Before the District Forum: Kurnool
Before the District Forum:Kurnool
Present: Sri K.V.H. Prasad, B.A., LL.B., President
And
Smt C.Preethi, M.A., LL.B., Member
Sri R.Ramachandra Reddy, B.Com., LL.B., Member
Wednesday the 22nd day of December, 2004
C.D.No.65/2004
Smt T. Aruna,
W/o. Late T. Sankaraiah,
R/o. D.No. 9/68,
Ganesh Complex,
Guntakal. . . . Complainant represented by his counsel
Sri M. Shivaji Rao.
-Vs-
1. The Branch Manager,
LIC of India,
Dhone.
2. The Divisional Manager,
LIC of India,
Kadapah. . . . Opposite party No.1&2 represented by their
Counsel Sri S.Viswanatha Reddy.
O R D E R
(As per Smt C. Preethi, Member)
1. This consumer dispute case of the complainant is field under section 12 of C.P. Act, 1986, seeking a direction on the opposite parties to pay insured amount with benefits along with interest @ 18% per annum from the date of death of the insured till realization, cost of the case and any such other relief or reliefs which the complainant is entitled in the circumstances of the case.
2. The brief facts of the complainant’s case is that the complainant W/o Late T.Shankaraiah, working as hotelkeeper at Bellary, insured his life with opposite parties on 28.8.2001 for Rs.1,00,000/- under policy bearing No.652723864 and nominated his wife Smt T. Aruna as his nominee. The insured T. Shankaraiah died on 28.1.2003 due to accidental electric shock at his residence. As a nominee the complainant sent claim form along with all required documents to the opposite parties for settling her claim. To the dismay of the complainant opposite party No.1 repudiated the claim through its communication dt 26.4.2004 stating that the said policy is in a lapsed condition. The complainant issued legal notice dt 16.4.2004 to opposite party No.2 requesting to settle her claim. The opposite party No.2 replied negatively confirming the repudiation of opposite party No.1 on 29.4.2004. It is further submitted by the complainant that the opposite parties have not advised the policy holder immediately after the due date of premium, if advised so, the policy holder would have paid the required premium in time. So, there arises deficiency of service on part of opposite parties in not responding to the complaint made by the complainant.
3. In substantiation of her case the complainant relied on the following documents Viz (1) FIR No. 3/2003 dt 28.1.2003 of P.S of Bellary Dist along with translation (2) Post Mortem report of deceased T Shankaraiah (3) legal notice dt 16.4.2004 issued by complainant’s counsel to opposite party (4) reply dt 29.4.2004 given by the opposite parties to the complainant’s counsel (5) last paid receipt dt 28.1.2003 and (6) death certificate dt 29.11.2003 issued by Municipal authority, Bellary besides to her sworn affidavit in reiteration of her complainant avernments and a third party sworn affidavit of G.Vijaya Bhaskar, and the above documents are marked as Ex A.1 to A.6 for its appreciation in this case. The complainant and third party suitably replied to the interrogatories filed by the opposite parties.
4. In pursuance of the notice as to this case of the complainant, the opposite parties appeared through their standing counsel and contested the case. The opposite party No.2 filed its denial written version and opposite party No.1 adopted the written of opposite party No.2.
5. The written version of opposite parties questions the maintainability of the complainant’s case either in law or on facts. It admits that the deceased T.Shankaraiah has taken an insurance policy bearing No. 652723864 by paying premium of Rs.6,7,14/- covering his life risk for Rs.1,00,000/- and nominated the complainant/wife as his nominee. It further submits that on 9.12.2003 the complainant addressed a letter to the opposite parties informing the death of the policy holder T.Shankaraiah on 28.1.2003 at 6.30 A.M due to electric shock and submitted claim form and relevant necessary documents such as FIR, PIR and PMR for insurance amount. But the opposite parties repudiated through its communication dt 26.4.2004 stating the premium due on 28.8.2002 was paid to the opposite parties on 28.1.2003 at 14.14 hours i.e after the death of the policy holder. So, it is evident that the policy holder died when the policy was in lapsed condition, due to non payment of premium due on 28.8.2002. Hence, the opposite parties have rightly repudiated the claim of the complainant. The complainant’s counsel issued a legal notice dt 16.4.2004 claiming insurance amount, which was properly replied by opposite parties on 29.4.2004 addressed to complainant’s counsel. It further submits that as the policy was in lapsed condition due to non payment of premium due on 28.8.2002 and the premium was paid on 28.1.2003 after the policy holder’s death, the opposite parties are not liable to pay the insured amount to the complainant and seeks for the dismissal of complaint with costs.
6. In substantiation of its case the opposite parties relied on the following documents Viz (1) policy bond bearing No. 652723864 issued by opposite parties in favour of the deceased T. Shankaraiah (2) policy history of premium of deceased T.Shankaraiah (3) Computer daily Cash book (Page No.1 to 16 ) (4) page No.10 of Ex B.3 (5) intimation dt 9.12.2003 of the complainant to the opposite parties (6) claim statement submitted by the complainant (7) FIR (8) inquest report (9) postmortem report and (10) repudiation letter dt 26.4.2004 of opposite party No.1 to the complainant, besides to its sworn affidavit in reiteration of its written version as defence and the above documents are marked as Ex B.1 to B.10 for its appreciation in this case and suitable replied to the interrogatories filed by the complainant and the opposite party also relied on the deposition of RW1.
7. Hence, the point for consideration is to what relief the complainant is remaining entitled alleging deficiency of service on part of opposite parties?:-
8. It is the case of the complainant that she is the wife/nominee of T. Shankaraiah, who insured his life with opposite parties for Rs.1,00,000/-, on the claim preferred by her, consequent to the demise of her husband T.Shankaraiah on 28.1.2003, the opposite parties repudiated her claim on the ground that the policy in question had lapsed because of default in payment of premium due on 28.8.2002. But the complainant submits that she is entitled to the insured amount of Rs.1,00,000/- as her husband paid the due installment through the agent of LIC on 28.1.2003 and which was duly accepted by opposite parties and renewed the said policy in question.
9. There is no dispute as to the issuance of policy bearing No.652723864 on 28.8.2001 to the deceased T.Shankaraiah by the opposite parties and there is no dispute that the complainant is the nominee of the deceased and to the payment of due premium amount on 28.1.2003 and as to the death of deceased T.Shankaraiah due to electric shock.
10. The Ex B.10 is the repudiation letter dt 26.4.2004 issued by opposite party No.1 to the complainant, intimating her claim for insured amount has been repudiated, as the said policy was under lapsed condition and nothing is payable. The Ex A.3 is the legal notice dt 16.4.2004 issued by complainant’s counsel addressed to the opposite parties, the same grievances such as, the complainant/wife of the deceased, T.Shankaraiah, who has insured his life with opposite parties for Rs.1,00,000/- and on demise of said T.Shankaraiah due to electric shock, the complainant as his nominee is entitled to the insured amount of Rs.1,00,000/- and requesting the opposite party to settle her claim within 15 days, if not, the complainant will be constrained to seek redressal in appropriate Forum. The Ex A.4 is the reply of the opposite parties denying all the material avernments of Ex A.3 notice of the complainant as false, as on the date of death the due premium on 28.8.2002 was not paid and allowed the policy to be in lapsed condition, so the policy acquired any value and informed that nothing is payable to the complainant under the said policy.
11. The Ex B.5 is the renewal premium receipt dt 28.1.2003, time 14:14 hours, issued by Dhone, Branch of LIC of India, accepting the due premium of deceased
T. Shankaraiah which was fallen due on 28.8.2002, for Rs.6,714/- with late fee of Rs.251/-. The complainant submits that the opposite parties accepted the due premium of her husband’s policy through Ex B.5. The said premium amount was handed over by the deceased to the agent of LIC by name G. Vijaya Bhaskar, 10 days prior to his death, but the said LIC agent remitted the said amount with late fee, on 28.1.2003, without having any information as to the death of the policy holder on the same day and the opposite parties had renewed the said policy in question. The above said contention of the complainant is evidenced by the sworn affidavit of LIC, agent on outh, therefore, the said contention of the complainant cannot be discarded. But as against, to it, the written version of opposite parties in its avernments in para 7 alleged that the policy holder died due to electric shock at 6.30 A.M, on 28.1.2003 in his house at Bellary and the premium due on 28.8.2002 was paid at the office of opposite party No.1 on 28.1.2003 at 14.14 hours i.e after the death of the policy holder, therefore, the policy holder died when the policy was in lapsed condition, due to non payment of premium due on 28.8.2002 and the opposite parties are not liable to pay the insured amount. In the absence of any cogent substance in support of supra stated contentions of the opposite parties, the opposite parties cannot be absolved of its responsibility, in this case only on the technical ground that the policy had lapsed for want of payment of premium due on 28.8.2002. If that was so, why did the opposite parties accepted the premium due of 28.8.2002 on 28.1.2003 and why did they not inform the policy holder that the policy had lapsed and without its revival the premium paid are not of any use and ought to have returned, had the opposite parties informed the policy holder any time after 28.8.2002 about the status of policy as lapsed, he might have taken steps to revive it. It is also true that it is gross negligence and carelessness on the part of the opposite parties to have accepted the premium due of 28.8.2002 on 28.1.2003, without bringing it to the notice of the policy holder that such premium were being received on a lapsed policy. This action of the opposite parties in accepting premium amount in respect of the said policy of T.Shankaraiah, stated by the opposite parties to have lapsed does not stand to reason.
12. The complainant in support of its case relied on the following judgements :
(1)Rajani Patwari VS LIC of India and Anr, reported in 1998 (NCJ) (NC) Pg 279, it was held that, repudiation of claim on the ground that policy lapsed because of default in payment of premium, negligence on part of LIC to have accepted premiums without intimating that premiums were being received on a lapsed policy, LIC held guilty of deficiency of service.
(2)The General Manager, Hotel Kanishka Vs Smt Saroj Attal and anr, reported in 1998 (NCJ) (NC) pg 340, where in it was held, that repudiation of claim on the ground that policy lapsed on 23.5.1990 on account of non payment of premium, arrears of premium were remitted by employer to LIC in Feb, 1991, payment accepted by LIC, LIC directed to pay compensation.
(3)LIC of India, Warangal & another Vs Komuravelli Rama Ratnam, held that, LIC is estopped from raising the plea that policy lapsed, after the death of the insured and after the claim was 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.
(4)LIC of India Vs Davithamma & anr, 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.
The Judgements relied by opposite party’s side are:
(i) Chameli Khatum Vs The state of Bihar & Ors, High Court of at patna, reported in legal digest Oct, 2000, repudiation of claim as policy was in lapsed condition, employer undertaken to deduct the premium amount from the salary and remit it to the Corporation, having failed to do so, resulted in lapsed policy employer asked to pay the claim amount.
(ii) Smt Indu Sinha Vs LIC of India & Ors, Bihar State Consumer Disputes Redressal Commission, Patna, reported in legal digest, Oct, 2000, held, repudiation of claim as the policy was in lapsed condition, premium’s were deducted after the death of the deceased and remitted to Corporation, hence, the complainant is not entitled to any of the reliefs.
13. The opposite parties learned counsel placed reliance on the evidence of their Branch Manager and got examined him as R.W.1 and got marked Ex B.1 to B.9. He deposed as to policy of deceased T. Shankaraiah saying that the said T. Shankaraiah has taken policy covering the risk of accidental natural death for Rs.1,00,000/-, the said policy bond is Ex B.1. The Ex B.2 is the premium (computerised ) history of policy of deceased T. Shankaraiah. The deceased T. Shankaraiah did neither pay the second premium on 28.8.2002 nor within the grace period allowed i.e 15 days from the due date and allowed the policy to be in lapsed condition. The premium amount of the said policy was paid on 28.1.2003 at 14:14 hours as per Ex B.3 computer cash book entries. The relevant entry of the cash transaction pertaining to the said policy holder T. Shankaraiah on that date is Ex B.4. The Ex B.5 is intimation given by the complainant regarding the death of policy holder. The Ex B.7 to B.9 are the certified true copies of FIR, inquest report and post mortem report submitted by the complainant to the opposite parties. It was further elicited by him that there is no agreement or stipulation condition in the policy obligating the LIC to intimate policy holder as to the due date for premium payment and lapse of policy in case of premium not paid. It was suggested to him that grace period in case of annual mode premium payment is 6 months, as per condition No.2 of the policy the annual grace period for annual premium payment is one month from the due date.
14. The learned counsel for complainant placed reliance on the Ex A.5, renewal receipt dt 28.1.2003, the facts borne in the above exhibit is not denied by the opposite party’s side. Hence, from them it remains clear that the opposite parties by their act of accepting premium amount of deceased T. Shankaraiah, renewed the said policy. Therefore, the said policy is in vogue and deceased T. Shankaraiah is covered under the above said policy. The material in Ex B.7 to B.9 indicates in uni-tone that the policy holder died due to accidental electric shock. The opposite parties in accepting the premium amount in respect of the said policy and renewed it and later cannot take a stand that the said policy is in lapsed condition vide RW1 deposition, as such no such credence can be given to such evidence. It remains to be seen in the light of the admitted facts can the Insurance Company reject the claim or escape its liability on the ground that the policy has lapsed for want of payment of premium. The learned counsel for the complainant strongly submitted that the opposite party cannot do so, in view of the rulings of National Commission reported in 1998, NCJ, Pg 279 and 1998 NCJ Pg 340. In the light of the above position of Law, the decisions reported by the opposite parties side has little relevancy for its appreciation in this case.
15. Hence, in the circumstances discussed above as there is clear deficiency of service on the part of opposite parties and the opposite parties cannot escape their liability from settling the claim, more so in view of the clinching, cogent and convincing material placed on record by the complainant, supporting the claim of the complainant. The opposite parties have miserably failed due to their gross negligence and carelessness in accepting the due premium of 28.8.2002, on 28.1.2003 without brining it to the notice of the policy holder that the premium was being received on a lapsed policy and the opposite parties are estopped from raising the plea that the policy is in lapsed condition, 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 be therefore, be made to suffer for the default of the opposite parties. Thus, the complainant is perfectly remaining entitled to the policy amount with interest.
16. In the result, of the discussions made above, the complaint is allowed directing the opposite parties jointly and severally to pay to the complainant, the insured policy amount of Rs.1,00,000/- with interest @ of 9% interest per annum from the date of demise of policy holder till realization along with costs of Rs.5,000/- within a month of receipt of this order.
Dictated to the Stenographer, typed to the dictation, corrected by us, pronounced in the Open court this the 22nd day of December, 2004.
Sd/-
PRESIDENT
Sd/- Sd/-
MEMBER MEMBER
