HYDERABAD

FA.NO.1037 OF 2005 AGAINST C.D.NO.974 OF 2004 District  Forum-I, Hyderabad.   

Between:

1. The Chief Postmaster General,

     A.P.Circle, Abids, Hyderabad.

2. The Deputy Divisional Manager (PLI)

     O/o.The Chief Postmaster General,

     A.P.Circle, Abids, Hyderabad.

3. The Postmaster,

     Kukatpally Post Office,

     Hyderabad.                                                                                   Appellants/

                                                                                                             Opp.parties

              And

Smt.A.Sarada Devi, W/o.late

Adabala Narasimha Rao,

Hindu, aged about 36 years,

R/o.Flat No.205, Devi Residiency

Sripuram Colony, Moosrambagh,

Hyderabad.                                                                                         Respondent/

                                                                                                              Complainant

Counsel for the Appellants   :      Mr.V.Vinod Kumar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Counsel for the Respondent:    Mr.M.Subba Reddy

QUORUM:THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT.

AND

SMT.M.SHREESHA, MEMBER.

THURSDAY, THE FOURTH DAY OF SEPTEMBER,

TWO THOUSAND EIGHT.

Oral Order:(Per Smt.M.Shreesha, Hon’ble Member)

***

Aggrieved by the order in C.D.No.974/2004 on the file of District Forum-I, Hyderabad, Opposite parties preferred this appeal.

The brief facts as set out in the complaint are that the complainant’s husband while working as Deputy Engineer, Hindustan Machine Tools Ltd., has taken life insurance policy for Rs.80,000/- on 28-12-1991 from opposite parties.  The policy was confirmed w.e.f. from 16-1-1992 and the premiums were paid regularly and the insured was obtaining permission the competent authority to accept the premium amounts whenever they were paid late.  During 2000-2003 the complainant’s husband could not pay within time and he was permitted to pay the premium with late fee and interest by extending the time on the request of the insured.  It is affirmed that the policy was subsisting  by the date of the claim.  The complainant submitted that her husband died on 29-4-2003 in a motor accident and the same was informed to the opposite parties by making a claim for payment of the insurance amount with bonus and interest to the complainant, who is the wife and nominee of the policy holder but opposite party No.2 by letter dated 19-8-2003 stated that an amount of Rs.4,662/- was paid by the insured on 24-4-2002 covering the period from 8/200 o 4/2003 without prior permission from the competent authority and by that period, the policy lapsed, therefore the paid amount will be refunded.  Thus the claim of the complainant was rejected due to lapse of policy.  Immediately the complainant issued a reply on 20-9-2003 stating that the officials of the opposite parties have received the amount with interest and late fee which was entered in the pass book and a receipt was also issued and this is with prior permission of the competent authority only.  But the opposite parties paid an amount of Rs.73,577/- towards insurance claim which includes bonus etc. and the same was received by the complainant under protest.  The complainant submits that the total amount insured  is Rs.80,000/- and the premium amounts were regularly paid from 1992-2003 and the policy is alive as the date of death of the insured and hence the amount should be more than Rs.80,000/- and should be around Rs.1,60,000/- and it is unjust to pay Rs.73,577/- which includes bonus also.  A legal notice was also issued on 5-1-2004  but the balance amount was not paid.  Hence the complaint for a direction to the opposite parties to pay an amount of Rs.86,500/- with interest at 24% p.a. from the date of claim and release the entire amount with bonus or interest as per the terms and conditions of the policy.

Opposite parties filed counter wherein they stated that the complainant’s husband had taken a PLI policy for Rs.80,000/- w..e.f 10-1-1992 and monthly an amount of Rs.140/- was recovered from his salary commencing from January, 1992.  The premium was recovered from 1/92 to 11/99 and after this date, the insured opted to pay premium in cash and as such premium receipt book was issued to the insured on 21-7-2000 and the insured paid the premium from 12/99 to 7/2000.  Subsequently the premiums were not paid from August, 2000 before completion of one year and this resulted in lapse of the policy under rule 40 of P.L.F. rules.  The husband of the complainant also did not apply for revival of the policy.  They denied that the insured was allowed to make belated payments after obtaining permission from the competent authority.  They also stated that it is not correct to state that opposite party’s staff directed them to pay an amount of Rs.4,662/- on 24-4-2002 to regularize the policy.  They submitted had he been permitted, he would have been advised to pay Rs.3,234/- an not Rs.4,662/- and hence the contention that he has been permitted to pay the premium is false.  No prior permission was issued from circle office for payment of the premium after due date and that all such payments without permission will go into suspense account as per rule 40(2) which was also communicated to the complainant.  The insured had never applied for revival of the lapsed policy nor for any prior permission and the contention that Rs.4,662/- was paid only with the permission of competent authority is not tenable.  The eligible amount together with bonus amounting to Rs.73,577/- was sanctioned to the complainant and also received and therefore the complaint may be dismissed.

Based on the evidence adduced i.e. Exs.A1 to A10 and the pleadings put forward, the District Forum allowed the complaint in part directing opposite parties to re-calculate the policy amount as Rs.80,000/- and pay to the complainant the said amount with interest and bonus after deducting the amount already paid together with costs of  Rs.1,000/-.

Aggrieved by the said order, opposite parties preferred this appeal.

