Life Insurance Corporation of India Managing Director, B.M.T.C.
...........Respondent(s)
BEFORE:
Complainant(s)/Appellant(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
ORDER
Date of Filing: 08.04.2010 Date of Order: 03.01.2011 BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20 Dated: 3RD DAY OF JANUARY 2011 PRESENT Sri. S.S. NAGARALE, B.A, LL.B. (SPL.), President. Smt. D. LEELAVATHI, M.A.LL.B, Member. Sri. BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member. COMPLAINT NO: 777 OF 2010 Smt. Jyothi.M. W/o late Umashamkar B.D. No.1017/c, 18th Cross, I Stage, I Phase, Chandra Layout, Bangalore-72. Complainant V/S 1.Life Insurance Corporation of India, Bangalore Urban, Basvanagudi Branch, Bangalore. Rep. by its Manager 2.The Managing Director, B.M.T.C. Bangalore Metropolitan Transport Corpn. Shanthinagar, Bangalore. Opposite Parties ORDER By the President Sri. S.S. Nagarale This is a complaint filed under Section 12 of the Consumer Protection Act, 1986. The brief facts of the case are that, the husband of the complainant Sri B.D. Umshankar was working as a driver in BMTC, he died on 4-5-2008. During his life time he had taken LIC policies from the op No.1. Due to illness Umashankar did not attend his duties for 4 months in December 2007, January to March 2008. The BMTC had sanctioned leave and salary for 4 months also given. But BMTC had deducted LIC premium amount for only 2 months. Husband of the complainant Umashankar was died even before encashment of the salary. The LIC and BMTC can not escape from the responsibility. They have refused to pay the policy amount. The complainant has got minor children she is in financial trouble. The complainant has prayed that the opposite party be directed to pay the insured amount of Rs.1,25,000/- in respect of policy No.612982326. 2. The opposite party No.1 has filed defense version stating that the golden jubilee policy No.612982326 for a sum assured Rs.1,25,000/- was issued to deceased Umashankar and his wife Jyothi is nominee under the policy. The eligible amount was paid to the assignee in respect of the other policies. In respect of policy no.612730726 full assured amount was paid. In respect of policy No.612982326 the life assured has not paid premium for 8 months. Since the policy is in lapsed condition and policy has not acquired paid up value on the date of death of life assured. Nothing is payable in respect of that policy. The LIC had repudiated the claim made by the complainant. BMTC has not sent the premium amount in respect of the policies since assured was on leave and did not attend the work. The complainant is not entitled any amount under the said policy. Therefore, LIC requested to dismiss the complaint. The opposite party No.2 BMTC has filed separate defense version, stating that Umashankar was on unauthorized absence hence, opposite party No.2 could not remit the premium amount to the opposite party No.1 for the month of November 2007 to March 2008. The salary paid to Umashankar for the absence period was not sufficient to recover the premium amount of the LIC policies. Employee had submitted a medical leave and it was sanctioned on 28-3-2008. The LIC premium of April 2008 was remitted to LIC. The opposite party No.2 further taken the defense that for the recovery of arrears of premium amount same could be recovered only on written intimation of the employee. The opposite party No.2 submits that no remainder by the opposite party No.1 is received negligence only on the part of opposite party No.1 and deceased for non payment of premium for the month of November 2007 to march 2008. Hence, the opposite party No.2 prayed to dismiss the complaint. 3. The complainant and the opposite party No.1 have filed affidavit evidence. Arguments are heard. The complainant has not engaged Lawyer, she herself made the submissions and requested the Forum to consider her case sympathetically since she is widow and she has got minor children to maintain and her husband died of ailments while under treatment and she had spent lot of money for the treatment of her husband, she is in a very bad financial condition. The complainant submitted that it is not her fault in any manner for the lapse of the policy. She submits that neither she nor her husband received any notice from the opposite parties, in respect of payment of premium amount. She submitted that totally her husband had taken 6 policies and some policies were assigned to financial institutions and the LIC had settled claims there is dispute in respect of one policy that is No.612982326 and the LIC had fully held up the claim and no amount is paid in respect of that policy. The complainant requested for direction to the opposite parties for payment of assured sum with Bonus to her in respect of that policy. 4. In the light of the arguments advanced by the complainant and learned Advocates for the opposite parties, the following points arise for consideration:- 1. Whether the complaint has proved deficiency of service on the part of opposite parties? 2. Whether the complainant is entitled for the sum assured under the policy No.612982326 from the op No.2? 3. What order and relief? REASONS 5. It is an admitted case of the parties that the complainant is wife of deceased Umashankar. Umashankar has working a driver in BMTC. During his life time he had obtained polices from opposite party No.1 total 6 policies were obtained, out of those policies there is dispute in respect of one policy. The LIC refused to settle the claim in respect of policy No.612982326 on the ground that there was irregular payment of premium and the policy had lapsed condition. The complainant has produced hospital records and discharge summary of her husband. Deceased Umashankar was not well he was under treatment for his ailment, during treatment he died on 4-5-2008, death certificate of Umashankar has filed. Due to illness he did not work for few months. For the month of November 2007 to March 2008 salary was not drawn due to absence of Umashankar. Therefore, the premium was not remitted by opposite party No.2. However, it is an admitted fact that for the absence period opposite party No.2 has sanctioned leave subsequently and salary was drawn and paid to the employee. But, unfortunately opposite party No.2 failed to recover the premium amount in the salary bill and the premium amount was not sent / remitted to the LIC of India. The employee had submitted medical leave application and sanctioned by the BMTC and arrears of salary was drawn and paid. When this is the case the opposite party No.2 could have primarily deducted the premium amount and remitted the same to LIC and remaining amount out of arrears salary could have been paid to the employee. The opposite party No.2 had committed deficiency of service in not deducting the premium while preparing the arrears of salary bill. The complainant who is widow of the deceased can not be held responsible for not remitting the LIC premium. The employee Umashankar died on 4-5-2008 and he was not aware whether the opposite party No.2 had remitted the premium amount to the LIC or not. Likewise the complainant who is widow of the employee was also not aware of the fact that premium was remitted or not by opposite party No.2. Admittedly, the opposite party No.2 had not sent any notice to the employee or to the complainant, intimating that the LIC premium was not deducted and not paid to the LIC of India. There is no communication of any kind between the opposite party No.2 and the complainant and the employee. There was sufficient amount in the arrears of salary bill and the opposite party No.2 could have deduced the LIC premium amount and remitted the same to LIC. The LIC of India admittedly had not sent any notice in writing either to the complainant or to deceased Umashankar intimating the non receipt of premium amount from the opposite party No.2. The LIC even had not given any intimation or letter to opposite party No.2 of non receipt of LIC premium. The deceased employee was kept in dark in respect of payment of monthly LIC premium. The Punjab State Consumer Disputes Redressal Commission in LIC of India-Appellant vs Mamchand & Another-Respondents. Reported in III(2009) CPJ 140. Where in Honble State Commission has held as under:- Consumer Protection Act, 1986-Section 2(1)(g)-Life Insurance-Policy lapsed-Premium not paid-Policy obtained through agent-No contract exists between employer and insurer-Since insurer assumed liability of writing to employer of assured to deduct premium amount from assureds salary, remit it to them-Insurer liable to pursue matter with employer Premium if not paid by employer, insurer liable to inform assured about non-receipt of premium from employer-Deficiency in service on part of insurer proved, which led to lapsing of policy-complaint allowed by Forum-Order upheld in appeal. In another judgment of Orissa State Consumer Disputes Redressal Commission, in LIC of India-appellant vs Hemalatha Nayak & Anr-Respondents. Reported in IV (2009) CPJ 239 where in the Honble State commission has held as under:- Consumer Protection Act, 1986- Section 15-Life insurance-Salary Saving Scheme Two Policies out of five, paid- Three policies in lapsed condition due to non payment of premium-Claim not settled complaint allowed by Forum-Hence appeal-insured remained bedridden due to serious suffering-No intimation given that his salary not being drawn, premium not deducted Order of Forum upheld. The facts of the cases referred above are very much similar to the facts of the present case. In this case also the assured had taken 6 policies from LIC of India, out of 6 policies in respect of 5 policies claim have been settled by the LIC in favour of the nominee / assignee. The insured person was bedridden due to serious illness and his salary for the month of November 2007 to March, 2008 was not drawn by the employer of the deceased Umashankar and therefore the premium amount was not remitted to the LIC. The policy was in question lapsed condition and LIC refused to pay the sum assured to the complainant. In the case in hand also neither the employer nor the LIC of India intimated non receipt of premium for the month of November 2007 to March 2008. So under this circumstances the authorities referred above are in all force applicable to the facts of the present case. In view of the ruling of Orissa State Commission and also Punjab State Commission it can very well be said that the complainant in this case is entitled for the sum assured in respect of policy No.612982326 from the LIC of India. The Honble Supreme Court of India in a judgment between United India Insurance Co., ltd., vs Great Eastern shipping co., Ltd. III (2007) CPJ 3 SC has observed that where two views are possible, the one which favours the consumer should be accepted. In this case there is no fault at all of the deceased Umashankar in not remitting premium for the month of November 2007 to March 2008, because he was not at all notified and no notice or letter was sent either by the employer or LIC of India informing him of non receipt of premiums. So under this circumstances the opposite parties can not escape from their liability in paying the sum assured. The repudiation of the claim by the LIC of India is not justified at all. In this case both the opposite party No.1&2 are responsible for the deficiency of service, both the opposite parties are jointly and severally responsible for payment of sum assured to the complainant. Both the opposite parties No.1 & 2 have committed deficiency of service, therefore, the burden to pay the sum assured shall have to be borned equally by opposite party No.1 & 2. It is just and fair to fast 50% burden on opposite party No.1 & 2 each for payment of sum assured Rs.1,25,000/-. The complainant being a widow having minor children unfortunately her husband died due to illness and she had suffered both emotionally, mentally and financially. The Consumer Protection Act is social and benevolent legislation intended to protect better interest of the consumers. The complainant being consumer her interest requires to be protected by passing order for payment of sum assured under the policy. On the facts of the case it is a fit case to allow the complaint and direct the opposite parties to pay the sum assured. In the result, I proceed to following:- ORDER 6. The complaint is allowed. The opposite party No.1&2 are directed to pay Rs.1,25,000/- (sum assured) to the complainant jointly and severally by taking 50% burden each within 60 days from the date of this order. In the event of non compliance of the order within 60 days the above amounts carries interest at 9% p.a. from the date of this order till payment / realization. 7. Send the copy of this Order to both the parties free of costs immediately. 8. Pronounced in the Open Forum on this 3RD DAY OF JANUARY 2011. Order accordingly, PRESIDENT We concur the above findings MEMBER MEMBER
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