Punjab

Faridkot

CC/19/46

Shinder Kaur - Complainant(s)

Versus

Life Insurance Corporation of India - Opp.Party(s)

Jagjot Singh Attri

13 Nov 2019

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

C.C. No. :                 46 of 2019

Date of Institution:    22.02.2019

Date of Decision :     13.11.2019

 

Shinder Kaur aged about 52 years, wife of Late Dara Singh resident of Street No.1, Sanjay Basti, Faridkot District Faridkot.                                           

                                                                                              ...Complainant

Versus

1. The Life Insurance Corporation of India, Division Office, Jallandhar, through its Divisional Manager. 144001.
2. The Life Insurance Corporation of India, Branch Office at Faridkot through its Branch Manager. 151203.

                                                                      .............OPs

Complaint under Section 12 of the

Consumer Protection Act, 1986.

 

Quorum: Sh. Ajit Aggarwal, President,

               Smt Param Pal Kaur, Member.

 

Present: Sh Rahul Bansal, Ld Counsel for Complainant,

              Sh Ashok Monga, Ld Counsel for OPs.

 

 

ORDER

(Ajit Aggarwal, President)

                                       Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against  OPs seeking directions to OPs to make payment of insurance claim

 

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with interest and for further directing OPs to pay Rs.1,00,000/- as compensation for deficiency in service and harassment alongwith litigation expenses of Rs.10,000/-.

2                                              Briefly stated, the case of the complainant is that husband of complainant was a government employee in Food Corporation of India and during his life time he purchased Insurance Policy under the Salary Saving Scheme from the agent of OP-1 and Policy bearing no.132474402 was issued to her husband Dara Singh and complainant was nominee in that insurance policy. Commencement of risk started from 28.09.2015 and sum assured under Policy in question was Rs.2,00,000/-. OPs obtained authorization from her husband for deduction of premium from his salary and till his death, premium was continued to be deducted from the salary of her husband. It is further submitted that till the death of husband of complainant, premium amount was going to be continuously deducted from his salary account by the OPs regularly. Husband of complainant died on 25.02.2018 and after his death, complainant completed all formalities and submitted requisite documents with them for processing the insurance claim on account of death of her husband, but Ops refused to pay the insurance claim for the reasons best known to them. Complainant made several requests to Ops to make payment of insurance claim and also sent legal notice dated 10.12.2018, but all in vain and OPs did not do anything needful. All this amounts to deficiency in service and has caused huge harassment and mental agony to her. Complainant has prayed for directing the OPs to

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pay Rs.1,00,000/- as compensation for harassment alongwith litigation expenses of Rs.10,000/- besides the main relief. Hence, the instant complaint.

3                                    The counsel for complainant was heard with regard to admission of the complaint and vide order dated 27.02.2019, complaint was admitted and notice was ordered to be issued to the opposite parties.

4                                On receipt of the notice, the OPs filed written statement taking preliminary objections that as per terms and conditions of the Insurance Policy in question and as per Claims Manual Provisions, complainant is not entitled for any claim and complaint filed by him is liable to be dismissed. It is averred that life assured did not make payment of premium for 11/2015 and policy in question was lying in lapsed condition. Claim lodged by complainant is an Early Death Claim and no relaxation is allowed under new plan as per Claims Manual Provisions. It is averred that complainant did not pay the premium regularly and this fact was duly conveyed to claimant on 25.10.2018. It is averred that complaint involves complicated questions of law and facts requiring lengthy evidence, which is not permissible in the summary proceedings of this Forum. Complainant has concealed the material fact from this Forum and complaint filed by her is vague and discloses no action. However, on merits Ops have denied all the allegations of complainant being wrong and incorrect but admitted

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before the Forum that deceased husband of complainant was insured with them under policy in question with date of commencement of risk from 28.09.2015 and complainant was nominee in that policy. It is also admitted by Ops that premium was being deducted from the salary of Dara Singh deceased husband of complainant and was being deposited by the employer, but they have denied that anything is payable to complainant on account of insurance policy in question and reiterated the same pleadings taken in preliminary  objections that due to gap in payment of premium of November, 2015 policy in question is lying in lapsed mode and therefore, complainant is not entitled for any claim under this Policy. It is further averred that there is no deficiency in service on their part and prayed for dismissal of complaint with costs.

