BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR.

Consumer Complaint No.390-14

Date of Institution:22-07-2014

Date of Decision:05-03-2015

1. S.Kabul Singh son of late Sh.Kant Singh.
2. S.Gurpreet Singh son of late Sh.Kant Singh
3. S.Ranjit Singh son of late Sh.Kant Singh, all residents of VPO Nangal, Amritsar. 

Complainants

Versus

1. SBI Life Insurance Company Limited, CPC, Kapas Bhavan, Plot No.3-A, Sector No.10, CBD Belapur, Navi Mumbai through its General Manager/ Person over all Incharge.
2. SBI Life Insurance Company Limited, SCO No.28, 3^rd Floor, District Shopping Complex, Ranjit Avenue, Amritsar through its Branch Manager/ Person over all Incharge.
3. State Bank of India, Gopal Nagar, Amritsar Branch, Amritsar through its Branch Manager/ Person over all Incharge.   

Opposite Parties

Complaint under section 11 and 12 of the Consumer Protection Act, 1986.

Present: For the Complainants: Sh.Neeraj Kumar, Advocate

              For the Opposite Parties No.1 & 2: Sh.Deepinder Singh

              For Opposite Party No.3: Sh.Amandeep Sharma, Advocate

Quorum:

Sh.Bhupinder Singh, President

Ms.Kulwant Kaur Bajwa, Member

Mr.Anoop Sharma, Member  

Order dictated by:

Sh.Bhupinder Singh, President.

