DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA (PUNJAB)<br /> <br /> CC. No. 151 of 20-05-2008<br /> Decided on : 24-02-2009 <br /> <br /> 1.Komal Sharma widow<br /> 2.Deepak Sharma, minor son<br /> 3.Priyanka Sharma, minor daughter<br /> of Sh. Rajeshwar Kumar Sharma, C/o Shamsher Singh, House No. 6036, Near Jain Bhawan, Mata Rani Gali, Bathinda. ... Complainants<br /> Versus<br /> <br /> 1.Life Insurance Corporation, Divisional Office, Urban Estate, Phase 1, Dugri, Ludhiana – 141002, through its Senior Divisional Manager<br /> 2.Life Insurance Corporation, Branch Office, Jeevan Jyoti Building, Bibi Wala Road, Bathinda through its Branch Manager.<br /> 3. Punjab Water Supply & Sewerage Division, Bathinda through its Executive Engineer and others.<br /> ... Opposite parties<br /> <br /> Complaint under Section 12 of the Consumer Protection<br /> Act, 1986. <br /> <br /> QUORUM <br /> <br /> Sh. Pritam Singh Dhanoa, President<br /> Dr.Phulinder Preet, Member<br /> Sh. Amarjeet Paul, Member<br /> <br /> Present : Sh. Ashok Gupta, Advocate, counsel for the complainants<br /> Sh. Sanjay Goyal, Advocate, counsel for opposite parties No. 1 & 2.<br /> Opposite party No. 3 exparte.<br /> <br /> O R D E R<br /> <br /> SH. PRITAM SINGH DHANOA, PRESIDENT<br /> 1. This complaint has been filed by Smt. Komal Sharma widow of Sh. Rajeshwar Kumar Sharma, and her minor children Deepak Sharma and Priyanka Sharma under Section 12 of the Consumer Protection Act, 1986 (in short called the 'Act') against the opposite parties.<br /> 2. Briefly stated the case of the complainant is that deceased husband of the complainant, named above employed with opposite party No. 3, secured Insurance policies No. 300237473 for the period 28-12-2004 to 28-12-2015, in the sum of Rs. 1,00,000/- and 161124940 for the period 28-06-1999 to 28-06-2014 in the sum of Rs. 50,000/-, from opposite parties No. 1 & 2, against his life under Salary Saving Scheme. The complainant No. 1 was appointed as nominee by her husband for receiving the amount under the policies referred above. The deceased husband of the complainant was hale and hearty and he completed all the formalities at the time of securing the insurance policies. He was medically examined by doctors on approved penal of opposite parties No. 1 & 2, who accepted the premium from him after fully satisfying themselves about state of his health. The insured expired on 01-08-2006, due to disease of Auto Immune Hepatitis with cirrhosis liver (phnemonia), at Bathinda. The complainants are his widow and minor children and he is not survived by any other legal heir. The amount of premium was deducted by opposite party No. 3, i.e. the employer of the insured, from his salary and was remitted to opposite party No. 2, who repudiated the claim, filed by the complainants on 31-03-2007, on the ground that policies have lapsed due to non deposit of remaining installments by the insured. The amount of premium for the month of June and July, 2006 was remitted to opposite party No. 2, vide schedule No. 9/2006 as confirmed by opposite parties No. 1 & 2. As such, there is deficiency of service on the part of the opposite parties and complainants cannot be deprived of the benefit of the insurance policies secured by the deceased insured on his life. At the end, prayer has been made for giving direction to the opposite parties to pay a sum of Rs. 1,50,000/- ( Rs. 1,00,000/- against policy No. 300237473 and Rs. 50,000/- against policy No. 161124940) alongwith bonus and interest at the rate of 12 percent per annum from the date of filing of claim upto the date of payment and a sum of Rs. 40,000/- on account of mental and physical harassment. <br /> 3. On being put to notice, opposite parties No. 1 & 2, filed written version resisting the complaint by taking legal objections that complainant has not approached this Forum with clean hands and there is no deficiency of service on the part of the answering opposite parties, as such complaint is not maintainable and it being false and vexatious, is liable to be dismissed with costs. On merits, it is admitted that insurance policies under reference and mentioned in para No. 1 of the complaint were secured by the deceased from the answering opposite parties. It is submitted that it was the duty of the insured to deposit the premium in time. As the amount has not been remitted even in the grace period, therefore, the opposite parties are not liable to pay any amount. It is contended that deceased insured has secured the policies by concealing the true state of affairs about his health and he had mis-represented facts in the proposal form. It is also submitted that insured made an attempt to defraud the insurer by suppressing true information about his health and the said fact, not being patent, was not expected to come to the notice of the doctors of the opposite parties. It is submitted