5                                     Parties were given proper opportunities to prove their respective case. Counsel for complainant tendered in evidence affidavit of complainant Ex.C-1 and documents Ex C-2 to C-7 and then, closed their evidence.

6                                    In order to rebut the evidence of the complainant, Counsel for OPs tendered in evidence affidavit of R K Verma Ex OP-1 and documents Ex OP-2 to 6 and then, closed the evidence.  

7                                    We have heard the ld counsel for complainant as well as OPs and have carefully gone through evidence and documents placed on record by respective parties.

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8                                    Ld Counsel for complainant vehementally argued that husband of complainant, who was a government employee, purchased insurance policy from OPs under the Salary Saving Scheme. Policy bearing no.132474402 was issued in the name of Dara Singh deceased husband of complainant and premium was to be deducted from his salary and complainant was nominee in said insurance policy. Commencement of risk started from 28.09.2015 for sum assured of Rs.2,00,000/-.OPs obtained authorization from her husband for deduction of premium from his salary and till his death, premium was continued to be deducted from his salary and policy in question never lapsed and even no intimation was ever given by OPs to her deceased husband regarding lapse of said policy. During the subsistence of policy in question, husband of complainant died on 25.02.2018 and after his death, she completed all formalities and submitted requisite documents with them for processing the insurance claim on account of death of her husband, but despite several requests and issuance of legal notice, OPs did not pay any heed to clear the insurance claim on the ground that policy premium was not deposited, which amounts to deficiency in service and has caused harassment to him. He has prayed for accepting the present complaint.

9                                     To controvert the allegations of complainant, ld counsel for OPs asserted that as per terms and conditions of the Insurance Policy and as per Claims Manual Provisions, complainant is not entitled for any claim because there is a gap of November, 2015

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when life assured did not pay the premium amount and policy in question is lying in lapsed mode. Claim lodged by complainant is an Early Death Claim and as per Claims Manual Provisions, no relaxation is allowed under new plan. Though it is admitted that Dara Singh deceased husband of complainant was insured with them under policy in question  and it is also admitted that premium was being deducted from the salary of Dara Singh, but have denied that anything is payable to claimant on account of insurance claim. It is further argued that there is no deficiency in service on their part and prayed for dismissal of complaint.

10                                              From the carful perusal of record and evidence produced by respective parties, it is observed that grievance of the complainant is that despite repeated requests and issuance of legal notice to OPs, they have not passed genuine insurance claim on account of death of her husband, who was insured with Ops under policy in question and he authorised Ops to deduct premium amount regularly against said policy from his salary. On the other hand plea taken by Ops is that there is a gap in payment of premium and policy issued to her husband is in lapsed mode. Due to non-payment of premium of November, 2015 and as per Claims Manual Provisions, complainant is not entitled to relief sought by her. To prove his pleadings, ld counsel for complainant has relied upon Ex C-4 which is copy of LIC Recovery Report for the period from September, 2015 to February, 2018 and it is a very cogent and vital document to prove the pleadings of complainant.

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Bare perusal of this document reveals the fact that premium amount was used to be regularly deducted by Ops from the salary of life assured till his death and there is no gap in payment of premiums on the part of deceased life assured. There is no doubt and it is admitted by OPs that Insurance Policy was purchased by Dara Singh during his life time and Authorization Letter Ex OP-3 placed on record by Ops themselves proves the fact that deceased life assured gave authority for deduction of premium from his salary account. Ex C-5 is copy of legal notice issued by complainant. From Ex C-4 copy of LIC Recovery Report, it is clear that there is gap of only one premium in said policy, but policy is continue and there is no recital that policy is ever in lapsed stage.

11                                     The Ld Counsel for complainant argued that husband of complainant purchased the policy in question under Salary Saving Scheme in which monthly instalment of premiums was to be deducted by the employer of the deceased Dara Singh from his salary and was to be paid to Ops. The Deceased Life Assured Dara Singh duly authorized his employer to deduct the premiums from his salary and to deposit the same with Ops and as per scheme, every month employer of Dara Singh DLA kept deducting the premiums from his salary and deposited with the OPs. If there is any gap in the deposit of premium then, Ops should have to inform regarding it to husband of complainant or his employer before receiving the subsequent premiums but in the present case, they neither informed life assured nor to his employer that there is gap in the payment of premium for the month of November,

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2015. The Ops received subsequent premiums from the employer of complainant without any objection. They did not bother to give any intimation regarding this gap either to the employer of DLA/Dara Singh or to life assured and kept receiving the subsequent premiums without any objection. So, now at this stage, they cannot deny the payment of insurance claim on the ground of gap in the premium which is not demanded by them during the life time of the deceased life assured Dara Singh. Even as per terms and conditions and rules and regulations of Ops, if there is any default in the payment of premiums then, in that case, they have to give notice to the concerned parties before lapse of the policy but in this case, they have not issued any notice to the deceased life assured Dara Singh or his employer. Even as per status of the policy, it is mentioned that there is gap in the premium but there is no recital that policy is in lapsed mode.

12                     Ld counsel for complainant has relied upon citation 2018 (4) CLT 76 (NC) titled as Life Insurance Corporation of India Vs Seeta & Anr. Wherein our Hon’ble National Consumer Disputes Redressal Commission, New Delhi held that Consumer Protection Act, 1986, Sections 2 (1) (g), 14(1) (d), 21 (b)–Insurance–Death Claim–Lapse of Policy–Non payment of premium–Life assured remained absent from duty for few months preceding his death–Premium could not be deducted from his salary–Deficiency in service–District Forum allowed complaint–State Commission dismissed appeal–hence revision–Policy was obtained by husband of complainant under Salary Savings Scheme

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from LIC–Since insured took leave from his office due to his illness, deduction of premium could not be made from salary, as salary is stated not to have been paid during period of absence from duty–It was primary duty of employer to have deducted premium out of salary of deceased insured–In case, they were not able to do so, on account of non payment of salary, it was duty of employer as well as LIC to provide appropriate information to insured, who could have then taken requisite steps to ensure that policy did not lapse for non payment of premium–Impugned order upheld. He has placed further reliance on Revision Petition No.4150 of 2007 titled as LIC Vs Ram Sakhi and others wherein Hon’ble National Consumer Disputes Redressal  Commission, New Delhi observed that default in payment of the premium has to be communicated to the employer on prescribed form, while posting the group ledger, which exercise obviously has to be from month to month. Further, the question of lapse of policy arises only when the premiums remain unpaid for 6 months and intimation in that behalf was required to be sent, in another prescribed form, to the concerned employee.

13                                From all these documents, it is clear that it is admitted case of the parties that husband of complainant was insured with Ops. There is also no doubt regarding nomination of complainant and it is admitted by OPs that premiums were being deducted from the salary of deceased Dara Singh till his death. It is observed that OPs have not given any prior notice to deceased Dara Singh or his employer regarding gap of premium or about lapse of his insurance policy. Ops

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received subsequent premiums from the employer of complainant without any objection but did not bring into his notice that there was any gap in payment of premiums. If insurance policy was in lapse mode, it was prime duty of Ops to send a letter or reminder to husband of complainant regarding non payment of policy, but OPs did not bother to send any letter either to DLA/ husband of complainant or to his employer, who was to deposit the premiums from the salary account of husband of complainant towards the account of OPs. OPs have failed in bringing on record any documentary evidence to prove their version that policy was in lapsed mode as they never sent any notice or letter to complainant asking him regarding non payment of one premium or regarding gap in payment of premium of 11/2015. Now, at this stage, Ops have no right to repudiate the claim on the ground that policy was in lapsed condition, because they kept deducting premiums from the salary of deceased Dara Singh without any objection and themselves did not give any intimation regarding gaps in premiums of policy to the deceased Dara Singh or to his employer.

14                                  From the above discussion, we are fully convinced with the arguments and case law produced by complainant and we are of considered opinion that Ops have wrongly and illegally repudiated the claim of complainant. Hence, complaint in hand is hereby allowed. OPs are directed to make payment of insurance claim of Rs.2,00,000/- to complainant on account of death of her husband alongwith interest at the  rate of 9 % from the date of filing the

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complaint till final realization. Ops are further directed to pay Rs.5,000/-to complainant for harassment and mental agony suffered by him besides Rs.3,000/-as litigation expenses. Compliance of this order be made within one month of receipt of the copy of the order, failing which complainant shall be entitled to proceed under Section 25 and 27 of the Consumer Protection Act. Copy of the order be supplied to parties free of cost under rules. File be consigned to record room.

Announced in Open Forum

Dated : 13.11.2019

 

(Param Pal Kaur)           (Ajit Aggarwal)

 Member                         President