BEFORE THE DISTRICT FORUM: KURNOOL
Present: Sri. T.Sundara Ramaiah, B.Com B.L., President
And
Sri. M.Krishna Reddy, M.Sc., M.Phil., Male Member
And
Smt. S.Nazeerunnisa, B.A., B.L., Lady Member
Tuesday the 12th day of July, 2011
C.C.No.11/2011
Between:
Dr.P.Kamalakar, P.M.P.,Private Medical Practitioner and Ex. LIC Agent,
Code No.180 65M (E.R.C.), S/o P.Late Devadas (Ex-Army Man),
R/o 36th Ward, D.No.76-97-281-13 (Rented),Weaker Section Colony, S.A.P. Camp Post, Kurnool-518 003.
…Complainant
-Vs-
The Branch Manager, Life Insurance Corporation of India,
Yemmiganur Branch, D.No.1/1295, H.B.S. Colony, Yemmiganur-518 360.
...Opposite ParTy
This complaint is coming on this day for orders in the presence of Sri Dr.P.Kamalakar, complainant in person and Sri L.Hari Hara Natha Reddy, Advocate for opposite party for upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Sri. T.Sundara Ramaiah, President)
C.C. No.11/2011
1. This complaint is filed under section 12 of C. P. Act, 1986 praying to direct the opposite party:-
- To pay to the complainant survival benefit amount of Rs.40,000/- due by 15-05-2010 under the policy bearing No.650596395;
(b) To pay interest on Rs.40,000/-;
(c) To pay cost of the complaint.
2. The case of the complainant in brief is as under:- The complainant is a private medical practitioner. He also worked as a L.I.C agent with code No.180-65M. The complainant obtained L.I.C. Policy bearing No.650596395 under scheme of deduction of insurance premium from agents commission bills. The sum assured under the policy is Rs.2,00,000/-. The monthly premium payable under the policy is Rs.1,194/-. The date of the commencement of the policy is from 15-05-1995. On 26-12-1995 the divisional office L.I.C. gave suspension of agency notice to the complainant. The complainant gave a reply notice dated 30-12-1995. The complainant also got a legal notice issued to the opposite party requesting to deduct the premiums payable under the policy from commission payable to him. The opposite party filed a false criminal case against the complainant in C.C.No.269/1996 on the file of J.F.M Court Yemmiganur. The complainant preferred criminal appeal No.31/1998 on the file of Second Additional District Judge, Kurnool. In the criminal appeal the complainant was found not guilty for the offence with which he was charged and he was acquitted. The agency of the complainant was terminated though he was acquitted by Session Judge. The opposite party paid the commission to the complainant without deduction the monthly premiums due under the policy. The complainant informed the opposite party that it is responsible for lapse of the policy. The complainant filed a case before the District Consumer Forum Kurnool for recovery of survival benefits due in the year 2000 and 2005. The District Forum Kurnool did not take the case on the file for want of limitation. The complainant preferred appeal to the State Commission Hyderabad. The State Commission also dismissed appeal preferred by the complainant. The complainant preferred revision to the National Consumer Disputes Redressal commission, New Delhi. The revision is pending. The complainant sent a letter dated 18-08-2010 to the opposite party requesting to pay the survival benefit of Rs.40,000/- payable under the policy in 2010. Opposite party failed to pay the survival benefits of Rs.40,000/- stating that the policy lapsed. There is deficiency of service on the part of the opposite party. Hence the complaint.
3. Opposite party filed written version stating that the complaint is not maintainable. The complainant has taken a policy bearing No.650596395 for assured sum of Rs.2,00,000/-. Monthly premium payable under the policy is Rs.1,194/-. As per the conditions of the policy 20% of sum assured will be payable towards survival benefit on life assured surviving 5 years, 10 years and 15 years from the date of commencement of the policy, provided the premiums were paid up to date the policy is in force. The facility of recovering the premium from agent’s commission is available only for the agents whose agency is in force. The agency of the complainant was placed under suspension from 26-12-1995 as he acted in a manner of detrimental to the interest of the corporation and committed fraud. Hence no commission was released and no premium was deducted from the commission bill of the complainant. On 05-11-1996 the opposite party issued letter to the complainant stating that the recovery of the premium was discontinued from the month of January, 1996 and that the said policy is in lapsed conditions. In spite of the letter issued by the opposite party the complainant has not chosen to pay the premiums due from January, 1996. The complainant intentionally allowed the policy to lapse. After through enquiry the agency of the complainant was terminated with effect from 19-08-1998 by the Senior Divisional Manager L.I.C Kadapa Division. The complainant preferred appeal to the Zonal Manger L.I.C of India. The Zonal Manger confirmed the order of the Senior Divisional Manager by his order dated 30-09-2000. As per the order of the competent authority the opposite party released the renewal commission payable to the complainant on 08-02-2001 after deducting the recoveries. The opposite party forfeited the balance amount of Rs.6,214.06 ps. payable to the complainant for fraud committed by him. In the authorization given under the scheme it is mentioned that the insured is responsible for any consequences that arises on account of nonpayment of premiums on his policy for any reasons whatsoever. The complainant paid eight monthly premiums due under the policy from 15-05-1995 to 15-12-1995. The policy was lapsed in the month of January, 1996. As the complainant did not pay the premiums from January, 1996 the question of paying the survival benefit amount of Rs.40,000/- on 15-05-2010 does not arise. The complainant has already filed a case for nonpayment of survival benefit due on 26-12-2005. The case of the complainant was rejected on the ground that it is barred by limitation. The complainant preferred appeal to State Commission and the State commission dismissed the said appeal. The complainant filed revision petition No.2458/2007 before the National Commission and the same is pending. The present complaint is not maintainable and it is liable to be dismissed. The complainant did not pay the premiums due under the policy to the corporation intentionally and allowed the policy to lapse. The complainant bore grudge against officers of the opposite party for termination of his agency. There is no deficiency of service on the part of the opposite party. The complaint is liable to be dismissed.
