AT  HYDERABAD.

FA 876 of 2008   against C.C.  14/2007,  Dist. Forum, Eluru  

Between:     

Mylabathula  Mary Emasteen

W/o. Late Bullabbai,

Age: 54 years,

D.No. 17-7-21, Martha Bhavan

Lakshmivarapupet

Eluru, West. Godavari Dist.                         ***                         Appellant/

                                                                                                Complainant.

                                                                   And

1)  The Branch Manager

LIC of India

Canal Road, Eluru

West Godavari Dist.

2)  The Senior Divisional Manager

LIC Of India

Divisional Office

Rajahmundry, East Godavari Dist.             ***                         Respondents/

                                                                                                O.Ps.

Counsel for the Appellant:                          M/s. V. Gourishankara Rao

Counsel for the Respondent:                      M/s.  K. Narayana  Rao

CORAM:

HON’BLE SRI JUSTICE D. APPA RAO,  PRESIDENT

                                                                   &

                                            SMT. M. SHREESHA, MEMBER

THURSDAY,  THE TWENTY NINETH DAY OF SEPTEMBER TWO THOUSAND ELEVEN

ORAL ORDER:  (Per Hon’ble Sri Justice D. Appa Rao, President)

***

1)                This is an appeal preferred by the complainant  aggrieved by the order of the Dist. Forum  directing her to withdraw the amount  deposited by the insurance company towards full satisfaction besides awarding costs of Rs. 2,000/- denying the benefits covered under the policies. 

2)                The case of the complainant in brief is that her husband late  Mylabathula  Bullabbai worked as  A.A.O in respondent insurance corporation  and died on  20.5.2001.   During his life time,   he took three policies for Rs. 15,000/-, Rs. 35,000/- and  Rs. 25,000/- and on their maturity she was entitled to receive as nominee.    Without assigning  any reason she was denied the amounts.  On that she got issued a lawyer notice for which no reply was came to be issued.  Therefore she sought  Rs. 1,70,264/-  towards maturity value of the policies together with  interest @ 24% p.a., besides Rs. 10,000/- towards mental agony and costs. 

3)                 The respondent insurance company resisted the case.    It  admitted that her husband worked  in LIC obtained three policies bearing Nos. 37082900, 37082901, and 64449999 under Salary Savings Scheme  for Rs. 35,000/-, Rs. 15,000/- and Rs. 25,000/- respectively in the year 1982 and 1983 which were matured  in the year  2001-2002.    The policies were lapsed due to non-payment of premium  as he was removed from the service. He did not pay premium even after removal from service.   He availed loans  but failed to discharge them.    Since he failed to discharge the loans and the policies  were in a lapsed condition the life assured was entitled for the paid up value along with vested bonus as under :

In all an amount of Rs. 41,372/- was deposited  before the Dist. Forum on 18.7.2007 towards full and final settlement of above three policies.    The life assured  had assigned the above policies as  collateral security  for his housing loan.  Therefore all the rights under the policies were vested with the corporation.    He was not competent to surrender the policies without clearing the housing loan.   There is no provision that loan and interest  are to be recovered from the salary of the life assured.   At no time representations were made to pay the amounts.   However, taking a sympathetic view in the matter they have deposited the said amount.    Though the complainant had claimed  Rs. 75,000/- in the calculation memo  she has shown  Rs. 1,70,000/- purely on imaginary grounds.   There was no deficiency in service on its part in settling the claim and therefore prayed for dismissal of the complaint with costs. 

4)                 The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A15 marked while the insurance company filed the affidavit evidence of its  Administrative Officer (Legal) and got Exs. B1 to B53 marked.    Full satisfaction memo filed by the respondent was marked as Ex. C1. 

5)                 The Dist. Forum after considering the evidence placed on record opined that the complainant could not show that her husband paid off the loan amount.  What all she was entitled to was Rs. 41,372/- which she was permitted to withdraw.   At any rate since she was denied the amounts till the complaint was filed she was awarded costs of Rs. 2,000/-. 

6)                Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.  It ought to have seen that her husband had taken four policies.  Policy bearing No. 67043436555  taken for Rs. 30,000/- was ignored.    In  1993 her husband  had taken housing loan of Rs. 1,90,000/-  and all the four policies were assigned as collateral securities.   When her husband was suspended in May, 1996 he submitted  a representation on  14.11.1996 requesting to cancel all the policies in view of his suspension.   On  17.12.1996  R2 informed  her husband  that it would furnish surrender value.   Unfortunately he died on 20.5.2001.  Till his death surrender value of the above policies were not paid.     In  Ex. A12  status report there was a categorical  mention that previous loan was repaid.   It failed to note that no loan was sanctioned under policy Nos.  37082900  and 37082901.  It could not have sanctioned loans on the lapsed policies.    It could not have claimed penal interest  on the outstanding amounts from 14.11.1996  the date on which request was  made to pay  the surrender value.    It ought to have awarded compensation for not settling the matter, and therefore prayed that the order of the Dist. Forum be modified. 

