Vijayawada.

Between-

1.Andhra Bank,

   Satynarayanapuram Branch,

   Vijayawada, rep. by its Branch Manager.

2.The General Manager,

   Nodal Officer for Customer Services

   Andhra Bank, Head Office- Dr.Pattabhi Bhavan,

   D.No.5-9-11, Saifabad, Hyderabad

….Appellants/O.P.Nos.1 and 2.

And

1.Vedavalli Siva Rama Krishna, S/o.V.L.N.Rao,

   TF-D, Third Floor, D.No.23-22-45, Sri Sai

   Srinivasa Nilayam Apartments,

   Sivalayam Street, Satyanarayanapuram, Vijayawada.

…R.1/Complainant.

2.The United India Insurance Company Ltd.

   Regional Office- 3-5-817 and 818, Basheerbagh,

   Hyderabad – 500 029.

…R.2/O.P.No.3.

Counsel for the Appellants                  -      Mr.K.Sridhar Rao.

Counsel for the Respondents              -      Admn.Stage.

QUORUM- THE HON’BLE MR.JUSTICE D.APPA RAO, PRESIDENT,

SMT.M.SHREESHA,HON’BLE LADY MEMBER,

AND

SRI G. BHOOPATHI REDDY, HON’BLE MALE MEMBER.

WEDNESDAY, THE TWENTY FIFTH DAY OF JUNE,

TWO THOUSAND EIGHT.

Oral Order (Per Hon’ble Mr.Justice D.Appa Rao, President)

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            Heard the learned counsel for the appellants.

1.         This is an appeal preferred by the Bank, opposite parties 1 and 2 against the order of the District Consumer Forum-II, Krishna District at Vijayawada, directing them to pay Rs.1,00,000/- with interest at 7.5 percent per annum besides costs of Rs.2,000/-.

2.         The case of the complainant in brief is that he opened a Kids Khajana Account in the name of his son.  An insurance coverage of Rs.1,00,000/- is available if death occurred either to the child or parents during the period of the policy.  The premium was also collected.  While so, on 15.09.2007 his son, aged 10 years and studying 6^th class, died due to acute myloid leukemia.  When the said fact was informed to opposite parties, they did not even give a reply.  Therefore, he filed the complaint claiming an amount of Rs.1,00,000/- from the opposite parties.

3.         Opposite parties 1 and 2 resisted the case, however, admitted that the complainant had opened an account in the name of his minor son on 08.12.2005 under Kids Khajana Scheme.  They alleged that the Bank is only a facilitator and it is the Insurance Company that had to pay.  The amount covered under policy is payable in the event of accidental death or permanent disability.  Since the death is neither accidental nor resulted in permanent disability, he was not entitled to any compensation.  In the light of the above circumstances, they did not even forward the claim to the Insurance Company. 

4.         Opposite party No.3, the Insurance Company filed counter alleging that there was no privity of contract between it and the complainant.  The claim was only against the Bank.  Since no papers were submitted, they did not entertain the claim.  Therefore, they prayed for dismissal of the complaint.

5.         The complainant in proof of his case filed his affidavit and documents, Exs.A.1 to A.16, while the opposite parties filed Exs.B.1 to B.3 documents.  After considering the evidence place on record, the District Forum opined that the death of the deceased covers the terms of the policy, and therefore, opposite parties 1 and 2 are liable to pay compensation of Rs.1,00,000/- with interest at 7.5 percent per annum from the date of filing of the complaint till the date of realization together with costs of Rs.2,000/-.

6.         Aggrieved by the said order, the Bank preferred this appeal contending that the District Forum did not appreciate the facts in correct perspective.  It ought to have seen that the death was due to blood cancer and is not covered by the terms of the policy.  Therefore, it has rightly declined to submit the claim forms to the Insurance Company.

7.         The point that arises for consideration is whether the complainant is entitled to the amount covered under the Kids Khajana Scheme?

8.         It is an undisputed fact that the complainant had taken a policy under the name and style of “Kids Khajana Scheme” in the name of his son, evidenced under Ex.A.3.  Under the said scheme, there is an insurance coverage for an amount of Rs.1,00,000/- in case of death or permanent disability.  It is also not in dispute that the complainant’s son died of sudden cancer, evidenced under Ex.A.5 death certificate and various admission chits issued by Hospitals, Exs.A.6 and A.7 and blood reports Exs.A.8 to A.16.  When the complainant, the father of the account holder, requested that the amount covered under the Scheme be paid, the bank did not even forward the claim papers to the Insurance Company.  In fact it could have forwarded the claim papers and it is upto the Insurance Company whether to pay it or not.  Without even forwarding the claim forms, the Bank itself took a stand denying the insurance coverage on the ground that the terms of the policy did not cover the case on hand.  The Bank having taken the policy to cover the death or disability of the assured ought to have referred the claim to the Insurance Company.  We were not shown any clause wherein the Bank could refuse to refer the matter to Insurance Company for processing the claim.  It is for the Insurance Company either to pay or repudiate.  The Bank cannot repudiate on behalf of Insurance Company.  It cannot take any decision either to reject or allow the amount covered under the policy.  The very act in not referring the matter to the Insurance Company amounts to deficiency in service on its part.  The Bank is duty bound under the policy to refer the matter to Insurance Company.  The claim can be allowed on this ground alone. 

9.         There is yet another ground.   We invite to the term and condition stipulated in Ex.A.3 under the head “Risks covered”.  It reads as follows-

            “Risks Covered- In the event of accidental death or permanent disability of account holder or parent/guardian, the nominee/claimant or the account holder, as the case may be, will be paid a sum of Rs.1,00,000. In case of death/permanent disability or both a sum of Rs.2,00,000 will be paid.  Death due to accidents like snake bite, electric shock, drowning, food poisoning, etc.  It is also covered under the policy.  The above cover is in addition to insurance cover already available to the account holder under other group policies such as Abhaya Savings Bank, Abhaya Gold SB, Credit Cards and Insured Current Deposit Scheme, etc. Any claim under Kids’ Khazana Scheme is limited to Rs.1.00/2.00 lacs irrespective of number of Kids’ Khazana accounts one has.”  (emphasis ours)

A bear reading of the clause would undoubtedly disclose that the coverage is for  accidental death or permanent disability.  They have expatiated the word ‘death’ in the context of the policy condition in the following words-

“Death due to accidents like snake bite, electric shock, drowning, food poisoning, etc.”

The question is the death by acute cancer in children can be covered.

Undoubtedly, food poisoning could not be said to be an accidental death.  Obviously, describing the causes of death they have used such words connoting the casualty occurring in cases, which are in/not natural and not in the immediate contemplation.  That is why they left it ambiguously by saying, “etc.”  We may state herein that Bank has taken the policy from the third opposite party, the United India Insurance Company Limited.  The District Forum allowed the claim on the ground that the death not being natural, it could be termed as accidental.  We do not think that we are straining the language by extending to  all forms of death.  Evidently, the death was not normal. Acute myloid leukemia in which the involved cell line shows little or no differentiation usually consisting of blast cells.  Acute refers to sudden whereas chronic refers to prolonged duration. 

10.       The complainant, when he had taken the policy, was not aware that his son was ailing from cancer.  It was so sudden, and if we may say so, accidental.  It is not the case of the Bank that the insurance coverage was taken by suppressing the said fact, and that the complainant had played fraud on them.  What all they contend that the terms of the policy do not cover the death by blood  cancer.   In cases of death by murder, the Supreme Court had an occasion to consider whether it could be termed as accidental in any given case, vide Smt.Rita Devi and Ors. Vs.New India Assurance Co. Ltd. and Anr. Reported in III 2000 CLT 192.  It held -

            “There is no doubt that murder, as it is understood, in the common parlance is a felonious act where death is caused with intent and the perpetrators of that act normally have a motive against the victim for such killing.  But there are also instances where murder can be by accident on a given set of facts.  The difference between a murder which is not an accident and a murder which is an accident, depends on the proximity of the cause of such murder.  In our opinion, if the dominent intention of the Act of felony is to kill any particular person then such killing is not an accidental murder but is a murder simplicitor, while if the cause of murder or act of murder was originally not intended and the same was caused in furtherance of any other felonious act then such murder is an accidental murder. “

Considering that there was no exclusion under Ex.B.1, the terms of the policy, we are of the opinion that the complainant was entitled to the said amount.

11.       Since the appellants did not mention the criteria and left in ambiguous words, we deem it fit that a liberal expression should be given to the said terms.  We may also state that when the complainant’s son had suffered from acute blood cancer, he was permanently disabled and ultimately died.  Moreover, the word “etc.” employed in the said terms would give a clue where the death was not in anticipation.  May be this amounts to taking an extreme view.  We do not rest the case on this ground.  All this discussion was to test the proposition.   As we have held that repudiation by the Bank by not referring the matter to the Insurance Company constitutes the deficiency in service, they are liable to pay the amount.  We do not see any ground to interfere with the order of the District Forum. 

12.       We do not see any merits in this appeal.  This is a fit case where the appeal could be disposed of at the stage of admission.  Accordingly, the appeal is dismissed.  No costs.  Time for compliance four weeks.         

PRESIDENT              LADY MEMBER         MALE MEMBER

Dt-25.06.2008.

Vvr.