4. On behalf of the complainant Ex.A1 to A34 are marked and sworn affidavit of the complainant is filed. On behalf of the opposite party Ex.B1 to B11 are marked and sworn affidavit of the Senior Branch Manager L.I.C of India Yemmiganur is filed.
5. Both sides filed written arguments.
6. The points that arise for consideration are:-
- Whether there is deficiency of service on the part of Opposite Party?
- Whether the complainant is entitled to the reliefs as prayed for?
(c) To what relief?
7. POINTS 1 & 2:- Admittedly the complainant took policy Ex.A4 bearing No.650596395 from the L.I.C for assured sum of Rs.2,00,000/-. The period of the policy is from 15-05-1995 to 15-05-2015. The monthly premium payable under the policy is Rs.1,194/-. As per the policy conditions 20% of sum assured is payable towards survival benefits on life assured surviving 5 years, 10 years and 15 years from the date of commencement of the policy. Admittedly the premiums payable under the policy are recoverable by the corporation under the scheme of deduction of insurance premiums from agents commissions bills. Admittedly the complainant who was the agent of the corporation gave a letter of authorization to the opposite party authoring it to recovery the premiums from the commissions payable to him. Ex.A1 contains the copy of the said letter of authorization. Admittedly the complainant was the agent of the corporation under agent code No.180-65M.
8. The complainant filed the present complaint claiming survival benefit of Rs.40,000/- due by 15-05-2010 under his policy bearing No.650096395. The complainant before filling the present complaint got issued a legal notice Ex.A30 dated 25-08-2010 demanding payment of survival benefit amount of Rs.40,000/- due under his policy. The opposite party received the said notice but did not pay the amount to the complainant. According to the complainant he was not paid the said amount of Rs.40,000/- by the opposite party stating that his policy lapsed long back. Admittedly the agency of the complainant was suspended by the corporation with effect from 26-12-1995. Ex.A6 is the copy of order of suspension of agency of the complainant. Against the order of suspension of agency the complainant filed a writ petition No.3783/1996 on the file of Honourable High Court of Andhra Pradesh. The said writ petition was dismissed. He preferred an appeal. Appeal No.1007/1997 was also dismissed by the Honourable High Court of Andhra Pradesh observing that the principal shall always have the right to suspend as well as terminate the agency. The said information is available in Ex.A13 copy of the termination order dated 19-08-1998 filed by the complainant. Admittedly the agency of the complainant was terminated by the corporation Ex.A13 is copy of the termination order dated 19-08-1998. The complainant preferred an appeal to the Zonal Manager/appellant Authority, Hyderabad against the order of termination of agency dated 19-08-1998. The appellant authority by its proceedings dated 20-10-1999 set aside order of termination dated 19-08-1998 and remanded the matter back to the Senior Divisional Manager for passing fresh order. The said information is available in Ex.A14 copy of the termination order dated 13-12-1999. As per the order of the appellant authority the Senior Divisional Manager passed fresh order terminating the agency of the complainant. Ex.A14 is the termination order of the Divisional officer dated 13-12-1999. The Senior Divisional Manager Kadapa passed the second termination order of agency of the complainant in view of the observation made by Zornal Manager in the appeal preferred by the complainant. The contention of the complainant that the second termination order of Senior Divisional Manager Kadapa is not sustainable cannot be accepted. The second termination order dated 13-12-1999 was passed by the Divisional Manager Kadapa as the first termination order was set aside and matter was remanded back for fresh disposal.
9. It is the case of the opposite party that as the agency of the complainant was terminated by the competent authority, the opposite party ceased to deduct the monthly premiums from the complainant commissions bills. Admittedly the complainant executed authorization letter in favour of the corporation. The copy of the letter of authorization is attached to Ex.A1. It is mentioned in the authorization letter that the deduction of the premiums from the agents commission bill ceases upon the termination of agency. As the complainant agency was suspended on 26-12-1995 and finally his agency was terminated on 13-12-1999, the opposite party did not deduct the premium from the commission bills of the complainant. Admittedly the opposite party issued Ex.A9 notice dated 05-11-1996 informing the complainant that the payment of premiums have been discontinued from the month of January 1996 and that the policy is in lapsed condition. The opposite party also requested the complainant to revive the policy to continue the protection of the insurance. No doubt the complainant after receiving the suspension order of his agency sent intimation to the opposite party to deduct the premiums from his commissions bills. The opposite party did not do so as the agency of the complainant was suspended. The complainant knowing fully well that the opposite party was not deducting the premiums from his commission bills did not choose to pay the premiums and allowed his policy lapsed. According to the opposite party, it is not responsible for consequence an account of nonpayment of premiums on the policy. In the authorization letter attached to Ex.A1 it is mentioned that the insured shall be entirely responsible for any consequence on account of nonpayment of premiums on his policy for reason whatsoever. In the present case the opposite party did not deducting the premiums from the commission bills of the complainant on the ground that the complainant agency was terminated by it. As per the conditions mentioned in the authorization letter the entire responsible is that of the insured for any consequence an account of nonpayment of premiums due under the policy. According to the complainant his agency was terminated illegally without any basis. He cited a decision reported in AIR 1993 MADRAS 150 where in it is observed that reasonable opportunity to show cause has to be afforded before termination of agency of agent of L.I.C. As seen from the termination orders EX.A13 and Ex.A14 it is very clear that opportunity was given to the complainant before passing order of the termination. Anyhow at this stage we can’t hold that the order of the termination of the agency of the complainant is illegal. This Forum cannot go merit or demerits in the termination order dated 13-12-1999.
10. It is submitted by the learned counsel appearing for the opposite party that the complainant failed to pay the premiums due under the policy in spite of notice issued by the opposite party and that the policy was lapsed in the month of January – 1996. The complainant is claiming survival benefit due on 15-05-2010. Admittedly the policy of the complainant was not in force by 15-05-2010. As the policy was lapsed long back the question of paying survival benefit of Rs.40,000/- due on 15-05-2010 does not arise. It is submitted by the complainant that the opposite party intentionally did not deduct the premiums from the commission payable to him. As already stated the agency of the complainant was terminated on 13-12-1999 finally. As per the authorization letter the corporation is not entitled to deduct premium from the commission of the agent whose agency was terminated. The learned counsel appearing for the complainant cited a decision reported in (1999) Supreme Court Cases 229, where in the Honourable apex court held that where the employer had failed to remit to L.I.C the amount of premium deducted from the salary of the deceased employee, held, L.I.C. was liable to pay the insurance amount to the deceased’s heirs (widow in this case) together with interest @ 15% till payment. In the instant case the opposite party not deducted the premiums from the commissions bills of the complainant as his agency was terminated. The opposite party issued notice to the complainant stating that his policy was in lapsed conditions for nonpayment of premium. Knowing fully well about the non-deduction of the premiums from his commission bills the complainant did not take steps to pay the arrears of premium to revive the policy. The facts of the present case are entirely different from the facts of the case cited above. The complainant intentionally allowed his policy lapsed without paying the premiums. It is not the case of the complainant that still the opposite party has to pay sum amount to him towards commission. As seen from Ex.A19 and Ex.A20 it is very clear that the complainant was paid his commission up to August 2000. The complainant having received his commission from the corporation did not make attempt to revive his policy by paying the arrears of premiums. As the policy of the complainant was not in force by 15-05-2010 the claim of the complainant cannot be accepted. The policy of the complainant lapsed in 1996 for nonpayment of the premiums. As the policy of the complainant is not in force the opposite party rightly refused to pay the survival benefit due on 15-05-2010 to the complainant. No deficiency of service on the part of the opposite party is found. The opposite party is not liable to pay the survival benefit of Rs.40,000/- to the complainant and the complaint is liable to be dismissed.
11. In the result, the complaint is dismissed without costs.
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 12th day of July, 2011.
Sd/- Sd/- Sd/-
MALE MEMBER PRESIDENT LADY MEMBER
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant : Nil For the opposite party : Nill
List of exhibits marked for the complainant:-
Ex.A1 Photo copy of L.I.C. of India circular No.63,
dated 07-10-1993.
Ex.A2. Photo copy of Proposal Deposit Rs.1,194/-
dated 28-04-1995.
Ex.A3 Photo copy of Acceptance letter cum first premium receipt dated 22-05-1995.
