BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri K.V.H.Prasad, B.A., LL.B., President
Smt C.Preethi, M.A., LL.B., Member
Sri R.Ramachandra Reddy, B. Com., LL.B., Member
Wednesday the 10th day of August, 2005
CD NO. 22/2002
J. Ushasree,
W/o. Narendranath,
C/o. Sreedhar Traders,
Near Overbridge,
Ananthapur. . . . Complainant
-Vs-
1.The Asst. Provident Fund Commissioner,
Sub-Regional Office,
1/30, Railway Station Road,
Erramukkapalle,
Cuddapah-4.
2. The District Manager,
The A.P. Housing Corporation Ltd.,
Sankshema Bhavan,
Kurnool.
3. The Branch Manager,
LIC of India,
Cuddapah. . . . Opposite parties.
This complaint coming on 29.7.2005 for arguments in the presence of Sri A.Rama Subba Reddy, Advocate for complainant, Sri C.V.Srinivasulu, Advocate for opposite party No.1, Sri M.Venkoba Rao, Advocate for opposite party No.2 and Sri B. Ramasubba Reddy, Advocate for opposite party No.3 and stood over for consideration till this day the Form made the following.
O R D E R
(As per Smt C.Preethi, Member)
1. This CD complaint of the complainant is filed under section 12 of C.P. Act, 1986, seeking a direction on the opposite parties to pay policy amount under policy bearing No. 651473504 with 24% interest per annum, Rs.10,000/- as compensation and costs of the complaint.
2. The brief facts of the complainant’s case is that the complainant is W/o T.J.Narendranath, who was working as Deputy Executive Engineer in opposite party No.2 office. The said T.J.Narendranath insured his life with opposite party No.3 under policy bearing No. 651473504 for assured amount of Rs.44,000/- with double benefit in case of death and triple benefit in case of accidental death. The said policy was assigned to opposite party No.1 and the premium for the said policy was deduct by opposite party No.2 from the salary of late T.J.Narendranath and sent to opposite party No.1, who is assignee for the said policy and the premiums were regularly deducted from the salary of the deceased till his accidental death on 17.2.2001.
3. After the death of the deceased the complainant preferred a claim with opposite parties but the opposite parties did not settle the claim and it appears that opposite party No.1 did not send premium to opposite party No.3, hence the opposite parties are unable to settle the said claim. Hence, their arises deficiency of service on part of opposite parties in not settling the claim of the complainant and opposite parties are liable to pay interest on the said policy amount.
4. In support of her case the complainant relied on the following document i.e (1) status report of policy bearing No. 651473504, dated 10.10.2001, besides to the sworn affidavit of the complainant in reiteration of her complaint averments and the above document is marked as Ex A.1 for its appreciation in this case.
5. In pursuance to the notice as to this case of the complainant the opposite party appeared through their standing counsel and contested the case by filing separate written versions as defence.
6. The written version of opposite party No.1 admits that the complainant’s husband has taken a policy from opposite party No.3 for assured sum of Rs.44,000/- and the complainant is a nominee under the said policy. It also admits to pay necessary premium of the said policy to opposite party No.3 as and when opposite party No.3 send invoice copy by intimating the due of insurance premium of the said insured. As per the invoices for the years 1995, 1996 and 1997, the opposite party No.2 paid necessary premium from the Provident Fund account of the deceased to opposite party No.3 but opposite party No.3 for the years 1998, 1999 and 2000, in the invoices sent by opposite party No.3 the name of the insured T.J.Narendranath due amount was not shown, so the premium was not sent to opposite party No.3 for above said period. The same was noticed only after intimation received from the complainant. As there appears negligence on part of opposite party No.3 in not asking the opposite party No.2 by including the name of the deceased T.J.Narendranath in the invoices list, the opposite party No.3 is liable to pay assured amount. The opposite party No.2 is ready to pay the premium due for the years 1998, 1999 and 2000 with interest to the complainant or to the opposite party No.3. Hence, there is no negligence on part of opposite party No.2 and no deficiency of service, hence, it is only for opposite party No.3 to pay the insurance amount to the complainant and seeks for the dismissal of complaint.
