Andhra Pradesh

Visakhapatnam-II

CC/268/2011

Allu Musali Naidu - Complainant(s)

Versus

SBI Life Insurance Company Limited - Opp.Party(s)

S. Sreeni Vasu

12 Mar 2015

ORDER

                                             Registration of the Complaint:13-07-2011                                                                            .Date of Order :12-03-2015

BEFORE THE DISTRICT CONSUMERS FORUM-II:AT VISAKHAPATNAM

 

                             Present:

1.Sri H.ANANDHA RAO, M.A., L.L.B.,

       President

2.Sri C.V.N. RAO, M.A., B.L.,

                                             Male Member

3.Smt.K.SAROJA, M.A., B.L.,

       Lady Member

 

THURSDAY, 12^TH DAY OF MARCH, 2015

        CONSUMER CASE NO.268/2011

 

BETWEEN:

ALLU MUSALI NAIDU S/O LATE MAHALAKSHMI,

HINDU, AGED 34 YEARS, R/O KONDALAA AGRAHARAM (V&P),

MAKAVARAMPALEM (M), VISAKHAPATAM DISTRICT-531 113.

 

                                                                                      …COMPLAINANT

A N D:

 

1.SENIOR MANAGER, AUTHORIZED SIGNATORY,

SBI LIFE INSURANCE CO., LTD., (GROUP CLAIMS)

DEPARTMENT, 2^ND FLOOR, KAPAS BHAVAN, PLOT NO.34,

SECTOR-10, CBD BELAPUR, NAVI MAMBAI-400 614.

2.THE CHAIRMAN, ANDHRA PRADESH GRAMEENA

VIKAS BANK, H.NO.2-5-81, RAMNAGAR, HANUMAKONDA,

WARANGAL DISTRICT, ANDHRA PRADESH.

          …OPPOSITE PARTIES

 

This case coming on 03-03-2015 for final hearing before this Forum in the presence of SRI S.SRINIVAS, Advocate for the Complainant and of SRI K.SAILESH PRASAD, Advocate for the 1^st OP and of SRI T.RAVI KUAMR, Advocate for the 2^nd OP, and having stood over till this day for consideration, the Forum made the following:

 

O  R  D  E  R

(As per the Honourable President on behalf of the Bench)

1.       The Complainant filed the present complaint against the OPs, directing them to pay assured amount of Rs.50,000/- with interest @ 24% p.a., from March, 2011 till the date of realization, compensation of Rs.45,000/- and costs of Rs.2,000/-

2.       The case of the complainant in brief is that during the life time of his father, Allu Mahalakshmi,  having a Bank Account bearing No.1022808471 in AP Grameena Vikas Bank, Kondalagraagraharam Branch, Makavarapalem Mandal, Visakhapatnam District and with the instigation of the Bank, he paid insurance policy of SBI, Swadhan Scheme  and his father paid 2 premiums and the said policy bearing No.86000061605 paid by his father to the 2^nd OP who is the  Master Policy Holder in the event of Death of Policy Holder, the total sum assured shall be paid to the legal heirs. Accordingly, after the death of his father, he submitted all relevant documents to the 2^nd OP, but OPs have not disbursed  the said policy amount till today inspite of repeated demands.  Hence, this complaint.

3.       The case of the 2^nd Opposite Party, denying the material averments of the Petition admitting that the deceased Mahalakshmi is the Account Holder and at his request, the Insurance Policy under Swadhan Scheme was given and as per  its terms, the 1^st OP and the insured Mahalakshmi entered into an agreement for the issuance of the said policy and this OP has acted as an Agent between the insured and the insurer and it is their duty to verify prerequisites of issuing policy. Therefore, this OP is not competent to either process the documentation nor is the issuing Authority. The said scheme is the product of 1^st OP and he alone responsible for any acts to be taken by the complainant.  He is not aware about the repudiation of the said claim by the 1^st OP. the 1^st OP is liable for any of the claim of the complainant as premiums  are received by the 1^st OP.

4.       The case of the 1^st Opposite Party in brief is that the insured person fraudulently mentioned his date of birth as 23-08-1959 in the membership form dated 30-11-2009 for insurance claim even though he knows his age more than 66 years. The age is the material fact which determines whether the member is the prima-facie eligible for enrolment under the insurance cover.  If the age of the insured member is such that, it rendered him uninsurable and still the insured member understates his age and obtained the insurance cover fraudulently any subsequent revelation of the understatement of age, would render the insurance cover void ab-initio. As per the terms and conditions of the master policy, the members in the age group 18 to 50 alone  are eligible to avail insurance cover. There was gross understatement of age at the time of enrolment by the DLA, the insurance cover was obtained fraudulently by suppression of material facts about age of the DLA. For these reasons, the complaint is liable to be dismissed.

5.       To prove the case on behalf of the complainant, he filed his affidavit and  got marked Exhibits A1 to A4,  on other hand, on behalf of the OPs, they filed their affidavits and got marked Exhibits B1 to B16.

