Punjab

Faridkot

CC/18/34

Kanta Devi - Complainant(s)

Versus

Life Insurance Corporation - Opp.Party(s)

Vipan Kumar Tayal

08 Apr 2019

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

C.C. No. :               34 of 2018

Date of Institution:  12.03.2018

Date of Decision :     8.04.2019

 

Kanta Rani wife of late Ved Parkash son of Chander Ram, r/o  Street No.10 (R) Balbir Basti, Faridkot, Tehsil and District Faridkot.                                           

                                                                                      ...Complainant

Versus

1. Life Insurance Corporation of India, B.O. situated near Bhan Singh Colony, Ferozepur Road, Faridkot through its Sr Branch Manager.
2. Life Insurance Corporation of India, Divisional Office “ Jeevan Parkash”, Post Box No.82, Model Town Road, Jallandhar.
3. Ygakshema Jeevan Bhima Marg, P.B. No.19953, Nariman Point, Mumbai-400021.

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

Complaint under Section 12 of the

Consumer Protection Act, 1986.

 

Quorum: Sh. Ajit Aggarwal, President,

               Smt Param Pal Kaur, Member.

 

Present: Sh Vipan Tayal, Ld Counsel for Complainant,

              Sh Lakhwinder Singh, 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 of

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Rs.1,65,000/- with interest and for further directing OPs to pay Rs 50,000/- as compensation for deficiency in service and harassment alongwith litigation expenses of Rs.11,000/-.

2                                              Briefly stated, the case of the complainant is that husband of complainant was a government employee and during his life time he purchased three insurance policies from the agent of OP-1 under the Salary Saving Scheme. Policy bearing no.132473757 was issued to Ved Parkash with monthly premium of Rs.1009/-to be deducted from his salary and complainant was nominee in that  insurance policy. Commencement of risk started from 28.03.2014, plan and term dated 31.03.2014 was for sum assured of Rs.1,65,000/-. 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 policy in question never lapsed and there was no intimation from OPs side regarding any kind of lapse of premium instalment. Husband of complainant died on 29.10.2016 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 on the false ground that policy premium was not deposited. Complainant made several requests to Ops to make payment of insurance claim and also sent legal notice dated 19.02.2018, but all in vain. All this amounts to deficiency in service and has caused harassment and mental agony to her. Complainant has prayed for

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directing the OPs to pay Rs.50,000/- as compensation for harassment alongwith litigation expenses of Rs.11,000/- 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 14.03.2018, complaint was admitted and notice was ordered to be issued to the opposite party.

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 her is liable to be dismissed. It is averred that there are four gaps of premiums due from June 2014 to August 2014 and one from June, 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. However, on merits Ops have denied all the allegations of complainant being wrong and incorrect but admitted before the Forum that deceased husband of complainant was insured with them under policy in question with date of commencement from 28.03.2014 with monthly premiums of Rs.1009/-each and complainant was nominee in that policy. It is also admitted by Ops that premium was being deducted from the salary of Ved Parkash and was being deposited by the employer, but they have denied that

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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 premiums, policy in question is 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-10 and then, closed their evidence.

6                                    In order to rebut the evidence of the complainant, Counsel for OPs tendered in evidence affidavit of Jagdeep Sharma Ex OP-1 and documents Ex OP-2 to 5 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.

8                                    Ld Counsel for complainant vehementally argued that husband of complainant, who was a government employee, purchased three insurance policies from OPs under the Salary Saving Scheme. Policy bearing no.132473757 was issued in the name of husband of complainant Ved Parkash with monthly premium of

 

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Rs.1009/-to be deducted from his salary and complainant was nominee in said  insurance policy. Commencement of risk started from 28.03.2014 for sum assured of Rs.1,65,000/-. 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 there was no intimation from OPs side regarding any kind of lapse of premium instalment. During the subsistence of policy in question, husband of complainant died on 29.10.2016 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, OP 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 her. She 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 are four gaps of premiums due from June 2014 to August 2014 and one from June, 2015 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 Ved Parkash deceased husband of complainant was insured with them under policy in

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question  and it is also admitted that premium was being deducted from the salary of Ved Parkash, but have denied that anything is payable to her 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 premiums and policy issued to her husband is in lapsed mode.  There are four gaps in payment of premiums 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-2 which is copy of Insurance Policy purchased by Ved Parkash during his life time. Ex C-3 is copy of death certificate. Ex C-4 is copy of legal notice issued by complainant. Ex C-10 is copy of status report of policy in question wherein it is mentioned that there was gap of four premiums 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

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Saving Scheme in which monthly instalment of premiums was to be deducted by the employer of the deceased Ved Parkash from his salary and was to be paid to Ops. The Deceased Life Assured Ved Parkash 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 Ved Parkash DLA kept deducting the premiums from his salary and deposited with the Ops. If there is any gap in the deposit of premiums then, Ops should have to inform regarding it to complainant and his employer before receiving the subsequent premiums but in the present case, as per Ops, there is gap in the payment of premiums from June, 2014 to August, 2014 and for the month of June, 2015. The Ops received subsequent premiums from the employer of complainant without any objection. They never gave any intimation regarding these gaps to the employer of DLA/Ved Parkas and received subsequent premiums without any objection. So, now at this stage, they cannot deny the payment of insurance claim on the ground of gaps in the premiums which are not demandeds by them during the life time of the deceased life assured Ved Parkash. 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 Ved Parkash or his employer. Even as per status of the policy, it is mentioned that there is gap in the premiums but there is no recital that policy is in lapsed mode.

 

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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 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

 

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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 Ved Parkash till his death. It is observed that OPs have not given any prior notice to deceased Ved Parkash or his employer regarding gap of premiums or about lapse of his insurance policy. Ops 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 complainant regarding non payment of policy, but OPs did not bother to send any letter either to complainant or to his employer, who was to deposit the premiums from the salary account 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 four premiums or regarding gap in payment of premiums. Now, at this stage,

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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 Ved Parkash  without any objection and themselves did not give any intimation regarding gaps in premiums of policy to the deceased Ved Parkash 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.1,65,000/- to complainant on account of death of her husband alongwith interest at the  rate of 9 % from the date of filing the complaint till final realization. Ops are further directed to pay Rs.5000/-to complainant for harassment and mental agony suffered by him besides Rs.3000/-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 8.04.2019

 

 

(Param Pal Kaur)           (Ajit Aggarwal)

 Member                         President