Andhra Pradesh

Visakhapatnam-II

CC/394/2011

Dadi Varalakshmi - Complainant(s)

Versus

M/s Life Insurance Corporation of India - Opp.Party(s)

C.R. Vasantha Kumar

06 Jan 2015

ORDER

                                              Date of Registration of the Complaint:30-09.2011

                                                                                                Date of Order:13-01-2015

BEFORE THE DISTRICT CONSUMERS FORUM-II AT

                             VISAKHAPATNAM

 

P  r  e  s  e  n  t:

1.  Sri H. Ananda Rao, M.A., L.L.B.,

     President           

2. Smt K. Saroja, M.A. B.L.,

     Lady Member 

                                3. Sri C.V. Rao,  M.A., B.L.,

                                     Male Member

 

                          Tuesday, the 13^th day of January, 2015.

                                 CONSUMER CASE No.394/2011

Between:-

Smt. Dadi Varalakshmi, W/o Thatha Rao,

Hindu, aged 45 years, resident at 35-10-8,

Ramamurthy Panthulu Peta, Kancharapalem,

Visakhapanam-530 008.

….. Complainant

And:-

1.M/s. Life Insurance Corporation of India,

   represented by its Branch Manager, Jeevan

   Prakash Road, Visakhapatnam-530 017.

2.M/s. Life Insurance Corporation of India,

   represented by its Branch Manager,

   Anakapalle Branch, Anakapalle-531 001.

                                                                                         …  Opposite Parties   

                     

          This case coming on 13.11.2014 for final hearing before us in the presence of Sri C.R. Vasantha Kumar, Advocate for the Complainant and Smt. Tehara, Advocate for the Opposite Parties and having stood over till this date for consideration, this Forum made the following:

 

                                                ORDER

          (As per Sri. H. Ananda Rao, Honourable President, on behalf of the Bench)

 

1.       This consumer complaint is filed by the Complainant against the Opposite Parties directing them to pay the proceeds under the policy bearing No.693613567 dated 21.03.2005 for the sum assured of Rs.2,00,000/- (Rupees Two lakhs only) along with bonus and benefits together with interest 24% p.a. from October, 2005 onwards till date of payment and to pay for compensation of Rs.2,00,000/- (Rupees two lakhs only) along with costs of Rs.10,000/- (Rupees ten thousand only).

 

 

 2.      The case of the Complainant in brief is that her son obtained an insurance policy with the 2^nd Opposite Party by paying the consideration by way of half yearly premium at Rs.3,668/- and obtained Policy bearing No.693613567 on 21.03.2005 for Rs.2,00,000/- and the Complainant herein as nominee.   But unfortunately her son died on 29.08.2005 with severe stomach pain and the same was informed to the 2^nd Opposite Party along with details for preferring the insurance claim but promised to settle the claim, but did not do so, inspite of approaching many times and finally the 1^st Opposite Party sent a letter dated 4.8.2011 i.e., after six years stating that they repudiated the policy of the Complainant’s son as he was dependant on his father till the time of his death etc.   Hence, this Complaint.

 

3.       The Case of the Opposite Parties denying the material averments of the Complainant admitted that the 2^nd Opposite Party issued a policy in the name of the Complainant’s son bearing No.693613567 for sum assured of Rs.2,00,000/- with premium paying term being 21 years and the death of the Policy holder was intimated.   It is the further case, that during the course of enquiry, it could come to know that the policy holder was Student of B.Com. at Budha Ramesh Memorial Degree College, Uravasi Junction, Kancharapalem, Visakhapatnam, as regular student and the college fee being paid by his parents.   The policy holder misled the Corporation and induced it to issue the policy by giving false information that he is a cycle mechanic with annual income of Rs.1,00,000/-.   Basing on the information available with the Corporation that the rightly repudiated the claim and communicated to the nominee vide its letter dated 4.8.2011.   There is no deficiency of service on the part of the Opposite Parties and the claim of the Complainant is Bogus therefore, it is liable to be dismissed.

 

4.       To prove the case; on behalf of the Complainant, she filed her evidence affidavit and got marked Exs.A1 to A4.   On the other hand, on behalf of the Opposite Parties their evidence affidavit is filed and got marked Exs.B1 to B5.

 

5.       Ex.A1 is the Photo copy of Premium Receipt issued by the 2^nd Opposite Party in favour of the Complainant on 21.03.2005.   Ex.A2 is the photo copy of Status Report of Policy No.693613567 in favour of the Complainant by the Opposite Party on 18.06.2011.   Ex.A3 is the Death certificate dated 16.11.2011.    Ex.A4 is the letter from the 2^nd Opposite Party to the Complainant dated 04.08.2011. 

 

6.       Ex.B1 is the Photo copy of the letter of Insurance on the lives of Minors under Non-risk Plans Major Children on 28.02.2012.   Ex.B2 is the Photo copy of Insurance Application in favour of the Complainant.  Ex.B3 is the Photo copy of Agent Certificate dated 21.03.2005.   Ex.B4 is the Photo copy of Study & Conduct Certificate.   Ex.B5 is the photo copy of Attendance Particulars dated 19.04.2011.  

  

7.       Both parties are filed their written arguments.

 

8.       Heard arguments from both sides.

 

9.       Now the points that arise for determination is:-

Whether there is any deficiency in service on the part of the Opposite Parties and the Complainant is entitled for the reliefs of advance amount with interest, compensation and costs.

 

10.     As seen from record, it is not in-dispute that the Complainant’s son obtained insurance policy with the 2^nd Opposite Party by paying the consideration by way of half yearly premium at Rs,3,668/- and the 2^nd Opposite Party issued a policy bearing No.693613567 dated 21.03.2005 for a sum of Rs.2,00,000/- and the Complainant’s son nominated the Complainant herein as nominee and on 29.8.2005 the Complainant’s son died and the same was informed to the Opposite Parties for settlement of the Claim and that immediately, the Complainant approached the Opposite Party for settling the claim i.e., in the year, 2005 and that in the year, 2011 the Opposite Party informed by way of letter dated 4.8.2011 that they have repudiated the policy of the Complainant’s son.

 

11.     According to the Complainant, the insurance policy was taken stating that the Complainant’s son is a cycle mechanic and he has taken of the work, since six months and that his average annual income would be Rs.1,00,000/- and the said statement given at the time of obtaining policy is true and correct.   On the other hand, according to the Opposite Parties the deceased policy holder obtained the policy with a fraudulent intention by making false information that he is a cycle mechanic though having qualifications of SSC and studying B.Com., Degree Course in Budha Ramesh Babu Memorial Degree College and P.G. College, Urvasi Junction, Kancharapalem, Visakhapatnam and attending the college by paying fee till his death, and that it was disclosed during the course of their investigation. 

 

12.     It is held 2005 (3) ALT 9 (CPA) between Oriental Insurance Co., Ltd.,  Vs. Ch. Venkatesham in FA 930/2003 and CD No.68/2000 decided on 8.4.2004 it was stated that the burden of proof lies upon the Insurer about the mis-representation of facts, about his health at the time of obtaining policies.  In the case of (2000) 8 Supreme 521 Life Insurance Corporation of India Vs. Smt. Asha Goel & Anr, it was held that the “burden of proof is on insurer” to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts does not arise.  In case of (1971) O AIR (AP) 41 between Life Insurance Corporation of India, South Zone, Madras Vs. Bhogadi Chandravathamma decided on 3.4.1970 it was held that the appellant Corporation has not examined either its agent or Medical Officer, as the case may be, who recorded the answers in the proposal forms.   The answers were faithfully recorded after interpreting in Telugu the questions in the proposal forms and that the insured fully understood the meaning of the questions.   Without examining those who were responsible for recording the answers in the language not known to the insured.   

 

13.     It is further held in 2006 CPJ 125 Delay in disposal of the case-repudiation, merely on basis of rumours, unjustified-Further, OP taken its own time to repudiate claim on frivolous unsubstantiated ground-Deficiency in service proved-Policy amount with interest @ 18% p.a. and cost and compensation awarded.    It is further held in III (2012) CPJ 5 (SC) Supreme Court of India, repudiation of claim of the insurer or nominee by Corporation suppression of material facts burden of proof on insurer only. 

 

14.     As seen from the respective contentions the burden on the Opposite Parties for which they relied upon Ex.A4 dated 23.03.2010 Study Certificate issued by Budha Ramesh Babu Memorial and P.G. College and Ex.B5 dated 19.04.2011 attendance particulars issued by the said college.   It is not the case of the Opposite Party that the Complainant cannot do the business along with his studies or that the complaint not doing the business at all.   The documents filed by the Opposite Parties showing that the Complainant attended the classes from 01.01.2004 to 29.08.2005 comes to 603 days out of which the Opposite Parties claims that the Complainant’s son attended 250 days and there is still 353 days but the Opposite Parties did not choose to file any document to show that what the Complainant’s son has done in those days.   The Opposite Parties filed documents along with the written version vide Exs.B4 and B5.   However, further they have not filed any proof in support of the said documents.   The concerned persons are the Principal and the Correspondence of the college, but they have not chosen to file their evidence affidavit in support of their case.

 

15.     It is the case of the Complainant that due to stomach pain the deceased died and to prove the death the deceased, they relied upon Ex.A3 Death Certificate.   It is not the case of the Opposite Parties the deceased died due to ill-health etc.  Their case appears to be the deceased obtained policy by suppression of material information i.e., the policy holder intentionally misrepresented the facts regarding his health and study particulars i.e., educational qualifications, Job and income particulars regarding the health.    If we look into Exs.B1 and Ex.B2 it is very clear as on the date of the policy the deceased was hale and healthy.    Ex.B3 shows that the deceased was a Cycle Mechanic.  It is held by us that the Opposite Parties have not filed any proof evidence of the concerned persons to establish that the deceased was a student at the relevant point of time of obtaining the policy and attending the college.   For all these reasons, we are of the considered view that the Opposite Parties failed to substantiate their contention.

 

 

16.     In the light of our discussions in the aforementioned paragraphs we are of the considered opinion that the Complainant is entitled for the sum assured of Rs.2,00,000/- with interest at 12% p.a. from 21.03.2005 till the date of realization.

 

 17.    Now the question that comes up for consideration, at this stages of our discussion what is the rate of interest for which the Complainant is entitled.   The rate of interest claimed by the Complainant is 24% p.a.  This rate of interest claimed by the Complainant appears to be excessive, of course, it is a fact that the transaction covered by Ex.A1 is in commercial in nature, but that does not and cannot mean to say that the Complainant is a licenced to claim interest @ 24% p.a. on Ex.A1.    But at the same time, it is an imperative on our part to award a reasonable interest.   Having regard to all these facts and circumstances, we sincerely feel having considered the case on hand awarding of interest @ 12% p.a. would better serve the ends of justice.    Consequently, we proposed to fix at rate in question @ 12% p.a. on Ex.A1 in question.   Accordingly interest is ordered.

 

18.     Whether the Complainant is entitled for compensation of Rs.2,00,000/- is to be considered.   It appears as seen from the evidence of PW-1 that the Complainant was compelled to approach the Opposite Parties and therefore experienced a lot of physical strain besides mental agony and financial loss. It is un-dispute fact that the Opposite Parties did not refund the amount subscribed by the Complainant.   Naturally that made have put the Complainant to suffer some mental agony besides physical stress and strain.   In this view of the matter, we sincerely feel that it is a fit case to award compensation.   But that does not and cannot mean to say that the Complainant claim for compensation is acceptable.    Having regard to all these facts and circumstances, we are of the considered opinion, award of compensation of 25,000/- would serve the ends of justice.   We therefore, proposed to award compensation of Rs.25,000 /-,  in the circumstances of the case on hand. Accordingly this point is answered. 

 

19.     Before parting our discussion, it is incumbent and imperative on our part to consider the costs of litigation.    The Complainant ought not have to approach this Forum had his claim for refund of the sum of Rs.2,00,000/- or reliefs sought for have been honored by the Opposite Parties within a reasonable time and in view of the matter, the Complainant’s claim for claims for cost deserves to be allowed.   In our considered and unanimous opinion awarding a sum of Rs. 2,500/- as costs would appropriate and reasonable.   Accordingly costs are awarded.

20.     In the result, Complaint is allowed, in part directing the Opposite Parties to pay a sum of Rs.2,00,000/- (Rupees two lakhs only) with interest @ 12% p.a. from 4.8.2011 i.e., from the date of Ex.A4 till the date of realization, and to pay a compensation of Rs.25,000/- (Rupees twenty five thousand only) and costs of Rs.2,500/- (Rupees two thousand and five hundred only) to the Complainant.   Time for compliance, one month.   Advocate fee is fixed at Rs.2,000/- (Rupees two thousand only) to the Complainant.   Time for compliance, one month.

 

     Dictated to the Steno, transcribed by him, corrected and pronounced by us in the Open Forum, this the 13^th day of January, 2014.

Sd/-                                     Sd/-                                          Sd/-

Male Member                   Lady Member                                          President

 

                             APPENDIX OF EVIDENCE

For the Complainant:-

NO.	DATE	DESCRIPTIONOFTHEDOCUMENTS	REMARKS
Ex.A1	21.03.2005	Premium Receipt issued by the 2nd OP.	Photo copy
Ex.A2	18.06.2011	Status Report of Policy	Photo copy
Ex.A3	16.11.2005	Death Certificate	Original
Ex.A4	04.08.2011	Letter from the 2nd OP	Original

For the Opposite Parties:-                                           

No.	DATE	DESCRIPTIONOFTHEDOCUMENTS	REMARKS
Ex.B1		Letter of Insurance on the lives of Minors under Non-risk Plans Major Children	Photo copy
Ex.B2		Insurance Application in favour of the Complainant	Photo copy
Ex.B3	21.03.2005	Agent Certificate	Photo copy
Ex.B4		Study& Conduct Certificate of deceased	Photo copy
Ex.B5	19.04.2011	Attendance Particulars	Photo copy

         

     Sd/-                                Sd/-                                                Sd/-

Male Member                     Lady Member                                    President