IN THE PRESIDENT, DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, SAMBALPUR

C.D. Case No. 41  of 2016

Sri Damodar Naik, S/o Nirakar Naik R/o Beluamal , P.O.:Kenadhipa, Via: Laida,

Dist. Sambalpur, Odisha, PIN-768214.    

                                                                                                                                ………………  Complainant

Versus

1. SBI Life Insurance Company Limited, Plot No. 2241/5263, Behind Sitala Mandir, Station Road, Jharsuguda- 768201.
2. SBI Life Insurance Company Limited, Registered Office, ‘Natraj’, M.V. Road & Western Express Highway Junction, Andheri  (East), Mumbai- 400069

                                                                                                                                                …………………  Opp. Parties

Advocate for Complainant                           :   Sri D.K. Thakur & others

                                    for O.P.s No.1 & 2                        :    Sri N.C. Behera, Adv.

        PRESENT:-  SHRI A.P. MUND, PRESIDENT

                                SMT. S. TRIPATHY, MEMBER

                             SHRI K.D. DASH, MEMBER

Date of Order 21.05.2018

SHRI A.P. MUND, PRESIDENT

The complainant has filed this case against the Opp. Parties alleging deficiency in service, mental agony and harassment  :

BRIEF FACTS OF THE COMPLAINANT’S CASE

1. The complainant is a permanent resident of  Sambalpur district and the Opposite Parties are one of the premier Insurance company selling Life Insurance products.
2. The complainant is the registered nominee under one ‘SBI Life- Flexi Smart Insurance-Series 1’ policy No.56032231108 (proposal No.56QE107261), commencing on 16.01.2013, on the life of Laxmi Prasad Naik (customer ID- 31738015), Life Assured and Policy Holder, his elder brother. Rs. 3,00,000/- is the sum assured under the policy.
3. The policy was in force when the Life assured and Policy Holder Laxmi Prasad Naik died on 02.10.2014. By then he had already paid two annual premiums of Rs.30,000/- each under the policy.
4. The complainant, being the nominee under the policy, duly intimated the death of the Life Assured and Policy Holder to the Opp. Parties and lodged claim under the policy. He also complied with the direction of filing the original policy bond and all other relevant documents, papers and certificates.
5. Since then the complainant had been made to run from post to pillar by the Opp. Parties and the claim under the policy has not been settled and paid.
6. On the above premises the complainant served advocate notices dated 25.01.2016 on the Opposite Parties demanding payment under the policy. Although the Opp. Parties received the notices they did not bother to settle the claim.
7. The complainant claims that Section 39 of the Insurance Act, urged the insurer to make death claim payment under a policy in favour of the registered nominee in valid discharge of its liability. Thus, in the absence of any prohibitory order from a competent court the insurer is legally bound to make payment under a policy in favour of the registered nominee. Under the law the insurer is not empowered to assume the judicial role to decide on inheritance, succession or partition.
8. The Opposite Parties have defaulted in their service, behaving indifferently; putting the complainant to financial hardship, inconvenience, pain and mental agony, hence this complaint.
9. The complainant prayed for direction to the Opposite Parties to settle the claim under the policy and pay Rs.3,00,000/- sum assured plus other accrued benefits to the complainant,  pay compensation of Rs.10,000/- for the mental agony, harassment and Rs.5,000/- towards cost of this proceeding along with other ancillary benefits.

The Complainant has filed the following Documents.

1. Computer generated copy of details of policy No. 56032231108- 1 sheet.
2. Copy of death certificate of policy holder Laxmi Prasad Naik-1 sheet.
3. Office copy of advocate notice dt. 25.1.16 with A.D. & postal receipt- 2 sheets.

COUNTER OF THE OPPOSITE PARTIES

1. After receiving notice from the court the Opp. Parties made appearance and filed written statement.
2. In the written statement the Opp. Parties questioned the territorial jurisdiction of this forum to entertain this complaint.
3. The Opp. Parties admitted the existence and validity of the policy in question as well as it’s nomination in favour of the complainant.
4. The Opp. Parties also submit that upon receipt of the death intimation, claim and necessary forms from the complainant they have admitted the claim under the policy after due verification and scrutiny and were willing to disburse the total claim amount of Rs.3,45,826/- under the policy.
5. The Opp. Parties state that during process of settlement of claim they received an application from one Ms Sanjukta Sarangi. Claiming to be the wife of the deceased Life Assured, she claimed the amount under the policy. Thus, as the title under the policy was disputed the Opp. Parties were not able to settle the claim, kept the payment in abeyance and requested the rival claimants through letters, to prove their respective title by obtaining succession certificates from the competent court of law.
6. The Opp. Parties admitted to have received the advocate notice dt. 25.01.2016, sent by the complainant and submits that they have replied to it.
7. The Opp. Parties lastly submit that they are willing and ready to disburse the claim amount in favour of the claimant as decided by the court of competent jurisdiction.
8. The Opp. Parties denies that they have been deficient in providing service to the complainant and thereby putting him to harassment and mental agony and as such are liable to pay compensation.