7. The written version of opposite party No.2 admits that the complainant’s husband T.J.Narendranath, who worked as Deputy Executive Engineer in the office of opposite party No.2, died in an accident on 17.2.2001. It also further submits that the deceased entered into agreement on 15.2.1995 with opposite party No.1 and opposite party No.3, that from his EPF fund account the opposite party No.1 has to deduct Rs. 3,329/- and the same amount has to be send to opposite party No.3, as yearly premium towards policy No. 651473504, while he was working at Ananthapur. On 5.6.1995 the deceased was transferred from Anantapur to Kurnool and at the time of transfer a copy of salary particulars were sent and no other information about the policy agreement was intimated and the deceased worked at Kurnool from 5.6.1995 to 24.12.1997 and was again transferred to Gadwal of Mahaboob Nagar Region and worked there from 24.12.1997 to 26.5.1999 and was again transferred to Kurnool and joined the office on 27.5.1999 till his death on 17.2.2001, during the above periods where the husband of the complainant worked, there is no information or intimation or notice or anything else regarding policy or its transfer or what so ever regarding the complaint allegations against this opposite party No.2 from the husband of the complainant or from opposite party No.1 and opposite party No.2. It is the duty of opposite party No.1 to deducted premium from EPF fund account of the deceased and remit to opposite party No.3 towards the said policy and it is opposite party No.1 who was negligence in performing his official duty. As there is responsibility on opposite party No.3 to remind the opposite party No.1 regarding the premium particulars not remitted to opposite party No.3 by opposite party No.1, so further if at all any liability arises, it is for opposite party No.1 and opposite party No.3 to pay claim amount. Hence, there is no negligence on part of opposite party No.2 and there is no liability to pay any claim amount to the complainant and seeks for the dismissal of complaint with costs.
8. The written version of opposite party No.3 admits that Late T.J.Narendranath has taken a policy for assured sum of Rs.44,000/- and got the said policy assigned infavour of Central Board of Trustees Employee Provident Fund and assignment was registered under section 38 of Insurance Act 1938. As the policy was assigned to Provident Fund Authorities and the premium in respect of the said policy was payable from Provident Fund accumulations of life assured, to which the life assured is liable to pay, the life assured has transferred all his rights of the said policy fully and absolutely to opposite party No.2 and the interest in the policy monies rests with assignee only. The yearly premium of Rs. 3,329/- falls due on February, 15 every year and opposite party No.1 paid premium up to 15.2.1997, the premium due from 15.2.1998 was not paid by opposite party No.1 to opposite party No.3. The list of Provident Fund policy premium due for February 1998 was sent by opposite party No.3 to opposite party No.1 and opposite party No.1 in respect of life assured T.J.Narendranath rounded off the relevant policy number and name of the life assured with remarks “transferred to AP/17710/175” and did not pay the required premium for February, 1998 and allowed the policy to lapse. It is reported that the life assured expired in an accident on 17.2.2001 and the policy was in lapsed conditions and had acquired paid up status, hence only paid up value of Rs.8,800/- became due on the policy due to death of the life assured and the claim for paid up value of Rs.8,800/- was settled in favour of opposite party No.1 who also executed a discharge voucher dated 17.11.2001 for the Rs. 8,800/-. Since the complainant has got no right claim the amount from LIC their lies no contract between the complainant and opposite party No.3 and alleges no deficiency of service on part of opposite party No.3 and seeks for the dismissal of complaint with costs.
9. In support of their case the opposite party No.3 relied on the following documents Viz (1) original proposal submitted to opposite party No.3 by T.J.Narendranath, dated 5.2.2005 (2) original policy Bond bearing No. 651473504 of the deceased life assured dated 28.3.1995 (3) Forum No.15 the Original form of assignment of policy dated 28.3.1995 and (4) discharge form of Rs. 8,800/- dated 1.7.2001, besides to the sworn affidavit of opposite party No.1, 2 and 3 and opposite parties exchanged interrogatories in between them and the above documents are marked as Ex B.1 to B.4 for its appreciation in this case.
