BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION-HYDERABAD
FA.No.276/2006 AGAINST C.D.NO.85/2003, DISTRICT CONSUMER FORUM, SRIKAKULAM.
Between-
1. The Sector Worker (Branch Manager)
Sahara India Pariwar, Sector Office,
Srikakulam Branch, Town Srikakulam.
2. The Managing Director,
Sahara India Pariwar, Command Office,
Sahara India Bhavan, 1, Kapurthala Complex,
Lucknow.
Both are represented by Zonal Office,
At Sahara Manzil, opp- Secretariat
Hyderabad through its Asst.Director Worker
Shri Zia Qadree. … Appellants/
Opposite parties
And
Smt.Kanchu Kannamma,
W/o.late Thavudu, Off-Housewife,
Aged 43 years,
R/o.Nelliparthi Village, Turakapeta Post,
Amudalavalasa Mandal,
Srikakulam Dist., A.P. ..Respondent/
Complainant
Counsel for the Appellant- Smt.Vijaya Sagi
Counsel for the Respondent - Mr.P.Veera Reddy.
QUORUM- THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT
SMT.M.SHREESHA, MEMBER
AND
SRI G.BHOOPATHI REDDY, MEMBER.
TUESDAY, THE EIGHTH DAY OF JULY,
TWO THOUSAND EIGHT
Oral Order-(Per Smt.M.Shreesha, Hon’ble Member)
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Aggrieved by the order in C.D.No.85/2003 on the file of District Forum, Srikakulam, opposite parties preferred this appeal.
The brief facts as set out in the complaint are that the husband of the complainant during his life time deposited an amount of Rs.10,000/- on 9-12-2000 under Sahara 10 Option A scheme with opposite party No.1, who issued a bond bearing No.340007804. The complainant was the nominee for recovery of the amount payable under the aforesaid death help benefit. The complainant submitted that her husband was hale and healthy at the time of purchasing the bond and died suddenly on 28-7-2002 due to heart attack. On account of the sudden demise, the complainant, a physically handicapped women and her three minor children became destitute and lost their bread winner. The complainant submitted that she intimated the opposite parties about the sudden demise of her husband in the month of August 2002 and claimed the benefits under Sahara 10 Option. Opposite party No.1 made letter correspondence with the complainant and inspite of her several demands, he did not choose to pay the amount under the bond. The complainant submitted that she along with her brother went to opposite party No.1 office and he tried to secure the thumb impression of the complainant on a blank paper and therefore she sent a representation directly to opposite party No.2 for which he issued a letter dated 17-6-2003 to the complainant directly asking her to approach opposite party No.1 for recovery of the scheme benefits. Even then opposite party No.1 did not make any attempt to pay death benefits, therefore, the complainant got issued a legal notice dated 28-12-2002 to the opposite parties calling upon them to pay the amounts due to her apart from compensation of Rs.50,000/- but they did not choose to pay the amount. Hence the complaint for a direction to the opposite parties to pay Rs.10,000/- towards bond amount together with interest at 12 percent p.a., to pay pension towards death help benefit at te rate of Rs.10,000/- per month for a period of ten years, together with compensation of Rs.50,000/-.
Opposite party No.1 filed counter which was adopted by opposite party No.2 and submitted that as per terms and conditions of the scheme, the nominee of the deceased bond holder has to submit age proof certificate, cause of death certificate and application and after submission of the above documents, the concerned branch officials will make enquiry and after the said enquiry recommend and forward the documents of the nominee to their regional office subject to eligibility for death help scheme. The complainant failed to submit the nominee request application and refused to sign on the nominee request application inpsite of the request of the opposite parties and therefore they are unable to send and recommend the case of the complainant to their higher authorities. They submitted that there is no willful or wanton negligence on the part of opposite party No.1 and as per the terms and conditions of the scheme, it is only a death help to the nominee of the deceased bond holder bot not an insurance and further the nominee shall be given personal guarantee for the amount payable to her by the opposite parties, which she is eligible. The complainant has to repay the said amount within a period of 20 years without interest. If death help amount is received and the said repayment starts as per clause No.7 of the scheme. They submitted that in the present case, the complainant failed to submit the above said guarantee and under those circumstances, opposite parties were not able to pay the death help to the complainant and therefore the complainant is entitled to claim any amount under the death help and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A15 and B1 to B3 and the pleadings put forward, the District Forum allowed the complaint in part directing opposite parties to pay interest at 12 percent p.a. on Rs.10,000/- being the bond value rom 29-7-2002 till 10-1-2005, to pay Rs.3,70,000/- being the death help to the complainant being the nominee of the bond at Rs.10,000/- for the period from 1-8-2002 to 31-8-2005 and also continue to pay at the rate of Rs.10,000/- p.m. till the end of July, 2012 on condition of the complainant giving a personal undertaking to repay the said amount without interest during the period of twenty years in equal monthly instalments commencing from 1-8-2012 to pay Rs.25,000/- towards compensation and to pay costs of Rs.1,000/- including advoate’s fee of Rs.500/-. Opposite parties are directed to comply with the above order within two months from the date of dispatch of copy of the award.
Aggrieved by the said order, opposite parties preferred this appeal.
The learned counsel for the appellants/opposite parties submitted that the death help is that the dependent family members may be given help in the form of interest free loan and drew our attention to the following pre requisites for advance the death help facility.
a) The death of the Bond Holder occurs after 12 months (365) days from the date of purchasing the Bonds and before completion of tenure
b) The age of the deceased bond Holder was between 16-60 years at the time of death.
c) The deceased Bond Holder was not suffering from any chronic fatal disease within 3 years from the time of purchasing the bonds. The nominee of the deceased Bond Holder shall produce authentic, convincing documentary proof in this regard along with birth certificate and proof of death of the Bond Holder to the satisfaction of the company.
d) The death of the Bond Holder did not occur due to suicide, or death punishment by the court of law.
e) The death of the Bond Holder did not occur due to communal violence or war.
f) In case Bond Holder exercises his option for premature redemption the nominees of the Bond Holder shall cease to be entitled for the death help facility ab initio
Note- Death help will be given on maximum 1 type of option only.
She further contended that the respondent should produce a medical certificate that the bond holder was not suffering from any fatal disease within the last three years from the opening of the account/purchasing of the bond and also give an undertaking that the death did not occur due to suicide or death punishment by any court of law or due to communal violence and war. She further contended that the respondent is not entitled to the death help on the following grounds-
i) The complainant is not the only nominee or the nominee described in the master opening form.
ii) The complainant has not furnished the succession certificate of the deceased account holder
iii) The complainant has not submitted the claim form to the Appellants
iv) The complainant has not filed the documents as required under caluse (c) (d) and (e) of the term for grant of death help.
The learned counsel submitted that the District Forum failed to appreciate the fact that death help of the scheme is not ‘Dues’ or in the nature of insurance claim, it is a interest free loan advanced by the company upon fulfillment of certain criteria and upon furnishing a personal guarantee by the nominee. She further contended that the respondent/complainant did not file all the required documents and that she made application only in the year 2002. It is also her contention that death help plea has to be accepted by the company and the respondent has to prove that her husband’s death was genuine and produce the guarantee to repay the amount without interest, such a guarantee was not executed by the respondent and therefore the death help was not paid. She further contended that the District Forum erred in awarding interest and compensation, which are against the norms of the scheme. The learned counsel also submitted in her grounds that when there is an arbitration agreement, Consumer Forum and Commission have no jurisdiction to entertain the said complaint.
The learned counsel for the respondent submitted that the respondent intimated the appellants about the sudden demise of her husband in August, 2002 itself and she went along with her brother to appellant No.1 office and he tried to secure her thumb impression, which she refused and therefore a letter dated 17-6-2003 was sent to the respondent by appellant No.2 asking her to approach appellant No.1 for recovery of the scheme benefits. A legal notice was also issued on 28-12-2002 for which the opposite party replied on 22-1-2003 but did not settle the claim.
