BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri.K.V.H. Prasad, B.A., LL.B President
And
Smt. C.Preethi, M.A.LL.B., Lady Member
Monday the 20th day of October, 2008
C.C.No. 08/08
Between:
Vankuri Sitha Ramanjaneyulu,S/o. Late V.Venkata Subbaiah,
H.No.17/183, Kota,Nandyal, Kurnool District. … Complainant
Versus
1. The Chief Executive Officer,Zilla Praja Parishad, Kurnool.
2. Branch Manager,LIC of India,
H.No.13-1-14, Behind Goudia Matham ,Kothapeta,Guntur – 522001. … Opposite parties
This complaint is coming on this day for orders in the presence of Sri. P. Siva Sudharshan, Advocate, for the complainant, and Sri. I.Anantha Rama Sastry, Advocate, for the opposite party and opposite party No.1 is present in person and upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Smt. C.Preethi, Lady Member)
C.C.No.08/08
1. This consumer complaint of the complainant is filed U/S 11 and 12 of C.P. Act, 1986 seeking a direction on opposite parties to pay policy amount of Rs. 1 lakh with 24% interest, Rs.10,000/- towards mental agony, Rs.5,000/- towards cost and any other relief or relief’s which the complainant is entitled in the circumstances of the case.
2. The brief facts of the complainants case is that the complainant retired on 31-3-2007 as Superintendent in opposite party No.1 organization. While in service the complainant insured his life with opposite party No.2 under the policy bearing No.673319152 for Rs.1 lakh. As per the instructions of complainant the opposite party No.1 deducted the premium amount from the complainants P.F account and remitted the same to opposite party No.2 every year . On 29-11-2006 the complainant received a letter from opposite party No.2 stating that that the complainants policy was in lapsed condition due to non payment of premium. On enquiry by the complainant he came to know that the premium amount as Rs.21,903/- was returned by opposite party No.2 along with letter dated 26-9-2006 to opposite party No.1 and the complainant also received letter dated 11-5-2007 of opposite party No.1 with details of premium payment by opposite party No.2. As per the said letter the opposite party No.1 regularly paid all the installments the said premium amount of Rs.21,903/- was returned to opposite party No.1 by opposite party No.2 as the policy was in lapsed condition and the said information was not intimated to the complainant. Hence, due to the negligent attitude of opposite parties the complainant’s policy was lapsed and the complainant suffered mental agony. Hence, constrained to approach the forum for relief’s.
3. In support of his case the complainant relied on the following documents viz., (1) policy bond bearing No. 673319152 , (2) complainants letter dated nil to opposite party No.1, (3) letter dated 11-5-2005 of opposite party No.1 addressed to complainant and (4) letter dated 26-2-2006 of opposite party No.2 to opposite party No.1 marking its copy to complainant,
besides to the sworn affidavit of the complainant in reiteration of his complaint averments and the above documents are marked as Ex.A1 to A4 for its appreciation in this case and replies to the interrogatories exchanged.
4. In pursuance to the notice of this forum as to this case of the complainant the opposite party No.1 appeared in person and opposite party No.2 appeared through their standing counsel and contested the case by filling separate written versions.
5. The written version of opposite party No.1 admits that the complainant policy bearing No.673319152 for Rs.1 lakh was taken from opposite party No.2 and the premium amount has been regularly drawn from his Z.P.P.F account No.11470 and remitted the same to LIC of India , Guntur Branch for three consecutive years i.e., 2004, 2005, 2006 respectively and the same was acknowledged by opposite party No.2 , it further submits that the Zilla Praja Parishad Management will not make payment on behalf of subscribers to the Insurance Company nor takes any steps to keep the policy alive , where payment is not made and the Zilla Praja Parishad management will not accept any responsibility for any loss caused by delay in payment of premia or insufficient payment of premia for keeping the policy alive and they will not enter into any correspondence with the Insurance Company with regard to policy , principle as per G.P.F Rules 19 and lastly seeks for the dismissal of complaint with costs.
