M. Venkatamma, W/o. Late Ramulu, R/o. Arempula Village, Khammam Rural Mandal,Khammam District. - Complainant(s)
Versus
The Branch Manager,Andhra Bank Khammam. - Opp.Party(s)
01 Nov 2010
ORDER
BEFORE THE DISTRICT CONSUMER FORUM AT KHAMMAM Varadaiah Nagar, Opp CSI Church consumer case(CC) No. CC/10/12
M. Venkatamma, W/o. Late Ramulu, R/o. Arempula Village, Khammam Rural Mandal,Khammam District.
...........Appellant(s)
Vs.
The Branch Manager,Andhra Bank Khammam. The Divisional Manager, L.I.C. of India,Pension & Group scheme division, Division Office, Jeevan Prakash, Secretariat Road, Hyderabad.
...........Respondent(s)
BEFORE:
Complainant(s)/Appellant(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
ORDER
BEFORE THE DISTRICT CONSUMERS FORUM AT KHAMMAM Dated this, the 26th day of October, 2010 CORAM: 1. Sri Vijay Kumar, B.Com., LL.B., President 2. Smt. V. Vijaya Rekha, B.Sc. B.L., Member 3. Sri.R.Kiran Kumar, B.Sc., LL.B., Member C.C.No.12 of 2010 Between: M.Venkatamma, w/o.late Ramulu, Age:50 years, occu: House hold, r/o.Arempula village, Khammm Rural Mandal, Khammam District. Complainant And 1. The Branch Manager, Andhra Bank Main Branch, Khammam 2. The Divisional Manager, L.I.C. of India, Pension & Group scheme division, Division office, Jeevan Prakash, Secretariat Road, Hyderabad. Opposite parties. This C.C. is coming on before this Forum for final hearing in the presence of Sri.K.Venugopal Rao, Advocate for complainant and of Sri.K.Ravindernath, Advocate for opposite party No.1 and of Sri.A.V.Ramanuja charyulu, Advocate for opposite party No.2; upon perusing the material papers on record; upon hearing the arguments, and having stood over for consideration, till this day, this Forum passed the following:- ORDER (Per Sri.Vijay Kumar, President) This complaint is filed u/s.12-A of Consumer Protection Act, 1986. The averments made in the complaint are that the husband of the complainant by name Morra Ramulu, opened A/c.No.ABJ-79 in Andhra Bank, Main Branch, Khammam and kept the complainant as his nominee. On 11-12-2005 the husband of the complainant died. During the lifetime, the husband of the complainant paid the policy amount on the date of opening account on 2-9-2003, 29-11-2003, 30-11-2005. The A.B.Jeevan Abhaya is a Savings Bank Account that provides Life Insurance Cover and Accident Death Benefit. This scheme is open to all the persons who are in the age group of 18 to 55. The sum assured is Rs.1,00,000/- in case of normal death and Rs.2,00,000/- in case of accidental death. This scheme does not require medical check up except a simple health declaration. After the death of her husband, the complainant contacted the Andhra Bank, Main branch, Khammam regarding the payment of policy amount. The Andhra Bank informed the complainant that settlement of claims is done by Insurance company i.e. opposite party No.2. This bank will act as a facilitator only. All the necessary documents have been sent to the insurance company. On 1-3-2008 the complainant got issued a notice to the opposite party No.2 regarding the payment of policy amount covered under A.B.Jeevan Abhaya-79. On that the opposite party No.2 gave reply on 29-5-2008 stating that the letter was already sent to the Bank on 10-8-2007 and the claim has been repudiated on the ground that in terms of the policy contract under Rule 11 as a consequence of nonpayment of premium and as per Rule 15 on Annual Renewal, dt.30-11-2004. There is no insurance coverage during the period from 1-12-2004 to 30-11-2005. The premium was deducted on 30-11-2005 the insurance coverage will be there for the period of 1-12-2005 to 30-11-2006. But it also attracts the lien clause and no claim is admissible for deaths during the first 45 days from the premium paid date. On this ground the opposite party No.2 repudiated the claim on the plea that there is a lien clause. There is insurance coverage from 1-12-2005 to 30-11-2006, but the husband of the complainant died on 11-12-2005. The death of the Account Holder covers the policy as it covers from 1-12-2005 to 30-11-2006 the complainant is entitled to receive the death claim. The intention of opposite party No.2 is only to receive the policy amounts from the innocent policyholders on various names of groups of insurance through the banks. They intimate the various kinds of policies and receive the policies even without informing the particulars. In case if the policyholder dies the insurance company create new clauses which are unilateral/ illegal, arbitrary and avoid to pay the policy amount covered under the policy. Hence, this complaint. 2. Having received the notice, opposite parties No.1 and 2 appeared through their counsel and filed counters. In the counter, opposite party No.1 admitted the averments made in the complaint as true and correct and submitted that the bank is no way concerned regarding the settlement of claim as it acts as facilitator only and settlement of claim is done by insurance company at their sole discretion. As the deceased/account holder did not fulfill the terms and conditions to receive the insurance coverage under the scheme. Therefore, the opposite party No.2 addressed a letter to this opposite party No.1 on 10-08-2007 in which it is clearly mentioned that the claim of the complainant is repudiated. As per the particulars furnished by opposite party No.2 The date of opening account 02-09-2003 (premium paid) Annual Renewal Date 29-11-2003 (premium paid) Annual Renewal Date 30-11-2004 (Premium not paid) Annual Renewal Date 30-11-2005 (premium paid) Date of death 11-12-2005 As per the rule 11 of the policy contract, if the premium is not credited to the NOPC account in full on the date one individual is admitted into the scheme or in respect of a member, on the annual renewal date, the life insurance coverage under this policy will not commence or be renewed in respect of that individual, as per rule 15 no claim is admissible for deaths during the first 45 days from the entry date premium payment date. Under Rule 11 as a consequence of non payment of insurance premium and as per rule 15 on Annual Renewal date 30-11-2004, there is no insurance coverage during the period 1-12-2004 to 30-11-2005, the insurance coverage will be there for the period 1-12-2005 to 30-11-2006, but it also attracts the lien clause and no claim is admissible for deaths during the first 45 days from the premium paid date and there is no deficiency on the part of opposite party No.1 and prayed to dismiss the complaint 3. Opposite party No.2 also filed the counter on the same lines as filed by opposite party No.1. In the counter it is submitted that the consequences of non payment of premium is if the premium is not credited to the non operative premium collection account in full on the date an individual is admitted into the scheme, the life insurance coverage under the policy will not commence or be renewed in respect of individual member. Under Rule 15 lien clause the assurances granted under the scheme are subject to a lien clause no claim is admissible for deaths during the first 45 days from the entry date, except for cases of death due to accident. In the counter the description of the event is also given on the same lines referred in the counter of opposite party No.1. It is further submitted that the averments made by the complainant under para 11 to 13 of the complaint that insurance companies bring new clauses without informing the policyholders, which are unilateral, illegal and arbitrary in order to avoid payment of policy amounts to the nominees, is false and baseless. Since all the rules cited in the counter are contained in the MOU, which are formed on the basis of contract between the opposite party No.1 and 2. It is further submitted that the Abhaya jeevan is a group insurance policy covering Lakhs of account holders of Andhra Bank, and the agreement is between the LIC and Andhra Bank, who is the master policyholder. It is the duty of the master policyholder i.e. opposite party No.1, Andhra Bank to communicate the terms and conditions of the scheme to its account holders at the time of opening of account, as per rule 2 of the MOU, and the averments made in the complaint in para 14 to 16 are false and baseless, since Abhaya Jeevan is a scheme for which the agreement was entered into between opposite parties No.1 and 2. All the decisions regarding the settlement of claim have to communicate the account holder through the bank and claim settlement by opposite party No.2 will be done in favour of opposite party No.1 only. For this reason only the repudiation is communicated to opposite party No.1 and there is no deficiency in service and prayed to dismiss the complaint. 4. On behalf of the complainant, chief affidavit filed along with the following documents. i) Office copy of notice to the opposite party No.2, dt.1-3-2008 ii) Photocopy of Account passbook A/c.No.ABJ 79 iii) Photocopy of death certificate iv) Photocopy of legal heir certificate v) Photocopy of medical certificate vi) Letter, dt.29-5-2008 vii) Letter, dt.10-8-2007 viii) Statement of Account of the husband of complainant for the period from 1-1-2003 to 8-8-2007 5. On behalf of the opposite party No.1 also filed chief affidavit and counter affidavit filed. On behalf of the opposite party No.2, the following documents filed and marked as Ex.B.1, memorandum of understanding signed by the authorized assistant of opposite party No.2 and Ex.B.2, Statement of Account of the husband of complainant for the period from 1-1-2003 to 8-8-2007. 