We have perused the material on record. Ex.A1 is dated 9-12-2000, which is a bond issued by appellant No.2 for a value of Rs.10,000/- and redemption date being 9-12-2010. Ex.A3 is dated14-8-2002 and is a representation signed by the respondent to appellant No.1 seeking payment of the benefits under SAHARA 10 Option ‘A’ scheme. It is an admitted fact that the bond holder has nominated his wife, who is the complainant herein as the nominee to receive the benefits under Ex.A1 bond and died on 28-7-2002 i.e. 12 months after the date of issuance of the bond. It is the case of the appellants that the respondent did not submit age proof certificate, cause of death and nominee requisite application because of which the appellant No.1 could not conduct and enquiry and recommend settlement of the claim. We observe from the record that appellant No.1 had addressed Ex.A9 letter directing the respondent to submit the specimen signature for their verification and also Ex.A11 letter dated 17-2-2003 addressed by Dy. Senior Manager of appellant stating that the respondent had submitted the certificates and appellant No.2 has returned them with a direction to submit the same at the branch office to initiate payment procedure. The contention of the learned counsel for the appellants that age proof and death certificate were not submitted is unsustainable in view of Ex.A5, which is the Death Certificate issued by M.R.O., and Ex.A6, which is the Birth Certificate issued by the Head Master of the concerned school stating that K.Thavudu was born on 6-7-1955. It is pertinent to note that Ex.A7 is the certificate issued by Dr.K.Sunil Naik M.D.(G.M.), Physician, Civil Surgeon of District Hospital, Srikakulam stating that the said K.Thavudu joined the hospital due to acute Myocardial infraction. The respondent has been able to establish through documentary evidence that the said Thavudu died due to cardiac arrest on 20-7-2002 and we see no sufficient grounds in the contention of the appellants/opposite parties that the birth and cause of death certificates were not submitted on time thereby not giving an opportunity to the appellant to enquire into the nature of death. It is the case of the appellants that the matter ought to have been referred to an arbitrator. We rely on the judgement of the National Commission reported in II(2006) CPJ 259 (NC) in YASHPAL MARWAHA v. PUSHPA BUILDERS LTD., and ANR. wherein the National Commission while discussing the jurisdiction of the Consumer Fora held that-
Even if there are pending arbitration proceedings, it is not a bar for
entertaining a consumer complaint.
The National Commission in UDAIPUR CEMENT WORKS v. PUNJAB WATER SUPPLY and SEWAGE BOARD reported in I (1999) CPJ 67 (NC) also held that-
Mere existence of an arbitration clause does not oust the jurisdiction
of Consumer Forum.
We rely on the judgement of the Apex court in the case of FAIR AIR ENGINEERS PVT. LTD. AND ANOTHER v. N.K.MODI reported in II (1996) CPJ 13 (SC) wherein the Apex court held as follows-
Though the District Forum, State Commission and National Commission
are judicial authorities, for the purpose of Section 34 of the Arbitration
Act, in view of the object of the Act and by operation of Section 3 thereof,
we are of the considered view that it would be appropriate that these
forums created under the Act are at liberty to proceed with the matter
in accordance with the provisions of the Act rather than relegating the
parties to an arbitration proceedings pursuant to a contract entered into
between the parties. The reason is that the Act intends to relieve the
consumer of the cumbersome arbitration proceedings or civil action
unless the forums on their own and on the peculiar facts and circumstances
of a particular case, come to the conclusion that the appropriate forum for
adjudication of the disputes would be otherwise than those given in the
Act.”
Therefore, we are of the view that this Commission has jurisdiction to entertain the complaint. Section 3 of the Consumer Protection Act, 1986 states that ‘The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force’. Keeping in view the aforementioned judgements and Section 3 of Consumer Protection Act, 1986, we are of the considered view that the ‘Consumer Forum’ and ‘State Commission’ have jurisdiction to entertain the complaint.
The learned counsel for the appellants in her written arguments also contended that the nominee is not aware that they had to repay the amount and she is under an impression that they will get this death benefit without repaying of the amount. The order of the District Forum clearly specifies that the respondent should submit a personal guarantee for repayment of the amount repayable towards death help of the nominee and we see no reason for the appellants to delay the payment of the death benefit any further. We see no reason to disallow the interest awarded by the District Forum since the appellants have not paid the death benefits though the death took place on 20-7-2002, which is almost six years till date and we reduce the same from 12 percent p.a. to 9 percent p.a. However, we observe from the record that the District Forum has awarded a compensation of Rs.25,000/- which we reduce to Rs.10,000/- and the interest also is being reduced from 12 percent p.a. to 9 percent p.a. while confirming the other aspects of the order of the District Forum.
In the result the appeal is allowed in part modifying the order of the District Forum by reducing the compensation awarded from Rs.25,000/- to Rs.10,000/- and also interest granted from 12 percent p.a. to 9 percent p.a. while confirming the other aspects. Since the respondent had already withdrawn an amount of Rs.50,000/-, interest would be calculated accordingly i.e. interest at 9 percent p.a. would be calculated from 29-7-2002 till the date of deposit on Rs.50,000/- and this amount of Rs.50,000/- would be deducted and thereafter 9 percent p.a. would be calculated on the balance amount. Time for compliance two weeks.
PRESIDENT. LADY MEMBER. MALE MEMBER
JM Dated 08-7-2008
