Complaint is filed on 12-8-2009

                                                                                     Compliant disposed on 19-5-2010  

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::AT:: KARIMNAGAR

PRESENT: HON’BLE SRI K. DEVI PRASAD, B.Sc., LL.B., PRESIDENT

SMT. E. LAXMI, M.A.,LL.M.,PGDCA (CONSUMER AWARENESS), MEMBER

SRI. K. CHANDRA MOHAN RAO, B.Com ., LL.B.,  MEMBER

WEDNESDAY, THE NINTEENTH DAY OF MAY, TWO THOUSAND TEN

CONSUMER COMPLAINT  NO.  131 OF  2009

Between: 

Rudrarapu Laxmi, @ Rudrapu Laxmi, W/o. Late Rudrapu @ Rudrarapu Hanmaiah, Age 40 years, Occ: Household, R/o. Qr.No.2417 ST-2, 8^th Incline Colony, Godavarikhani village of Ramagundam mandal of Karimnagar district.

                                                                                                                       … Complainant

     AND

Life Insurance Corporation of India, Ramagundam branch, R/by it’s Branch Manager, Ramagundam proper and mandal, Karimnagar district.

                                                                                        …Opposite Party

         This complaint is coming up before us for final hearing on 18-5-2010, in the presence of Sri B.Srinivas and Smt. B. Geetharani,  Advocates for complainant and Sri P.Ashok, Advocate for opposite party, and on perusing the material papers on record, and having stood over for consideration this day, the Forum passed the following:

:: ORDER::

1.       This complaint is filed under Section 12 of C.P. Act, 1986 seeking direction to the opposite party to pay an amount of Rs.1,80,000/- towards the sum assured under the policies with bonus, interest, compensation and costs.

2.       The brief averments of the complaint are that the husband of the complainant R.Hanmaiah was an employee in Singareni Collaries Company Ltd. During his life time he obtained several insurance policies from the opposite party on his life. The policies issued by opposite party are mentioned below:

As per the terms and conditions of the policy the monthly premiums shall be deducted from the salary of the policy holder and the Singareni Collaries Company Ltd. is authorized to deduct the same and send it to the opposite party. The policy holder nominated the complainant as his nominee under the policy. As per the terms and conditions of the policy the opposite party undertook to pay sum assured with accident benefit coverage in case of accidental death of the policy holder. The complainant submits that her husband died on 30.5.2008 on account of Sunstroke and a case is also registered by P.S. Godavarikhani II Town in Crime No.66 of 2008. Within one month of his death the complainant submitted a claim to the opposite party to pay a sum of Rs.1,80,000/- towards the amounts payable under the three policies by enclosing all the documents. But the opposite party paid Rs.12,380/- under the policy no.683805378, but failed to pay the sum assured under the policies. The complainant got issued a Legal Notice on 23.7.2009 demanding the opposite party to pay Rs.1,80,000/-. Having received the Legal Notice the opposite party sent a reply denying the claim of the complainant and stated that the policies are in lapsed conditions. It is submitted that when the opposite party issued Insurance policies he is bound to pay the sum assured and failure to pay the same constitutes deficiency of service. Therefore, the complainant sought direction for payment of the said amount.

3.       The opposite party filed counter denying the averments of the complaint but admitted that the husband of the complainant obtained three policies for Rs.20,000/-, Rs.20,000/- and Rs.50,000/-. On receipt of the claim for payment of the assured sum the opposite party verified the policies. It is revealed that the said policies were in lapsed condition as on the date of death of the policy holder and they have further stated that the monthly premiums were not received from January 2005. On receipt of claim form the opposite party settled death claim under policy no.683805378 and paid Rs.12,380/- through cheque no.8569146 Dt: 9.9.2008. Regarding the policy no.683120095 no amount is payable as the policy was in lapsed condition as on the date of death of the policy holder. Under the said policy the premium amount is not received by the opposite party since January 2005. Regarding policy no.683823216 the said policy was not in force as on the date of death of the policy holder. Hence there is no amount payable under policy. Immediately after receipt of the death claims the opposite party settled them, as such there is no deficiency of service on the part of the opposite party, hence prayed for dismissal of the complaint.

4.       The complainant filed Proof Affidavit reiterating the averments made in the complaint and filed documents which are marked as Ex.A1 to A9. Ex.A1 is the Status Report of Policy no.683120095 Dt: 8.1.2007. Ex.A2 is the Status Report of Policy no.683805378 Dt: 2.7.2009. Ex.A3 is the Status Report of Policy no.683823216 Dt: 2.7.2009. Ex.A4 is the Xerox copy of F.I.R. Dt; 30.5.2008. Ex.A5 is the Xerox copy of Inquest Report Dt: 30.5.2008. Ex.A6 is the Xerox copy of P.M.E. Report Dt: 30.5.2008. Ex.A7 is the office copy of Legal Notice got issued by complainant Dt: 23.7.2009. Ex.A8 is the receipt of professional courier Dt: 27.7.2009. Ex.A9 is the reply issued by the opposite party Dt: 28.7.2008.

5.       The opposite party filed Proof Affidavit of it’s Administrative Officer reiterating the averments made in the counter and filed documents which are marked as Ex.B1 to B4. Ex.B1 is the original policy bond. Ex.B2 to B4 are the Status Reports of policy no. 683120095, 683805378 and 683823216.

6.       Heard both sides.

7.       The points for consideration are:

1. Whether there is any deficiency of service on the part of opposite party?
2. If so, to what relief the complainant is entitled?

8.       It is contended by the complainant that her husband obtained three Life Insurance Policies from the opposite party. The policy holder died on 30.5.2008 due to Sunstroke. Regarding his death a case is registered by Police, Godavarikhani II Town in Crime No.66 of 2008. F.I.R. and P.M.R. are filed as Ex.A4 and Ex.A5. After receipt of death claim the opposite party did not pay the assured sum under the policies, but paid only paid-up value with eligible bonus. It is contended that the opposite party can’t take the plea that the premiums were not received from the employer due to which the policies were lapsed as on the date of death of the policy holder. It is contended that when the employer agreed to deduct the premiums from the salary of the employee and the same is accepted by the opposite party, it is for the opposite party to inform the policy holder about non-receipt of the premiums. On that ground the opposite party can’t escape from their liability and they are bound to pay the sum assured.

9.       It is contended by the opposite party that the policies were in lapsed condition as on the date of death of the policy holder for non-payment of monthly premiums. After receipt of the death claim the opposite party settled the same by paying Rs.12,380/- towards amount payable under the policy no.683805378 and no amount is payable under policy no.683823216 as mentioned in the reply sent by opposite party under ex.A8. Except the said amount the opposite party is not liable to pay the sum assured under the three policies. The complainant is not entitled for any amount under the policies.

10.     It is an admitted fact that the husband of the complainant obtained three insurance policies for Rs.50,000/- under Ex.B1 Rs.20,000/- and Rs.20,000/- from the opposite party. It is also an admitted fact that the policy holder nominated the complainant as his nominee to receive the sum assured in case of his death. A perusal of Status Report under Ex.A1 to A3 and equivalent to Ex.B2 to B4 discloses that the monthly premiums for the said policies were not received by the opposite party from June 2006 and due to which the policies were lapsed as on the date of death of policy holder. The Status Report under Ex.B3 for policy no.683805378 a total premium of Rs.1,737/- is received upto June 2006. For policy No.683823216 a total premium of Rs.6,336/- is received upto June 2006 as mentioned under Ex.B4 Status Report. The Status report under Ex.B2 in respect of Policy no.683120095 there is a loan of Rs.4,290/- and the last premium was paid in January 2005. The loan is also remained unpaid. After receipt of the claim from the complainant the opposite party paid Rs.12,380/- towards the amount payable under policy no.683805378 which is evidenced by the letter under Ex.A8. For the other policies no amount is payable as the policies were not in force at the time of death of the policy holder.

