BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri K.V.H.Prasad, B.A., LL.B., President
Smt C.Preethi, M.A., LL.B., Member
Monday the 4th day of September, 2006
CC NO 27/2006
S. Neelamma, W/o. late Ranga Swamy alias Ranga Swamy Naik Aged about 25 years, Hindu,
Resident of H.No.49/50/A-52, now presently residing at H.No.49/1/45, Sreeram Nagar, Kurnool Town and District.
…Complainant
-Vs-
1. Life Insurance Corporation of India,
Rep. by its Divisional Manager, Kadapah.
2. The Superintendent of Police,
District Police Office, Kurnool. …Opposite parties,
This complaint coming on this for orders in the presence of Sri D. Siva Sankara Reddy, Advocate, Kurnool for complainant and Sri G.MD. Habeebur Rahiman, Advocate, Kurnool for opposite party No.1 and opposite party No.2 appeared by in person, and stood over for consideration till this day, the Forum made the following:-
O R D E R
(As per Smt C.Preethi, Member)
1. This Consumer Complaint of the complainant is filed U/S 12 of C.P. Act, 1986, seeking a direction on opposite parties to pay policy amount of Rs. 2,00,000/- with bonus, Rs.5,000/- as costs and any other relief or reliefs which the complainant is entitled in the circumstances of the case.
2. The brief facts of the complainant’s case is that the complainant is the nominee of the deceased Ranga Swamy @ Ranga Swamy Naik who has insured his life with opposite party No.1 under policy bearing No. 652740604 with monthly premium of Rs.493/-. The policy holder paid two installments and thereafter gave an under taking to “the Superintendent of Police “ (opposite party No.2) District Police Office, Kurnool to deduct the said premium every month from his salary and remit it to LIC (opposite party No.1). On 9.3.2005 the policy holder died in an accident near Thummala Bailu (V), Dornala (M) Prakasam Dist. After the death of policy holder the complainant approached opposite party No.1 and the opposite party No.1 addressed a letter stating that they have received initial two premiums only i.e 2/2004 and 3/2004 and the policy is in lapsed condition and nothing is payable under the policy and further informed that opposite party No.2 did not deduct the premium from the salary of the policy holder and remitted to opposite party No.1 Therefore there is no responsibility of the policy holder for the lapsed condition of the policy. Thereafter, the complainant got issued legal notice dt 22.8.2005 to opposite party No.1 and 2 and the opposite parties gave evasive reply escaping their liability. The above said lapsive conduct of opposite parties constrained the complainant to resort to the Forum for redressal
3. In support of her case the complainant relied on the following documents Viz (1) repudiated letter dt 27.7.2005 of opposite party No.1 addressed to the complainant(2) legal notice issued by complainant’s counsel dt 22.8.2005 to opposite parties 1and 2 (3) postal acknowledgement as to the receipt of Ex A.2 by opposite party No.1 (4) postal acknowledgement as to the receipt of Ex A.1 by opposite party No.2 (5) reply by opposite party No.1 dt 15.9.2005 (6) reply by opposite party No.2 dt 1.10.2005 and (7) death certificate of the deceased policy holder, besides to the sworn affidavit of the complainant in reiteration of her complaint averments and the above documents are marked as Ex A.1 to A.7 for its appreciation in this case. The complainant caused interrogatories to opposite parties 1 and 2 and suitablely replied to the interrogatories caused by opposite party No.1 and 2.
4. In pursuance to the notice of this Forum as to this case of the complainant the opposite party No.1 appeared through their standing counsel and opposite party No.2 appeared in person and contested the case by filling separate written versions.
5. The written version of opposite party No.1 admits the complainant’s husband has taken a policy for assured sum of Rs.1,00,000/- with 5.2.2004 as date of commencement under salary saving mode (monthly ) with premium of Rs.493/- and 2/04 and 3/4 premium paid as first premium and first year premium. After completion of the policy a letter of authorization for recovery of premium was sent to the employer of the policy holder i.e opposite party No.2. The death of the policy holder on 9.3.2005 was intimated by the nominee was received on 11.6.2005. The premium due from 4/04 on wards was not received by Kurnool branch office and the Kurnool branch office vide letter dt 27.7.05 informed the nominee that they have received initial two premiums and as on date of death of policy holder the policy is in lapsed condition and nothing is payable under the policy, as opposite party No.2 failed to remit premiums to opposite party No.1. As per policy condition No.2 a grace period of 15 days for monthly premium is allowed and if the premiums are not paid before the expiry of grace period allowed the policy lapses and lastly alleges that all the allegations leveled against opposite party No.1 are baseless and seeks for the dismissal of complaint with costs.
