F.A.No.800 OF 2009 AGAINST C.C.NO.448 OF 2007 DISTRICT FORUM-I VISAKHAPATNAM

Between

SBI Life Insurance Company Limited
2^nd Floor, Turner Morrison Building
G.N.Vaidya Marg, Mumbai-023                                                                                                                       Appellant/ opposite party No.2

        A N D

1.  Badagala Kondamma W/o Penta Rao
     aged 45 years, D.No.30-75-28, RH Colony
     Vadlapudi, Visakhapatnam

                                                        Respondent no.1/complainant

2.  The Manager
     State Bank of India
     Ukkunagaram Branch, Steel Plant
     Visakhapatnam
     (Proforma Party)

                                                Respondent No.2/opposite party no.1    

Counsel for the Appellant             Sri Gosala Sreenivasa Rao

Counsel for the Respondent no.1   Sri C.Shanmukha Rao

        QUORUM:   SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER

                                                AND

SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

FRIDAY THE NINETH DAY OF DECEMBER

                                TWO THOUSAND ELEVEN

Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)

                                        ***

1.     This appeal is directed against the order passed by the District Forum-I, Vishakhapatnam whereby the District Forum  has allowed the claim of the respondent to the tune of `3,00,000/- and directed the appellant company to pay the amount of `10,000/- towards compensation and `3,000/- towards costs. Aggrieved against this order of the District Forum, the present appeal has been filed by the appellant insurance company.

2.     The facts which are necessary for disposal of this appeal are that the first respondent’s husband during his life time obtained loan from the second respondent bank under loan account bearing number 0159302530501. The second respondent obtained insurance policy under “Super Suraksha Insurance Plan” from the appellant insurance company on the life of the borrower by deducting from his account an amount of `13,363/- towards premium of the insurance policy. The insurance policy provides protection from the payment of loan amount by the legal heirs of the borrower in case of his sudden death during the tenure of the policy. The husband of the first respondent died on 27-05-2005 by committing suicide. The police,Gajuwaka registered  a case in crime no.187 of 2005. After the death of her husband, the first respondent lodged claim with the appellant insurance company requesting for adjustment of the sum assured under the insurance policy to the loan account of her husband which was not done and instead the second respondent stated to have demanded her to pay the balance loan amount due from her deceased husband.

3.     The second respondent bank resisted the claim contending that it had remitted the amount of `13,363/- by deducting the same amount from the loan amount of the husband of the first respondent and the appellant insurance company issued insurance policy on 24-07-2004 and the second respondent bank has not committed any fault as also no relief is sought for by  the first respondent against the second respondent bank.

4.     It is contended on behalf of the appellant insurance company that as per the terms and conditions of the insurance policy, the first respondent is not entitled to the benefits under the policy on account of suicide committed by her husband which event is not covered by the terms of the policy.

5.     The first respondent No.1 has filed her affidavit and the documents, ExA1 to A5.  On behalf of the appellant V.Srinivas, Head-Legal and Smt Nayak Annapurna, the Branch Manager of respondent no.2 have filed their respective affidavits and the documents Exs.B1 to B3

6.     The District Forum allowed the complaint on the premise that as per the clause no.5 of the insurance policy the amount is required to be paid by the appellant insurance company.

7.     Aggrieved by the order of the District Forum, the appellant insurance company has filed the appeal contending that the District Forum has not construed the terms and conditions of the insurance policy in correct perspective.

8.     The point for consideration is whether the first respondent is entitled to the  benefits conferred under the insurance policy?

9.     The admitted facts are : The first respondent’s husband obtained loan under loan account number 10485667909  from the respondent bank and the second respondent bank obtained insurance policy for him by deducing an amount of `13,363/- from the loan account and remitting towards the premium to the appellant insurance company. The first respondent’s husband died on 27.5.2005 by committing suicide.

10.    The only question that fall for our consideration is whether the amount assured under the insurance policy can be adjusted towards the due by the deceased husband of the first respondent with the second respondent bank. A bare reading of the terms and conditions of the insurance policy would show that the first respondent is not entitled to the amount sought for.

11.    In the schedule annexed to the insurance policy , General conditions applicable to the claim are incorporated ; Conditions No.1 and  2 read as under:

        1.         The Company shall not be liable to ay the benefit referred to under para 5 in Schedule II if the death of the Member shall,

·        be caused by intentional self injury, insanity or immorality or whilst the Member is under the influence of intoxicating liquor, drug or narcotic substances; or,

·        take place as a result of accident while the Member si engaged in aviation or aeronautics in any capacity other than that of a fare-paying passenger in any aircraft which is authorized by the relevant regulations to carry passengers and flying between established destinations, or,

·        be caused by injuries resulting from riots, civil commotion, rebellion, war (whether war be declared or not), invasion, hunting, mountaineering, steeple chasing or racing of any kind, bungee jumping, river rafting, scuba diving, paragliding, or any such adventurous sports; or,

·        result from the Member committing any breach of law; or,

·        arise from the employment of the Member in the armed forces or military service of any country at war (whether war be declared or not) or from being engaged in police duty in any military, paramilatry or police organization.

        2.         The company shall not be liable for payment of any Syum Assured in terms of para 5 of Schedule II of this Policy in respect of a Member, if such a Member commits suicide during the first year of his admission to the cover.                   

12.    Clause No.5 referred to , by the District Forum reads as under:

        In case of premature repayment of any loan isntalment by the member ahead of the agreed EMI repayment schedule, and subsequent death of such member during the tenure of the original EMI repayment schedule, the Company would pay the Sum Assured to the branch of the Grantees where the loan is availed.  The branch would liquidate the amount outstanding in the loan account and pay the surplus amount, if any, to the nominee and the cover stands extinguished.

13.    Clause No.5 is applicable only on satisfaction of the ingredients of the Clauses no.1 and 2 of the Insurance Policy.

14.    In view of the suicide committed by the first respondent’s husband. Clause No.2 is applicable for determination of the entitlement of the first respondent to the benefits conferred by the policy. Clause No.2 excludes all claims where the insured committed suicide. Therefore, the appellant cannot be fastened with any liability under the insurance policy. The District Forum misdirected itself in applying clause no.5 of the policy ignoring the governing clauses of the policy. The appeal deserves to be allowed.

15.    In the result, the appeal is allowed.  The order of the District Forum is set aside.  Consequently the complaint is dismissed.  There shall be no order as to costs.

                                                                           Sd/-

                                                                        MEMBER

                                                                            Sd/-

                                                                        MEMBER

                                                                    Dt.09.12.2011

KMK*