BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.

FA. No.137/2008 against CC.No.119/2007 District Consumer Forum-II, Krishna District at Vijayawada.

Between:

The Divisional Personnel Officer,

South Central Railways,

Railway Divisional Office,

Vijayawada.

…Appellant/Opp.Party No.2

And

1.Thollabandi Nagalakshmi, W/o.Srinivasa Rao(late)

   Door No.626-K, Bogguline Quartes,

   Beside Railway Divisional Office, Vijayawada.

…R.1/Complainant.

And

2.The Life Insurance Corporation of India,

   Rep. by its Branch Manager, C.D.3,

   Swarnalok Complex, Eluru Road,

   Vijayawada – 2.

…R.2/Opp.Party. No.1

Counsel for the Appellant          :  Mr.K.Yadagiri Reddy.

Counsel for the Respondents    :  Mr.P.Suresh Kumar (for R1).

                                                      Mr.K.Srinivas (for R2)

QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT,

SRI SYED ABDULLAH, HON’BLE MEMBER,

AND

SRI R.LAKSHMI NARASIMHA RAO, HON’BLE MEMBER.

WEDNESDAY, THE TWENTY THIRD DAY OF JUNE,

TWO THOUSAND TEN.

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

*******

1.         Opposite party No.2 preferred this appeal against the order of the District Consumer Forum-II, Krishna District at Vijayawada directing him along with opposite party No.1/respondent No.2 herein to pay Rs.85,000/- each to the complainant with interest at 7.5% per annum from the date of complaint till the date of realization, besides costs of Rs.1,000/- each. 

2.         The case of the complainant in brief is that her husband, T.Srinivasa Rao took two insurance policies viz. No.673437616 for Rs.50,000/- and another No.673438175 for Rs.60,000/- on 16.03.1998 and 21.03.1998 respectively.  The appellant, the employer of late Srinivasa Rao, has agreed to pay premium from out his salary to the Insurance Company/respondent No.2 herein.  While so, he died on 19.07.2002.  When she approached the Insurance Company they repudiated the claim.  On that she filed complaint for recovery of the said amount along with vested bonus and other benefits.

3.         The Insurance Company, 2nd respondent herein, had resisted the case,  however, it admitted that the deceased had taken two policies, wherein the Railways had to pay premium from out of his salary.  The premia for 2/1999 to 12/1999, 9/2000, 4/2001, 4.5.6/2002 were due towards first policy, and premia for 1/1999 to 11/1999, 9/2000, 1/2001, 4, 5, 6/2002 were due towards second policy.  As per the terms and conditions of the policy, the policies were lapsed.  However, the claim was considered on ex-gratia basis and called the Railways the reasons for non-recovery of the premium.  However, they did not receive any response.  Therefore, there was no legal liability against them to pay the amount under the insurance policies.  Therefore, it prayed for dismissal of the complaint with costs.

4.         The South Central Railway, the appellant herein, equally resisted the case.  While admitting the issuance of policies and non-recovery of the premium from out of his salary, however it alleged that there was computer mistake in regard to the period from 1/`1999 to 12/1999 and no recovery was made in 9/2000due to less drawal of salary due to his sick leave.  No recovery was made due to less drawal of salary for his sick leave in 4/2001.  As he was on sick leave the Insurance Company informed about the non-payment of the premium.       In the circumstances it prayed for dismissal of the complaint with costs. 

5.         The complainant in support of her case filed her affidavit evidence and got the documents marked as Exs.A.1 to A.13, while the 1st opposite party filed affidavit evidence of its officer and got the documents marked as Exs.B.1 to B.7 and 2nd opposite party filed affidavit evidence of its officer.

6.         The District Forum after considering the evidence placed on record directed the Insurance Company as well as Railways to pay Rs.85,000/- each to the complainant together with interest at 7.5% per annum from the date of filing of the complaint till the date of realization, besides costs of Rs.1,000/- each.

7.         Aggrieved by the said order, the Railways preferred this appeal contending that the District Forum did not appreciate the facts in its correct perspective.  It ought to have made the order against the Insurance Company directing it to pay the amount.  There was neither agreement nor contract between them and the complainant to pay the policy amount.  There was no deficiency in service on its part.  In fact the husband of the complainant was on sick leave and therefore, it could not send the premium and therefore prayed that the appeal be allowed setting aside the order against it.

8.         The point for consideration is whether the order of the District Forum is vitiated by mis-appreciation of facts?

9.         It is an undisputed that the husband of the complainant, an employee of the Railways had taken two insurance policies for Rs.50,000/- and another for Rs.60,000/- on 16.03.1998 and 21.03.1998 respectively.  It is also not in dispute that he died on 19.07.2002.  Admittedly, he entered into an agreement with the opposite party No.2/appellant under Ex.B.1 and B.2, wherein it was agreed that the premium had to be recovered from out of his salary payable by the Railways.  It is not in dispute that certain amounts were not recovered from the salary nor paid to the Insurance Company.  The Railways alleged that due to computer mistake, the said amount could not be recovered and remitted to the Insurance Company. 

10.       Assuming without admitting that there was a mistake in computer, there is no reason why the Railway Administration did not issue notice to the complainant’s husband to pay the said amount to the Insurance Company.  Consistently from January, 2000  to December, 2000 no recovery was made from the salary of the husband of the complainant, equally so from January, 2001 to February, 2001.  The appellant contends that it is for the Insurance Company that had to issue notice requesting to pay the premium amount.  Had such notice been issued, it could have forwarded the amount to the Insurance Company.  The District Forum also directed the Insurance Company to pay the said amount along with Railways.  It had created a joint and several liability.  However, the Insurance Company did not choose to prefer appeal questioning the order of the District Forum.  The order has become final so far as the Insurance Company is concerned.  Coming to the facts of the case the Railways having agreed to collect the premium amount from out of the salary of the complainant’s husband, it could have collected the premium and remitted the same to the Insurance Company.     If really, it was the mistake of the computer it could have collected the amount and paid even after coming to know that there was mistake.  It could have asked the Insurance Company as to the insurance amounts that had to be paid and it could have been collected from out of his salary.  The appellant could have issued notice on the ground that he could not collect the amount due to mistake in the computer system.  Thus there is a clear deficiency in service on the part of the Railways.  It cannot get over from payment of the amount.  For the fault of Railways, the complainant should not suffer.  We do not see any mis-appreciation of fact in that regard.  We do not see any merits in the appeal.

11.       In the result, the appeal is dismissed with costs of Rs.2,000/-.  Time for compliance four weeks.   

PRESIDENT

MEMBER

MEMBER

Dt:23.06.2010.

Vvr.