BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY

PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President

Smt. Meena Ramanathan, B.Com., Lady Member

Tuesday, the 12^th day of March, 2013

CC. No. 28 of 2011

Between:                                               

Manne Krishnaveni W/o late Manne Manikyam,

Aged about 33 years, Occ: House Wife,

R/o H.No. 2-1-13, Bhavani Nagar,

Sangareddy, Medak District.                                               …….Complainant

And

The Branch Manager,

Life Insurance Corporation of India,

Sangareddy Branch, 3-5-34,

Near New Bus Stand,

Sangareddy – 502 001.                                                     ….opposite party

          This complaint has come for final hearing on 26.02.2013 before us in the presence of M/s. S. Balachander, Advocate for complainant and Sri M. Prabhakar Gupta, Advocate for opposite party, upon hearing the arguments of both sides, on perusing the record and having stood over for consideration till this day, this Forum delivered the following:

O R D E R

(Per se Smt. Meena Ramanathan, Lady Member)

                  The complainant, who is the wife of the deceased Sri Manne Manikyam approached this Forum by way of the present complaint under Section 12 of the Consumer Protection Act, 1986, claiming Rs. 6,64,300/- towards death benefits (including Triple Cover with Death Accidental Benefit and vested Bonus) under the policy numbers, 643092229, 643092930, 643093187 & 643093410  together with interest @ 9% p.a. from 01.09.2009 till date of realization and to pay a sum of Rs. 50,000/- towards mental agony and Rs. 10,000/- towards costs of the litigation against the opposite party. Her contention, in short, is that her husband  Sri Manne Manikyam was working in MRF Ltd, and on 18.05.2009 at about 12.30 p.m. he went to Mahaboobsagar pond in Sangareddy and accidentally fell into the pond and drowned. Death was instantaneous. During his lifetime he took policies from the opposite party for a total sum of Rs. 6,64,300/-.

                   All the above policies were obtained under the SSS (Salary Savings Scheme) and her husband was paying the premiums regularly – through salary deductions. The complainant further contends that when she made a claim for the policy amounts on 01.09.2009 the opposite party did not respond and as such she issued them a legal notice on 22.02.2011 and filed the present complaint.

2.              The opposite party filed counter and resisted the claim on the grounds, that on the date of death of the policy holder, the above four policies were in lapsed condition and no premiums were received from the employee of the deceased and as such nothing is payable under the policies. The opposite party also further submitted that the death of the policy holder occurred within a period of 2 years from the date of commencement of policies, therefore the claim is treated as very early death claimand the processing is done by their divisional office.

                   The employer of the deceased did not respond as regards to the (non) remittance of premiums for the month of April 2009. They received intimation only on 24.06.2011, and that as such there was no delay in processing the claim. Moreover the insured died after the grace period of 15 days under the policies, and that no premiums were paid within the said grace period. Even as per the authorization letter of the insured, he took responsibility in the event of non payment of premium by the employer on the policy, for any reason beyond the employer’s control. Therefore the claim of the complainant is repudiated. Hence they seek the Forum to dismiss the complaint with costs.

3.            Complainant filed her evidence in the form of affidavit reiterating the facts stated in her complaint and submitted documents Exs. A1 to A19. Where as the opposite party filed their affidavit of one K. Madan Mohan Rao and Exhibited documents Exs.B1 to B27.

                 Perused the written arguments submitted by both sides.

4.               Now the point for consideration is whether the complainant is entitled for the reliefs as prayed for and whether there is any deficiency of service on the part of the opposite party is not settling the claim?

Point:

5.              There is no dispute regarding the issuance of policies in favour of the deceased. There is also no dispute regarding the receipt of claim form from the complainant. Apart from the policies admitted to in this complaint, vide Ex.A16, the deceased had also obtained further policies from the opposite party under SSS (Salary Savings Scheme) which are not in dispute. The complainant is the nominee and the nature of death of the policy holder is also not in dispute. The insured died on 18.05.2009 by drowning – Ex.A15 is the death certificate. Ex. A11 to A14 are the criminal case record, evidencing the fact of the death of the insured, due to drowning. When the complainant, being the nominee of the deceased, got issued a legal notice, putting forth her claim, Ex. A17 & A18 are the documents pertaining to this. When the claim of the complainant was repudiated by the opposite party, through the letter Ex. B27 – she approached this Forum by way of the present complaint. The nature of dispute that is for adjudication is that the policies in question were in a lapsed condition as on the date of death of the deceased.

6.                Exs. A1 to A4  (and B1 to B4) are the policy bonds issued to the deceased by the LIC (opposite party).

                   On these bonds, mode of payment mentioned is monthly. These bonds were issued on 09.07.2007, 27.12.2007, 18.02.2008 & 26.03.2008 and the nominee is M. Krishnaveni, wife of the policy holder.

                   Exs.A5 to A10 are the status reports of the policies in question issued by the opposite party. These status reports were printed soon after the death of the policy holder.

                   The policy holder died on 18.05.2009 where as the date on these documents – i.e. Exs. A5 to A10 is

                   16.06.2009 for policy No. 643092930 - Ex. A5

                   16.06.2009 for policy No. 643093187 – Ex.A6  

                   16.06.2009 for policy No. 643093410 – Ex. A7

                   12.08.2009 for policy No. 643092229 – Ex. A8

                   12.08.2009 for policy No. 643093187 – Ex. A9

                   12.08.2009 for policy No. 643093410 – Ex.A10

7.                The status is very clearly shown as “in force” in all these policies. On the contrary opposite party have filed Exs. B23 to B27, where in the status of the policies is shown as “LAPSED-WOUT”.  On every exhibit it is shown as “Lapsed-Wout”, what does LIC mean by that? It is to be noted that Exs. B23 to B27 were prepared only on 01.08.2011 at the time of filing the counter. The counter was filed on 04^th August, 2011. Therefore in the circumstances, it has to be presumed that Exs. B23 to B27 were prepared only to suit their defence.

8.        The bone of contention of the opposite party is that when no premiums were received by the insurance company for the month of April, 2009 and when an under taking given by the insured as per the letters of authorization under Exs. B5 to B8 to face the consequences, the insurance policies stood lapsed and as such the claim of the complainant was repudiated by the company. In this regard Exs. B9 to B17 are copies of letters allegedly addressed by the opposite party to the employer of the deceased informing about the fact of non-receipt of premium for the month of April 2009, with a request to furnish details of recovery particulars from his salary for said month. These letters seems to have been created only to cover up the delay in settling the claim of the complainant. Virtually there is no acknowledgement of the employer for the said letters. Be that as it may this aspect is not of much importance. Any how the opposite party has filed the recovery particulars of the insured vide Exs. B18 to B21 which show that he attended the duties only for three days in the month of April, 2009 for which he was paid net wages of Rs. 1390/- after the monthly permissible deductions there from. As per a copy of statement of accounts under Ex. A20, after crediting the above said amount of Rs. 1390/- the balance of the insured became Rs. 1447.65p in his account. Thereafter he withdrew Rs. 1400 leaving Rs.47.67 p as closing balance as on 07.05.2009. Thus there was no amount to the credit of the insured sufficient enough to meet the due premium amount towards insurance policies for the month of April, 2009. But this fact has to be read in consonance with terms & conditions of the policies under Exs.B1 to B4. In all these policies, condition no. 2 reads as under: Payment of premium: A grace period of one month but not less than 30 days will be allowed for payment of yearly ,half-yearly or quarterly premiums and fifteen days for monthly premiums. If death occurs within this period but before the payment of the premium then due, the policy will still be valid and the some assured paid after deduction of the said premium as also the unpaid premiums falling due before the next anniversary of the policy.  If premium is not paid before the expiry of the days of grace, the policy lapses. If the policy has not lapsed and the claim is admitted in case of death under a policy when the mode of payment of premium is other than yearly, unpaid premiums, if any, falling due before the next policy anniversary shall be deducted from the claim amount. (Emphasis added).

                The insured died on 18.05.2009 i.e. after the grace period of 15 days and as per the status report under Exs. A5 to A10, which were issued by opposite party corporation itself soon after demise of the insured, all the policies were “in force”. When this being the fact and when admittedly the mode of payment of premium was other than yearly (monthly in this case), the unpaid premium (for the month of April, 2009) fell due before the next policy anniversary can be deducted from the claim amount, as per the above referred condition No. 2 of the policies. By virtue of these clinching facts, in our considered opinion, the under taking given by the insured by way of letters of authorization vide Exs. B5 to B8,  become insignificant and of no consequence. Because as per the said letters, the insured took responsibility of the consequences of non-payment of premiums but the same are subject to condition No. 2 referred above. The said condition does not in any way, make a claim defeated since the policies were still inforce but never lapsed.  For all these reasons we hold that the defence setup by the opposite party with regard to non-payment of premium leading to lapse of the policies, is wholly unfounded.

9.           No doubt the learned defense counsel has relied on a copy of the order dated 17.10.2008 passed by the Hon’ble Karnataka State Commission in, “Muniyappa K. vs. Life Insurance Corporation of India”, which has been marked, by mistake as Ex. B22, but the terms & conditions of the insurance policy involved in the said case are not known to us. Simply because the facts of said case and present case on hand are identical, the findings cannot be the same because they depend on the actual terms & conditions of the insurance policies. Therefore the opposite party cannot avail any benefits from the said decision.

10.              In view of the aforesaid discussion, we hold that the policies is question were “in force” as on the date of death of the insured and that as such, repudiation of the claim of the nominee by the opposite party is certainly illegal. In this view of the matter the opposite party is liable to pay the claim amount to the complainant on deduction of unpaid premium amount, there from.

11.              As the opposite party did not consider the claim of the complainant in the right perspective but repudiated the same on untenable grounds and forced her to resort to this present litigation, she is certainly entitled for the interest on the claim amount and also compensation and the same is reasonably settled at 9% p.a. and Rs. 40,000/- (Rs. 10,000/- per policy) respectively and also Rs. 2,000/- towards costs of the litigation.

      The point is answered accordingly.

13.           In the result, the complaint is allowed and we direct the opposite party to pay Rs. 1,02,200/- covered by policy No. 643092229, Rs. 2,55,500/- covered by policy No. 643092930,  Rs. 2,04,400/- covered by policy No. 643093187 and Rs. 1,02,200 covered by policy no. 643093410 with interest @ 9% p.a. from the date of complaint till realization and compensation of Rs. 40,000/- (Rs. 10,000/- per policy) and further to pay costs of Rs.2,000/-. Time for compliance: One month.

                   Dictated to Stenographer, after correction the order was pronounced by us in the open court this the 12^th day of March, 2013.

                          Sd/-                                                 Sd/-         

                  LADY MEMBER                              PRESIDENT

WITNESS EXAMINED

For the complainant:                                            For the opposite parties:-

-NIL-                                                                              -NIL-

DOCUMENTS MARKED

For the complainant:                                            For the opposite parties:-

              Sd/-                                                  sd/-                                                                                                            

                LADY MEMBER                                  PRESIDENT

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The Opp.Party

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