6. The written version of opposite party No.2 submits that after verifying the office records for the month of March and April 2004 no letter was received by the office from late PC 145 Sri Rangaswamy Naik. The undertaking letter addressed to the Superintendent of police Kurnool to deduct Rs. 493/- from the salary of Ranga Swamy every month under salary saving scheme for his LIC policy was not at all received by thier office, hence no recovery was made from this office to that effect. It further submits that employees making insurance should ensure themselves whether premiums are being paid in time by deducting from their salaries or not. The deceased policy holder received salaries from 4/04 to 2/05 with statement of drawals and recoveries in his pay slip and it his responsibility to watch whether his insurance premiums were recovered or not and if not he should brought to the notice of this office to deduct the premium and the deceased policy holder failed to do so during his life time and the District Police office could not recover premium from his salary and lastly submits that it has suitablely replied to the legal notice caused by the complainant and seeks for the dismissal of complaint.
7. The opposite parties in substantiation of their case relied on the following document Viz (1) Policy bond of the deceased (2) letter addressed toclaims department Kurnool to SSS department, Kurnool (3) complainant’s letter dt 29.4.2005 addressed to Branch Manager LIC, Kurnool (4) letter dt 21.2.2004 of NB department Guntakal to PS/ SSS Department LIC, Kurnool (5) Receipt bearing No. 0023467 for Rs. 986/- as to the payment two installments (6) proposal review slip dt 5.2.2004 (7) proposal of the deceased (8) office copy of letter of authorisation issued by P. Sr. Branch Manager to Superintendent of Police (9) Addendum of the application for Insurance under/SSS issued by policy holder (10) policy clause No.2 under/SSS (11) LIC agents confidential report (12) Acknowledgement as to the receipt of policy bond by policy holder dt 5.2.2004 and (13) office copy of repudiation letter dt 27.7.05, besides to the sworn affidavit of opposite party No.1 in reiteration of its written version averments and the above documents are marked as Ex B.1 to B.13 for its appreciation in this case. The opposite party No.1 caused interrogatories to the complainant and suitablely replied to the interrogatories caused by the complainant.
8. Hence, the point for consideration is to what relief the complainant is entitled alleging deficiency of service on opposite parties:
9. The facts of this case are not very much in serious dispute rather stands admitted which can be noticed with relative brevity. One S. Ranga Swamy who was working as policy constable No. 145 in opposite party No.2 office (Superintendent of Police, Kurnool) has taken a LIC policy bearing No. 652740604 from opposite party No.1 and he paid initial two premiums and later on changed the said policy into salary saving scheme by issuing a letter of authorization vide Ex B.8 to opposite party No.1 in turn to send it to opposite party No.2 for deducting premium of Rs.493/- from his salary and remit it to opposite party No.1. The said policy holder died on 9.3.2005 in an accident. On the claim preferred by the complainant the opposite party No.1 vide Ex A.1/B.13 repudiated stating that only initial two premiums i.e 2/04 and 3/04 are received and the policy is in lapsed condition and nothing is payable under the said policy.
10. The main contention of opposite party No.1 is that the Ex B.8 letter of authorization issued by the policy holder for deducting premium of Rs.493/- from his salary was sent to opposite party No.2 and inspite of issuing regular demand invoices the opposite party No.2 did not remit premium of Rs.493/- of the policy holder where as on the other side the written version of opposite party No.2 submits that after verifying their office records no letter i.e Ex B.8 was received by their office and further submits that they have not deducted the premium from the salary of policy holder and they have no intimation about the particulars of the policy taken by the deceased. While such is so, the opposite party No.1 admittedly know that the deceased. Ranga Swamy, after completion of the policy authorised his employer i.e opposite party No.2 (The Superintendent of Police, Kurnool) for deducting the premium from his salary and to remit the same to opposite party No.1 (LIC) and the said authorisation letter was submitted by the deceased policy holder to opposite party No.1 inturn to send the same to opposite party No.2, and the opposite party No.2 in their written version denied that no letter was received by their office for deducting premium and from the salary of the deceased policy holder. Hence, what appears is that the opposite party No.1 sat over the matter and did not made any endeavor to sent the letter of authorization issued by the policy holder to opposite party No.2 and no other cogent material is placed by the opposite party No.1 as to the receipt of Ex B.8 letter of authorization by opposite party No.2. Hence, it is gross negligence and carelessness on part of opposite party No.1, as a policy issuer should have taken necessary steps and a little endeavour to sent the Ex B.8 to opposite party No.2.
11. The other contention of opposite party No.1 is that the policy was in lapsed condition on the date of death of policy holder and it is for opposite party No.2 to remit premium regularly by deducting from the salary of the policy holder and remit to same to opposite party No.1. This stand taken by opposite party No.2 is unsustainable in the eye of law for the simple reason that amounts of premium from 4/04 should have been remitted to LIC by opposite party No.2, admittedly opposite party No.1 know that the deceased Ranga Swamy authoirsed opposite party No.2 to pay the premium and it was obligatory on part of opposite party No.1 to inform the insured or opposite party No.2 to pay the due premium or at least appropriate steps could have been taken in order to keep the policy alive. Hence, there arises deficiency of service on part of opposite party No.1 and opposite party No.1 is estopped from taking the plea that the policy is in lapsed condition on the date of death of policy holder.
12 In arriving at such conclusions, the observations adopted are made in the following decisions (1) LIC, Warangal and another Vs Komuravalli Rama Ratnam, reported in 2000(1) ALD (cons) Pg 25 held that LIC is estopped from raising the plea that policy lapsed after the death of the insured and after the claim is made. The insured should have been informed of the fact of the lapse of policy in which case he would have an opportunity to get the policy revived. The nominee cannot therefore be made to suffer for the default of Insurance Company (2) LIC of India Vs Davithamma and another, reported in III (1999) CPJ pg 353, held, that it is imperative on the part of LIC to bring to the notice of the insured that premium was not paid and held LIC guilty of deficiency of service and liable to make payment along with interest.
13. In the light of the discussions made supra and following the above mentioned decisions, there is clear deficiency of service on part of opposite party No.1 as opposite party No.1 failed miserable due to their gross negligence and carelessness in not bringing to the notice of the insured/ opposite party No.2 that the premium due is not remitted and the policy is in lapsed condition and opposite party No,1 is further estopped from raising the plea that the policy is in lapsed condition after the death of the policy holder and after the claim is made. If the insured have been informed of the fact of the lapse of the policy in which case he would have an opportunity to get the policy revived. The nominee cannot be therefore be made to suffer for the default of opposite party No.1. Thus, the opposite party No.1 cannot escape their liability and is liable to pay the insured amount to the complainant to which the complainant is perfectly remaining entitled. As no cause of action is made against opposite party No.2, the case against opposite party No.2 is dismissed for want of merit and force.
14. In the result, the case against opposite party No.2 is dismissed and the complaint is allowed directing the opposite party No.1 to pay to the complainant the assured amount with accidental benefit under policy bearing No. 652740604 with 12% interest per annum from the date of filling of this complaint i.e 8.3.2006 till realization along with costs of Rs.2,000/- within a month of receipt of this order.
Dictation to the Stenographer, transcribed by her, corrected and pronounced in the Open Court this the 4th day of September, 2006.
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant :Nil For the opposite parties :Nil
List of exhibits marked for the complainant:-
Ex.A1 Repudiation letter, dated 27.07.2005.
Ex.A2 Office copy of legal notice dated 22.08.2005 addressed to opposite party1 & 2.
Ex.A3 Postal Acknowledgement by opposite party1.
Ex.A4 Postal Acknowledgement by opposite party2 .
Ex.A5 Reply letter of opposite party No.1 dated 15.09.2005.
Ex.A6 Reply letter of opposite party No.2 dated 01.10.2005.
Ex.A7 Attested copy of death certificate (Form No.6).
List of exhibits marked for the opposite parties:-
Ex.B1 Policy bond (P.B.No.652740604, dated 05.02.2004 for 20 years assured sum
of Rs.1,00,000/- monthly premium of Rs.493/-.)
Ex.B2 Letter addressed by claims department, Kurnool to S.S.S. department
Kurnool.
Ex.B3 complainant letter, dated.29.04.2005 to Branch Manager LIC, Kurnool.
Ex.B4 Letter, dated 21.02.2004 addressed by NB department Guntakal to PS/SSS
department LIC, Kurnool.
Ex.B5 Receipt No.0023467 for Rs.986/- (towards two premiums).
Ex.B6 Proposal review slip dated 05.02.2004.
Ex.B7 Proposal for insurance on own life.
Ex.B8 Office copy letter of authorization issued by P.Sr. Branch Manager to S.P.
Kurnool.
Ex.B9 Addendum to the application for insurance under S.S.S. issued by policy
holder on 05.02.2004.
Ex.B10 Policy clause No.22.
Ex.B11 Agents confidential report dated 05.02.2004.
Ex.B12 Acknowledgement letter dated 05.02.2004 (Authorisation receipt issued by
policy holder)
Ex.B13 Office copy of repudiation letter dated 27.07.2005.
MEMBER PRESIDENT
Copy to:-
1. Sri D.Siva Shankara Reddy, Advocate, Kurnool.
2. Sri G.Md. Habeebur Rahiman, Advocate, Kurnool.
3. The Superintendent of Police, District Police Office, Kurnool.
Copy was made ready on:
Copy was dispatched on:
Copy was delivered to parties:
