DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA (PUNJAB)<br /> <br /> CC No. 241 of 22.08.2007<br /> Decided on : 04-02-2008 <br /> <br /> Laxmi Kaur @Lachhmi Kaur Wd/o Satnam Singh, R/o # 7576 Guru Nanak Pura Mohalla, Near Kali Mata Mandir, Bathinda.<br /> ... Complainant<br /> Versus<br /> <br /> 1.Life Insurance Corporation of India, Bibi Wala aRoad, Bathinda, through its Branch Manager.<br /> 2.Life Insurance Corporation of India Branch Office, Sri Ganga Nagar-II, through its Branch Manager.<br /> 3.Life Insurance Corporation of India, Branch Office, Patiala-II, through its Branch Manager.<br /> 4.Life Insurance Corporation of India, Divisional Office, Sector 17, Chandigarh through its Sr. Divisional Manager.<br /> 5.Station Superintendent Northern Railway Station, Bathinda.<br /> 6.C. Section Er. (Signal) Northern Railway, Railway Station, Bathinda.<br /> 7.Divisional Railway Manager, Northern Railway, Ambala Division, Ambala.<br /> <br /> ...Opposite parties<br /> <br /> Complaint under Section 12 of the Consumer Protection<br /> Act, 1986.<br /> <br /> QUORUM :<br /> Sh. Lakhbir Singh, President<br /> Sh. Hira Lal Kumar, Member<br /> Dr. Phulinder Preet, Member<br /> <br /> For the Complainant : Sh. Naresh Garg, Advocate.<br /> For the Opposite parties : Sh.Sanjay Goyal, Advocate, counsel for opposite parties No. 1 to 4. <br /> Sh.M.L. Garg, Advocate, counsel for opposite parties No. 5 to 7.<br /> <br /> <br /> <br /> O R D E R <br /> LAKHBIR SINGH, PRESIDENT <br /> 1. Complainant is the widow of Satnam Singh who was the Railway employee and was working under opposite party No. 6. He had purchased one Insurance Policy No. 500668364 of Rs. 75,000/- from opposite parties No. 1 to 4. Policy was issued by opposite party No. 2. Installment of the premium was Rs. 463/- per month. Policy was issued under Salary Savings Scheme. Opposite parties No. 1 to 4 and the assured had given intimation of the policy to opposite parties No. 5 to 7 about payment of the monthly premium by way of deducting it from his salary. Complainant was declared by the assured as his nominee. It is averred by her that on 12.3.06 her husband has died a natural death at Bathinda. Representation was made by her to the opposite parties to make payment of the assured amount alongwith benefits. Inquiries were made from opposite parties No. 3 and 5 to 7 about the insurance claim amount but no satisfactory reply was given. Letter dated 28.6.07 was received by her from opposite party No. 4 vide which opposite parties No. 1 to 4 have rejected the claim on the grounds that it is not payable as policy was lying lapsed due to non-payment of the monthly premium and the assured deliberately misstated and concealed material information about his health. It is added by her that it was the duty of opposite parties No. 1 to 4 to get the premium directly from opposite parties No. 5 to 7. Similarly it was the duty of opposite parties No. 5 to 7 to deduct the premium from the salary of the assured and deposit the same every month with opposite parties No. 1 to 4 as per agreement with the assured. According to her the assured was having good health at the time of issuance of the insurance policy and was not suffering from any ailment. Before issuing the policy, opposite parties No. 1 to 4 had got him medically examined from their empanelled doctor. His complete service record was also obtained. She assails the repudiation as illegal, null and void and against principles of natural justice. Request was made by her to the opposite parties to pay the due amount alongwith interest @ 18% P.A. but to no effect. In these circumstances complaint has been filed by her under Section 12 of the Consumer Protection Act, 1986 (Here-in-after referred to as 'Act') alleging deficiency in service seeking direction from this Forum to the opposite parties to pay her claim amount i.e. Rs. 75,000/- alongwith bonus and interest @ 18% P.A. from the date of death of the assured till payment; Rs. 10,000/- as damages for mental agony and pains and Rs. 5,000/- as cost of the complaint.