BEFORE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
FATEHABAD.
Complaint No.: 42 of 2015
Instituted on: 24.03.2015
Date of order: 31.05.2016.
1. Smt. Kalawati wife of Late Mani Ram son of Sahi Ram, aged 65 years, 2. Puran Mal son of Late Mani Ram son of Sahi Ram (now deceased) through his legal heirs and representatives (a) Smt. Maya Devi wife of Late Puran Lal aged 29 years, (b) Baby Punam aged 10 years minor daughter of Late Puran Mal, (c) Master Sanjeev Kumar aged 8 years minor son of Late Puran Mal son of Sahi Ram, complainant No. b&c minors through their next friend and natural guardian mother Smt. Maya Devi i.e. complainants No.2A, (d) Smt. Kalawati wife of Late Mani Ram son of Sahi Ram aged 65 years (mother of Puran Mal), all residents of VPO Shekhupur Daroli, Tehsil and District Fatehabad.
3. Smt. Dayawanti daughter of Late Mani Ram son of Sahi Ram, aged 35 years (wife of Sadhu Ram son of Bhadar Chand) resident of village Gangwa, Tehsil and District Hisar.
….. Complainants.
Versus
1.Life Insurance Corporation of India, through its Branch Manager, Branch office Arorvansh Dharamshala Fatehabad, Tehsil & District Fatehabad.
2. Life Insurance Corporation of India, through its Senior Divisional Manager, Divisional Office SCO 3-4-5, Sector 1, Rohtak-124001 Tehsil & District Rohtak.
3. Life Insurance Corporation of India, Central Office Jiwan Bima Marg, Mumbai-400021 through its Chairman.
….Opposite parties.
Complaint U/s 12 of the Consumer Protection Act
BEFORE: Sh. Raghbir Singh, President.
Sh.R.S.Panghal, Member
Present: Shri R.K.Tayal, Advocate for the complainants.
Shri S.K. Dharnia, Advocate for the opposite parties.
ORDER:
Initially, the present complaint under Section 12 of the Consumer Protection Act, 1986 was filed by complainant Puran Mal against the opposite parties and after the death of Puran Mal complainant, Smt. Kalawati wife of late Mani Ram and legal heirs and representatives of said Puran Mal have been impleaded as complainants.
2. Briefly stated the facts of the present complaint are that Mani Ram son of Sahi Ram obtained a life insurance policy i.e. Jeevan Anand (with profits) with accidental benefits having No.178916718 for sum assured of Rs.4,75,000/-. It is further averred that policy was proposed on 25.9.2011 and requisite premium of Rs.22,490/- was paid to the opposite parties. However, the policy was commenced for risk from 28.4.2011. Puran Mal being the only son was appointed as nominee in the said policy, who also died on 25.7.2015. It is further averred that said Mani Ram policy holder had died due to electrocution on 4.10.2011 while he was in a process to switch off the motor of fetching water. The factum of death of Mani Ram due to electrocution is mentioned in death register of village by Asha worker and his death was also verified by the Sarpanch of the village. Thereafter, Puran Mal being the nominee of policy holder Mani Ram (now deceased) had applied for sum assured i.e.Rs.4,75,000/- with bonus and an additional sum equal to sum assured under this policy on account of accidental benefit with op no.1 as per terms and conditions. It is further averred that the matter was lingered on by the opposite parties as usual with the intent to repudiate the claim and ultimately vide letter dated 28.3.2013 received from op no.2, it was informed to the nominee Puran Mal that “We have decided to repudiate all liabilities under the policy because date of FPR is 05.10.2011. As per death certificate it is confirmed that Mani Ram son of Sahi died on 4.10.2011, i.e. at the time of death contract had not been established between insurer and insured as contract gets concluded on 5.10.2011 with date of FPR, hence, contract becomes null and void ab initioi.” It was further advised vide this letter that in case you disagree with the above decision and feel that you have not considered any particular facts and circumstances in support of your claim, you may send your representation within three months for reconsideration of your claim to Zonal office, New Delhi. It is further averred that thereafter, Puran Mal moved an application for reconsideration to the office of Zonal Manager of ops at New Delhi and received a letter dated 18.11.2013 from the office of op no.2 by which the claim was admitted on ex-gratia with this advise that if your are not satisfied, then you can file appeal before the Central