6. The written version of opposite party No.2 admits the complainant has taken a policy bearing No.673319152 on 28-4-2004 for yearly premium of Rs.21,903/- from opposite party No.2 and the complainant paid the installments regularly. Subsequently the remittance of Rs.21,903/- was remitted by opposite party No.1 to opposite party N.2 in September, 2006 and the said amount was returned by opposite party No.2 as already two installments premium i.e., 28-4-2005 and 28-4-2006 were fell in due and the policy was in lapsed condition. As per the policy conditions the said policy has not acquired any paid up value , because the premium were not paid for a period of three years and the opposite party No.2 is ready to revive the policy, provided the arrears of premium with interest are to be paid by the complainant. Hence, the opposite party No.2 will not pay the policy amount i.e, Rs. 1 lakh with accrued bonus because the policy is not revived and the policy does not acquired paid up value . Hence, there is no deficiency of service on part of opposite parties and seeks for the dismissal of complaint with costs.
7. In support of their case the opposite parties relied on the following documents viz., (1) status report of policy No.673319152 , (2) attested copy of account statement for a period from 19-6-2007 to 30-6-2007 , (3) letter of opposite party No.2 dated 4-1-2007 to complainant, (4) letter dated 8-2—2006 of opposite party No.2 to complainant , (5) ordinary revival quotation dated 8-2-2006 to complainant, (6) declaration of power issued by South Central Zonal Office, (7) statement of LIC payment premium particulars of payment, (8) Xerox of letter dated 20-9-2004 of C.E.O ( OP.No.1) to opposite party No.2, (9) acknowledgement of opposite party No.2 dated 10-10-2004 to opposite party No.1 , (10) letter dated 9-1-2006 of opposite party No.2 to opposite party No.1, (11) letter dated nil of opposite party No.1 to opposite party No.2 as to the details of DDs , (12) Xerox copy of A.P. Provident Fund Manual pages 1, 72 and 73 Sec. Rule 19 (1) besides to the sworn affidavit of opposite party No.1 and 2 in reiteration of his written version averments and the above documents are marked as Ex.B1 to B12 for its appreciation in this case and replies to the interrogatories exchanged.
8. Hence, the point for consideration is to what relief the complainant is entitled alleging deficiency of service.
9. It is the case of the complainant that he obtained an LIC policy bearing No. 673319152 for Rs.1,00,000/- from opposite party No.2 and for payment of premiums towards said policy, the complainant vide Ex.A2 dated 29-6-2004 requested opposite party No.1 to deduct the premium amount from his provident fund account No.11470 & remit the same to opposite party No.2. The opposite party No.1 accepting the said request of complainant deducted premium amount from the complainants provident fund account and remitted the same to opposite party No.2 . Thereafter, the opposite party No.1 did not remit the due premium for 4/2005 to opposite party No.2. On 2-2-2006 the opposite party No.1 sent the premium amount of Rs.21,903/- to opposite party but opposite party No.2 could not adjust the premium as already the policy was in lapsed condition, and returned the said amount to opposite party No.1 vide Ex.B2 and also addressed a letter to complainant vide Ex.B3 dated 4-1-2007 stating the same state of affairs.
10. The opposite party No.1 submits that as per Rule 19 of The Andhra Pradesh General Provident Fund Rules 1935, the Government will not make any payments on behalf of subscriber to insurance companies nor take any steps to keep the policy alive. But in the case the opposite party No.1 accepted the liability to pay premium amount to opposite party No.2 vide Ex.A2 by deducting the said amount from complainants provident fund account and cannot now take a stand that they have no responsibility to pay premium amount of complainants policy to opposite party No.2. It is the sole responsibility of opposite party No.1 to remit premiums of the complainants policy to opposite party No.2 intime.
11. From the above it is clear that premium amount for 4/2005 was not paid by opposite party No.1 and the opposite party No.2 returned the delayed payment of premium as the policy was already in lapsed condition. The complainant in support of his case relied on the decision of Desu Vs Basanti Devi reported in AIR 2000 SC Pg.43, the Hon’ble Supreme Court in relation to a similar kind of insurance policy observed in para II about the relationship between DESU & LIC, Desu is certainly not an insurance agent within the meaning of the Insurance Act and the regulations but Desu is certainly an agent as defined in Section 182 of the Contract Act. The mode of collection of premium has been indicated in the scheme itself and the employer has been assigned the role of collecting premium and remitting the same to LIC. As far as the employee as such is concerned, the employer will be an agent of LIC. It is a matter of common knowledge that insurance companies employ agents. When there is no insurance agent as defined in the regulations and Insurance Act, the general principles of the law of agency as contained in the Contract Act are to be applied”.
