Haryana

Ambala

CC/253/2018

Manisha Garg - Complainant(s)

Versus

LIC - Opp.Party(s)

31 Aug 2021

ORDER

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

 

                                                                      Complaint case no.         :  253 of 2018

                                                          Date of Institution           :  10.08.2018

                                                          Date of decision     :  31.08.2021   

 

Manisha Garg widow of Sh. Manoj Garg, s/o Sh. Kailash Chand Garg, r/o H.No. 618, Sector-4, HUDA, Naraingarh, Tehsil Naraingarh, District Ambala.

……. Complainant.

 

1. The Life Insurance Corporation, Head Office:489, Model Town, Karnal,    through its Divisional Manager.
2. The Life Insurance Corporation, Branch Office, Near Subhash Chowk,       Naraingarh, Tehsil Naraingarh, District Ambala, through its Branch Manager.

 

                                                                    ….…. Opposite Parties.

 

Before:        Smt. Neena Sandhu, President.

                   Smt. Ruby Sharma, Member,

Shri Vinod Kumar Sharma, Member.         

                            

Present:       Shri Gaurav Dhingra, Advocate, counsel for the complainant.

Shri G.S. Antal, Advocate, counsel for the OPs.

 

Order:        Smt. Neena Sandhu, President

Complainant has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To pay claim amount of Rs.15 lacs, to the complainant alongwith interest @ 18% per annum.
2. To pay Rs.1,00,000/- as compensation for the mental agony and physical harassment suffered by the complainant and litigation charges.
382.  

                   Any other relief which this Hon’ble Commission may deem  fit.

 

Brief facts of the case are that the husband of the complainant during his life time had taken a policy No. 479295712 on 17.09.2016 for the sum of Rs.15 lacs (Plan 836) for 21 years from the OP No. 2 through the authorized agent of the OPs and the premium of Rs.7756/- was to be paid monthly for 15 years, Accordingly, the husband of the complainant was paying the instalments of premium amounting to Rs. 8047/- (Rs.7756+Rs.291 i.e. tax), regularly. OPs assured the husband of the complainant that as per terms of the policy, in case of the death of the policy holder, the Ops will pay the sum  assured i.e. Rs. 15 lacs and it was not required to pay remaining premium.  Unfortunately, the husband of the complainant died on 27.10.2017 and the complainant gave the information to the OP No.2 in this regard and also submitted the requisite documents alongwith Claim Form for settlement of the claim. But the OPs with malafide intention repudiated the claim vide letter No. Claim/Ngh-17 dated 26.02.2018, thereby mentioning the reason that policy was in lapsed condition, at the time of death, so nothing is payable to the complainant. On 07.09.2017, the OP No.1, after receiving the amount of Rs.41,139.72/- towards the premium amount for the period from 05,2017 to 9,2017 had issued a receipt in the name of the husband of the complainant. OP No.2 advised the husband of complainant to adopt the NACH facility (auto Pay) and in that facility amount of premium will be deducted from the account of policy holder and the policy holder has to maintain the sufficient amount in his account. Accordingly, the husband of complainant, provided the account details to the Ops and NACH facility was successfully registered with the Bank account No. 21011530000993 with HDFC Bank and the same was also processed with the Bank. The husband of the complainant was under the impression that now the amount of premium will be deducted from his account with HDFC Bank and the husband of the complainant was maintaining sufficient balance to pay the premium on the due date. The husband of complainant has not committed any default in making the payment of premium, rather there was deficiency in service on the part of the OPs, to not to deduct the amount of premium from the account of husband of the complainant, as there was sufficient balance in the account, on the due date. As such, the Ops have no right, title or authority to repudiate the claim of complainant, as the husband of complainant was regularly paying the instalments without any default and in such situation, the policy cannot be termed as in lapsed condition, at the time of the death of the husband of the complainant. It is also stated that when the amount of premium was not deducted from the account of the husband of the complainant on its due date, then son of the complainant contacted the authorized agent of the Ops and gave him the amount of premium in cash but he did not deposit the same and rather told the complainant that since NACH facility is registered with the account of husband of complainant, so the amount of premium will be deducted from the account only and the authorized  agent of OPs refunded the amount of premium, by depositing  the same in the account of husband of complainant vide receipt dated 10.10.2017. Complainant also served a registered AD legal notice dated 18.05.2018(posted on 24.05.2018) upon the OPs and the same was duly received by Ops but the OPs have failed to pay the amount and settle the claim of complainant and by not paying the claim amount, the OPs have committed deficiency in service. Hence, the present complaint.