1. Present complaint has been filed by the complainants under the provisions of the Consumer Protection Act alleging therein that Sh.Kant Singh father of the complainants took personal loan to the tune of Rs.2 lacs from Opposite Party No.3 in April, 2013. Complainants allege that Opposite Parties also introduced scheme known as Rinn Raksha Personal Loan Scheme which was sponsored by State Bank of India Group and as per the said insurance scheme, the person who raises personal loan from the Opposite Party No.3, was to be insured by Opposite Parties No.1 and 2 for a sum insured to the  extent of the amount of personal loan raised, meaning thereby in the event of death of policy holder, his personal loan account maintained with Opposite Party No.3 would be repaid/ adjusted by Opposite Parties No.1 and 2. This insurance was being arranged by Opposite Party No.3 for the father of the complainants and as such, the father of the complainants was also insured under the said scheme vide policy No. 70000001001 and in respect thereof one time premium to the tune of Rs. 4933/- was deducted by Opposite Party No.3 directly from the saving bank account of Kant Singh, father of the complainants with Opposite Party No.3 on 6.5.2013.  It is pertinent to mention here that no policy documents containing terms and conditions were ever supplied to the father of the complainants or complainants by the Opposite Parties much less any alleged terms and conditions ever formed part of contract between the parties and as such, the complainants or their father were not aware of the details of the scheme and its coverage. Complainants further allege that in the above said insurance, Smt.Swaran Kaur wife of Kant Singh was mentioned/ appointed as nominee who also died on 21.4.2014 and as such, late Kant Singh and Swaran Kaur are survived  by their sons i.e. complainants as Class-I legal heirs and as such, the present complaint is signed, verified and instituted by proper and competent persons as envisaged under law.  Unfortunately, Kant Singh father of the complainants died on13.6.2013 and it was his sudden and unexpected death and prior to this, he was enjoying good health and remained busy in daily routine work at job as well as at home. The intimation in this respect was given to Opposite Party No.3 and all the documents were also supplied to them. The complainants requested the Opposite Parties so may times to settle the claim, but they did not pay any heed to the genuine and legitimate requests of the complainants and malafide conduct of the Opposite Parties can be well judged that the Opposite Parties No.1 and 2 rejected claim vide their letter dated 6.3.2012 on flimsy ground and without any basis, but this letter was never sent to the complainants or their mother and this letter was sent to Opposite Party No.3 only who also did not inform the complainants or their mother regarding the alleged rejection letter and even otherwise, the complainants or their mother never received any alleged cheque of Rs.4350/- as alleged in the said letter dated 6.3.2014 which was never supplied to the complainants or their mother by the Opposite Parties. In the month of   April, 2014 when mother of the complainants visited the premises of Opposite Party No.3 with respect to the above said claim, then Opposite Party No.3 handed over the copy of that letter dated 6.3.2014 to the mother of the complainants. But no such alleged terms and conditions or clause of the policy as alleged in the repudiation letter dated 6.3.2014 were ever supplied to the father of the complainants or the complainants much less the same were ever explained or communicated to them and even the alleged clause as mentioned in the repudiation letter is not applicable in the present claim/ case and this act on the part of the Opposite Parties is a clear cut case of gross negligence, carelessness, deficiency in service and unfair trade practice with has necessitated the filing of the present complaint.   Alleging the same to be deficiency in service, complaint was filed seeking directions to the opposite parties to pay Rs.2 lacs sum assured to the complainants alongwith interest @ 12% per annum. Compensation and litigation expenses were also demanded.
2. On notice, Opposite Parties No.1 and 2 appeared and filed written version in which it was submitted that in the Group Insurance Scheme, the privity of contract is between the Master Policy holder and the Insurer. As an evidence of contract, a Master Policy containing all the terms and conditions of the insurance coverage will be issued to the Master Policy Holder. All the terms and conditions of the master policy are binding on all the members of the scheme. In the instant case, the date of commencement of risk on the life of  Kant Singh was 28.5.2013 and the date of death was 13.6.2013 i.e the death happened within 16 days from the date of commencement of risk due to natural cause and as per the terms and conditions of the Master Policy, the company is not liable to pay any claim amount except for a claim arising out of death due to accident, during the first 45 days from the date of commencement of the cover for the insured member. In the instant case, on receipt of the proposal form dated 13.5.2013 and the same was accepted and the insurance cover was granted with effect from 28.5.2013. Even if calculated from the date of proposal also, the DLA has expired within 31 days from the date of proposal. So, the DLA has died within 45 days from the date of proposal/ commencement of the policy and the cause of death was not accident, but natural. Hence nothing is payable. Therefore, the claim has been repudiated as per the terms and conditions of the Master Policy which is just and legal.  While denying and controverting other allegations, dismissal of complaint was prayed.
