BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 469/2004 Filed on 22.12.2004

Dated : 31.03.2010

Complainant:

Vimala, W/o late Rajendran, Kalpakavady, Karumom, Kaimanam, Thiruvananthapuram-2.

(By adv. G. Manmadhan Nair)

Opposite parties:

1. Union of India represented by its Secretary, (Department of Posts, India), New Delhi.

    

2. The Chief Post Master General, Kerala Circle, Thiruvananthapuram-33.

    

3. The Deputy Divisional Manager, Postal Life Insurance, Kerala Circle, Thiruvananthapuram.

    

   (By M.P. Sasidharan Nair)

Addl. Opposite party:

4. Ramadevi, Aswathy Bhavan, Karumom P.O, Thiruvananthapuram.

(By adv. P. Venugopalan Nair)

This O.P having been heard on 15.02.2010, the Forum on 31.03.2010 delivered the following:

ORDER

SRI. G. SIVAPRASAD: PRESIDENT

The facts leading to the filing of the complaint are that complainant is the mother, nominee and legal heir of the deceased R. Baijumon who was working as Sr. TOA(G) of BSNL, that Baijumon expired on 05.04.2003, that the said Baijumon was holding a policy in Postal Life Insurance, Kerala Circle vide policy No. KL-45942-T, that he made his proposal for policy on 13.11.2002 and insurance came into force on 25.11.2002. The deceased Baijumon was the only bread winner of complainant's family, that after his death, complainant submitted an application before the 2^nd opposite party for death claim relating to Postal Life Insurance policy held by late Baijumon dated 07.06.2004. 2^nd opposite party did no sanction any amount on death claim, instead he issued a letter to the complainant stating that the policy has been lapsed due to non-payment of premium for December 2002. It is submitted that the deceased Baijumon remitted premium during the month of January, February and March 2003 and that was duly accepted by the PLI authorities without any objection whatsoever. No default notice has been served to the deceased either on December 2002 or even before accepting the subsequent premiums for January to March. Opposite parties failed to give any opportunity to the deceased to rectify the default said to be happened on December 2002. Complainant entitled to get the whole policy amount of Rs. 3,00,000/- plus other benefits covered under the policy, that only because of the deficiency in service of the opposite party complainant has sustained irreparable injuries for which opposite parties are held to be liable. Hence this complaint to direct opposite parties to pay the full amount with respect to the policy No. KL 45942 T held by late R. Baijumon to the complainant along with interest and costs.

Opposite parties 1 to 3 filed version contending that the deceased insurant Sri. Baijumon submitted a proposal for Postal Endowment Assurance Policy for a sum of Rs. 3,00,000/- on 13.11.2002, that the proposal was accepted in accordance with terms and conditions laid down by POIF Rules and policy document was also issued vide memo No. KL 45942 T with effect from 25.11.2002, that in the letter of acceptance dated 05.10.2002 issued by Deputy Divisional Manager, (PLI), it was stipulated that the amount of Rs. 1,065/- remitted by him along with his proposal has been adjusted as first premium for November 2002 and the subsequent premium for the following months are to be remitted in cash at the post office and receipt issued by the post office is to be sent to the Deputy Divisional Manager till recovery of the premium is commenced from his salary by the concerned pay drawing and disbursing officer. The deceased insurance failed to fulfil the terms and conditions of the contract. He failed to remit the premium for December 2002. Instead he remitted premium for November 2002 and from January to March 2003. Since premium for December 2002 remains unpaid the policy became void and therefore no claim on void policy can be entertained by opposite parties. An application for death claim was submitted by Smt. S.R. Rema Devi on 07.06.2004 and the claim was rejected due to the reason mentioned above on 25.08.2004. Thereafter the nominee submitted a representation on 11.05.2004. The CPMG has considered the representation with sympathetic view and granted Rs. 5,000/- as exgratia purely as an act of grace and not on account of any liability. The exgratia payment awarded is higher than the premium which credited by the deceased insurant in the lapsed policy. The specific conditions laid down in para 6 of the policy as well as the acceptance letter issued by the opposite party on 05.12.2002 are evident to note that the policy holder is liable to credit the premium regularly and any default on his part would cause the policy void. Complainant is not entitled to get any relief whatsoever. Hence opposite parties prayed for dismissal of the complaint.

The additional 4^th opposite party also filed version admitting the averments in the complaint and prayed for directing opposite parties to pay the insured sum with 12% interest to the additional 4^th opposite party and the complainant.

The points that arise for consideration are:-

1. Whether the postal life insurance policy had lapsed during the life time of the insured deceased?

2. Whether the legal heirs of the deceased are entitled to claim the insured amount?

3. Whether there is deficiency in service on the part of opposite parties?

4. Whether the complainant is entitled to get compensation?

In support of the complaint, complainant has filed proof affidavit and Exts. P1 to P3 were marked. In rebuttal, 3^rd opposite party has filed proof affidavit and Exts. D1 to D4 were marked.