<br /> 2. Opposite parties No. 1 to 4 filed their version taking legal objections that this Forum has got no territorial jurisdiction to entertain and try the complaint; complainant has not come with clean hands and complaint is false and frivolous. On merits, they admit that Insurance policy was purchased by Satnam Singh at Sri Ganga Nagar on 20.8.04. Monthly premium was Rs. 463/-. Insurance policy was issued under Salary Savings Scheme. They and assured had informed opposite parties No. 5 to 7 about Insurance policy. Monthly premium amount was to be paid by them (Opposite parties No. 5 to 7) after deducting the same from the salary of the assured. Complainant was declared as nominee. They admit the death of the assured. They deny that his death was natural. According to them, he has died after prolonged illness. At the time of death of Satnam Singh Insurance policy was lying lapsed due to non payment of the monthly premium installments due on 11/2004, 1/2005, 2/2005 and 3/2005 without acquiring any paid up value on the date of death of assured i.e 12.3.06. Nothing was payable under the policy. Assured died within a period of one year, six months and 22 days from the date of proposal i.e. 15.8.04. Before taking the policy, he had taken treatment from Railways Hospitals at Bathinda and Ambala. He also remained on sick leave from time to time. He had knowledge of his pre-proposal illness. He did not disclose it at the time of taking the policy. He was suffering from Tuberculosis and had taken treatment for the same from 3.12.2003 to 10.12.2003. He was diagnosed as patient of Pulmonary TB/Tuberculosis, Cirrhosis C enclepathy. He was also found to be drug addict. He had also undergone various pathological tests i.e. TLC, DLC, CSR, Blood Sugar, Urea, Uric Acid, Chest X-ray, PA View etc., at Divisional Hospital of Railways. As per record of the employer, he was not keeping good health since 23.12.2000 and had taken treatment. He had availed leave of 90 days on medical grounds for the period from 6.2.01 to 6.5.01. These facts were not disclosed by him in the proposal form dated 15.8.04. In this manner, he made deliberate mis-statement and concealed material facts regarding his health. Claim has been rightly repudiated. They deny that it was their duty to collect the premium from opposite parties No. 5 to 7. Rather it was the duty of the assured to ensure the deposit/payment of the monthly installment of premium or of his employer. They deny deficiency in service and other averments in the complaint.<br /> 3. Reply of the complaint was filed by opposite parties No. 5 to 7 assailing the maintainability of the complaint and locus standi of the complainant to file it. According to them, complainant is not consumer; She has concealed the material facts from this Forum and complaint is false and frivolous. They admit that Satnam Singh was employee of opposite party No. 6 and was working as Box Porter. Vide order dated 13.8.03, he was posted as signal Khalasi at Abohar. Representation dated 25.3.04 was made by him to the effect that he was unable to join his duty at Abohar due to illness and that he be posted as Chowkidar at Bathinda. His request was acceded vide order dated 23.4.04 for posting him as Signal Khalasi at Bathinda. He was relieved on 30.4.04. As per authorisation letter monthly premium was Rs. 463/-. They deny that opposite parties had given anything in writing for making payment of the monthly Insurance premium after deducting it from the salary of the assured. Rather assured himself had requested and given authorisation letter to them stating that policy was taken by him from opposite parties No. 1 to 4 under Salary Savings Scheme. Opposite party No. 6 was authorised by him to deduct the amount of monthly premium for payment to the Life Insurance Corporation. He had agreed that their (opposite parties No. 5 to 7's) liability would be confined of making arrangement for deduction of premium from his salary and that he would be entirely responsible for any consequences on account of non-payment of premium of his policy for reasons beyond their control such as in the event of his proceeding on leave without pay. In such cases, it was his responsibility for making arrangement for remitting the premium directly to the Life Insurance Corporation to prevent the policy from lapsing. In this case, assured was on leave due to sickness for the period 11/2004 to 3/2005 and 2/2006. There was no leave to his credit and as such, leave was without pay. No salary was due for the period from 11/2004 to 3/2005 and 2/2006. Accordingly they could not make any deduction for this period. As per authorisation letter, it was for the assured to make the payment of premium directly to the Life Insurance Corporation himself. They admit that Satnam Singh has died on 12.3.2006. They deny that there was an agreement between them and the assured. Premium was to be paid by them to opposite parties No. 1 to 4 as per authorisation letter. They do not admit the remaining averments in the complaint.<br /> 4. In support of her averments contained in the complaint, complainant has produced in evidence her two affidavits (Ex. C-1 & Ex. C-8), photocopy of Death Certificate of Satnam Singh (Ex. C-2), photocopy of salary sheet (Ex. C-3), photocopy of Policy (Ex. C-4), photocopy of letter dated 28.6.07 (Ex. C-5), photocopy of policy with conditions (Ex. C-6) and photocopy of Proposal Form (Ex. C-7).<br /> 5. In rebuttal, on behalf of opposite parties No. 1 to 4 affidavit of Sh. J.P. Arya, Manager, Legal and H.P.F. Dated 20.11.07 (Ex. R-7), photocopy of Inquiry report (eight pages) (Ex. R-8), photocopies of medical/treatment record (Ex. R-9 to Ex. R-12), photocopy of statement of Sh. Lachman Dass (Ex. R-13), photocopy of statement of Dharm Pal (Ex. R-14), photocopy of letter dated 2.5.01 (Ex. R-15), photocopies of two applications (Ex. R-16 & Ex. R-17), photocopy of Medical Certificate dated 26.4.05 (Ex. R-18), photocopies of Medical test reports (Ex. R-19 & Ex. R-20), photocopy of Medical/Treatment report (Ex. R-21), photocopy of Status Report of Policy (Ex. R-22), photocopy of Form No. 3816/Certificate of Hospital treatment (Four pages) (Ex. R-23), photocopy of certificate of employer of leave record (Ex. R-24) and on behalf of opposite parties No. 5 to 7 affidavit of Sh. D.K. Singh (Ex. R-1), photocopies of letters 13.8.03, 23.4.04, 27.4.05, 25.3.04 (Ex. R-2 to Ex. R-5 respectively ) and photocopy of Authorisation letter (Ex. R-6) have been tendered in evidence.<br /> 6. We have heard learned counsel for the parties. Besides this, we have gone through the record and written brief of arguments submitted on behalf of opposite parties No. 5 to 7.<br /> 7. Some facts do not remain in dispute. They are that Satnam Singh was the husband of the complainant. He had purchased Life Insurance Policy copy of which is Ex. C-4. It was under Salary Saving Scheme. Amount assured was Rs. 75,000/-. Complainant was appointed by him as his nominee. Satnam Singh has since died on 12.3.06. Copy of this Death Certificate is Ex. C-2. Insurance claim submitted by the complainant has been repudiated by opposite parties No. 1 to 4 vide letter dated 28.6.07, copy of which is Ex. C-5 on the grounds that insurance policy was lying lapsed due to non-payment of monthly premiums due on 11/2004, 01/2005, 02/2005 and 3/2005 without acquiring any paid up value on the date of death i.e. 12.3.06 and that assured was not keeping good health before the date of proposal i.e. 15.8.04 and about 3 years 2 months prior to the date of proposal, he had suffered from Pulmonary Tuberculosis for which he had consulted a medical man and had taken treatment in a hospital and had availed leave on medical grounds for 90 days during the period of 6.2.01 to 6.5.01 and that these facts were not disclosed in the proposal and that he had made deliberate misstatement and had concealed material information about his health at the time of insurance.<br /> 8. Material question for determination is as to whether repudiation of the insurance claim is legal or valid ?<br /> 9. Mr. Garg, learned counsel for the complainant argued that a sum of Rs. 463/- was being deducted from the salary of deceased Satnam Singh as is clear from the copy of the salary sheet. It was the duty of opposite parties No. 1 to 4 to get the premium directly from opposite parties No. 5 to 7. Similarly it was the duty of opposite parties No. 5 to 7 to deduct the premium from the salary of the assured for depositing the same every month with opposite parties No. 1 to 4 as per their agreement between the employer and the insurer. He further argued that status report regarding Policy No. 500668364, copy of which is Ex. R-22 has been obtained subsequently. His next contention is that authorisation letter copy of which is Ex. R-6 was not read over and explained to the assured. No notice was issued to the assured by opposite parties No. 1 to 4 or by the employer.<br /> 10. Learned counsel for the opposite parties 1 to 4 argued that there was no agreement between opposite parties No. 1 to 4 and the employer regarding monthly premium of the policy obtained by the assured.<br /> 11. Learned counsel for opposite parties No. 5 to 7 submitted that opposite parties No. 5 to 7 were not liable to send the premium to opposite parties No. 1 to 4 as the salary was not disbursed to the assured on account of the fact that leave was not due to him and he was on leave without pay.<br /> 12. We have considered the respective arguments and we feel ourselves inclined to agree with the learned counsel for the opposite parties. Learned counsel for the complainant failed to show us any agreement between opposite parties No. 1 to 4 and the employer concerning the liability of the employee regarding the sending of the monthly insurance premium in each and every eventuality. So far as the policy, copy of which is Ex. C-4 is concerned, it was purchased by the assured. Ex. R-4 is the copy of the application of the assured which has been addressed by him to his employer. A perusal of the same reveals that he had applied for leave without pay from 2.11.04 to 26.4.05 i.e. for 176 days. This without pay leave was sanctioned to him. Complainant cannot wriggle out of the situation by saying that authorisation letter given by the assured to his employer was not binding upon him. Through authorisation letter, assured had agreed that liability of the employers would be confined to make arrangement for deduction of the premium amount from his salary whenever this can be made and remitting the amount of eduction to the Life Insurance Corporation in time. He further undertook that it would be entirely his responsibility for any consequences on account of non payment of premium of his policy for reasons beyond the control of employer such as in the even of his proceeding on leave without pay or his drawing advance salary without deduction of premium per chance of his withdrawing his authorisation by a due notice to him and to the Life Insurance Corporation after the minimum period of his being transferred to any office where the salary saving scheme has not been introduced or his being transferred on promotion to any gazetted post where the salary saving scheme is not operative or his leaving present service. In any such case of withdrawl of salary saving scheme with the employer by Life Insurance Corporation of India for any reason whatsoever, it would be his responsibility to make arrangement for remittance of premium directly to the Life Insurance Corporation of India to prevent his policy from lapsing. Plea of the complainant that opposite parties No. 1 to 4 had given writing to opposite parties No. 5 to 7 does not stand substantiated. In this case deceased Satnam Singh was on leave due to sickness for the period from 11/04 to 3/05 and 2/06. There was no leave at his credit. He was on leave without pay. No salary was due for the period from 11/04 to 3/05. It being so, opposite parties No. 5 to 7 could not make any deduction from his salary for this period. As per authorisation letter, it was the duty of the deceased to make payment of the premium directly to opposite parties No. 1 to 4. In the facts and circumstances of this case, employer cannot be treated even impliedly as an agent of the Life Insurance Corporation of India. Due to the non payment of the monthly premiums due on 11/04, 1/05, 2/05 and 3/05 , Insurance policy purchased by the assured was lying elapsed without acquiring any paid up value on the date of death i.e. 12.3.06. Accordingly, repudiation of the claim on this ground is certainly legal and valid.<br /> 13. Another ground for repudiation of the claim is that assured made deliberate mis-statement and concealed material information about his health in the proposal dated 15.8.04. Submission of Mr. Garg, learned counsel for the complainant is that mere concealment of some facts does not amount to concealment of material facts. Repudiation cannot stand when there is no nexus between the cause of death and the alleged disease. For this, he drew our attention to the authorities Life Insurance Corporation of India and Another Vs. Geri Devi I(2007) CPJ 371 , Life Insurance Corporation of India Vs. Kamla Devi Gupta I(2007) CPJ 226 (NC) and New India Assurance Company Limited & Others Vs Raj Kumar Chuchra III(2007) CPJ 320 (NC).<br /> 14. Mr. Goyal, learned counsel for opposite parties No. 1 to 4 countered the arguments of the learned counsel for the complainant by submitting that complainant had purchased Insurance Policy on 20.8.04 on the basis of proposal dated 15.8.04. Before taking the policy, assured had taken treatment from Railway Hospitals at Bathinda and Ambala . He had remained on sick leave from time to time. He had knowledge of pre proposal illness. He did not disclose the same at the time of taking the policy. He was suffering from T.B. and had taken treatment. He was not keeping good health. Moreover, there is nexus between the cause of death and the disease from which he was suffering.<br /> 15. Thoughtful consideration have been given by us to the rival arguments advanced by the learned counsel for the parties. Ex. R-9 is the copy of the Outdoor Ticket dated 23.2.2000 concerning the assured. A perusal of this document reveals that he was getting treatment. Ex. R-10 is the Outdoor Patient Record of the assured which shows that treatment was taken by him. Various tests were also advised. He was suffering from Chronic Obstructive Pulmonary Disease. Ex. R-11 is the copy of the Medical Treatment Record of the assured in the year 2002. From Ex. R-12 it becomes evident that assured had got medical treatment from 3.12.03 to 10.12.03 and he remained admitted in the Hospital due to Pulmonary Tuberculosis (T.B.). Copies of the statement of S/Sh. Lachman Dass and Dharam Pal which are Ex. R-13 & Ex. R-14 also show that he was suffering from this disease. Leave of 90 days was recommended to him from 5.2.01 on account of his illness as is clear from Ex. R-15. It was further made clear that no leave of any kind was due to him. Even assured himself had moved application, copy of which is Ex. R-16, to the Divisional Personnel Officer, Northern Railway, Ambala Cantt that he was on sick list and was on leave. Various tests were got conducted by him as is obvious from Ex. R-19. Dr. Rajeev Gupta vide his report dated 30-11-04, copy of which is Ex. R-20 gave the opinion that findings suggest Chronic Bronchitis with Fibrotic Bands in Lung fields with partial collapse of right Lung and Bullae formation in right middle zone and right lower zone. He also got treatment from Railway Divisional Hospital Ambala concerning Chronic Obstructive Pulmonary Disease( COPD). Ex. R-21 is the copy of letter dated 29.11.04 of the Medical Officer. Certificate of the Hospital treatment is Ex. R-23. It also makes the position crystal clear about the disease from which the assured was suffering. It was Chronic Obstructive Pulmonary Disease with acute exacerbation. He was discharged from the hospital on 6.3.06. His condition had deteriorated within a few days. Ex. R-24 is the copy of the certificate given by the employer of the assured. It is evident that assured was availing leave due to sickness much prior to obtaining the policy and continued suffering from the disease. He did not disclose this information to opposite parties No. 1 & 4 in the proposal dated 15.8.04. From the facts, circumstances and the evidence, it is established that assured had concealed the disease from which he was suffering while taking the policy. It being so, repudiation of the claim for concealment of the disease is justified as there is violation of the terms and conditions of the policy. For this, we are fortified by the observations of the Hon'ble State Commission, Punjab in the case of Life Insurance Corporation of India Vs. Smt. Nirmala Devi 1997(2) CPC 447 and of Hon'ble National Commission in the case of Goparatnam & Others Vs. LIC of India & Ors. 2006(1) CPC 364. With utmost regard and humility to the authorities relied upon by the complainant, they are distinguishable on facts.<br /> 16. In view of our foregoing discussion, crux of the matter is that repudiation of the claim made by opposite parties No. 1 to 4 is certainly legal and valid. In view of this and as per discussion made above, there is no deficiency in service on the part of the opposite parties. Accordingly complaint is dismissed. Parties are left to bear their own costs.<br /> Copy of this order be sent to the parties concerned free of cost and file be consigned to record room. <br /> Pronounced :<br /> 04-02-2008 (Lakhbir Singh )<br /> President<br /> <br /> <br /> (Dr. Phulinder Preet) (Hira Lal Kumar)<br /> Member Member <br />