Office, Mumbai. It is pertinent to mention here that the amount equal to sum assured i.e. Rs.4,75,000/- being ex-gratia was disbursed on 6.12.2013 after more than two years of the death of policy holder. Thereafter, Puran Mal also moved an application/ revision for reconsideration to Central Office, Mumbai and received a letter dated 13.10.2014 after about one year by which the accidental benefit was declined flatly. The so called decision taken by the opposite parties as conveyed to Puran Mal vide their repudiation letter dated 18.11.2013 and thereafter on 13.10.2014 is wholly wrong, incorrect against law and facts, void and is not at all binding on the valuable rights of the complainants in any manner. The complainants being the legal heirs and representatives have a legal right to recover an amount of Rs.4,75,000/- with vested bonus as per clause 10B of the terms and conditions of the policy in addition to sum assured with interest w.e.f expiry of one month of submitting the claim from to the opposite parties till realization. The complainants are entitled to payment of Rs.4,75,000/- alongwith interest @24% per annum w.e.f. expiry of one month of submitting the claim form with the ops. The opposite parties have not only acted as arbitrarily, but have also committed numerous illegalities causing much mental tensions, agonies, shock, pain and suffering. Not only this the complainants have also been put to special and general losses which are at present quantified to the tune of Rs.2lacs. The complainants are also entitled to special compensation of Rs.1,00,000/- from the opposite parties. Hence, this complaint.
3. Upon notice, opposite parties appeared and resisted the complaint by filing written statement and took certain preliminary objections that complainant has no cause of action and locus standi to file the present complaint; that present complaint is not maintainable in the present form; that complainant has not come to this Forum with clean hands and that complainant is stopped from filing the present complaint by his own act and conduct. On merits, it has been submitted that complainant is not entitled to get death benefit of Mani Ram because he had died on 4.10.2011, whereas the alleged first premium amount was deposited on 5.10.2011. As such, it clear that at the time of death of Mani Ram, contract had not been established between the insurer and the insured as contract was to be concluded on 5.10.2011 with the date of first premium receipt, hence the alleged contract was null and void abinitio. The competent authority has repudiated the claim under the policy as per the rules of the Corporation, because date of first premium receipt is 5.10.2011, whereas as per the death certificate, Mani Ram son of Sahi Ram died on 4.10.2011 and the repudiation letter was sent to the complainant. It has been further submitted that after that the complainant moved an application for reconsideration of his claim and the Zonal office has admitted the benefit of sum assured on ex-gratia basis and it was held that complainant is not entitled to get the accidental benefit as the facts and situation remained the same and accordingly the sum assured of Rs.4,75,000/- on ex-gratia basis has already been paid to the complainant. Remaining contents of the complaint have also been denied and controverted and prayer for dismissal of the complaint has been made.
4. The parties then led their respective evidence by way of affidavits and documents. The complainant Smt. Kalawati has tendered into evidence his affidavit as Ex.CW1/A. The complainants have also tendered documents as Annexures 1 to 10. On the other hand, opposite parties have tendered into evidence affidavit of Ms. Gurveen Kaur, Manager Legal as Annexure R1, affidavit of Sh. Vivek Kumar Saini, Deputy Manager as Annexure R2 and documents as Annexures R3 to R13.
5. Heard. The counsel for the complainant reiterated the averments made in the complaint and prayed for its acceptance whereas the counsel for OPs-Insurance Company reiterated the averments made in the reply and prayed for its dismissal. Learned counsel for the opposite parties has also relied upon judgment of the Hon’ble National Commission, New Delhi in cases titled as Manisha Haridas Gawande Vs. LIC of India Revision Petition No.4082 of 2012 decided on 12.9.2014 and LIC of India Versus Mrs. Bimala Routray II (1993) CPJ 146 (NC).