Points (i) to (iv):- Admittedly, the policy holder R. Baijumon got his life insured by means of postal life insurance policy No. KL-45942-T for a sum of Rs. 3,00,000/-. The proposal of the said policy was on 13.11.2002 and the policy came into effect from 25.11.2002. The policy holder died on 05.04.2003. It has been the case of the complainant that she is the mother, nominee and legal heir of the deceased Baijumon and has been fully depending on him for all her day to day affairs and daily needs and when she submitted application claiming the insured amount of the said policy, opposite party repudiated the claim on the ground that the policy stands lapsed due to non-payment of premium for December 2002. It is the specific case of the complainant that no default notice has been served to the deceased either in December 2002 or even before accepting the subsequent premiums in January to March and that there is no default on the part of the deceased Baijumon for non-payment of premium for the month of December 2002. It is the say of opposite parties 1 to 3 that the deceased insurant Sri. Baijumon, Sr. TOA(G) of BSNL, Thiruvananthapuram had submitted a proposal for postal Endowment Assurance Policy for a sum of Rs. 3,00,000/- on 13.11.2002, which was accepted and policy document was also issued with effect from 25.11.2002. Ext. P1 is the copy of the letter from 3^rd opposite party to S.R. Remadevi informing her that the policy No. KL-45942-T held by Sri. Baiju stands lapsed due to non-payment of premium for December 2002 and hence not eligible for any benefit. Copy of the Ext. P1 is seen served to complainant also. Ext. P2 is the copy of the letter dated 25.11.2004 showing the sanction of the Chief Postmaster General(CPMG) Kerala Circle for the payment of a sum of Rs. 5,000/- to the nominee, Smt. Vimala mother of late Sri. Baijumon being the exgratia payment in respect of policy No. KL-45942-T. It is stated in Ext. P2 that the amount sanctioned by the CPMG purely as an act of grace and not as any liability. It is further mentioned that the said sanction is operative for one year only. Ext. P3 is the copy of the letter dated 05.11.2004 addressed to CPMG by the complainant. Ext. D1 is the copy of the letter dated 05.12.2002 in respect of policy No. KL-45942-T addressed to Baijumon R in his official address from Department of Posts. As per Ext. D1 Mr. Baijumon was informed that his proposal dated 13.11.2002 for an insurance has been accepted on 25.11.2002, that his policy No. KL-45942-T has been come into effect from 25.11.2002, that the money paid by him on 22.11.2002 has been adjusted as his first premium. It is pertinent to point out that as per Ext. D1 Mr. Baijumon was advised to deposit monthly premium at post office and send the receipt issued by post office to opposite party's office till recovery of premium is commenced by DDO(Drawing & Disbursement Officer). Ext. D2 is the copy of the postal life insurance. On perusal of Ext. D2 policy No. is KL-45942-T, date of commencement of risk is 25.11.2002, date of maturity is 25.11.2024, sum assured is Rs. 3,00,000/-, names of nominees are Vimala/Remadevi (mother/wife). Ext. D3 and Ext. P1 are one and the same. It has been contended by the opposite parties that the deceased insured has failed to fulfill the terms and conditions of the contract in which he entered into, that the deceased insurant has failed to remit premium for December 2002, that he remitted premium for November and from January 2003 to March 2003. It is further contended by the opposite parties that since the premium for November 2002 remains unpaid, the policy became void and therefore no claim on void policy can be entertained by the opposite parties. It is argued by the opposite parties that the Rules with regard to the remittance of premium have furnished in the policy (para 6) itself and hence no notice to the insurant is mandatory. As per clause 6 of the Terms of Contract (Ext. D2) relating to the postal life insurance and Endowment Assurance “the policy shall be treated as lapsed in the case the policy holder fails to pay premium/premia that has/have become due against his/her policy within the period of grace in accordance with Rule 39 & 40 of POIF Rules as applicable”. Opposite parties have furnished the copies of the relevant pages of POIF Rules enacted by the Government of India marked as Ext. D4. On perusal of Ext. D4, 39(1) (Ext. D4) relates to lapsing policy of less than three years. Rule 40 relates to lapsing policy of not less than three years. As per 39(1) of the Post Office Insurance Fund Rules, “If in the case of a policy of less than three years duration, the premium be not paid on or before last day of any month in which such premium is due the policy will become void. But if all arrears of premium are paid within six months from the first day of the month for which the premium was due and if an application for the revival of the policy is made to the Postmaster General , the Postmaster General, may, in his discretion allow the policy to be revived subject to the payment of all arrears and to the further payment within a date specified by him of such fine if any, as he may impose...............”