The O.P. has filed the following Documents.

1. Common proposal form – 8 pages.
2. Welcome letter by O.P.  to deceased  submitted 17.01.13.
3. Premium received dt. 10.01.13.
4. Policy document.
5. Letter by complainant to the O.P. No. 1.
6. Letter by O.P. No. 2 to the complainant dt. 14.09.14.
7. Letter by O.P. No. 2 to complainant  dt. 03.03.2015, 08.03.15, 05.04.15, 21.04.15, 21.05.15, 08.02.16.
8. Letter by O.P. No. 2  to  Sanjukta Sarangi dt. 03.03.2015, 18.03.2015, 05.04.2015, 21.04.2015, 21.05.2015, 08.02.2016 .
9. Reply made by O.P. No. 2 to the Advocate notice dt. 03.05.2016.
10. Advocate noticed dt.
11. Letter by O.P. No. 2 to the Complainant dt. 14.09.14.

SUMMARY OF THE DISPUTE

Upon perusal of documents filed and hearing submissions of counsels of both the parties, it can be ascertained that:

1. One Laxmi Prasad Naik (customer ID- 31738015) was the Life Assured and Policy Holder of

one ‘SBI Life- Flexi Smart Insurance-Series 1’ policy being No.56032231108 (proposal No.56QE107261), of the Opp. Parties co. in which the complainant Damodar Naik, the brother of the life assured and policy holder, was the registered nominee.

2. The policy was in force on the date of death of the Life Assured and Policy Holder on 02.10.2014 as up-to-date annual premiums have been paid.
3. The nominee under the policy/complainant submitted death intimation, claim and necessary forms before the Opp. Parties who in turn admitted the claim under the policy after due verification and scrutiny and were willing to disburse the total claim amount of Rs.3,45,826/- under the policy.

9. While processing the claim the Opp. Parties received an application from one Ms Sanjukta Sarangi, claiming to be the wife of the deceased Life Assured, claiming the amount under the policy. Thus, as the title under the policy got disputed the Opp. Parties were not able to settle the claim, kept the payment in abeyance and requested the rival claimants through letters, to prove their respective title by obtaining succession certificates from the competent court of law.

4. Being aggrieved by the said decision of the Opp. Parties the complainant has approached this forum after duly serving notice to them.

ISSUES

1. Whether this forum command jurisdiction to entertain this complaint ?
2. Whether the complainant being the valid registered nominee has the rightful claim to the receive the claim amount under the policy ?

FINDINGS

1. First of all, as the complainant is residing at Beluamal, Po: Kenadhipa, Via; Laida, Dist. Sambalpur, within the jurisdiction of this forum and the Opp. Parties are having a branch office at Sambalpur among other places, this forum is having jurisdiction to redress this complaint petition as per provisions of Sec. 17 of the CP Act.
2. Secondly, as regards the right of the complainant to receive the death claim amount under the policy, being the nominee, reference can be made to relevant provisions in Sec. 39 of the Insurance Act.

Insurance Act. 1938, Sec. 39 (1)- ‘ The holder of a policy of life insurance, on his own life, may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death.’

On a bare reading, law provides that, in the event of death of a policy holder the money secured by the policy SHALL be paid to his nominated person(s).

In the instant case the Opp. parties have not disputed the status of the complainant as the NOMINEE under the policy in question. They have submitted that they were constrained to withhold payment to him pending rival claim by somebody who claims to be the wife of the deceased life assured.

In Smt. Sarbati Devi and another VS. Smt. Usha Devi  (AIR 1984 SC 346) the Hon’ble Supreme Court of India, setting to rest all disputes, confusions and conflicting judicial opinions on NOMINEE’s status under an Insurance policy, held that -

 “A mere nomination made under Section 39 of the Insurance Act, 1938 does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.  An analysis of the provisions of Section 39 of the Act clearly established that the policy holder continues to hold interest in the policy during his life time and the nominee acquires no sort of interest in the policy during the life time of the holder. If that is so, on the death of the policyholder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him. Such succession may be testamentary or intestate. The tenuous character of the right of a nominee becomes more pronounced when one contrasts the provisions of Section 39 with that of Section 38. Section 39 of the Act was not intended to act as a third mode of succession which can be styled as "statutory testament". The language of Section 39 of the Act is neither capable of altering the course of succession under law nor can be said to have equated a nominee to an heir or legatee.”