10. Hence the point for consideration is to what relief the complainant is entitle alleging deficiency of service on part of opposite parties:-
11. The facts of this case are not very much in serious dispute rather stands admitted which can be noticed with relative brevity. One T.J.Narendranath, who worked in opposite party No.2 office died in an accident. The deceased has taken an Insurance Policy bearing No. 651473504 from opposite party No.3. There is no dispute that the policy holder/ deceased assigned the said policy to opposite party No.1 and opposite party No.1 has to remit the premium of Rs.3,329/- by deducting the said amount from provident fund accumulations of the complainant to opposite party No.3. Admittedly, the opposite party No.1 remitted the premium amounts to opposite party No.3. On the claim preferred by the nominee on the death of the policy holder on 17.2.2001, the opposite party No.3 repudiated the claim on the ground that the premiums for the years 1998, 1999 and 2000 was remained unpaid and as such the policy in question remains lapsed.
12. The written version of opposite party No.2 (employer) submits that they regularly paid provident fund accumulations of the deceased to opposite party No.1 and it is for opposite party No.1 to deduct the premium from the said accumulations and remit the same to opposite party No.3, hence there is no deficiency on their part.
13. The written version of opposite party No.1 submit that it is for the opposite party No.3 (LIC) to send invoices (demand note) to opposite party No.1 for payment of premiums as opposite party No.3 did not send invoices for the years 1998, 1999 and 2000 covering the deceased T.J. Narendranath’s policy, therefore, the opposite party No.1 could not remit premium of the deceased to opposite party No.3 Admittedly, the opposite party No.1 was receiving provident fund accumulations of the deceased/ policy holder from the employer (i.e opposite party No.2) and did not remit the premium s for the years 1998, 1999 and 2000 with opposite party No.3 by deducting them from the provident fund accumulations of the deceased. It is obligatory on the part of the opposite party No.1, as an assignee to remit regularly, premiums of the deceased, undisputedly, after receiving the Provident Fund accumulations, but the opposite party No.1 had not remitted the premium which was required to be paid to the opposite party No.3 (LIC) prior to the death of the deceased (husband of the complainant) and cannot now take shelter of non receipt of invoice from opposite party No.3 which included the name of the deceased T.J.Narendranath. Admittedly, the opposite party No.1 sat over the matter and did not made any endeavour either to inform the deceased T.J.Narendranath before to his death nor to the LIC about the non-inclusion of the deceased T.J.Narendranath name in the invoice list and allowed the policy to lapse. It is gross negligence and carelessness on part of opposite party No.1, as an assignee to the said policy he should have taken necessary steps and a little endeavour, to remit the premiums to opposite party No.3 and keeping the Provident Fund accumulations of the deceased with him, hence, there is clear deficiency of service on part of opposite party No.1 in not remitting the premium of the deceased T.J. Narendranath to opposite party No.3, as an assignee vide Ex B.3.
14. The written version of opposite party No.3 submits that is not obligatory on the their part to inform the insurer i.e assignee regarding non receipt of premium amount and to sent invoice (demand note), but it is for opposite party No.1 to remit premium regularly and keep the policy alive. This stand taken by opposite party No.3 in unsustainable in the eye of Law for the simple reason that amounts of premium for the years 1998,1999 and 2000 should have been remitted to LIC by opposite party No.1, admittedly, opposite party No.3 know that the deceased T.J.Narendranath assigned the said policy to opposite party No.1, it was obligatory on part of opposite party No.3 to inform the insured/ assignee to pay the due premium or at least appropriate steps could have been taken in order to keep the policy alive, hence there arises deficiency of service on their part.
