Telangana

Khammam

CC/67/2016

Thirukovalluri Sree Sai Poojitha D/o.Late Rama Krishna Age 13 Years, Occ Student R/o.Medical Colony Bhadrachalam Town & Mandal Khammam District being minor rep. by her MotherThirukovalluri - Complainant(s)

Versus

M/S Shree Ram Life Insurance Company Limited, Rep its Authorized Person,RegOffice HNo 3-6-478, 3rd f - Opp.Party(s)

Sri. Billa Srinivasa Rao

29 Oct 2018

ORDER

BEFORE THE DISTRICT CONSUMER FORUM AT KHAMMAM

Dated this, the 14^th day of November, 2018.

 

          CORAM:     1. Sri. P. Madhav Raja, _{B.Sc., M.Li.Sc. LL.M.,}– President

2. Sri. R. Kiran Kumar_{, B.Sc., LL.M.} – Member

 

C.C. No. 67/2016

Between:

 

Thirukovalluri Sree Sai Poojitha, D/o. Late Rama Krishna,

Age: 13 years, Occu: Student,

R/o. Medical Colony, Bhadhrachalam Town & Mandal,

Khammam District.

 

Complainant being minor rep. by her Mother and natural guardian by name Thirukovalluri Vijaya Laxmi,             W/o. Late Rama Krishna, Age:;30 years,                          Occu: Household, R/o. Medical Colony, Bhadhrachalam Town & Mandal, Khammam District.                               

                                                

…Complainant

And

1. M/s. Shree Ram Life Insurance Co.Ltd., Rep. its Authorized Person, Regd. Office, H.No.3-6-478, 3^rd Floor, Anand Estate, Liberty Road, Opp: Indian Bank, Himayath Nagar, Hyderabad.

 

2. M/s. Shree Ram Life Insurance Co.Ltd., Rep. its Divisional Manager,

R/o.3^rd Floor, Gayathri Complex, Sai Nagar, Near Benz Circle, Eluru Road, Vijayawada.   

 

3. M/s. Shree Ram Life Insurance Co.Ltd., Rep. its Collection

Manager, Collection Centre, R/o. U.B.Road, Bhadhrachalam Town & Mandal, Bhadradri Kothagudem District.                  

…Opposite Parties

 

This C.C. is coming on before us for final hearing in the presence of          Sri Billa Srinivasa Rao, Advocate for Complainant;  and of Sri Swarna Ram Babu, Advocate for Opposite Party No 1;  Notice of Opposite Parties Nos.2 and 3 served and called absent, upon perusing the material papers on record; upon hearing and having stood over for consideration, this Forum passed the following order;

 

O R D E R

(Per Sri. P. Madhav Raja, President)

 

This complaint is filed under section 12(1) of the Consumer Protection Act, 1986. 

 

 

2.     The averments made in the complaint are that the complainant is the daughter of life assured Rama Krishna, who was died on 21-12-2014 and resident of Medical Colony, Bhadhrachalam Town and Mandal, Khammam District.  During the lifetime of deceased Ramakrishna had taken Shri Vivah Insurance policy bearing No.NP100700156588 for Rs.1,00,000/- from  Opposite Party No.1. The opposite parties had assured benefits under Certificate of Insurance policy which was covered for the period from                  19-10-2007 to 19-10-2022. After the death of Ramakrishna, the complainant as nominee, made claim with all necessary documents to the Opposite Parties for payment of death benefits of the deceased /life assured, for which there is no compliance from the Opposite Parties and  the same had been postponed on one pretext or the other.  Vexed with the attitude of Opposite Parties the complainant got issued legal notice on 20-01-2016 to the Opposite Parties to settle the claim, for which the Opposite Party No.1 gave reply on 26-02-2016 stating that “the policy installments were not at cleared and there is a due for the last month installment.”  False calculation was shown and send a cheque for Rs.62,614/- with a malafied intention to cheat the complainant.  That after waiting for a considerable period also, there is no compliance from the Opposite Parties to settle the death benefit.  Due to the death of father of the complainant, the complainant suffered lot of mental agony, inconvenience and major loss not only financially but also in leading bright future.  As such the complainant entitled to claim the compensation, filed this complaint praying this Forum to direct the Opposite Parties to pay Rs.2,90,187/- towards sum assured, damages, mental agony and costs, further prayed any other relief which the Forum may deems fit and proper in the circumstances of case.

 

3.       In support of the complainant’s contention,  she had filed the Affidavit and documents,  which are marked as Ex.A-1 to Ex.A-7.  

 

Ex.A-1 is the photocopy of policy schedule.

Ex.A-2 is the photocopy of first premium report.

Ex.A-3 is the photocopy of Death Certificate of deceased Thirukovalluri Rama

Krishna.

Ex.A-4 is the Office copy of Legal Notice dt:20-01-2016 issued to   Opposite

Parties Nos.1 and 2.

Ex.A-5 is the Reply notice dt:26-02-2016 from the Opposite Party No.1           

Ex.A-6 is the original Cheque bearing No.013396, dt:17-02-2016 for

Rs.62,614/-.

Ex.A-7 is the original Discharge Voucher of Opposite Party No.1.

4.       On receipt of notice, the opposite party No.1 appeared through their  counsel and filed Written Version/Counter and contended that all averments and allegations made in the complaint are false and incorrect except the obtaining the policy with certain conditions therein and as such the claim on the death of policy holder was repudiated, restricted and the question of payment does not arise.

 

The Opposite Party No.1 further submitted that  the quarterly premium of Rs.2,081/- was paid regularly until  3rd quarter of 2014 i.e. 19-07-2014 by the father of the complainant. The 4th quarter premium of 2014, which was fell due on 19-10-2014 was not paid even after sending reminders, as such the policy was deemed to be not in force by the time of the death of the insured.  As per terms and conditions of the policy “if the premium is not paid even after the grace period, the benefits will not be payable.  If the payment of premium is discontinued after a minimum of three years premiums paid, from the date of commencement, the policy will not be fully void, but will acquire a Paid UP Value and the life insurance protection will continue to the extent of the Paid Up Value until the end of the policy term”.  The Opposite Party No.1 further submitted that after the receipt of the death intimation of  the life assured, the Opposite Party No.1 calculated the Paid Up Value of the life assured and prepared a Cheque No.11908 for Rs.62,614/- dt:17-03-2015, sent to the Khammam branch in the month of April,2015 and informed the complainant to collect the same. The complainant did not collected the same on reasons best known to her and issued a legal notice to which the Opposite Party No.1 issued suitable reply  along with revalidated cheque No.013396 for Rs.62,614/- dated:17-02-2016 towards payment of Paid up Sum Assured, which is full and final pay out as per the policy terms and conditions and informed accordingly. The Opposite Parties prayed the Forum to dismiss the complaint.

 

5.       Notice of Opposite Parties Nos.2 and 3 served and called absent

6.       The Opposite party had filed the documents and got marked as Ex.B-1  

          Ex.B-1 is a photocopy of Shri Vivah policy terms

7.       Opposite Party No.1 filed Written Arguments.

8.       Heard both sides arguments

9.       Upon perusing the material papers on record, now the points that arose for consideration are:

 (I) whether the complainant is entitled as prayed for?

 (II) If so, to what relief?

 

Point No. I :-  

On perusal of averment made by both parties and material on records the complainant father Rama Krishna had obtained Shri Vivah insurance policy bearing No.NP100700156588 for Rs.1,00,000/- from Opposite Parties during his life time, which was covered for the period from 19-10-2007 to 19-10-2022.  The life assured Rama Krishna died on 21-12-2014. After the death of insured Ramakrishna the complainant as nominee, made  claim with all necessary documents. As per the terms and conditions of the policy after minimum three years premium or 10 years or more premiums paid from the date of the commencement and if the premium is not paid even after grace period and discontinued it will acquire a Paid up Value. Basing on the paid up value the opposite party had sent a revalidated Cheque No.013396 for Rs.62,614/- dated on 17-03-2016 towards paid up of sum assured.

 

          The complainant father had paid the past premiums regularly and was due only last quarter premium for 19-10-2014. The framers of the Insurance act framed the act as welfare act keeping in mind to provide support to the deprived family of the insured after his death. The Insurance Act had provided grace period and revive facility for insured people in case of nonpayment of premiums under heading concessions for claims during the lapsed period. The revival facility had given for 5 years to the lapsed policies  by imposing penalty but not provided facility for a deceased insured. The insured/ complainant father keeping his daughter future welfare and her marriage had taken the said policy. The policy itself is Vivah Policy and the policy is designed like so and the maturity or death benefits resembles for the said purpose. As the insured was died within grace period and no one can presume the insured/deceased family can coup up the time and situation for payment of premium as the nominee is minor, conditions and social status of the complainant family was not given. The Insurance act is social welfare Act and should be provide uniformly. The Insurance Company/ opposite parties at one hand give a chance to enhance their business in the name of revival and at another hand curbs the payment of assured amounts to the deceased on one pre text or the other.

    

    The opposite parties had send a cheque for Rs.62,614/- dated 17-03-2016 towards paid up of sum assured under acquired a Paid up Value.  The complainant had  refused the same and  filed the said cheque (Ex. A-6) with the complaint. The opposite party had not followed Insurance Act and the Insurance companies provides concessions under heading claims during the lapsed period as

1. If the policyholder had paid premiums for at least 3 full years and subsequently discontinued paying premiums, and in the event of death of the life assured within six months from the due date of the first unpaid premium, the policy money will be paid in full after deduction of the unpaid premiums  up to date of the death.

 

2.  If the policyholder had paid premiums for at least 5 full years and subsequently discontinued paying premiums and in the event of death of the life assured within 12 months from the due date of first unpaid premium, the policy money will be paid in full after deducting the unpaid premiums, with interest up to date of the death. 

 

The Opposite parties have not proved with evidence that they had given total information and accordingly served the insured.

The Hon’ble National Commission observed in “M/S. Murali Agro Products Ltd. vs. M/S. Oriental Insurance Co. Ltd. in original petition No. 253 of 1999 on 10 December, 2004 that

 

    “Contract is based upon good faith. It is the duty of the insurer and their agents to disclose all material facts in their knowledge since obligation of good faith applies equally with the assured. If the contract is Vague, benefit should be given to the insured- finally it is to state that the insurance company should have terms clearly defined in insurance policy with reasonable clarity and not continue with the old forms with vague terms”

 

At the same time the opposite parties failed to render service as per norms and interpreted the terms in their favour,  in “Rajender Singh V/s LIC of India II (2014) CPJ 194 NC” Hon’ble National commission observed that

 

         “When two reasonable interpretations of terms of policy are possible- interpretation which favours insured but not to the interpretation which favours insurer- opposite party miserably failed to explain complainant who represented”

          

      

The opposite party No.1 had stated in his written arguments that one month grace period had given to pay the unpaid premium and on nonpayment of premium the policy was lapsed. The Insurance Act,1938 is a statute and under section 50 it provides 90 days grace period for the nonpayment premium and read as Notice of options available to the assured on the lapsing of a policy

                Section.50: An insurer shall, before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid, give notice to the policy holder informing him of the options available to him unless these are set forth in the policy.

 

The complainant filed policy bond does not have terms and conditions. The opposite party had filed terms and condition in which the grace period was shown as one month. The opposite parties contended that they have sent reminders to pay the premium but failed to prove with proper documentary evidence i.e. acknowledgements that they had sent and failed to show that the grace period was informed to the complainant or to her father. It is a settled law that only averring the contentions had no validity and the onus to prove lies on them. The opposite parties are adopting and practicing to enhance their business ignoring the statute Insurance Act.  The consumer Act was framed to safe guard the consumers from the clutches of defective practice.

 

The Hon’ble Apex Court in Lucknow Development Authority Vs. M. K. Gupta reported in (1994) 1 SCC 243 had observed that: "it appears appropriate to ascertain the purpose of the Act, the objective it seeks to achieve and the nature of social purpose it seeks to promote as it shall facilitate in comprehending the issue involved and assist in construing various provisions of the Act effectively and further observed that In fact that the law meets long felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons had become illusory. Various legislations and regulations permitting the State to intervene and protect interest of the consumers have become a haven for unscrupulous ones as the enforcement machinery either does not move or it moves ineffectively, inefficiently and for reasons, which are not necessary to be stated. The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful, business, described as, 'a network of rackets' or a society in which, 'producers have secured power' to 'rob the rest' and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampant, widespread and deep that the society instead of bothering, complaining and fighting against it, is accepting it as part of life. The enactment in these unbelievable yet harsh realities appears to be a silver lining, which may in course of time succeed in checking the rot'. 29. The said view was reiterated by the Supreme Court once again in (2004) 6 SCC 230 in H.N. Shankara Shastry Vs. Asst. Director of Agriculture, Karnataka.

          

In the light of above discussion we are in opinion that the opposite parties had not rendered their services in proper manner and had not given opportunity to the complainant to pay the unpaid premium and also have not initiated justified action under heading concessions for claims during the lapsed period hence liable to pay as stipulated in the policy bond after deducting the unpaid premium of Rs.2,081/-. The point is answered accordingly.

 

POINT No. II:

 

The opposite parties in policy bond i.e. Ex.A-1 assured that in the event of insured death they shall pay the sum assured Rs.1,00,000/- with vested bonus. As per the opposite parties official web site vested revisionary bonus including terminal bonus if any is subject to minimum 105% of all Premiums paid for the said policy, therefore the complainant father/ Insured had paid seven years premiums in equally four quarters i.e. Rs.2,081 x 4 = Rs. 8324 x 7= Rs.58,268 x 105% = Rs.61,181/- and further assured 1% annually payable monthly on sum assured i.e. 1,000/- from the date of death 21-12-2014 to date of maturity 19-10-2022  and also sum Rs. 1,00,000/- at the time of maturity date i.e. 19-10-2022. Therefore after deducting the unpaid premium Rs.2,081/- from the complainant the opposite parties have to pay  Rs.1,59,100/- along with stipulated benefits in the policy bond.  The point accordingly resolved.

 

10.      In the result the complaint is allowed in part, directing the opposite parties No. 1 to 3, jointly and severally to pay the sum assured and vested bonus of Rs.1,59,100/- (Rupees One Lakh Fifty Nine Thousand One Hundred Only) and costs of Rs 1,000/- to the complainant within 30 days from the receipt of this order, failing which the amount shall carry interest @9% per annum from the date of complaint i.e. dt.30-01-2017.  Further directed to pay sum Rs. 1,00,000/- (Rupees One Lakh only) at the time of maturity date i.e. 19-10-2022 to the complainant and to  pay monthly amount of Rs 1,000/- from the date of death of the life assured 21-12-2014 till the date of maturity 19-10-2022 to the mother of complainant.   The complainant being minor, the awarded amount of Rs.1,60,100/-,  shall be kept in Forum fixed deposit, until she attains the majority.  

 

(Dictated to the Stenographer, transcribed by her, corrected and pronounced by us in the open Forum, on this the 14^th day of November, 2018).

                                               

     

 

                                                   Member                     President                  

                                                          District Consumer Forum,

Khammam.

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED:-

For Complainant                                                    For Opposite parties  

       None                                                                          None

                                         DOCUMENTS MARKED:-

For Complainant                                                    For Opposite parties

   

Ex.A-1	is the photocopy of policy schedule.	Ex.B-1	is a photocopy of Shri Vivah policy terms
Ex.A-2	is the photocopy of first premium report.
Ex.A-3	is the photocopy of Death Certificate of deceased Thirukovalluri Rama Krishna.
Ex.A-4	is the Office copy of Legal Notice dt:20-01-2016 issued to   Opposite Parties Nos.1 and 2.
Ex.A-5	is the Reply notice dt:26-02-2016 from the Opposite Party No.1
Ex.A-6	is the original Cheque bearing No.013396,               dt:17-02-2016 for Rs.62,614/-.
Ex.A-7	is the original Discharge Voucher of Opposite Party No.1.

 

                                                     Member                   President                  

                                                          District Consumer Forum,

Khammam.