Thus the nominee is the person, on payment of which hand the insurer gets a valid discharge of its liability under the policy. The nominee does not command any beneficial interest in the amount payable under the policy and the amount can be claimed by the heirs of the assured in accordance with the law of succession governing them in case of disputes.

On perusal of documents and hearing submissions of the learned counsel for the Opp. Parties it is observed that after the claim got disputed on submission of an application by one Ms Sanjukta Sarangi, the Opp. Parties kept the claim payment on abeyance and through letters sent between 03.03.2015 to 08.02.2016, asked the nominee (complainant) to prove his title under the policy by obtaining a Succession Certificate from the court of law.

Between the same period letters were also sent to said Ms Sanjukta Sarangi, the content of which is reproduced here for better appraisal –

‘Madam,

This is with reference to death claim of late Laxmi Prasad Naik under the above mentioned policy. In this context, we state that a valid nomination subsists under the above mentioned policy in the name of Mr. Damodar Naik Brother Late Laxmi Prasad Naik. As per Section 39 of the Insurance Act 1938, we will be constrained to make payment to the nominee in this case, unless restrained by a court of competent jurisdiction.’

Thus the Opp. Parties admit that the complainant being the nominee under the policy has a prima facie claim to receive the amount under the policy as per provisions U/s 39 of the Insurance Act unless restrained by a court of competent jurisdiction. It is more than two years since the last of the aforesaid letters was sent on Dt. 08.02.2016 by the Opp. Parties to said Ms Sanjukta Sarangi. Evidently no documents have been produced, evidence led or submissions made by the Opp. Parties to the fact that they have received a restrained order from any court of law in this regard.

During course of argument the learned counsel for the complainant relied on a decision of the Hon’ble High Court of Orissa published in 2015(Supp.-II) OLR-1072 (Rabinarayan Sarangi vs Smt Tarulata Sarangi) and referring to para 7 of the order submitted that a Succession Certificate is also not a final adjudication either to decide on the question as to who is the next heir and as such is entitled to the estate of the deceased. It is also simply, like the ‘Nomination’ in a life insurance policy, an authority to realize and receive the debt and securities of the deceased. In the aforesaid decision in para 7, sub para 6 the Hon’ble court have held that ‘debt and securities of a deceased cannot be allowed to be lying without any or proper return much to the undue advantage and gain in the hands of third parties and thereby loss to the estate or misused.’ The learned counsel for the complainant relied on another decision of the Hon’ble Supreme Court of India published in (2009) 10 SCC 680 (Shipra Sengupta vs Mridul Sengupta and oth.) and referring to para 18 of the order submitted that the amount under the policy in question can be received by the nominee and the heirs can claim the amount from him, if they prefer so, in accordance with the law of succession governing them.

ORDER

In the light of the above discussion and findings it can be concluded that the complainant Damodar Naik, being the valid registered nominee under the policy in question is authorized to receive the claim amount under the policy along with all the ancillary benefits. More so because of absence of any prohibitory order from any competent court of law obtained by interested parties, if any. The claim amount cannot be allowed to be lying without any or proper return much to the undue advantage and gain in the hands of the Opp. Parties Insurance Company and thereby causing loss to the estate or misused.

The Opp. Parties are therefore directed to pay the total claim amount of Rs. 3,45,826/-(Rupees three lakhs forty-five thousand eight hundred twenty-six) only; which the O.P. has admitted under ‘SBI Life- Flexi Smart Insurance-Series 1’ policy No.56032231108 (proposal No.56QE107261) on the life of Late Laxmi Prasad Naik (customer ID- 31738015), to his registered nominee, his brother Damodar Naik, the complainant, under proper identification, within one month from the date of this order along with interest @ 9 % per annum from the date of death i.e. 2.10.2014 The Opp. Parties are also directed to pay the complainant Rs. 7000/- (Rupees  seven thousand) towards compensation for mental agony, harassment and  litigation expenses.

                                                                                                      Sd/-

                     Sd/-                                                                           SHRI A.P.MUND

         SMT S.TRIPATHY. Member I agree.                                            PRESIDENT.                                                                    .

                      Sd/-                                                                                      Sd/-

         SHRI K.D.DASH.  Member    I agree.                             Dictated and corrected by me.

                                                                                                         PRESIDENT