BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 206/2009 against C.C. 3/2008, Dist. Forum, Machilipatnam
Between:
The Branch Manager
Indian Overseas Bank
Machilipatnam.
*** Appellant/
O.P. No. 1
And
1) Nizampatnam Padma
W/o. Late Viruguleswara Rao
Age: 40 years,
2) Nizampatnam Sobarani
D/o. Late Viruguleswara Rao
3) Nizampatnam Durga Bhavani
W/o. Late Viruguleswara Rao
Mnior Rep. by mother N. Padma
4) Nizampatnam Satyanarayana
S/o. Late Viruguleswara Rao
Mnior Rep. by mother N. Padma
All are R/o. D.No. 9/647,
Balaramunipet
Machilipatnam, Krishna Dist. *** Respondents/
Complainants
5) The Divisional Manager
L.I.C. of India
P&G Unit, Divisional Office
Hyderabad.
6) The Divisional Manager
L.I.C. of India,
Central Office, Chennai. *** Respondents/
Ops 2 & 3.
Counsel for the Appellant M/s. K. Suryanarayana
Counsel for the Respondent: None.
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT. M.SHREESHA, MEMBER.
TUESDAY, THIS THE NINETH DAY OF NOVEMBER TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President.)
***
1) This is an appeal preferred by the opposite party bank against the order of the Dist. Forum directing it to pay Rs. 1 lakh with interest @ 9% p.a., from 3.8.2006 till the date of realization together with costs.
2) The case of the complainants in brief is that complainant No. 1 is the wife, complainant Nos. 2 to 4 are children of late Veruguleswara Rao. He had opened a savings bank account with the appellant bank on 16.11.2005. It was covered by group insurance scheme for a sum of Rs. 1 lakh. It had deducted Rs. 33/- towards group insurance scheme and Rs. 168/- towards premium on 1.12.2005. While so he died of Hepatitis on 3.8.2006. When claim was made it had postponed and later despite notice it did not respond. Therefore they sought the amount covered under the policy together with compensation of Rs. 10,000/- and costs.
3) The bank resisted the case. While putting the complainant to proof that they are LRs of the deceased and he died on 3.8.2006, however it admitted that it had floated a scheme IOB-Jeevan – Group Life Insurance Scheme in association with LIC of India, and whoever joined in the scheme as per the age of the assured, premium will be collected in three categories along with Rs. 33/- for every policyholder. The policy commences from 1st July and ends by 30th June. The deceased was aged about 45 years. He joined in the scheme on 1.12.2005 and the premium was charged for the succeeding seven months only viz., till 30.6.2006. The premium was forwarded to the insurance company. It was only a facilitator. From 30.6.2006, no premium was collected. On the date of death of the deceased the policy was not in force. Therefore it was not liable to pay any compensation, and prayed for dismissal of the complaint with costs.
4) Op2 resisted the case. It alleged that it does not cover any kind of policy under any scheme for appellant bank. It was not liable to pay any amount much less the amount claimed by the complainants. It was unnecessarily impleaded as a party and therefore prayed for dismissal of the complaint with costs.
5) Op3 equally resisted the case. It admitted that earlier insurance plan was linked with appellant bank. The complainants were not entitled to any amount as premium was not paid either by the assured or by the appellant bank for the period when the assured died during the year 2006. It was not liable to pay any amount much less the amount claimed by the complainants. Therefore it prayed for dismissal of the complaint with costs.
6) The complainants in proof of their case filed the affidavit evidence of first complainant and got Exs. A1 to A8 marked while the opposite parties filed Exs. B1 to B4.
7) The Dist. Forum after considering the evidence placed on record opined that admittedly the deceased had opened a savings bank account with appellant bank vide Ex. A1 and an amount of Rs. 33/- and Rs. 168/- were deducted towards insurance scheme and premium. However the bank did not deduct the subsequent premium and sent it to the insurance company evident from Ex. B3. In fact by virtue of terms and conditions of the policy the bank had to pay to LIC. Due to latches on the part of the bank the complainants/LRs of the deceased were denied the benefit, and therefore directed the bank to pay Rs. 1 lakh covered under the policy with interest @ 9% p.a., from 3.8.2006 till the date of realization together with costs of Rs. 1,000/-.
8) Aggrieved by the said decision, the bank preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the death was informed after the expiry of the insurance scheme. The amount that was deducted on 1.12.2005 was valid up to 30.6.2006. The deceased did not approach it for renewal of the policy, and as a result of which the policy had lapsed. It could not be held responsible for not sending the premium and therefore prayed that the appal be allowed by dismissing the complaint.
9) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
10) It is an undisputed fact that the appellant bank had floated IOB-Jeevan – Group Life Insurance Scheme in association with LIC of India whereby the savings bank account holders were entitled to group insurance scheme wherein on the death of the accountholder his LRs would get Rs. 1 lakh vide Ex. B1. In fact the very bank had deducted Rs. 33/- and Rs. 168/- towards premium on 1.12.2005. Evidently the premium for subsequent period was not paid. The bank pleads that the deceased had to approach for renewal. It is not in dispute that the depositor died on 3.8.2006 evidenced under death certificate Ex. A4 death certificate issued by Registrar of Births & Deaths. Ex. A5 ration card filed by the complainants shows that they are LRs of the deceased. The complainants informed the bank by way of registered post under Ex. A6. Despite the fact that the bank had received it under acknowledgement Ex. A7 it did not choose to give any reply. The bank admittedly did not pay the subsequent premium.
11) The question is whether the assured has to request the bank to send the premium or the bank had itself taken up the responsibility of paying the same?
Ex. B2 IOB Jeevan Consent-cum-Authorization-cum-declaration of good health reads as follows:
“I hereby authorize you to debit my savings account with your branch towards initial enrolment as member and the appropriate annual premium, depending on my age, every year on the annual renewal date additionally. I authorise you to debit to my account Rs. 33 now and every year of renewal being your administrative charges.
I am aware that the life cover is restricted to Rs. 1 lakh only even if I have jointed as a member of this scheme for more than one account in any branch of Indian Overseas Bank.”
12) It is not as though the assured had no amount in his savings bank account. He was having Rs. 1,630/-. The amount required hardly comes to Rs. 168/- which is more than sufficient to pay towards premium. The bank could not explain as to why it has undertaken the responsibility in the first place to deduct the premium and pay to the insurance company. Having undertaken to pay the premium now it cannot turn round and contend that the assured had not requested to deduct premia. If the scheme is discontinued it ought to have informed to the assured. At any rate even before completion of the scheme the bank had failed to pay the premium as agreed upon under Ex. B2. This undoubtedly amounts to deficiency in service. It cannot abdicate its function or duty to pay the premium to the insurance company. For the fault of the bank, the complainants should not suffer. We agree with the opinion expressed by the Dist. Forum in this regard. There are no merits in the appeal.
13) In the result the appeal is dismissed with costs computed at Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 09. 11. 2010
*pnr
“UP LOAD – O.K.”