11.     The complainant claimed an amount of Rs.90,000/- + Rs.90,000/- towards basic sum assured and accident benefit coverage. As per the arrangement made between the policy holder and opposite party the monthly premiums shall be deducted from the salary of the employee by Singareni Collaries Company Ltd and the same shall be remitted to the opposite party. The mode of payment is accepted by the opposite party and the previous monthly premiums were received in the same manner. The opposite party refused to pay the sum assured on the ground that the policy was not in force at the time of his death. Infact the opposite party did not produce any document to show that the policy was repudiated on account of non-receipt of monthly premiums. Further no proof is placed before this Forum that the policy holder was informed about non-receipt of premiums from the employer of the policy holder. Admittedly the deceased obtained insurance Policies under salary saving scheme by way of salary deductions. In support of her contentions the complainant relied on the following decisions:

(i)       2009 (2) CPR 85 (NC) in a case Branch Manager & Anr Vs Smt. A.Yasodamma & Anr, wherein it is held that “Neither employer nor petitioner had informed insured about non-payment of premium-Employer and insurance Company were bound to inform insured of consequence of non-payment of premium-No reason on ground to interfere-” 

(ii).     2009(2) CPR 143 (NC) in a case Life Insurance Corporation of India Vs Smt. Ranjana Misra & Ors, wherein it is held that “Where premium for LIC policy was to be remitted from salary and failure in remittance was for no fault of insured and employer was liable for that fault, employer being agent of LIC, Corporation was liable to pay policy amount”.       

12.     A perusal of policy under Ex.B1 and Status Reports discloses that the husband of the complainant obtained three policies from the opposite party with accident benefit coverage and as per the terms and conditions of the policy the opposite party undertook to pay sum assured in case of accidental death of the policy holder. The F.I.R. under Ex.A4, Inquest Report under ex.A5 and P.M.E. Report under Ex.A6 discloses that the policy holder died due to Sunstroke which is an accidental death. As per the terms and conditions of the policy the opposite party is liable to pay the sum assured with accident benefit coverage. The basic sum assured under the three policies is Rs.20,000/-, Rs.20,000/- and Rs.50,000/- respectively with accident benefit coverage. Having issued the policies undertaking to pay the sum assured, opposite party cannot refuse to pay the same on the ground of non-receipt of the premium. After receiving the claim the opposite party paid Rs.12,380/- in respect of policy no.683805378 and did not pay any amount in respect of other two policies. The opposite party is liable to pay the basic sum with accident benefit coverage. Since the opposite party paid Rs.12,380/- under policy no.683805378 it shall be deducted from the amount payable under the said policy. For the above said reasons we hold, that the opposite party liable to pay Rs.1,80,000/- towards the sum assured under three policies with eligible bonus. The opposite party is entitled to recover unpaid premiums and any other loan amounts from the amounts payable under the policies.

13.     In the result the complaint is allowed directing the opposite party to pay an amount of Rs.1,80,000/- towards the sum assured under three policies. Out of the said amount the amount of Rs.12,380/- already paid for policy no.683805378 shall be deducted and also the unpaid premiums and if any other loan amounts shall be deducted. The balance amount shall be paid with interest @ 9% per annum from the date of filing the complaint i.e. 12.8.2009 till the date of realization along with Rs.1,000/- towards costs of the complaint within one month from the date of receipt of this order.

           Typed to my dictation by Stenographer, after correction the orders pronounced by us in the open court this the 19^th day of May, 2010.

 Sd/-                                                   Sd/-                                                 Sd/-

MEMBER                                          MEMBER                                         PRESIDENT

             NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE

FOR COMPLAINANT:

            Ex.A1 is the Status Report of Policy no.683120095 Dt: 8.1.2007.

           Ex.A2 is the Status Report of Policy no.683805378 Dt: 2.7.2009.

           Ex.A3 is the Status Report of Policy no.683823216 Dt: 2.7.2009.

          Ex.A4 is the Xerox copy of F.I.R. Dt; 30.5.2008.

          Ex.A5 is the Xerox copy of Inquest Report Dt: 30.5.2008.

          Ex.A6 is the Xerox copy of P.M.E. Report Dt: 30.5.2008.

         Ex.A7 is the office copy of Legal Notice got issued by complainant     Dt: 23.7.2009.

        Ex.A8 is the receipt of professional courier Dt: 27.7.2009.

        Ex.A9 is the reply issued by the opposite party Dt: 28.7.2008.

FOR OPPOSITE PARTY:

          Ex.B1 is the original policy bond.

         Ex.B2 to B4 are the Status Reports of policy no. 683120095, 683805378  and 683823216.

 Sd/-                                                   Sd/-                                                 Sd/-

MEMBER                                          MEMBER                                         PRESIDENT