that though the policies have lapsed in the month of June, 2006, due to non payment of premium. It is contended that nothing was payable under the policy No. 300237473 and intimation to that effect was conveyed to the complainant vide letter dated 31-03-2007, but taking a lenient view, competent authority, although decided to repudiate the claim but waived of the amount of Rs. 16,000/-, secured by the insured as loan under policy No. 161124940 treating the said amount as Ex-gratia amount. It is submitted that in the course of investigation, it turned out that in the year, 1996, insured remained under treatment in various hospitals including Delhi Nursing Home, Bathinda and P.G.I., Chandigarh, and he had knowledge of pre-existing diseases suffered by him at the time of taking the policies but deliberately made mis-statement and concealed material facts in the proposal form. Rest of the averments made in the complaint have been denied and prayer has been made for dismissal of the same with costs.<br /> 4. Notice of the complaint was given to opposite party No. 3, but he was proceeded against exparte, vide order dated 26-06-2008.<br /> 5. On being called upon, by this Forum, to do so, learned counsel for the complainants furnished affidavits of Smt. Komal Sharma, complainant No. 1, Sh. Bharat Bhushan, Sh. Jatinder Sharma, Sh. Uttam Kumar and Sh. Name Paul, Ex. C-1 to Ex. C-5 and the documents Ex. C-6 to Ex. C-20. He also tendered another affidavit of Smt. Komal Sharma, Ex. C-21 and closed their evidence. On the other hand, learned counsel for the opposite parties No. 1 & 2, tendered in evidence affidavit of Sh. J P Arya, Manager Ex. R-1 and copies of documents Ex. R-2 to Ex. R-46 and closed their evidence.<br /> 6. We have heard, the learned counsel for the parties and perused the oral and documentary evidence and written submissions adduced on record, by the parties, carefully, with their kind assistance.<br /> 7. To begin with, learned counsel for the complainant Sh. Ashok Gupta, Advocate, has submitted that factum of issuance of policies in the name of the insured and his death, have not been denied by the contesting opposite parties, but they have failed to produce on record any cogent and convincing evidence to the effect that deceased had been suffering from any serious ailment and deliberately concealed the said fact in the proposal form filled at the time of securing the insurance policies. Learned counsel has further submitted that as per evidence led on record by the complainants, the deceased has been sick and proceeded on commuted leave prior to his death and his salary was paid to his widow and the amount of premium deducted from his salary was remitted by his employer to opposite parties No. 1 & 2, and the amount has been accepted by the them, as such, opposite parties cannot escape liability on the ground of suppression of pre-existing disease by the insured. In support of his contentions, learned counsel has relied upon 2006(1) ACJ 25 ( Supreme Court), Chairman, Life Insurance Corporation & Ors. Vs. Rajiv Kumar Bhasker, wherein under the 'Salary Savings Scheme' employer was to deduct premium from the salary of the insured and to send the same to Corporation. There was failure of employer to remit the amount to the Insurance company for one reason or the other after deduction of the amount from his salary. It was held by the Hon'ble Apex Court that employer acted as agent of Corporation, as such it could not avoid its liability under the policy on the plea that due to non receipt of premium policy had lapsed.<br /> 8. On the other hand, learned counsel for the contesting opposite parties Sh. Sanjay Goyal, Advocate, has submitted that from the documents produced on record by the opposite parties, it is established that insured has been suffering with serious ailments before his death, but he deliberately concealed the said fact in proposal forms, as such his legal heirs are not entitled to payment of any amount in breach of the terms and conditions of the policies. Learned counsel has also submitted that policies had expired because employer of the insured failed to remit the amount within stipulated period and the same has been retained by the contesting opposite parties in sundry account and policies had not been got revived by the insured prior to his death, as such, liability cannot be fastened upon the contesting opposite parties. In this regard, learned counsel has placed reliance on 1997(1) CPC 89 Divisional Manager, L.I.C. of India Vs. Haribandhu Setha and Others, wherein employer failed to pay premium of the employee under the 'Salary Saving Scheme' and after his death, Insurance company repudiated the claim of his legal heirs due to non-payment of premium. It was held that deficiency of service on the part of the officer of the State Government in rendering service to policy holder and the nominee under the policy i.e. the complainant has proved, as such, officers of State Government are liable to pay compensation and not Life Insurance Corporation.<br /> 9. Admittedly Sh. Rajeshwar Kumar Sharma, husband of complainant No. 1, and father of the remaining complainants had been employed under opposite party No. 3 and he had secured Insurance Policies No. 300237473 and 161124940 with maturity value of Rs. 1,00,000/- and Rs. 50,000/- respectively under Salary Saving Scheme. It is also admitted fact that insured has granted permission to his employer i.e. opposite party No. 3 to deduct the amount of premium from his salary and to remit the same to opposite parties No. 1 & 2 as per schedule of payment. It is also not disputed that insured has appointed his widow, complainant No. 1, as his nominee to receive the amount of maturity under the Insurance policies in case of his death and that he died on 01-08-2008, during the validity period of the Insurance policies secured by him. <br /> 10. As per oral and documentary evidence adduced on record, complainant remained sick, for a couple of month and because of said reason, the payment of his salary was not made till date of his death i.e. 01-08-2006. The payment was made by his employer to his widow and the amount of premium for the month of June, 2006 onwards was remitted to opposite parties No. 1 & 2 , who has accepted the same without raising any objection on the ground that policies have lapsed due to non-remittance of premium by the employer of the insured as per schedule of payment. Since the insured had not recovered from sickness, the policies could not be revived by his nominee or legal heirs. The employer of the insured had acted as an agent so far as remittance of amount of premium after deduction of amount from his salary, is concerned. The opposite parties have accepted the amount from the employer of the insured, remitted after deduction from his salary, paid to his widow and has not made any effort to refund the same on the ground of lapse of policies. In view of peculiar facts and circumstances of the case and being fortified by ratio of Judgement delivered by the Hon'ble Apex Court in 2006(1)ACJ 25 (SC) (supra), we are of the considered opinion that opposite parties No. 1 & 2 cannot escape liability under the policies issued in the name of the insured on the ground that they have lapsed due to non-deposit of amount of premium by his employer during the period of his prolonged sickness. We have carefully gone through the ratio Judgement delivered in 1997(1) CPC 89 (supra), but have come to the conclusion that facts and circumstances thereof were quite distinguishable from those of the case in hand, as such, complainant cannot be non suited on the basis of said authority. It may not be out of place to mention here that the contesting opposite parties have admitted that an amount of Rs. 16,000/- secured as loan by the insured against policy No. 161124940, has been waived of by them by treating the same as Ex-gratia payment. As such, the conduct of the contesting opposite parties suggests that they were not justified in rejecting the claim lodged by the complainants under the said policy and policy No. 300237473 secured by the deceased insured. It is admitted fact that insured had nominated his widow Smt. Komal Sharma, complainant No. 1, as his nominee to receive the payment in case of his demise but it is well settled that nomination only indicates the hand which can receive the payment but it does not supercedes the law of succession governing the parties. The complainants are governed by Hindu Succession Act, 1956 in the matter of successors and they are class one legal heirs of the deceased insured and are entitled to inherit his property in equal share. As such, they are entitled to receive payment of claim under the polices in equal share. <br /> 11. The second plea of the contesting opposite parties for repudiation of claim is that in the proposal forms, the deceased has deliberately concealed the factum of his admission in Delhi Nursing Home, Bathinda and PGI, Chandigarh, since 1996 and pre-existing ailments suffered by him in proposal forms. In order to substantiate the said plea, the opposite parties have produced on record claim form Ex. R-9, wherein it is mentioned in column No. 2 that insured was admitted in hospital on 31-07-2006. They have also produced the statement of complainant No. 1, Ex. R-16, wherein it has been submitted that insured has been suffering from Auto Immune Hepatitis with Cirrhosis Liver. In column No. 4 of said document, it is mentioned that he has complained of the said ailment first time on 12-06-2006. They have also produced on record medical certificates Ex. R-10 & Ex. R-11. As mentioned in these documents, complainant was treated in OPD from 01-07-2006 to 31-07-2006 and 12-06-2006 to 30-06-2006. As per Ex. R-12 to Ex. R-14, brought on