion that the complainant/nominee deserves relief from this Forum and the point is answered against the opposite party and in favour of the complainant.

14.     In the result the complaint is, therefore, allowed and the opposite parties are jointly and severally directed to pay the sum assured with accident benefit i.e., additional sum equal to sum assured under the “SSS Policy” to the complainant –nominee for all the (six) policies except the policy no.683969569 which is “ORD” type, along with 9% interest p.a. from the date of claim till realization. The opposite parties are further directed to pay Rs.60,000/- for the mental agony and hardship including the costs of the litigation.

Time for compliance is 30 days.

Typed to my dictation by Stenographer and after correction, the order pronounced by us in the open court this the 10^th day of November, 2014.

Sd/-                                                                                                          Sd/-

MEMBER                                                                                 PRESIDENT(FAC)

NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE

FOR COMPLAINANT:                       

1. Ex.A1 to A7 are the copies of Status Reports in respect of 7 policies issued by opposite parties Dt: 12.08.2013.
2. Ex.A8 is the photo copy of O.P. Ticket of Rajendar Singh issued by Singareni Collieries Company Ltd. Srirampur Area Dt: 02.06.2009.
3. Ex.A9 is the copy of letter of Dy.Chief Medical Officer, Area Hospital, Ramakrishnapur Dt: 25.09.2009.
4. Ex.A10 is the copy of letter of Addl. Chief Medical Officer, Area Hospital RG, Dt: 06.10.2009.
5. Ex.A11 is the copy of letter addressed to the Director, NIMS Hospital Dt: 10.10.2009.
6. Ex.A12 is the copy of out-patient medical record of NIMS Hospital Dt: 14.10.2009.
7. Ex.A13 is the copy of Whole Body Dual Intensity Picture of deceased Dt: 10.11.2009.
8. Ex.A14 is the copy of Discharge Summary issued by NIMS Hospital Dt: 14.01.2010.
9. Ex.A15 is the copy of requisition of the deceased to Singareni Collieries Company Ltd. Dt: 05.01.2010.
10. Ex.A16 is the copy of letter addressed to the Director, NIMS Hospital Dt: 07.01.2010.
11. Ex.A17 is the copy of requisition of the deceased to Singareni Collieries Company Ltd. Dt: 29.01.2010.
12. Ex.A18 is copy of letter addressed to the Director, NIMS Hospital, Dt: 30.01.2010.
13. Ex.A19 is the copy of Death Certificate issued by Muncipality Mandamarri Dt: 18.05.2010.
14. Ex.A20 is the office copy of Legal Notice got issued by counsel for complainant Dt: 23.08.2013.
15. Ex.A21 is the Regd. Postal Receipt addressed to opposite party no.1 Dt: 27.08.2013.
16. Ex.A22 is the Regd. Postal Receipt addressed to opposite party no.2 Dt: 27.08.2013.
17. Ex.A23 is the served Regd. Post A/C due card of opposite party no.1 Dt: 30.08.2013.
18. Ex.A24 served Regd. Post A/C due card of opposite party no.2 Dt: 30.08.2013.  

FOR OPPOSITE PARTY:

          Ex.A1 to A7 are the copies of Status Reports in respect of 7 policies issued by opposite parties Dt: 30.12.2013.

Sd/-                                                                                                          Sd/-

MEMBER                                                                                 PRESIDENT(FAC)