As per 39(2) When a policy becomes void for default in payment of premium in terms of sub-rule (1) above, any payments purporting to be premium payments subsequently made but before the policy is formally revived under the provisions of Sub rule (1) above of Rule 41 will be held in suspense and will not be considered as payment by way of premium.

As per Rule 40(1), if in the case of a policy of not less than 3 years duration, the premium be not paid on or before the last day …....... of any month in which such premium falls due, the policy ceases to be active at the end of 12 months unless all arrears of premium together with interest thereon to date of payment at 8% per annum are paid within the said period of 12 months.......... The very case of the opposite parties is that the deceased has failed to fulfill the conditions laid down in the acceptance letter (Ext. D1) dated 05.12.2002). Complainant has no case that the deceased had remitted the premium for December 2002. The stand of the complainant is that the letter dated 05.12.2002 (Ext. D1) produced by the opposite party was not served to insurant, that no notice issued by the opposite parties to the insurant with respect to the non-payment of premium during the month of December 2002, while opposite parties accepted premium for January 2003 to March 2003 without raising any objection. It is pertinent to note that Ext. D1 is the acceptance of policy letter dated 05.12.2002 wherein opposite parties directed Mr. Baijumon to arrange to deduct the premium at the rate of Rs. 1,065/- per month commencing from the month of December 2002 payable on last working day of the months and upto the month of October 2024, unless a notice of this discontinuance is issued by opposite parties' office. The very case of the opposite party is that Mr. Baijumon failed to pay the policy premium for December 2002, while he remitted policy premium for January, February and March 2003. Naturally a question may arise why opposite party has accepted subsequent premium amounts without accepting the premium amount for December 2002. There is no document to show that opposite party had intimated Mr. Baijumon regarding the non-payment of premium for December 2002. Opposite party is bound to inform the policy holder about the monthly due then and there. Non-issuance of notice regarding the due for December 2002 and acceptance of monthly premium for January, February and March 2003 after the lapse of the policy would amount to deficiency in service. The 3^rd opposite party never informed the lapse of policy when Mr. Baijumon was alive. It is only after his death when his mother approached the 3^rd opposite party for death claim opposite party raised such an issue that policy lapsed in December 2002 itself. If that be so, the acceptance of premium amount thereafter is against the principles of equity and natural justice. Evidently the above referred policy lapsed during the life time of the insured. Thereby the complainant is not entitled to get the death claim benefits. It is pertinent to point out that had complainant been informed by 3^rd opposite party on time about the premium for December 2002 being due, complainant would have remitted the same along with subsequent premium remittances. Admittedly, he had remitted subsequent premiums from January to March 2003, thereby it is evident that complainant wanted to proceed the policy till its maturity. There is no case on the part of opposite parties 1 to 3 that complainant is a defaulter. Had he been informed the due for December 2002 by 3^rd opposite party on time and remitted the same by the deceased, the survivors or nominees would have got the amount assured by 3^rd opposite party. The action of opposite parties 1 to 3 in accepting the monthly premium for January, February and March 2003, without informing the due for December 2002 had resulted in loss of insurance amount to the nominees/legal representatives of the deceased policy holder. The action of opposite parties would definitely amount to deficiency in service. Factually the aforesaid policy lapsed, thereby complainant and additional 4^th opposite party cannot claim the amount assured by 3^rd opposite party. In view of the foregoing discussion and of the evidence available on record, we are of the considered opinion that opposite parties 1 to 3 cannot escape from their liability to pay compensation to nominees of the deceased. Considering the totality of the situation, we feel it would meet ends of justice if opposite parties 1 to 3 are directed to pay Rs. 25,000/- towards compensation.

In the result, complaint is partly allowed. Opposite parties 1 to 3 shall jointly and severally pay a sum of Rs. 25,000/- towards compensation to complainant and additional 4^th opposite party within two months from the receipt of this order. Both parties shall bear and suffer their costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 31^st day of March 2010.

G. SIVAPRASAD,

President.

BEENAKUMARI. A : MEMBER

S.K. SREELA : MEMBER

jb

O.P. No. 469/2004

APPENDIX

I COMPLAINANT'S WITNESS :

NIL

II COMPLAINANT'S DOCUMENTS :

P1 - Copy of letter from 3^rd opposite party.

P2 - Copy of letter dated 25.11.2004.

P3 - Copy of the letter dated 05.11.2004.

III OPPOSITE PARTY'S WITNESS :

NIL

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Copy of the letter dated 05.12.2002.

D2 - Copy of the postal life insurance.

D3 - Copy of letter from 3^rd opposite party.

D4 - Copy of lapsing policy conditions.

PRESIDENT