6. Complainant and opposite party No.1 filed written arguments. Opposite party No.2 filed a memo to treat the contents of counter as written arguments. Heard both sides. Perused the oral and documentary evidence, upon which the points that arose for consideration are, 1. Whether the complainant is entitled to the amount covered under the ABJ scheme policy? 2. To what relief? Point No.1: 7. The facts position of the case is concerned, there is no dispute from either side. It is not in dispute that the husband of the complainant has opened account in Andhra Bank Main branch, Khammam with account No. ABJ 79. It is also not in dispute that the husband of the complainant died on 11-12-2005. It is also not in dispute that the husband of the complainant paid policy amount on the date of opening of account on 2-9-2003. It is also not in dispute that as per ABJ scheme, policy premium amount received by Andhra Bank, opposite party No.1. It is also not in dispute that sum assured is Rs.1,00,000/- in case of normal deaths and Rs.2,00,000/- in case of accidental death. There is dispute only regarding the legal aspect of the case. The claim of the complainant is repudiated on the ground that there was no renewal of premium during the period from 1-12-2004 to 13-11-2005, again the annual premium was paid on 30-11-2005 commencing from 1-12-2005 to 30-11-2006. With regard to the memorandum of understanding terms and conditions is concerned, opposite party No.2 has filed a copy of memorandum of understanding, which is marked as Ex.B.1. As per the contents of Ex.B.1, condition No.11, consequence of non payment of premium, if the premium is not credited to the NOPC account in full on the date an individual is admitted into the scheme or in respect of a Member, on the Annual Renewal Date, the Life Insurance Coverage under the policy will not commence or be renewed in respect of that individual member. The corporation is under no obligation to send any intimation of lapsation of Life Insurance Coverage under this clause, to a Member or his beneficiary or to the Bank. Any personal claiming benefits under this policy shall give the corporation all necessary information and authorization needed for underwriting administration and paying claims. As per clause 15 of the lien clause, the assurances granted under the scheme are subject to a lien clause. No claim is admissible for the deaths during the first 45 days from the entry date, except for cases of death due to Accident. By virtue of clause 11 and 15, the opposite party No.2 has repudiated the claim of the complainant. It is an admitted fact that annual premium was not made by the complainant for a period from 01-12-2004 to 30-11-2005. Therefore, no insurance coverage was available as per rule 11 of memorandum of understanding. The renewal was effected for a period from 1-12-2005 to 30-11-2006. Whereas the death of husband of the complainant was taken place on 11-12-2005, within a period of 45 days from the entry date, for this lien clause is applicable. The lien clause starts from the date of premium paid i.e. from 30-11-2005 whereas the death has taken place on 11-12-2005 within 45 days from the entry date. Therefore, the claim is not admissible. This ABJ scheme is a group insurance policy agreement in between the opposite parties No.1 and 2. Therefore, the opposite party No.2 will communicate its decision regarding the claim settlement to opposite party No.1, who in turn communicate the decision to account holder i.e. complainant. In the instant case the complainant is in contravention of rule 11 and 15 of memorandum of understanding. By virtue of rule 11 and 15, the complainant becomes disentitled. As the death of her husband has took place within 45 days from the date of entry into agreement. It is not out of place to mention here that the death of the husband of the complainant is a natural death, but not due to accident. Therefore, the lien clause is applicable. Therefore, the claim is not admissible during the first 45 days from the entry date. In view of the above said reasons, the complaint is liable to be dismissed. Point No.2: 8. In the result, the complaint is dismissed. Dictated to the steno, transcribed by her, corrected and pronounced by us in the open forum on this 26th day of October, 2010. PRESIDENT MEMBER MEMBER DISTRICT CONSUMERS FORUM KHAMMAM Appendix of Evidence Witnesses examined for complainant: - None- Witnesses examined for opposite parties 1 &2: - None- Exhibits marked for complainant: - Nil - Exhibits marked for opposite party No.1: - Nil - Exhibits marked for opposite party No.2: Ex.B.1 - Memorandum of understanding signed by the authorized assistant of opposite party No.2 Ex.B.2 - Statement of Account of the husband of complainant for the period from 1-1-2003 to 8-8-2007. PRESIDENT MEMBER MEMBER DISTRICT CONSUMERS FORUM KHAMMAM
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