The learned counsel for the appellants/opposite parties the order of the District Forum is arbitrary and against the statutory rules governing PLI., equity and good conscience.  He submitted that the insured had taken policy No.AP/43160-UC dated 27-1-1992 effective from 16-1-1992 for Rs.80,000/- to  be recovered through DDO and accordingly the premium was deducted from January, 1992 onwards @ Rs140/- per month.  However as seen from PRB issued to insured he opted to pay the premium in cash from the month of 12/99 to 21-7-2000 on which date he paid premium from the month of 12/99 to 7/2000 and later the insured had paid premium from 8/2000 to 4/2003 on 24-4-2002 at Kukatpally SO without any prior permission from the Department as detailed below:

Premium 8/2000 to 4/2003 (33 months x Rs.140/-) = Rs.4620+ Rs.42/-

Towards interest i.e. total Rs.4662/-

The insured died on 29-4-2003 and the claim of the nominee was submitted on 16-6-2003 and after examining it was rejected by their letter dted 19-8-2003 as the insured did not pay the premium of 8/2000 within the grace period of one year which resulted din lapse of the policy under Rule 40 of POIF Rules and the amount paid in respect of lapsed policy will not be treated as premium and such amount will go into suspense account as per Rule 40(2) of POIF Rules.  Hence the amount of Rs.4662/- was refunded to the claimant.  He submitted that the District Forum erred in relying on the statement of the complainant that she and her husband visited the circle office on 24-4-2002 and that the Circle office directed the insured to pay an amount of Rs.4662/- which includes premium and penal interest to regularize the policy, which is not correct.  

The observation of District Forum that acceptance of Rs.4,662/- for which a receipt was issue, goes to show that the specific permission, if any, is implied to have been given is untenable and for a lapsed policy, any payment made is taken with acknowledgement but kept under suspense account ill permission is granted by  competent authority which in this case has not happened and the complainant has failed to prove that any such permission was granted by the competent authority.  He also submitted that if the insured had visited the circle office, he should have handed over a permission letter and in such an eventuality, the insured would have been asked to pay Rs.3234/- (Premium for 21 months = Rs.2940/-+ Rs.294/- interest.  The District Forum ought to have insisted for such a letter and permission granted by circle office and it also did not take due note of statutory provisions contained in Rule 40(2) of POIF Rules.  The insured defaulted in payment from August 2000 onwards till more than one year on his own volition  and without permission paidRs.4,662/- and as the policy stood lapsed on the date of death of insured and since the insured continued the policy for more than a period of 3 years, the eligible amount  (paid up value + Bonus on sum assured ) amounting to Rs.73,577/- was sanctioned to the complainant after rejecting original claim and prayed to allow the appeal.

            The facts not in dispute are that the complainant’s husband while working as Deputy Engineer, Hindustan Machine Tools Ltd., had taken postal life insurance for Rs.80,000/- on 28-12-1991 from the opposite parties.                                                                                                                                                                   The policy AP/43160-UC dated 27-1-1992 was issued in the name of the insured and since then the insured was paying the premiums regularly.  It is the case of the complainant that for the period August, 2000  to April, 2003 the premiums were admittedly not paid by him and therefore on 24-4-2002, he paid the amount of Rs.4,662/- to the opposite parties.  It is the case of the opposite parties that no prior permission was taken by the insured from the competent authority before payment of Rs.4,662/-.  The grace period is only for a period of one year under Rule 40 POIF  Rules and the amount paid in respect of a lapsed policy will go into suspense account as per Rule 40(2) of POIF Rules, hence the amount of Rs.4,662/- was refunded to the complainant.

            It is not in dispute that the insured died on 29-4-2003 in a motor accident.  It is not clear as to which rule the appellant had accepted the premium amount and for how long period this amount is kept in suspense account and how this amount was accepted without verifying if the policy was in a lapsed condition or not.  It is also not as if the amount was paid after the death of the insured.  This amount of Rs.4,662/- is the premium for 33 months together with interest and when the amount was being accepted by the opposite parties, they are well aware that it is the premium for 33 months and ought to have issued a receipt to the complainant stating that this acceptance is subject to final approval.  No such intimation was given to the insured at the time of acceptance of the amount.  Ex.A9, which is a receipt No.15 issued by the opposite parties only states the amount and the policy number and also that it is for the period from August, 2000 to April, 2003 which clearly states that at the time of receipt of this amount, the opposite parties are well aware that the policy was in a lapsed condition.  Since it is the premium that was being paid for a period of 33 months, they ought to have endorsed on the receipt their rule position, if any, that it is subject to final approval.  No such endorsement or communication was made to the insured and only after the claim was made after the death of the insured on 29-4-2003, after 4 months i.e. on 19-8-2003, opposite parties informed the complainant that the policy was lapsed and the amount was paid at a belated stage without permission, and therefore the claim application is being rejected.   After the complainant had once again approached the opposite parties, second opposite party informed the complainant on 2-12-2003 that an amount of Rs.73,577/- is being calculated as the amount that has to be paid to the complainant and sent a cheque for Rs.73,577/- which was received by the complainant under protest.  We find force in the contention of the complainant that the total amount insured by her husband is Rs.80,000/- and he has paid the premium amount from 1992 onwards and as on the date of death of the policy holder, the policy was in force and therefore the complainant is entitled to the claim amount.  The District Forum has directed the opposite parties to recalculate the policy amount at Rs.80,000/- and pay the same to the complainant along with interest and bonus after deducting the amount already paid together with costs of Rs.1,000/-.  We do not see any reason to interfere with this order of the District Forum.

            In the result the appeal fails and is accordingly dismissed.  Time for compliance six weeks.                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                          PRESIDENT.   MEMBER.

JM                                                                               Dated  04-9-2008.