Karnataka

Chitradurga

CC/216/2018

Srimathi.s.g - Complainant(s)

Versus

The chief Manager,Pragathi Krishna Gramina Bank - Opp.Party(s)

Sri.C.M.Veeranna

08 Mar 2019

ORDER

COMPLAINT FILED ON:25/10/2018

DISPOSED      ON:08/03/2019

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA.

CC.NO:216/2018

 

DATED: 8^th MARCH 2019

PRESENT :-     SRI.T.N.SREENIVASAIAH :   PRESIDENT                                     B.A., LL.B.,

                        SMT. JYOTHI RADHESH JEMBAGI

BSc.,MBA., DHA.,                LADY MEMBER

 

……COMPLAINANT/S	Srimathi S.G W/o Late S.Hanumantha Reddy, Aged about 52 Years, Household, R/o Shyamala Nilaya, C.K.Pura, Chitradurga-577 501.    (Rep by Sri.C.M. Veeranna, Advocate)
V/S
…..OPPOSITE PARTIES	1. The Chief Manager, Pragathi Krishna Gramina Bank, Human Resource Wing, Staff Section, Post No.55, Gandhinagar, Bellary-583 103.   2. The Branch Manager, Pragathi Krishna Gramina Bank, Burujanaroppa, Hiriyur Taluk, Chitradurga Dist.    3. The Branch Manager, L.I.C.of India,P.B.No.48, P.B.Road, L.I.C. Building, Chitradurga-577 501. (Rep by Sri.A.M. Rudramuni, Advocate for OP No.1 and 2 and Sri.H.S. Sathyanarayana Shetty, Advocate for OP No.3)

ORDER

SRI. T.N. SREENIVASAIAH:   PRESIDENT

The above complaint has been filed by the complainant u/Sec.12 of the C.P. Act, 1986 for the relief to direct the OPs to pay Rs.1,00,000/- with benefits along with interest at the rate of 18% p.a from the date of policy, Rs.50,000/- towards damages and Rs.10,000/- towards costs.

2.      The brief facts of the case of the above complainant are that, the husband of the complainant by name Hanumantha Reddy was working as a Branch Manager in Pragathi Krishna Gramina Bank, Burujanaroppa, Hiriyur Taluk, had taken life insurance policy from OP No.3 vide policy No.629971118 on 10.03.2014 for a sum of Rs.1,00,000/-, the premium of the said policy will be paid through the salary of said Hanumantha Reddy.  The premium amount of Rs.,804/- has been regularly deducted by OP No.1.  Unfortunately, the husband of the complainant died on 23.12.2016.  It is further submitted that, on 08.01.2016, the OP No.3 had given letter to OP No.1 to send premium of Rs.812/- instead of Rs.804/-.  The OP No.1 wrongly came to the conclusion and stopped to sending the premium from January 2016 to OP No.3.  After the death of her husband, the complainant traced the policy taken by her husband and she came to know that, she is the nominee under the policy.  Thereafter, she met OP No.3 several times and requested to settle the claim, but the OP No.3 neglected to comply the same and given evasive answers and drag on the matter, for that the complainant has suffered physically, mentally and financially.  Further on 15.09.2018 complainant got issued legal notice to OP through her counsel to get settle the claim, but the OP replied falsely, which is a deficiency of service.  The cause of action arose for this complaint is on 23.12.2016, when the husband of complainant died and also on 15.09.2018 when the complainant sent the legal notice to the OPs, which is within the jurisdiction of this Forum and prayed for allow the complaint.

 3.     On service of notice, OP No.1 and 2 appeared through Sri. H.S. Sathyanrayana Shetty, Advocate and filed version stating that the complaint is not maintainable in law against the OP No.1 and 2.  It is true that, the husband of the complainant by name Hanumantha Reddy died on 23.12.2016, who had taken insurance policy from OP No.3 under Policy No.629971118 on 10.03.2014 for Rs.1,00,000/- and the premium amount of Rs.804/- has been paid from his salary through OP No.1.  It is true that, on 08.01.2016, the OP No.3 issued letter to OP No.1 to send the premium amount of Rs.812/- instead of Rs.804/- from January 2016 by making shara as premium corrections in respect of Hanumantha Reddy salary deductions to be verified by the employees towards LIC and other deductions, the Pragathi Krishna Gramina Bank has not committed any mistake or wrong in this regard.  During his life time, the deceased has drawn the salary since from January 2016 till his death, he has drawn the entire salary from the Bank including LIC deduction and he was the head of the Branch and he was working as a Manager and he knows everything and he has not questioned or paid the premium amount to OP No.3 and simply he withdrawn the entire salary.  The OP No.1 and 2 have not committed any unlawful act towards compensation and the claim made by the complainant and the same is tenable under law and there is no negligence on the part of OP No.1 and 2.  The OP No.1 and 2 have suitably replied the notice given by the complainant on 25.08.2018.  The OP No.1 and 2 are not liable to pay Rs.1,00,000/- and therefore, prayed for dismissal of the complaint.