6.       Exhibit A1 is the Insurance Policy dated 01-12-2009, Exhibit A2 is the Statement of Account belongs to Allu Mahalakshmi (late) dated 24-05-2011, Exhibit A3 is the Death Certificate dated 15-11-2010 and Exhibit A4 is the Reply Notice issued by the 2^nd OP dated 31-03-2011.

7.       Exhibit B1 is the Master Policy dated 03-04-2008, Exhibit B2 Certificate of Insurance issued by SBI Life dated 25-01-2010, Exhibit B3 is the Group Insurance Scheme Membership Form dated 03-11-2009, Exhibit B4 is the Acknowledgement cum requirement letter, dated 02-02-2011, Exhibit B5 Acknowledgement cum requirement letter dated 02-02-2011, Exhibit B6 is the Enquiry Letter dated 03-03-2011, Exhibit B7 is the Ration Card, Exhibit B8 is the Arogyasree Card, Exhibit B9 is the Pension Book, Exhibit B10 is the Identity cum concessional eligibility, Exhibit B11 is the Repudiation letter dated 31-03-2011, Exhibit B12 is the Judgement, dated 12-04-2010, Exhibit B13 is the Judgement, dated 29-07-2010, Exhibit B14 is the Judgement, dated 29-07-2010, Exhibit B15 is the Revision Petition, dated 02-02-2010 and Exhibit B16 is the Judgement, dated 07-13-2010 .

8.       Both parties filed their respective written arguments.

9.       Heard oral arguments from both sides.

10.     Now the point for determination to be determined in this case is;

Whether there is any deficiency of service on the part of the OPs and the Complainant is entitled to any reliefs asked for?

11.     It is evident as seen from record, as per the terms of the master policy, the members in the age group of 18 to 50 alone are eligible to allow insurance cover. Thus, the age is a material fact which determines whether the member is a prima-facie eligible for enrolment under the insurance cover. Exhibit A1 shows the deceased life assured Allu Mahalakshmi  mentioned his Date of Birth as      23-08-1959 in the Membership Form dated 30-11-2009 for insurance claim which means his age as on last birthday as 50 years. According to OPs as per the documents furnished by them B series Household Card, Health Card,  Pension Slip, Disability ID Card show that the DLA Smt.Allu Mahalakshmi is having more than 50 years as on the date of submission of Membership Form. Therefore, he is not insurable at all under the master policy and that by suppressing the age factor, he obtained the policy. Therefore, the complainant is not entitled for the reliefs sought for.

12.     As seen from record, it is evident that OP-1 is an Insurance Company and OP2 is a Bank, so they are both separate entities and their nature of works being businesses are also different. The product of OP No.1 is SBI LIFE Swadhan Group for RRB’s Master Policy, the OP No.1 has not filed any document to show that OP2 is a person to act as an Agent and in turn, OP2 has not filed any record to show his power to do any Act on behalf of the OP-1. If any Insurance Company wants to sell their products through a Bank, it should obtain permission from Insurance Regulatory Development Authority i.e., only after obtaining permission from the said Insurance Company, is legally authorized to appoint such Bank as an agent to that company to sell the products. If any bank wants to act as a Bank Assurance Agent to any Insurance company who have obtained license of IRDA to conduct such business.

13.     Exhibit A1 in para 1 page 1 of the Master Policy, it is stated that SBI Life Insurance Company Limited i.e., OP 1 has received a proposal from the proposed name in the schedule together with a statement and particulars of the members and received the initial premiums  amounts as mentioned in schedule I for grant of benefits detailed in Schedule 2 and further the Master Policy Holder (OP2) has agreed to produce such statement and particulars of members as required by the complainant from time to time as applicable.  According to the above contract, the Master Policy Holder i.e., OP2 ought to join 119 members into that Grand Society fulfilled the target OP2 appears to be instigated the father of the complainant to join in his group which prompted him to deposit Rs.10,000/- to his account for future premiums. The complainant father joined this scheme and deposited Rs.10,000/-  on the same day and the OP2 paid two premiums to his account.

14.     As per Para 9 of Exhibit A1, it is clear that the declaration made by OP2 towards insured persons as “I certify that I have verified the liability of the aforesaid group member and accordingly, this form has been completed by the aforesaid group member. I further, certified all the bank account related information stated in this form has been duly verified and found correct and true which clearly shows that the diseased is innocent and he did not commit any mistake incurred to his age particulars. That the OP2 clearly admitted in his counter that the deceased Allu Mahalakshmi is Account Holder of 2^nd OP and he has availed certain loan facilities from OP2 which is not disputed by OP1. Further the father of the complainant submitted his address and age proof to OP2 at the time of opening of his Bank Account also does not dispute by OPs 1 and 2. Therefore, the contention of the learned counsel for OPs that the complainant played fraud and misrepresentation does not arise. Further the variance between the date of birth as mentioned in the proposal form documents collected by the IO of the OP1 is more than 16 years.