6. There is no dispute that Mani Ram (deceased) obtained an insurance policy bearing No.178916718 for sum assured of Rs.4,75,000/- from the opposite parties. From the facts of the case and document i.e. policy of insurance placed on file by the complainants as well as by the opposite parties as Annexure R6, it is evident that proposal for the insurance policy was made on 25.9.2011 and date of commencement of risk was 28.4.2011 and payable amount of premium was Rs.22,490/-. There is also no dispute that policy holder Mani Ram expired on 4.10.2011 and his son Puran Mal (since deceased) was his nominee in the said policy. According to the learned counsel for complainants, death of Mani Ram is accidental as he died due to electrocution on 4.10.2011 when he was switching off the motor and said fact is also mentioned in the death register of the village and is also verified by the Sarpanch of the village. According to the complainants, since Puran Mal (since deceased) nominee of Mani Ram has also expired on 25.7.2015, therefore, complainants Kalawati wife of late Mani Ram and Smt. Dayawanti daughter of late Mani Ram, wife and children of Puran Mal being his legal heirs are entitled to an additional sum equal to the sum assured i.e. Rs.4,75,000/- as per clause 10B of the policy. However, the opposite parties have only paid an amount of Rs.4,75,000/- to them as ex-gratia payment that too after a period of more than two years of the death of the policy holder. According to the opposite parties, the complainants are not entitled to get death benefit of Mani Ram because he had died on 4.10.2011 whereas the alleged first premium amount was deposited on 5.10.2011 and as such with the death of Mani Ram a day prior to deposit of first premium amount, contract has become null and void abinitio.
7. In the present case, no doubt the Mani Ram (since deceased) made proposal with the opposite parties to obtain Jeevan Anand (with profits) (with accident benefit) on 25.9.2011 and risk was to be commenced from 28.4.2011 but when the proposer Mani Ram unfortunately expired on 4.10.2011 although his death can be considered to be accidental death, the payment of first premium on 5.10.2011 carries no value. If the opposite parties would have been aware of the fact that Mani Ram has expired on 4.10.2011, they would not have accepted the premium on 5.10.2011. Learned counsel for the opposite parties also contended that even death of Mani Ram is not accidental as in the claim inquiry report Annexure R9, it is mentioned by the Investigator that Mani Ram was admitted in Jindal Hospital and he died there only on 4.10.2011 one day before FPR. He was ill for more than month and FPR on 5.10.2011 was to accept subject sign of LA on ECG whereas LA had already expired on 4.10.2011. Death certificate is manipulated and he did not die due to electric shock as claimed. According to the opposite parties, despite that they have already made payment of Rs.4,75,000/- i.e. sum assured on ex-gratia basis and complainants are not entitled to the accidental death benefit. There is nothing on record to show that Mani Ram was suffering from any disease for which he was admitted in Jindal Hospital, Hisar. No treatment record of Mani Ram in this regard has been placed on file. So, it is not proved on record that death of Mani Ram is not accidental. However, the plea of the opposite parties that since the first premium was paid on 5.10.2011, whereas deceased Mani Ram had expired on 4.10.2011, so the contract has become null and void abinitio has substance. In this regard we are also fortified with the observations of the Hon’ble National Commission in case titled as Manisha Haridas Gawande Vs. LIC of India (supra) wherein it has been observed as under:-
“ In this case, the proposal form was furnished by the insured on 26.2.1997. The said proposal was accepted on 27.3.1997. Unfortunately, the insured died on 24.3.1997, that is prior to acceptance of his proposal. The time taken by the insurance company for acceptance of proposal is 29 days. The insurance company repudiated the claim on the ground that there was no concluded contract. The District Forum accepted the complaint. However, the State Commission accepted the appeal filed by the insurance company and dismissed the complaint of the complainant. We have heard the learned counsel for the parties. Learned counsel for the complainant/ petitioner has invited our attention towards 5 authorities, which are reported in Life Insurance Corporation of India & Ors. Vs. Rakshna Devi, IV (2005) CPJ 214 (NC), ICICI Prudential Life Insurance Company Ltd. Vs. Bimal Kanta Kharab I (2013) CPJ 155 (NC), Life Insurance Corporation of India vs. Mrs. V. Jeeva decided on 16.2.1995 by this Commission reported in IV 1995(1) 838, Gita Devi Aggarwala Vs. Chairman, LIC & Ors. II (2008) CPJ 375 (NC) and the last authority decided by this Bench in the case of Branch Manager (Legal) Vs. C.P.Sinha, 2013 NCJ 15 (NC) decided on 4.3.2008 wherein this Bench has held that the insurance starts the moment when the cheque of premium is accepted. All these authorities are not applicable to the facts of this case. So far as the case decided by this Bench in Branch Manager (Legal) Vs. C.P.Sinha (supra), we had made the said remarks because there was inordinate delay of more than two years. In other cases too, there was inordinate delay and thereafter, the case of the complainant was allowed. If there is abnormal delay caused by the officer and staff of the insurance company in communicating the acceptance of the insurance policy, only in that case, the above said authorities will be applicable. In the instant case, there is delay of only 29 days. By no stretch of imagination, it can be said to be an inordinate or abnormal delay. Consequently, we hold that the repudiation of the claim is valid. The revision petition is lame of strength, therefore, the same is hereby dismissed.”
Similarly, in another judgment titled as LIC of India Vs. Mrs. Bimala Routray (supra), the Hon’ble National Commission has held that “Consumer Protection Act, 1986- Section 21- Appeal- Insurance- Contract- Insured made proposal to Corporation on 22.2.1987- Premium paid on 11.3.1987- Proposal papers submitted on 14.3.87- On 19.3.87 proposal was accepted- Policy issued covering risk from 27.3.87- On 15.3.87 proposer died- Whether there is concluded contract of insurance? -No.”
8. In the present case also, as the premium was paid on 5.10.2011, but Mani Ram (since deceased) proposer died one day prior to deposit of premium i.e. on 4.10.2011, the contract cannot be said to have been started and comes to an end automatically because the insurance company cannot receive the premium on behalf of an already dead person. The opposite parties have already refunded an amount of Rs.4,75,000/- i.e. sum assured to the original complainant and nominee Puran Mal as ex-gratia payment. So, the complainants are not entitled to the accidental benefit of deceased Mani Ram.
9. Learned counsel for the complainants has contended that opposite parties have paid the amount of Rs.4,75,000/- to Puran Mal very late i.e. after a period of more than two years, so they be directed to pay adequate interest on the above said amount from the date of filing of claim till actual realization. On the other hand learned counsel for the opposite parties contended that delay in payment of ex-gratia claim is justified and due to the fact that Puran Mal was filing applications/ revision before the competent authorities of the opposite parties. In our opinion, the complainants are not entitled to any interest on the ex-gratia amount of Rs.4,75,000/- as Puran Mal himself filed application/ revision for reconsideration to pay an additional amount up to Central Office Mumbai and that can be the reason for delay in payment of ex-gratia claim. Moreover, Clause 3.1 of Claim Manual for Ex-gratia claims reads as under:-
“ Ex-gratia payment of claims would arise where there is no legal liability on the Corporation to make payment as in the case of a repudiated claim or uncluded contract (imcomplete Proposal). Though there is no legal liability on the Corporation to pay the claim, in order to mitigate hardship to the claimants, payment by way of equitable relief may be considered. Ex-gratia payment can be considered only in full and final settlement of the claim under the policy, without attaching any condition by the claimant.”
10. In view of the above said clause, the complainants cannot claim interest on the ex-gratia amount of Rs.4,75,000/- as a matter of right. The net result of our above discussion is that there is no merit in the present complaint and same is hereby dismissed. File be consigned to the record room after due compliance.
Announced in open Forum.
Dated: 31.05.2016.
(Raghbir Singh)
President
(Ranbir Singh Panghal) Distt.Consumer Disputes
Member, Redressal Forum, Fatehabad.
