BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
FA NO.127 OF 2015 AGAINST CC NO.179 OF 2014
ON THE FILE OF DISTRICT FORUM AT KARIMNAGAR
Between:
Andhra Bank, Choppadandi branch,
Choppadandi, Karimnagar district.
Rep. by its branch Manager.
… Appellant/Complainant
And
Smt.Bathini Swapna W/o late Rajasekhar Raju,
Hindu, aged about 30 years, R/o H.No.12-16,
Choppadandi village & Mandal,
Karimnagar district.
… Respondent/Opposite party
Counsel for the Appellant : Sri K.Sridhar Rao
Counsel for the Respondent : Sri M.V.R. Suresh
Coram :
Hon’ble Sri Justice B.N.Rao Nalla … President
Tuesday, the Nineteenth day of April
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
1) This is an appeal filed by the Opposite party against the orders of the District Consumer Forum, Karimnagar dated 08.07.2015 made in C.C.No.179 of 2014 directing the Opposite party to pay Rs.2,00,000/- towards accidental death benefit (ABJ-40955) with interest @ 9% p.a. from the date of death of account holder i.e., 06.05.2013 till realization and also directing to pay Rs.10,000/- towards compensation for mental agony and costs of Rs.1000/-.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
3) The case of the complainant, in brief, is that her husband, during his lifetime became the member of A.B. Jeevan Abhaya scheme of the opposite party with account No.106910027040955 and as per the terms and conditions of the scheme, in the event of normal death of account holder, the nominee is entitled to get Rs.1,00,000/- and in the event of accidental death, the nominee is entitled to get Rs.2,00,000/-. That, on 05.04.2013, her husband Rajashekar @ Raju along with his friend Md.Ajju while travelling from Karimnagar to Choppadandi in a car bearing No.AP-15-AL-1947, on their reaching near Srinivas Saw Mill, Choppadandi, one Bolero vehicle bearing No.AP-01-Y-5119 came in opposite direction and dashed against the husband of Complainant’s car, as a result of which, her husband sustained severe injuries and succumbed to injuries while undergoing treatment at NIMS, Hyderabad on 06.05.2013 at about 10.20 a.m.
4) During the course of enquiry before the District Forum, in order to prove her case, the Complainant filed her evidence affidavit and got marked Exs.A1 to A8 while the Opposite party did not chose to file any affidavit, but the document sent by it was marked as Ex.B1.
5) The District Forum after considering the material available on record, allowed the complaint bearing C.C.No.127/2015 by orders dated 08.07.2015, as stated in paragraph No.1, supra.
6) Aggrieved by the said orders, the Appellant/Opposite party preferred this appeal contending that the bank’s cannot do insurance business, instead, bank is only a facilitator and insurance claim, if any, had to be settled by insurance company and the complaint is bad for non-joinder of insurance company and ought to have dismissed the complaint. A.B. Abhaya Jeevan account is a savings bank account linked with insurance coverage and for insurance coverage, every year, during the month of November i.e., on 30th November, if balance is available in the account, the system will debit the insurance premium and the insurance coverage will be made available from 1st December of the year to end of November of succeeding year. If the balance is not available as on 30th November, the system will not debit the premium and the account holder will not be eligible for insurance coverage.
7) Forum below erred in observing that there are lot of transactions in the account including deposits in savings bank account, in fact, sufficient balance shall be there to debit the insurance premium. From Ex.B1, it was clear that from 05.11.2012 to 23.12.2012, there was no balance of Rs.394/-, apart from administrative charges so as to enable the bank to deduct the same towards insurance premium, as such, no coverage was provided for the period from 01.12.2012 to 30.11.2013.
8) Forum below ought to have seen that if the account holder does not maintain sufficient balance towards deduction of renewal premium, no insurance coverage was provided to the account holder. It failed to understand the statement that claims are to be settled by the insurance company only and it failed to understand the claim payable in case of natural and accidental death are Rs.1.00 lakh only but not Rs.2.00 lakhs. It also erred in holding Appellant liable to pay the accidental benefit of Rs.2.00 lakhs. Hence, prayed to set aside the order dated 08.07.2015 passed in CC No.179/2014 by allowing the appeal.
9) The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief ?
10) It is not in dispute that the husband of the Complainant was an account holder under savings bank with the Appellant/Opposite party bearing a/c No.106910027040955. It is also not in dispute that the insurance year for the policy in question is 1st December of every year to the 30th November of succeeding year. The only dispute is that the account holder was not maintaining proper balance so as to deduct the insurance premium and that the amount payable for both natural death and accidental death of the account holder is Rs.1.00 lakh only but not Rs.2.00 lakhs, as contended by the Respondent/ Complainant.
11) Counsel for the Appellant while advancing arguments, admitted that the husband of Respondent was a savings bank account holder with Appellant bank branch and the said account was linked with insurance coverage and that the master insurance policy was issued to the bank by United India Insurance Company and that the account holder is entitled to a coverage of Rs.1.00 lakh in case of natural death and Rs.2.00 lakhs in case of accidental death. That, for various reasons the death was not covered under the policy, therefore, the Respondent is not entitled to claim any compensation as the account holder failed to maintain minimum balance. And further drawn the attention of this Commission that the bank is prohibited from entering into insurance business by virtue of Section 6 (1) and 6(2) of the Banking Regulation Act, 1949.
12) Surprisingly, though the counsel for Appellant submitted arguments contending that the insurance for the period from 01.12.2012 to 30.11.2013 was provided by the United India Insurance Company, no single piece of paper is filed to that extent. However, the document stated to be circular No.348 bearing Ref.No.51/20 dated 23.11.2012 issued by Marketing Department, Head Office of the Appellant bank is filed along with the appeal, which would be marked as Ex.B2, would go to show that AB Jeevan Abhaya Scheme policy is renewed with M/s IndiaFirst Life Insurance Company Ltd., for the insurance year commencing from 01.12.2012 to 30.11.2013. In the said document, the premium rates are given as below:
Age group Premium per head per annum in Rs.
18-35 220/-
36-50 394/-
51-55 801/-
13) It is mentioned further in the said document that the claim amount is Rs.1,00,000/- in case of accidental and natural death also. Claim is applicable in case of one account only and not in multiple accounts under the scheme. Claim intimation is to be given within three months and submission of documents within 180 days from the date of the death of the account holder. Nodal branch is Kandivali branch, Branch code: 1210, Mumbai zone. Pro-rata premium to be collected from new account holders while joining in the scheme for various months of the insurance year upto 2013 is given in Annexure-I. Admittedly, this Annexure-I is not filed. There is also a lien clause. It is clearly mentioned in the Circular, which is reproduced for better understanding.
“Please ensure availability of sufficient balance in the accounts on the day of debiting the premium and pursue all the existing customers to keep sufficient balance. A grace period of 30 days has been accorded by IFLIC for debiting accounts in which premium is not recovered either by the system or by insufficient funds. Branches have to ensure deduction of premium manually within 30 days grace period.”
………..A separate menu option, INSMAN is already provided in Finacle for effecting manual recovery of insurance premium. Branches should use this option for manual recovery, instead of debiting the accounts through TM. Branches may also follow detailed guidelines given by DIT in Cir. No.355, Ref.No.35/02, dated 03.02.2010 on Insurance Linked Products and Jobcard No.CBS/73 dated 07.07.2008 available in our Banks Intranet Portal for further details regarding data rectifications in Insurance linked deposit Accounts.”
………Branches are advised to mobilize more number of accounts under AB Jeevan Abhaya Scheme under CASA to augment fee based Income of the Bank.”
From the keen perusal of above circular, it is clear that responsibility is fastened on the concerned to ensure the availability of sufficient balance in the accounts of the members of the scheme so as to deduct the insurance premium and to renew the policy. In the circular, the address for making correspondence regarding claims is also furnished. Admittedly, this address is not furnished by the Appellant bank to the Respondent so as to enable her to pursue her claim, in case, her claim is not to be settled by the bank.
14) In the instant case, as can be seen from the statement of account of the account holder (deceased), an amount of Rs.238/- was deducted as on 29.11.2008 towards insurance premium and Rs.45/- towards insurance charges (say administrative charges). Though there was balance of Rs.518/- as on 11.11.2009, no insurance premium was deducted from the deceased account holder. Likewise, though there was a balance of Rs.557/- as on 11.08.2010, insurance premium was not deducted by the Appellant bank. On 04.01.2011 though there was a balance of Rs.17,967/-, the insurance premium is not deducted for 2011 insurance year. On 10.11.2011 there was balance of Rs.1027/- in the account of deceased, but no insurance premium was deducted by the bank for the insurance year 2012. It is also true that there was no sufficient balance most of the times in the account of the account holder.
15) Admittedly, the deceased account holder died on 06.04.2013 having sustained the fatal injuries in a motor vehicle accident occurred on 05.04.2013. And for this, the insurance year is 2013 which commenced from 1st December 2012 to 30th November 2013. As per the Circular, there is a direction for collection of pro-rata premium from the account holders, as provided in Annexure-I thereof, which the Appellant bank failed to follow. Even otherwise, there were instructions to the banks to ensure that proper balance is maintained by the account holder in the account, which they failed to take any steps. The Appellant bank officials ought to have pursued the account holders to maintain proper balance, particularly, the deceased account holder in this case, which they failed to inspite of circular guidelines issued under Ex.B2. There is also a directive to the branches to ensure deduction of premium manually within 30 days grace period, which, they also failed to do so.
16) In the case on hand, which is under challenge, the Forum below erred in granting the claim of Rs.2.00 lakhs without any basis and record instead of granting Rs.1.00 lakhs. From the perusal of document, Ex.B2, it is clear that the amount payable in respect of claims pertain to death of the account holder under normal circumstance as also under accidental death is one and the same i.e., Rs.1.00 lakh but not Rs.2.00 lakhs.
17) It is to be stated here that though there were guidelines to all the branches including the Appellant bank to ensure that the account holders under AB Abhaya Scheme to maintain proper balance, it failed in initiating the steps to inform the account holder in this particular case and it also failed to pursue with the account holder to keep sufficient balance, which is nothing but deficiency in service and negligence on the part of the Appellant.
18) As discussed above, inspite of Circular guidelines, the Appellant bank failed to take any steps to ensure that the deceased account holder maintained proper balance in the account and it also failed to pursue with the account holder to keep sufficient balance. However, it is to be stated that there is a grace period of 30 days for remittance of premium, which the branches are authorized to do so. In the instant case, there was balance of Rs.2,054/- as on 04.01.2013 and in spite of the same, the Appellant bank failed to deduct the insurance premium for the insurance year 2013 covering from 01.12.2012 to 30.11.2013, which is nothing but deficiency of service. Having failed to deduct the premium from the account holder and having failed to remit the same to the insurance company concerned, it cannot turn around and say that there was no balance or insufficient balance in the account of the account holder. This Commission is not inclined to accept the above contention of the Opposite party and accordingly negates the same.
19) Coming to the aspect of granting claim, the Forum below granted an amount of Rs.2.00 lakhs, might be, under wrong notation that accidental death benefit payable is Rs.2.00 lakhs without there being any record and without any basis, instead of granting Rs.1.00 lakhs which is liable to be set aside and reduced.
20) Coming to the aspect of banks’ not doing insurance business as contended by the learned counsel for the Appellant, this Commission agrees with the said contention. The point involved in this case is whether there is any deficiency in service or else negligence on the part of the Appellant bank in rendering service to its customer. As can be seen from the document Ex.B1 and Ex.B2, though there was sufficient balance in the account of the account holder as on 04.01.2013, it failed to deduct the insurance premium and remit the same to the insurance company, which amounts to sheer negligence and deficiency in service. Ex.B2 clearly contemplates the branches to ensure availability of sufficient balance in the accounts on the day of debiting the premium and pursue all the existing customers to keep sufficient balance. This clinches the issue. As the Appellant bank failed to adhere to these instructions, it can be clearly mandated that there is deficiency in service on its part in scrupulously following to the circular instructions.
21) In the above facts and circumstances, this Commission is inclined to modify the impugned orders dated 08.07.2015 passed in CC No.179/2014 reducing the awarded amount of Rs.2,00,000/- to Rs.1,00,000/- and confirm the order in all other respects. The point framed for consideration in paragraph No.9, supra, is answered accordingly.
22) In the result, the order of the Forum below dated 08.07.2015 passed in CC No.179/2014 is modified reducing the awarded amount of Rs.2,00,000/- to Rs.1,00,000/- and confirm the order in all other respects. There shall be no order as to costs in this appeal and parties to bear their own costs. Time for compliance four weeks.
PRESIDENT
Dt. 19.04.2016
APPENDIX OF EVIDENCE
For Appellant For Respondent
Ex.B2 Photostat copy of Circular No.348, -NIL-
bearing Ref.No.51/20, dt.23.11.2012.
PRESIDENT