record by the opposite parties, he had secured commuted leave on medical ground from 12-06-2006 to 31-07-2006. As per copy of certificate issued by cremation ground Ex. R-15, he was suffering from Auto Immune Hepatitis with Cirrhosis Liver for a period of 10 days prior to his death. All these documents have come in existence much later than the date of issuance of Insurance policies and filling of proposal forms by the deceased insured. The contesting opposite parties have also brought on record the prescription slips, bills, and test reports Ex. R-17 to Ex. R-44. These documents pertain to the period after issuance of policies and filling of proposal forms by the insured. However, the opposite parties have not produced any witness who might have treated the deceased or had personal knowledge about pre-existing disease suffered by the insured. They have neither examined any doctor who attended him or any person who might be conversant with his signatures and handwriting. As such, much reliance cannot be placed on these documents by us to non-suit the complaint. They have further produced the claim inquiry report Ex. R-45, conducted by their Investigator holding that deceased has concealed the material facts in the proposal forms regarding pre-existing disease suffered and treatment received by him, but the contesting opposite parties have neither examined him nor even tendered his affidavit. Therefore, the opposite parties No. 1 & 2, have failed to produce any conclusive proof of any pre-existing ailment suffered by the deceased insured and about his admission and treatment in any hospital. Therefore, we are unable to accept their plea that insured deliberately concealed those facts in the proposal forms. The contesting opposite parties have also not specifically denied the averments made in the complaint that deceased was medically examined by their doctors on their approved penal before issuance of Insurance policies in his name. Therefore, inference is that they admit the said fact but they have withheld the material documents in their possession about the medical examination of the deceased insured before he secured the insurance policies by their doctor. Resultantly, we have no option but to hold that the action of the opposite parties No. 1 & 2, in repudiating the claim preferred by the complainants for payment of amount of policies secured by the insured, is not justified and there is deficiency of service on their part and they are liable to pay bonus at the prescribed rate and interest at the rate of 9 percent per annum from the date of repudiation i.e. 31-03-2007 till the date of payment on the amount of Rs. 1,50,000/- to the complainants in equal shares under both the policies. Since we are inclined to award interest at the above said rate, therefore, complainants cannot be granted compensation as grant of interest and compensation simultaneously is not permissible under the Act. However, the complainants are also entitled to payment of Rs. 1,000/- on account of costs, as the amount spent by them in filing the complaint.<br /> 12. Since the opposite party No. 3 has remitted the amount of premium after deduction from the salary of the insured after his death, as such liability cannot be fastened upon him. <br /> 13. For the aforesaid reasons, we dismiss the complaint against opposite party No. 3 and accept the same against opposite parties No. 1 & 2, who are directed to pay a sum of Rs. 1,50,000/- to the complainants in equal shares against Insurance policies No. 300237473 and 161124940 , bonus at the prescribed rates, alongwith interest at the rate of 9 percent per annum from the date of repudiation of claim i.e. 31-03-2007, till the date of actual payment. The amount of the shares of Priyanka Sharma and Deepak Sharma minor complainants, be deposited in some fixed deposit in any Nationalised Bank or Post Office depending upon rate of interest which is more beneficial, by opposite parties No. 1 & 2, under guardianship of complainant No. 1, and be renewed periodically but it would be payable on attaining majority to them. However, complainant No. 1 would be at liberty to receive the amount of interest periodically and use the same for welfare of minor claimants for which sue would be accountable to them on attaining age of majority. The opposite parties No. 1 & 2, are also burdened in the sum of Rs. 1,000/- on account of costs incurred by him for filing the complaint. The compliance of this order be made within a period of two months from the date of receipt of copy of this order.<br /> <br /> <br /> The copies of this order be sent to the parties, free of costs as per rules, on the subject.<br /> File be indexed and consigned. <br /> Pronounced :<br /> 24-02-2009 (Pritam Singh Dhanoa)<br /> President<br /> <br /> <br /> (Dr. Phulinder Preet)<br /> Member <br /> <br /> (Amarjeet Paul)<br /> Member <br /> <br /> <br />