    OP No.3 appeared through Sri. H.S. Sathyanarayana Shetty, Advocate and filed version admitting about obtaining the insurance policy by the husband of complainant by name Hanumantha Reddy on 10.03.2014 under Policy No.629971118 for a sum of Rs.1,00,000/-.  The premium amount is of Rs.804/-.  It is admitted that, OP No.3 has given letter to OP No.1 with respect to payment of premium amount of Rs.812/- instead of Rs.804/- because of the accident premium amount is included.  It is admitted that, the OP No.1 has wrongly stopped the recovery of premium from January 2016 onwards. Leading the disputed policy to fall in lapsed condition without acquiring any benefit.  The averments made in para 5 and 6 of the complaint are put to strict proof.  It is further submitted that, the OP No.3 has not received the death intimation under the disputed policy and therefore, it was unable to process the claim of the complainant under the policy.  The OP No.3 has settled the death claims under 12 policies amounting to Rs.20,65,994/- as the intimation received with other claim requirements.  However, the OP No.3 has not received intimation under Policy No.629971118.  The OP No.3 will identify the policy holder by policy numbers, hence, without policy number it is not possible to trace the policy holder.  Till this date, the OP No.3 has not received the death intimation under the disputed policy and hence, this OP has not decided the claim and therefore, the question of rejecting the claim under the disputed policy does not arise and this OP has not committed any deficiency of service.  This OP has received the notice sent by the complainant and the same was replied on 17.10.2018 and informed for having sent the correction ON and correction OFF statement, which was sent to the Pay drawing Authority in January 2016.  The averments made in para 7 to 11 are put to strict proof.  It is further submitted that, after receiving the notice sent by this Forum, this OP has verified the disputed policy status and found that the policy holder died within three years from the date of commencement of the policy.  Since it is an early claim, it attracts Sec.45 of the Insurance Act, 1938 – where under the insurer has the right to repudiate the claim under the policy, if some matter is concealed by the policy holder, while taking the policy.  Hence, this OP need to conduct investigation and enquire with the local hospitals and employer, which takes some more time to arrive at a conclusion to consider the claim or to repudiate the claim.  It is further submitted that, this OP has not received the policy premium from January 2016 onwards.  This OP has instructed the OP No.1 to recover the premium at enhanced rate of Rs.812/-, instead of earlier rate of premium of Rs.801/-.  Bu the OP No.1 wrongly stopped to recover the premium under the disputed policy, thereby the OP No.1 is liable for the loss incurred to the complainant.  To this effect, OP No.3 has produced the statement of inclusions and exclusions.  While taking the policy, the life assured under takes as mentioned below:

Under Sl.No.4: the employer is acting on my behalf and in no way the employer is representing the corporation.

Under Sl.No.5: As stated I shall be entirely responsible for keeping the policy to be issued by the corporation in force by ensuring the payment of premium to the corporation by the employer for whatever reason, it shall be my responsibility to make the payment of premiums directly to the corporation together with any additional charges as applicable for monthly payment of premium and with interest, if any, to keep the policy in force. 

Under Sl. No.6: I agree that in the event of the said policy becoming lapsed on account of nonpayment of the premium within the stipulated time for whatever reason, the liability of the corporation will be limited to the extent of the premium actually received by it and the corporation shall not be held responsible for any claim beyond this liability as accrued to the said policy at the time of its lapsation.