The Hon’ble Supreme Court further observed that the authority of Desu to collect premium on behalf of LIC was implied. In any case, Desu had ostensible authority to collect premium and so far the employee was concerned Desu was an agent of LIC to collect premium on its behalf. Accordingly in the case the opposite party No.1 was acting as an agent having implied authority of the LIC of collecting the insurance premium, the moment the insurance premium payable by opposite party No.1 to opposite party No.2 , it would be deemed to have been paid to opposite party No.2. Failure on part of agent having an implied authority to remit the premium amount to opposite party No.2 could not lead to lapse of the policy by any stretch of imagination .
12. To sum up, following the above mentioned Supreme Court decision the opposite party No.1 is an agent of opposite party No.2 and non payment of premium by opposite party No.1 is definitely deficiency in service towards the complainant and as the sole responsibility is on opposite party No.1 to remit premiums to opposite party No.2 and in not doing so it would definitely attract the provisions of C.P.Act .
13. The opposite party No.2 (LIC) has the knowledge that it is the responsibility of opposite party No.1 to pay the premium of complainant’s policy the opposite party No.1 is the agent of opposite party No.2 and for non receipt of premium from its agent the opposite party No.2 cannot lapse the policy of the complainant. In wrongly doing so the opposite party No.2 is at deficiency of service.
14. In Desu Vs Basanti Devi (Supra) ultimately the Hon’ble Supreme Court directed LIC to pay to Basanthi Devi the insurance amount. In the present case there is clear deficiency of service on part of opposite parties 1 and 2 in lapsing the policy of the complainant. For the sufferance undergone by the complainant the opposite party No.1 is directed to pay to the complainant the costs of Rs.10,000/- and opposite party No.2 is directed to pay to the complainant the assured amount of Rs.1,00,000/-.
15. Consequently, the complaint is allowed directed the opposite party No.1 to pay costs of Rs.10,000/- to the complainant and opposite party No.2 is directed to pay to the complainant the assured amount of Rs.1,00,000/- under the policy bearing No. 673319152 within one month from the date of receipt of this order. In default the opposite parties are liable to pay the above award amount with 12% interest from the date of default till realization.
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 20th day of October, 2008.
Sd/- Sd/-
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant :Nil For the opposite parties :Nil
List of exhibits marked for the complainant:-
Ex.A1. Policy bond No.673319152.
Ex.A2. Complainants letter dated nil to OP.No.1
Ex.A3. Letter dated 11-5-2005 of OP.No.1to complainant.
Ex.A4. Letter dated 26-2-2006 of OP.No.2 to OP.NO.1
marked copy to complainant .
List of exhibits marked for the opposite parties:
Ex.B1. Status report of policy No.673319152.
Ex.B2. Attested copy of account statement for the period 19-6-2007.
Ex.B3. Letter of OP No.2 dated 4-1-2007 to complainant.
Ex.B4. Letter dated 8-2-2006 of OP.No.2 to complainant.
Ex.B5. Ordinary revival quotation dated 8-2-2006 to complainant.
Ex.B6. Delegation of power issual South Central Zonal Office,
Ex.B7. Statement of LIC premium payment particulars of complainant.
Ex.B8. Xerox of letter dated 20-9-2004 of CEO ( OP.No.1) to
OP.No.2.
Ex.B9. Acknowledgement of OP.No.2 dated 10-10-2004 to OP.No.1.
Ex.B10. Letter dated 09-01-2006 of OP.No.2 to OP.NO.1.
Ex.B11. Letter dated nil OP.No.1 to OP.N.o.2 as to the details of DDs.
Ex.B12.. Xerox copy of A.P. Provident Fund manual pages 1, 72 and 73 Sec. Rule 19 (1)
Sd/- Sd/-
MEMBER PRESIDENT
// 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 :