7)                 During the course of hearing the appeal  the complainant filed documents by way of additional evidence  marked as Exs. A16 to A18 the letters that were issued  by the insurance company to the life assured. 

8)                 The point that arises for consideration is whether the complainant is entitled to the entire amount claimed in the complaint?

9)                 It is an undisputed fact that the complainant’s  husband had taken four policies  and not  three as alleged in the complaint.   They are as follows :

Since  he was working in the very insurance corporation  he had also taken housing loan  of Rs. 2,34,500/-keeping the above policies as collateral security  for loan evidenced under Ex. A16 dt.  30.11.1996. On 24.4.2000 the complainant’s husband was informed that he was entitled to Rs. 2,85,600/- towards pension benefits   as on that date and  that loan amount of Rs. 3,10,377/- was payable by him.     After adjusting the said amount towards housing loan  the balance would  be deducted from the pension payable to him in future.    Finally it had informed on 18.8.2000 that  he  had discharged the entire loan on 5.5.2000 and the balance payable to him was Rs. 94,599/-.  The same was paid by way of cheque  on 14.8.2000.    Therefore whatever  loan  that was borrowed under the first  policy  No. 670435655 was cleared. 

10)              Though there is  discrepancy  in the policy in Ex. A17 from that of Ex. A16 in regard to policy No. 67046555 the amount under the said policy has been cleared.  Obviously  the loans that were borrowed under Ex. A17 is altogether  different from the  loans that were borrowed under Ex. A18.    The loan that was borrowed was covered under a  mortgage,  while  these three policies  were kept as collateral security towards repayment of housing loan.   Now the complainant intends that the loans that were sanctioned as against policy Nos. 37082900 and 37082901 be also taken note of   forgetting the fact that  the very complainant alleged the said fact not only in her complaint but also evident from Ex. A15 calculation memo.    When the Dist. Forum opined that the complainant had failed to prove that loan against first policy was totally repaid,  she filed Ex. A17.  However, as we have earlier stated that the said amount is altogether different from the loans that were borrowed from these three policies and the said fact was admitted by the respondent insurance company.    We do not intend to  reiterate that the  very complainant’s husband had acknowledged  them under Ex. A1 besides Exs. B9 & B11.   The insurance company in order to substantiate the fact that various amounts were borrowed and outstanding filed Exs. B7 to B7 and B22 to B34.   It looks as though the deceased had borrowed several loans.   The amount  that was paid  under Ex. A17  has no relevancy. Therefore, we are unable to appreciate the contention of the complainant that she was entitled to Rs. 1,70,264/-.    The Dist. Forum by relying a memo filed dt. 23.7.2007 which was not in dispute extracted and opined that  it was sufficient to explain as to how much she was  entitled.   We do not intend to repeat what the Dist. Forum mentioned therein except stating that the Dist. Forum considered various amounts covered under the policies, dates of policies as well as the maturity periods, and the fact that the deceased did not pay certain premia, and   they were lapsed and that certain debts were also liable to be paid.    Calculating the paid up value along with vested bonus  arrived  the amount   viz., Rs. 11,772/- for first policy, Rs. 7,858/- for second policy and Rs. 21,742/- for third policy in all Rs. 41,372/-   This is in conformity with Ex. B12.   Principal amounts were deposited with self-imposed penal interest @ 8% p.a. as a goodwill gesture.   Since the entire amount was deposited before the Dist. Forum which was permitted to be received, however, in view of the fact that only after filing of the complaint the amount was deposited  the Dist. Forum directed the insurance company to pay costs of Rs. 2,000/-.  Finally the Dist. Forum observed:

 “the complainant is not entitled to the relief as prayed by her though she is entitled to the relief  to the extent the opposite parties concerned, no doubt rightly.  Because she was somehow constrained to move court for getting this relief, we feel that she deserves to the reparation by way of reasonable litigation expenses.  So much so, it is held that the complainant is entitled to claim the entire amount deposited by the opposite parties in this mater and also an amount of Rs. 2,000/- by way of costs.    Accordingly the complaint is allowed partly, enabling the complainant to withdraw the amount deposited by the opposite parties in this matter in full satisfaction of her claim and directing the opposite parties to pay to her an amount of Rs. 2,000/- by way of costs.”  

 In the light of voluminous documentary evidence substantiated by various loan sanction letters, account copies and the amounts that were due to the deceased by way of pension etc., we are of the opinion that the Dist. Forum has rightly come to the conclusion which we have excerpted  above.  We do not see any merits in the appeal.

11)                        In the result the appeal is dismissed.  No costs.

1)       _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER          

29/09/2011

*pnr

UP LOAD – O.K.