15. In arriving at such conclusions, the observations adopted are made in the following decisions (1) LIC, Warangal and another Vs Komuravalli Rama Ratnam, reported in 2000(1) ALD (cons) pg 25 held that LIC is estopped from raising the plea that policy lapsed after the death of the insured and after the claim is made. The insured should have been informed of the fact of the lapse of policy in which case he would have an opportunity to get the policy revived. The nominee cannot therefore be made to suffer for the default of Insurance Company (2) LIC of India Vs Davithamma and another, reported in III (1999) CPJ Pg 353, held, that, it is imperative on the part of LIC to bring to the notice of the insured that premium not paid, LIC guilty of deficiency of service and liable to make payment along with interest.
16. The complainant also relied on the following decisions: (1) Branch Manager, LIC of India Vs Smt Sanchida Das, State Commission, Jharkhand, reported in 2003(1) CPR pg 507, held that employer under the salary saving scheme acts as an agent of LIC while deducting premium amount from salary of employee and failure on part of employer binds LIC of its liability to pay policy amounts. (2) Regional Provident Fund Commissioner Vs Shiv Kumar Joshi, (Supreme Court) reported in, 2000(1) CPR Pg 61, held that a member of Employees Provident Fund Scheme under the Provident Fund Act, is a consumer within the meaning of C.P. Act, 1986.
17. In the light of the discussions made supra and following the afore mentioned decisions, there is clear deficiency of service on part of opposite parties 1 and 3 and they cannot escape their liability. The opposite party No.1 has failed miserably due to their gross negligence and carelessness as an assignee to remit premium amount for the years 1998, 1999 and 2000 to opposite party No.3 after receipt of Provident Fund accumulations from the employer of the deceased and the assignee perfectly knows that he has to remit premium to the said assigned policy. The opposite party No.3 also failed miserably due to their gross negligence and carelessness in not bringing to the notice of the insured/ assignee that the premium due is not remitted and the policy is in lapsed condition and opposite party No.3 is estopped from raising the plea that the policy is in lapsed condition after the death of the insured and after claim is made. The insured/assignee should have been informed of the fact of the lapse of policy in which case he would have an opportunity to get the policy revived. The nominee cannot be therefore, be made to suffer for the default of opposite party 1 and 3. Thus, the opposite parties 1 & 3 are jointly and severally liable to pay the insured amount to the complainant to which the complainant is perfectly remaining entitled. As no cause of action is made against opposite party No.2 and the case against opposite party No.2 is dismissed for want of merit and force.
18. In the result, the case against opposite party No.2 is dismissed and the complaint is allowed directing the opposite party 1 and 3 jointly and severally liable to pay to the complainant the assured amount with accidental benefit under policy bearing No. 651473504 with 12% interest per annum from the date of demise of the policy holder till realization along with costs of Rs.5000/- within a month of receipt of this order.
Dictation to the Stenographer, type to dictation corrected by us, pronounced in the Open Court this the 10th day of August, 2005.
PRESIDENT
MEMBER MEMBER
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant For the opposite parties
-Nil- -Nil-
List of Exhibits marked for the complainant:-
Ex A.1 Status Report of policy No. 651473504, dt 10.10.2001.
List of Exhibits marked for the opposite parties:-
Ex B.1 Original proposal for Insurance on Own life of deceased life assured
Dt 5.2.1995.
Ex B.2 Original policy bond bearing No. 651473504 of the deceased life
Assured dt 28.3.1995.
Ex B.3 Forum No. 15 the original form of assignment of policy dated 28.3.1995.
Ex B.4 Discharge Form for Rs.8,800, dated 7.11.1001.
PRESIDENT
MEMBER MEMBER
Copy to:-
- Sri A.Ramasubba Reddy, Advocate, Kurnool for complainant.
- Sri C.V.Srinivasulu, Advocate, Kurnool for opposite party No.1.
- Sri M. Venkaba Rao, Advocate, Kurnool for opposite party No.2.
- Sri B.Ramasubba Reddy, Advocate, Kurnool for opposite party No.3.
Copy was made on ready:
Copy was dispatched on:
Copy was delivered to parties:
