BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 1702/2007 against C.C. 49/2004, Dist. Forum, Khammam.
Between:
Vankayala Radhika
W/o. Late Vankayala Sridhar
Age: 28 years, Household
R/o. 2-5-502,
Burada Raghavapuram
Khammam. *** Appellant/
Complainant.
And
1) The Branch Manager
L.I.C. of India
H.No. 8-2-163, Wyra Road
Khammam.
2) The Divisional Manager
L.I.C. of India
P.B. No. 17, Balasamudram
Hanamkonda, Warangal Dist.
3) Andhra Bank, BSC Branch
Rep. by its Branch Manager
Bus Station Complex Branch
Khammam.
4) Central Bank of India
Khammam Branch
Rep. by its Branch Manager
Khammam. *** Respondents/
Ops.
Counsel for the Appellant: : M/s. K. Kalpana.
Counsel for the Respondents: : M/s. Srinivasan (R1 & R2)
M/s. K. Sridhar Rao (R3)
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT. M. SHREESHA, MEMBER.
TUESDAY, THIS THE SIXTH DAY OF APRIL TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)
***
1) Appellant is unsuccessful complainant.
2) The case of the complainant in brief is that her husband late V. Sridhar took ‘Jeevan Shree’ policy for his life commencing from 28.1.2002 to 28.1.2027. The policy being for Rs. 5 lakhs a quarterly premium of Rs. 6,625/- was payable. He issued a cheque towards payment of premium for 1/2003 by cheque Dt. 28.2.2003 drawn on Central Bank of India, Khammam (R4). Later he went to Goa and died on 15.4.2003 in a boat tragedy. When she claimed the amount they informed that the cheque was bounced on the ground of ‘insufficient funds.’ Had the insurance company presented the cheque immediately the bank would not have dishonoured the cheque as he was having the amount up till 8.3.2003. Had it returned the cheque immediately he would have paid the amount as he was alive by then. The insurance company had taken advantage of belated payment. There was negligence on the part of insurance company in not presenting the cheque in time. Thereupon she got issued a lawyer notice to which the insurance company gave reply with false allegations. Therefore, she claimed the amount covered under the policy together with interest, compensation and costs.
3) The insurance company R1 & R2 resisted the case. While denying each and every allegation made in the complaint, however it admitted issuance of policy wherein premiums were payable in the months of January, April, July and October every year. By the time of death of assured on 15.4.2003 the policy was in a lapsed condition due to non-payment of premium due in January, 2003. On receipt of intimation of death, they had promptly informed that the policy was lapsed without acquiring any paid up value and that she was not entitled to any amount. The cheque that was sent on 28.2.2003 towards policy premium due in 1/2003 was immediately lodged with Andhra Bank, Khammam on 3.3.2003 as 1.3.2003 and 2.3.2003 are holidays being Mahashivaratri and Sunday respectively. The Andhra Bank in its turn returned the cheque along with a memo of Central Bank of India, Khammam alleging that the cheque was returned unpaid for the reason ‘Insufficient funds’. In fact immediately by letter Dt. 22.3.2003 it requested the assured to pay the premium together with interest by informing the dishonouring of cheque. She had acknowledged the receipt of intimation. However, he did not pay the instalment due. In fact the assured should have kept sufficient funds in his bank account at least till the realization of the cheque. Since the amount was not received policy was lapsed. The dishonour of cheque for whatever reason would be an offence u/s 138 of the N.I. Act. There was sufficient time to the policyholder to pay the premium amount in view of advice sent on 22.3.2003 but they have totally disregarded and therefore they may not be helpful to the complainant in any manner. He should have made alternative arrangements while leaving the house or paid premium amount within due date. Therefore, it prayed for dismissal of the complaint with costs.
4) R3 & R4 did not choose to file any written version.
5) The complainant in proof of her case filed her affidavit evidence while the insurance company filed Exs. B1 to B3.
6) The Dist. Forum after considering the evidence placed on record opined that the assured not having paid the premium and the cheque that was issued was bounced, and that the policy was in a lapsed condition, she was not entitled to any amount, consequently dismissed the complaint.
7) Aggrieved by the said order, the complainant preferred the appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. It ought to have seen that sufficient amount was lying in the account of the assured. The cheque Dt. 28. 2. 2003 was sent belatedly to R3 which in turn did not send it for collection immediately. It was sent on 12.3.2003. In fact her husband kept the amount in his account till 8.3.2003. Due to their negligence the cheque was bounced. It amounts to deficiency in service, and therefore claimed that she was entitled to the amount covered under the policy together with compensation and costs.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9) It is an undisputed fact that late V. Sridhar, husband of the complainant had taken ‘Jeevan Shree’ policy for his life commencing from 28.1.2002 to 28.1.2027. for Rs. 5 lakhs. He had to pay quarterly premium of Rs. 6,625/- in January, April, July and October of every year. For the amount due towards premium in January, 2003 just one year after taking of the policy late V. Sridhar issued a cheque on 28.2.2003 for Rs. 6,625/- drawn on Central Bank of India, Khammam (R4) and presented the same to LIC which in turn sent it to Andhra Bank, Khammam (R3) for collection. By endorsement Dt. 12.3.2003 Andhra Bank returned the cheque with a memo issued by the Central Bank of India alleging that cheque was returned for ‘insufficient funds’. The insurance company in fact sent a letter informing the policyholder vide its letter Dt. 22.3.2003 that the cheque was returned by the banker for insufficient funds which the complainant had acknowledged, however, did not pay the amount together with interest as requested. Consequently it did not revive the policy.
10) It is also not in dispute that late V. Sridhar died in a boat accident on 15.4.2003 vide FIR. The complainant alleges that the assured was not aware as to the return of the cheque. The complainant claimed the amount on the ground that the Andhra Bank to which the cheque was presented by LIC belatedly sent it to Central Bank of India on which an endorsement of ‘insufficient funds’ was made on 13.3.2003. The allegation that it sent the cheque belatedly to the collection bank and the said bank in turn belatedly sent it to his banker R4 Central Bank of India and in the process the cheque was bounced.
11) It is an undisputed fact that after expiry of January, 2003, the policy was in a lapsed condition. Late V. Sridhar had issued a cheque on 28.2.2003 for the premium due in January, 2003. The LIC on receipt of cheque on 28.2.2003 sent it to Andhra Bank for collection from Central Bank of India to the account of the assured. It was sent on 3.3.2003 since 1.3.2003 and 2.3.2003 were public holidays. Therefore, it cannot be said that there was delay on the part of LIC. The complainant also impleaded Andhra Bank as well as Central Bank of India as parties to the matter. For the cheque that was given on 3.3.2003 to Andhra Bank, it was sent to Central Bank of India and Central Bank of India in its turn returned the cheque on 13.3.2003 mentioning that there were ‘insufficient funds’ along with a memo. The insurance company informed the life assured to pay the premium with interest towards premium so that policy could be validated. Though the assured had received it in the very month of March, 2003, he did not deposit the amount either by way of cash or by way of cheque. He kept quiet. The assured late V. Sridhar visited Goa and died in a boat accident on 15.4.2003. Since no amount towards premium was paid and the assured having died on 15.4.2003 the policy was lapsed.
12) For the first time the complainant alleges that had the cheque been presented before 8.3.2003 the cheque would have been encashed. Therefore she attributes negligence on the part of LIC in not presenting the cheque within reasonable time. The complainant did not file account copy to show that late Sridhar was having sufficient amount in the bank so that cheque issued could have been honoured, had it been presented before 8.3.2003. This is a belated contention that too without any evidence to that effect.
13) Learned counsel for the appellant/complainant contended that by virtue of a circular issued by LIC she would be entitled to the amount assured together with bonus besides the amount towards ex-gratia. In support of his contention he relied a decision of Supreme Court reported in AIR 1995 SC 1367. Their Lordships in the above decision relying a circular Dt. 16.10.1987 observed that “ If the death of the assured were to occur after two premiums have been paid within three months of the due date of the next unpaid premium, the full sum assured together with the declared bonuses would be paid.” Assuming the said circular applies to the facts it would show that the assured had paid two premiums, however, he did not pay the premium due within three months of the due date of the next unpaid premium. Had this amount been paid, she would have undoubtedly entitled to the sum assured together with declared bonus. Obviously that was the reason why the insurance company had issued a notice by letter Dt. 22.3.2003 intimating the assured to pay the premium amount of Rs. 6775/- with interest in view of dishonour of cheque. They have also directed him to pay the premium. It is not known why the complainant did not inform her husband about dishonour of cheque and requested him to deposit the due amount and issue a fresh cheque in order to enable the LIC to collect the amount. The complainant obviously would not have thought that her husband would die in an unfortunate accident. Whatever be the reason, the fact remains that the premium due in January, 2003 was not paid. The policy was lapsed. The Dist. Forum after considering these facts dismissed the complaint, and we think rightly so. We do not see any merits in the complaint.
14) In the result the appeal is dismissed. However, no costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 06. 04. 2010.
*pnr
“UP LOAD – O.K.”