15.     Exhibit A1 clearly shows that the Date of birth of the deceased Allu Mahalakshmi is 23-08-1959 and the members cover start date is from 01-12-2009  and its matured date is 01-12-2019. Having knowledge that the age is material fact and that the policy is eligible for members in between the age group of 18 to 50; this policy was issued in the name of the deceased even though, he was aged 50 years, as seen from his date of birth in Exhibit A1 as 23-08-1959. It is the bounden duty of the first OP to verify the prerequisites for issuing the policy and the eligible conditions etc., but they failed to do so, for the reasons best known to them. From the above facts and circumstances, it can be further held that the OPs played a fraud against the complainant with a design of securing something by taking unfair advantage of another. For all these reasons, the contention of the learned counsel for the OPs that the deceased suppressing the age obtained the policy does not hold any water.

16.     Now the question that comes up for consideration, at this stage of our discussion is, 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 commercial in nature, but that does not and cannot mean to say that the Complainant is licensed to claim interest @ 24% p.a. on Ex.A 4.  But at the same time, it is 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 @ 9% p.a. would better serve the ends of justice.    Consequently, we proposed to fix at rate in question @ 9% p.a. on Ex. A4 i.e., Repudiation letter of OPs in question.   Accordingly interest is ordered.

17.     Whether the Complainant is entitled for compensation of Rs.45,000/- is to be considered.  It appears as seen from the evidence of the Complainant that the Complainant was compelled to approach the Opposite Parties and therefore, he experienced a lot of physical strain besides mental agony and financial loss. It is an un-disputed fact that the Opposite Parties did not refund the advance amount paid by the Complainant.  Naturally, that might 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 10,000/- would serve the ends of justice.   We, therefore, proposed to award compensation of Rs.10,000 /-,  in the circumstances of the case on hand. Accordingly this point is answered.

18.     Before parting our discussion, it is incumbent and imperative on our part to consider the costs of litigation.    The Complainants ought not have to approach this Forum had his claim for payment of the assured amount of Rs.50,000/- 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 costs deserves to be allowed.   In our considered and unanimous opinion awarding a sum of Rs.2,000/- as costs would appropriate and reasonable.   Accordingly costs are awarded.

20.     In the light of our discussion, referred supra, the complainant is entitled to receive the sum of Rs.50,000/- together with subsequent interest @ 9% p.a., from the month of March, 2011 till the date of realization, a compensation of Rs.10,000/- and also costs of Rs.2,000/- to the Complainant.

21.     In the result,  this compliant  is allowed in part, directing the OPs to pay the Assured amount of Rs.50,000/- (Rupees Fifty Thousand Only) together with subsequent interest @ 9% p.a., from the month of March, 2011 till the date of realization, a compensation of Rs.10,000/- (Rupees Ten Thousand only) and also costs of Rs.2,000/- (Rupees Two Thousand only) to the Complainant.  Time for compliance one month from the date of this order.

Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open Forum, on this the 12^th day of March, 2015.

 

      Sd/-                                            Sd/-                                     Sd/-

LADY MEMBER                       MALE MEMBER                       PRESIDENT        

APPENDIX OF EVIDENCE

  For the Complainant:-

Exhibits	Date	Description
A-1	01-12-2009	Insurance Policy Copy	Photostat Copy
A-2	24-05-2011	Statement of account belongs to Allu Mahalakshmi	Original
A-3	15-11-2010	Death Certificate	Original
A-4	31-03-2011	Reply Notice issued by OP2	Original

 

For the Opposite Parties:-   

Exhibits	Date	Description	Remarks
B-1	03-04-2008	Master Policy	Photostat Copy
B-2	25-01-2010	Certificate of Insurance issued by SBI Life	Photostat Copy
B-3	03-11-2009	Group Insurance Scheme Membership form	Photostat Copy
B-4	02-02-2011	Acknowledgement cum requirement letter	Photostat Copy
B-5	02-02-2011	Acknowledgement cum requirement letter	Photostat Copy
B-6	03-03-2011	Enquiry Letter	Photostat Copy
B-7		Ration Card	Photostat Copy
B-8		Arogyasree Card	Photostat Copy
B-9		Pension Book	Photostat Copy
B-10		Identity cum concessional eligibility	Photostat Copy
B-11	31-03-2011	Repudation letter	Photostat Copy
B-12	12-04-2010	Judgment	Photostat Copy
B-13	29-07-2010	Judgment	Photostat Copy
B-14	08-02-2011	Judgement	Photostat Copy
B-15	02-02-2010	Revision Petition	Photostat Copy
B-16	07-13-2010	Judgement	Photostat Copy

 

    Sd/-                                              Sd/-                                           Sd/-

LADY MEMBER                            MALE MEMBER                        PRESIDENT