2.       Upon notice, OPs No.1 & 2 appeared through counsel and filed written version, raising preliminary objections regarding maintainability; jurisdiction and cause of action. On merits, it is stated that the husband of complainant had obtained policy No.479295712 having commencement date 07.09.2016, for sum assured of Rs.15,00,000/- under table terms 836-21-15 on monthly basis and the premium of the policy was Rs. 7756/- and the complainant is nominee under the said policy. The DLA has not paid the premium due on 07.10.2017 and grace period of 15 days as per policy condition No. 5(B) also expired on 22.10.2017 and the life assured expired on 27.10.2017, So, the policy was in lapsed condition, at the time of death of life assured. The husband of complainant died on 27.10.2017, however, death claim papers were submitted by complainant but as on death i.e. 27.10.2017, the policy was in lapsed condition due to non-payment of premium due on 07.10.2017 and the grace period of 15 days as per policy condition No. 5(B) also expired on 22.10.2017. The same was conveyed to complainant vide Registered letter dated 26.02.2018. On 07.09.2017, premium amount of Rs. 41,139/- was deposited under the policy, due for the month of May, 2017 to September, 2017. Thereafter, DLA applied for NACH mandate. The same was processed by Branch Office on 14.09.2017 and by the Division Office on 15.09.2017. The mandate was also sent by Division to the scanning vendor of the ICICI Bank on 15.09.2017, which was duly acknowledged by the Bank, on 15.09.2017, but the NACH mandate was processed by NACH centre on 09.10.2017 i.e. after the expiry of the due date to pay premium. The premium was due on 07.10.2017 and the grace period of 15 days expired on 22.10.2017, so the policy was in lapse condition on the date of death of life assured i.e. on 27.10.2017. Hence, the claim is not payable. As per terms and conditions for NACH, “NACH deduction can commence only after mandate is accepted by customer’s Bank and acceptance is updated in LIC’s database. If any premium falls due in the meanwhile, the same shall be paid at cash counter or through alternate channel by the customer”.  It is further stated that policy was in lapsed condition due to non-payment  of premium due on 07.10.2017 and the death claim under the policy was not payable and the same was conveyed to the complainant vide Registered letter dated 26.02.2018. Life assured should have taken care of acceptance and updation of NACH form as well as deduction of premium from his Bank’s account well before due date, otherwise he should have deposited the premium with LIC on due date or within grace period through cash or ulternate channel, which he failed to do so. LIC cannot be held responsible for non-payment of death claim at this stage as policy was in lapse condition on the date of death of life assured. The present complaint filed by complainant is a false, frivolous and based on concocted story and same may be dismissed with costs.

3.                The ld. counsel for the complainant tendered affidavit of complainant and affidavits of Shri Sunil Kumar, HDFC Bank Limited, Nahan Road, Kala Amb, Distt. Sirmaur (H.P.), Shri Shanky Adlakha son of Shri Naresh Kumar, H.No.204, Ward No.13, Milk Road, Naraingarh, Tehsil Naraingarh, District Ambala and Shri Sarush Garg son of Sh. Manoj Garg R/o H.No.618, Sector-4, HUDA, Naraingarh, District Ambala as Annexure CA to CD respectively along with documents as Annexure C-1 to C-18 and closed the evidence on behalf of complainant. On the other hand, learned counsel for OPs tendered affidavit of Shri Ravi Mohan Manager Legal, LIC of India, Divisional Office, Karnal as Annexure OP1&2/A alongwith documents Annexure OP1&2/1 to OP1&2/7 and closed the evidence on behalf of OPs.

4.                We have heard the learned counsel for parties and carefully gone through the case file and also gone through the written arguments filed by the learned counsel for the complainant.