Ex.A4 Photo copy of Policy Bond No.650596395,
dated 15-05-1995.
Ex.A5 Photo copy of Policy premia recovery under SSS Code
No.1239-01 showing recovery of Rs.1,194/- vide
Commission payment voucher.
Ex.A6 Photo copy of Suspension letter da ted 26-12-1995.
Ex.A7 Reply letter to the suspension letter dated 30-12-1995.
Ex.A8 Photo copy of lawyer notice dated 04-04-1996.
Ex.A9 Photo copy of L.I.C. of India Branch Office, Yemmiganur letter Dated 05-11-1996.
Ex.A10 Reply dated 23-12-1996.
Ex.A11 Photo copy of Judgment in C.C.No.269/1996
dated 04-03-1998.
Ex.A12 Photo copy of Judgment in Criminal Appeal No.31/1998, dated 22-06-1998.
Ex.A13 Photo copy of Termination order dated 19-08-1998.
Ex.A14 Photo copy of Second time termination order,
dated 13-12-99.
Ex.A15 Photo copy of L.I.C. of India Zonal Manager Hyderabad dated 04-10-2000.
Ex.A16 Photo copy of Division Manager L.I.C. Kadappa
dated 05-01-2001.
Ex.A17 Photo copy of my lawyer notice dated 12-01-2001.
Ex.A18 Photo copy of commission bill dated 12-03-2001.
Ex.A19 Photo copy of commission bill dated 08-02-2001.
Ex.A20 Photo copy of Commission bill dated 22-01-2001.
Ex.A21 Photo copy of 2000 April Commission bill.
Ex.A22 Photo copy of details of the renewal commissions showing from January 1996 to onwards each and every month amount 2008.
Ex.A23 Photo copy of Docket order in SR.No.155/2007
dated 10-01-2007.
Ex.A24 Photo copy of oral order in F.A.No.113/2007 against C.D.S.R.No.155/2007 District Forum, Kurnool by the State Commission Hyderabad dated 09-03-2007.
Ex.A25 Photo copy of notice from National Consumer Disputes Redressal Commission, New Delhi in R.P.No.2458/2007, dated 10-09-07.
Ex.A26 Photo copy of written arguments in R.P.No.2458/2007 dated 1-03-2010.
Ex.A27 Office copy of my application to the Branch Manager L.I.C. of India, Yemmiganur with postal receipts and
acknowledgement due dated 18-08-2010.
Ex.A28 Lawyer notice to the Branch Manager L.I.C. of India Yemmiganur with postal receipts and acknowledgement due dated 25-08-2010.
Ex.A29 Photo copy of explanation to the Branch Manager L.I.C. of India yemmiganur with postal receipt and
acknowledgement due dated 01-09-2010.
Ex.A30 Legal notice dated 25-08-2010 along with postal receipts & acknowledgement.
Ex.A31 Certified copy of L.I.C. of India agents Rules 1972.
Ex.A32 Termination order dated 20-10-99.
Ex.A33 Photo copy of LIC of India Kadapa Division renewal of licence dated 29-08-1998.
Ex.A34 JAN 1996 bill (Original) (2).
List of exhibits marked for the opposite party:-
Ex.B1 Photo copy of conditions regarding deduction of insurance premiums from agent’s commission bills dated 07-10-1993 of the opposite party corporation.
Ex.B2 Photo copy of letter addressed to the complainant by the Senior Divisional Manager, L.I.C. of India Kadapa
dated 26-12-1995.
Ex.B3 Photo copy of letter dated 05-11-1996 addressed to the complainant by the opposite party Branch Manager.
Ex.B4 Photo copy of order addressed to the complainant dated 19-08-1998 by the Senior Divisional Manager, LIC of India Kadapa terminating the agency of the complainant.
Ex.B5 Photo copy of order addressed to the complainant dated 13-12-1999 by the Senior Divisional Manager, LIC of India Kadapa terminating the agency of the complainant.
Ex.B6 Photo copy of appeal order addressed to the complainant by Zonal Manger, LIC of India Hyderabad
dated 04-10-2000.
Ex.B7 Photocopy of details of the renewal commission of the complainant from 2/96 to 7/98 dated 08-02-2001.
Ex.B8 Photo copy of docket order in S.R.No.155/2007 on the file of District Forum Kurnool dated 10-01-2007.
Ex.B9 Photo copy of order of state commission in F.A.No.113/2007 against C.D.S.R.No.155/2007
dated 29-03-2007.
Ex.B10 Photo copy of notice of National Commission in P.R.No.2458/2007.
Ex.B11 Photo copy of policy status report.
Sd/- Sd/- Sd/-
MALE MEMBER PRESIDENT LADY MEMBER
// Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties :
Copy was made ready on :
Copy was dispatched on :