3. Opposite Party No.3 appeared and filed written version in which it was submitted that the claim of the complainants was rightly rejected by the Opposite Parties according to the terms and conditions of the policy in question to which the complainants are bound being the nominee. So far as the letter dated 6.3.2014 issued by the Opposite Parties to the complainants is concerned, it is on the record and the same may be perused. It is duly mentioned in the said letter dated 6.3.2014 that the date of commencement of the policy in question is 28.5.2013, whereas as per the information supplied by the complainants to the Opposite Parties, their father Kant Singh died on 13.6.2013 i.e. within 45 days of the date of commencement of the said policy. Moreover, Opposite Party No.1 is the subsidiary branch of Opposite Party No.3 it is clearly mentioned in the policy that if the policy holder dies, then the insurance company is to pay the balance amount to the bank, but subject to the conditions applicable to it. While denying and controverting other allegations, dismissal of complaint was prayed. 
4. Complainants tendered into evidence affidavit of Kabal Singh, one of the complainants Ex.C-1 alongwith documents Ex.C2 to Ex.C5 and another affidavit of Kabal Singh Ex.C6 and closed the evidence on behalf of the complainants.
5. Opposite Parties No.1 and 2 tendered into evidence affidavit of Ms.Gurpreet Kaur, authorized signatory Ex.OP1,2/1 and documents Ex.OP1,2/2 to Ex.OP1/2/7 and closed the evidence on behalf of the Opposite Parties No.1 and 2. Similarly, Opposite Party No.3 tendered into evidence the affidavit of Sh.Baljeet Singh, Branch Manager Ex.OP3/1 and closed the evidence on behalf of Opposite Party No.3.    
6. We have carefully gone through the pleadings of the parties; arguments advanced by the ld.counsel for the parties and have appreciated the evidence produced on record by both the parties with the valuable assistance of the ld.counsel for both the parties.
7. From the record i.e. pleadings of the parties and the evidence produced on record by the parties, it is clear that father of the complainants namely Kant Singh got personal loan from Opposite Party No.3 Bank. Opposite Party No.3 Bank got insured the amount of personal loan raised by Kant Singh from Opposite Parties No.1 and 2. That in the event of death of policy holder, his personal loan account maintained with Opposite Party No.3 would be repaid/ adjusted by Opposite Parties No.1 and 2. Resultantly, an amount of Rs. 4933/-  was deducted by Opposite Party No.3 directly from the saving bank account of Kant Singh on 6.5.2013 and the Opposite Parties No.1 and 2 issued policy documents to Opposite Party No.3. However, the policy documents alongwith terms and conditions were not supplied to Kant Singh father of the complainants by the Opposite Parties No.1 and 2. Kant Singh, loanee expired on 13.6.2013. The intimation in this respect was given to Opposite Party No.3 and the relevant documents i.e. death certificate etc. were also supplied to 3. Nominee under the aforesaid insurance was Swaran Kaur, wife of Kant Singh, who has also expired on 21.4.2014 and the complainants are only legal heirs of Kant Singh and Swaran Kaur. The complainants requested the Opposite Parties to settle the claim of the complainants regarding the death of Kant Singh, but the Opposite Parties No.1 and 2 rejected the claim vide their letter dated 6.3.2014 Ex.C2 on the ground that as per clause 5 of the schedule III of the policy, the company shall not be liable for payment of any benefit under the master policy in respect of a Member, if the claim event takes place within 45 days of the Date of Commencement of cover for that Member.  The date of commencement of the policy is 28.5.2013 and Kant Singh expired on 13.6.2013 i.e. within 45 days. Ld.counsel for the complainant submitted that neither the policy document nor terms and conditions were supplied by the Opposite Parties to Kant Singh or to the complainants. So, the same were not applicable to the complainant. In this regard, the complainants relied upon the ruling of Hon’ble Supreme Court of India in case Modern Insulators Ltd. Vs. Oriental Insurance Company Limited, 1(2000) CPJ 1 (SC). Moreover, there is no such clause in the policy applicable to the complainants, rather as per the master policy, clause No.2, the insurance cover of the member will commence from the date of underwriting acceptance of proposal or date of receipt of premium, whichever is later and as per clause No.13 of the policy, the insurance cover start date is the date from which the policy benefits commence. Here in this case, the insurance cover commenced & when the Opposite Party No.3 deducted the amount of premium from the account of kant Singh i.e. on 6.3.2013.  Ld.counsel for the complainants submitted that all this amounts to deficiency of service on the part of the Opposite Parties No.1 and 2 towards the complainants.