5.                Admittedly, Deceased Life Assured (DLA) applied for NACH facility on 14.09.2018, by way of filing the NACH Mandate Form, Annexure C-3, which was duly processed by the LIC on 15.09.2017, and the same was duly acknowledge by the bank on 15.09.2017 itself. From the status report of LIC of India Annexure C-11, it is evident that NACH center has processed the NACH mandate on 09.10.2017 i.e. two days after the due date but during the grace period of 15 days. It is not the case of the OPs that it was not in their knowledge that the complainant applied for NACH Mandate on 14.09.2017 and the same was processed on 09.10.2017 i.e. two days after the due date, 07.10.2017 but during the grace period of 15 days. Since, the OPs were well aware of the date of the process of the NACH Mandate, therefore, they should have opted for auto debit of the premium amount, within the grace period of 15 days but they did not do so.  Even otherwise, if there was any procedural lapse between the insurance company and the bank for which policy holder cannot be held responsible.

                    It is apposite to note that as per Section 50 of the insurance Act 1938, which reads as under:-

          50.     notice of options available to the assured on the lapsing of a policy- An insurer shall, (1) (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid) give notice to the policy-holder informing him of the options available to him (2) (unless these are set forth in the policy).

                   It was the duty of the OPs to issue a notice to the policy holder for non-payment of the instalment. However, no document regarding issuance of notice for non-payment of the premium has been placed on record by the OPs.  In the case of Jammu and Kashmir Bank Limited Jammu Vs. Tania Jamwal & Others, 2016 AIR (J&K) 114, the Hon’ble Jammu and Kashmir High Court, while dismissing the appeal filed against the order of the J& K, State Consumer Disputes Redressal Commission, Jammu, has held that no notice issued, rather it allowed to lapse policy without any fault of policy holder.

                    It may be sated here that to prove this fact that there is no fault on the part of the complainant, she has examined Sh. Sunil Kumar, Deputy Manager, HDFC Bank Ltd.  and Sh. Shanky Adalakha, Agent of LIC and they were also cross-examined by the learned counsel for the OPs. Sh. Sunil Kumar in his affidavit, Annexure CA, has deposed that the LIC not presented the auto debit for the encashment of the instalment. Sh. Shanky Adalakha in his affidavit, Annexure CB deposed that the son of the complainant paid him Rs.8110/- to deposit with the OP No. 2 but it refused to accept the said amount in cash on the plea that the NACH facility available and the amount will be deducted from the account of the policy holder. Accordingly, he deposited the said amount of Rs. 8110/- in the account of deceased, Manoj Garg.

                   Facing with this situation, we found that there was no fault on the part of the policy holder rather OPs committed a mistake by not making requisition for debit of the premium amount. The OPs further committed mistake by not issuing the notice to the policy holder for non-payment of the premium amount. It may be stated here that for their own mistake, the ops cannot be absolved of their liability to pay the claim amount. As per death certificate Annexure C-14, the husband of the complainant Sh. Manoj Garg died on 27.10.2017. From the perusal of policy document OP1&2/1, it is evident that Manisha Garg was appointed as a nominee by the policy holder and the sum assured was Rs.15 lacs. As per condition No.2 of Part C of the policy document Annexure OP1&2/1, which reads as under:

 1.

 (2).   Death benefit: On death of the Life Assured before the stipulated date of Maturity provided the policy is inforce, then, Death Benefit, defined as sum of “Sum Assured on Death” vested Simple Reservation Bonuses and Final Additional Bonus, if any, shall be payable.

                   In this view of the matter, we do not hesitate to conclude that complainant is entitled to get the death benefits to the tune of Rs.15 lac alongwith other benefits if any, as per the terms and conditions of the policy. She is also entitled to get compensation for the mental agony and physical harassment suffered by her alongwith litigation expenses. 

                   In view of the aforesaid discussion, we hereby allow the present complaint and direct the OPs in the following manner:-

1. To pay Rs.15 lacs (fifteen lacs only) alongwith other benefits if any, to the complainant, alongwith interest @  4% per annum from the date of filing of the complaint i.e10.08.2018, till its  realisation.
2. To pay Rs.3,000/- as compensation for mental agony and physical harassment suffered by the complainant.
3. To pay Rs.2,000/- as litigation expenses.

 

                   The OPs are further directed to comply with the aforesaid directions within the period of 45 days from the date of receipt of the certified copy of this order. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced on :31.08.2021.

 

 

          (Vinod Kumar Sharma)            (Ruby Sharma)               (Neena Sandhu)

              Member                                   Member                       President