8. Whereas the case of the Opposite Parties No.1 and 2 is that in the instant case the date of commencement of policy  i.e. risk on the life of Kant Singh insured was 28.5.2013 and date of death was 13.6.2013 i.e the death happened within 16 days from the date of commencement of risk. As per the terms and conditions of the master policy, the company is not liable to pay any claim amount except for a claim arising out of death due to accident, during the first 45 days from the date of commencement of the cover for the insured member. In the instant case, the deceased life assured Kant Singh (herein-in-after ‘DLA’) has died within 45 days from the date of proposal/ commencement of the policy and the cause of death was not accident, but natural. So, they may impose waiting period of maximum 45 days as per clause 11.3.1 of the terms and conditions fo the policy Ex.OP1,2/2. Ld.counsel for the Opposite Parties No.1 and 2 submitted that there is no deficiency of service on the part of the Opposite Parties No.1 and 2.
9. Whereas the case of Opposite Party No.3 is that Kant Singh father of the complainants had taken personal loan to the tune of Rs.2 lacs from Opposite Party No.3. Opposite Party No.3 got insured the loan amount of Kant Singh from Opposite Parties No.1 and 2. The date of commencement of the policy was 28.5.2013. Kant Singh died on 13.6.2013 i.e. within 45 days from the date of commencement of the policy and as per clause 5 of the schedule III of the policy, the company shall not be liable for payment of any benefit under the master policy in respect of a Member, if the claim event takes place within 45 days of the Date of Commencement of cover for that Member. However, this exclusion will not apply where death occurs due to the accident. Whereas in the present case, the death of Kant Singh occurred due to natural cause. Moreover, Opposite Parties No.1 and 2 have to decide the case regarding the death of Kant Singh, DLA and Opposite Party No.3 has nothing to do with the same.  They are to recover the loan amount alongwith interest from the complainants or the insurance company. Ld.counsel for the Opposite Party No.3 submitted that there is no deficiency of service on the part of the Opposite Party No.3.
10. From the entire above discussion, we have come to the conclusion that Kant Singh father of the complainants got personal loan to the tune of Rs.2 lacs from Opposite Party No.3 Bank. Opposite Party No.3 Bank got the loan amount of Kant Singh insured from Opposite Parties No.1 and 2 by deducting the premium amount of Rs. 4933/- from the saving bank account of Kant Singh on 6.5.2013 and the Opposite Parties No.1 and 2 have issued the policy with commencement date 28.5.2013. It is admitted case of the parties that policy documents were sent by Opposite Parties No.1 and 2 to Opposite Party No.3 and the same were never supplied to the complainants. As such, the complainants were not appraised of the terms and conditions of the policy in question. It has been held by Hon’ble Supreme Court of India in case M/s.Modern Insulators Ltd. Vs. Oriental Insurance Company Limited, 1(2000) CPJ 1 (SC) that where the exclusion  clause is neither part of the contract of insurance nor disclosed to insured, no benefit is available to the insurance company. The respondent cannot claim benefit of said exclusion clause. Said Kant Singh expired on 13.6.2013. The nominee under the policy Smt.Swaran Kaur also expired on 21.4.2014 and the complainants are the only legal heirs of Kant Singh, DLA and Smt.Swaran Kaur nominee. The complainants informed about the death of Kant Singh to Opposite Party No.3 and also supplied the relevant documents i.e. death certificate, etc. of Kant Singh and Swaran Kaur nominee also to Opposite Party No.3 who further informed about the same to Opposite Parties No.1 and 2, but Opposite Parties No.1 and 2 vide letter dated 6.3.2014 Ex.C2 rejected the claim regarding the death of Kant Singh,  on the ground that Opposite Parties No.1 and 2  as per the terms and conditions of the policy, may impose condition of 45 days as waiting period. The date of commencement of the policy is 28.5.2013 and Kant Singh died on 13.6.2013 i.e. within 45 days from the date of commencement of the policy, so the Opposite Parties No.1 and 2 are not liable to pay the claim, due to the death of DLA Kant Singh. 
11. We have gone through the terms and conditions of the policy. Firstly, the terms and conditions are not applicable to the complainants as the same were not supplied to the complainants or D.L.A, as per the law laid down by Hon’ble Supreme Court of India in case M/s. Modern Insulators Ltd. Vs. Oriental Insurance Company Limited (supra). Secondly, clause 11.3.1 gives arbitrary powers to Opposite Parties No.1 and 2 that they may impose waiting period of maximum 45 days. This clause is not the part of the contract as the terms and conditions of the policy were not supplied to Kant Singh, DLA. Moreover, Opposite Parties No.1 and 2 can not impose any clause on the complainants arbitrarily. So, this clause is not applicable to the complainants. As such, we hold that the Opposite Parties No.1 and 2 have wrongly rejected the claim due to the death of DLA Kant Singh vide letter dated 6.3.2014 Ex.C2.
12. Consequently, we allow the complaint with costs and the Opposite Parties No.1 and 2 are directed to pay/ adjust the loan amount due against DLA Kant Singh in the aforesaid personal loan account of Kant Singh with Opposite Party No.3. The Opposite Parties No.1 and 2 are also directed to pay costs of litigation to the complainants to the tune of Rs.2000/-.  Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum.

Dated: 05-03-2015.                                                                                                                                

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