It is further submitted that, the deceased Hanumantha Reddy being an educated person knowingly that the premium is not recovered from salary, must have taken notice to pay the same directly to the OP No.3, which he knowing allowed the policy to lapse.  Since the non recovery of the premium was well within the knowledge of the deceased/LA, even after noticing, LA has not taken care to remit the further premiums for last 11 months, therefore, the policy went on lapse without acquiring any paid-up value.  Therefore, the OP No.3 is not liable for payment of any amount under the policy and also not liable for payment of any costs, damages and for mental agony and prays for dismissal of the complaint.

      4. Complainant herself has examined as PW-1 by filing affidavit evidence and the documents Ex.A-1 to A-9 were got marked and closed her side. On behalf of OP No.1 and 2, one Sri. Y.C. Krishna Shetty, the Manager and PA Holder has examined as DW-1 by filing the affidavit evidence and one Sri. B. Shamanna, the Administrative Officer of OP No.3 has examined as DW-2 and Ex.B-1 & Ex.B-13 documents have been got marked and closed their side.  

 

5.      Arguments heard.

6.      Now the points that arise for our consideration for decision of above complaints are that;

(1)  Whether the complainant proves that the OPs have committed deficiency of service in settling the claim under the insurance policy of her husband and entitled for the reliefs as prayed for in the above complaint?

              (3) What order?

 

         7.       Our findings on the above points are as follows:-

                    Point No.1:- Partly in Affirmative. 

Point No.2:- As per final order.

 

REASONS

8.      Point No.1:- There is no dispute between the parties that, the husband of the complainant by name Hanumantha Reddy was working as a Manager with OP No.2.  During his life time, he has obtained the insurance policy from OP No.3 under policy No.629971118 on 10.03.2014 for a sum of Rs.1,00,000/- agreeing to pay the premium of Rs.804/- p.m, the same is to be deducted through OP No.2.  On 23.12.2016, the husband of the complainant died leaving behind the complainant as his legal heir and the nominee under the policy.  After the death of her husband, the complainant made a requisition before the OP No.3 and prays for settle the claim under the policy obtained by her husband.  The OP No.3 neglected to settle the claim.  On 08.01.2016, the OP No.3 given a letter to OP No.1 to send the premium amount of Rs.812/- instead of Rs.804/-.  But the OP No.2 has not send any amount to OP No.3.  The OP No.3 has repudiated the claim made by the complainant on the ground that, the policy of the deceased Hanumantha Reddy was lapsed as OP No.2 has not send the premium amount to OP No.3.  Thereafter, the complainant got issued legal notice to OP No.3 and OP No.3 has replied the same.  Here the case on hand is that, the point for consideration is whether the OP No.3 is the responsible to settle the claim of the complainant.  The arguments addressed by the complainant that, the husband of the complainant has obtained the insurance policy from OP No.3 and he was working as a Manager in OP No.2.  OP No.2 has deducted the premium amount from the salary of the husband of the complainant and send the same to OP No.3 from 10.03.2014 up to 08.01.2016.  The OP No.3 has send a letter to OP No.1 and 2 to deduct the premium amount of Rs.812/- instead of Rs.804/-.  But the OP No.2 has not deducted any single pai from the salary of the husband of the complainant.  Here the main contention taken by the complainant is that, the mistake has been committed by the OP No.2 and 3 but not the husband of the complainant.  It is the duty of the OP No.2 to deduct the amount from the salary of the policy holder.  If the premium amount has not been received from OP No.2, the duty of the OP No.3 is to intimate the same to the policy holder.  In this case, the OP No.3 failed to do so.  The OP No.1 and 2 have taken a contention that, it is the duty of the OP No.3 to settle the claim and OP No.1 and 2 have not committed any deficiency of service.  It is true that, the husband of the complainant was working as a Manager and obtained insurance policy from OP No.3 and the premium amount has been deducted from the salary and send the same to OP No.3 up to 08.01.2016.  But as per the letter given by the OP No.3 that, they have deducted the premium amount from the salary of the deceased Hanumantha Reddy.  But the said letter is given only respect of stop the premium amount of one Sri.Chandrashekar and not the husband of complainant.  The complainant in support of his arguments has cited a judgment passed in Appeal (Civil) 6113/1995 passed by the Hon’ble Supreme Court of India in the case of Delhi Electric Supply Undertaking Vs. Basanti Devi and another wherein the Hon’ble Supreme Court held that, the Insurance Company is held responsible to settle the claim of the deceased.  The important points in the said judgment reads thus:

9. The Life Insurance Corporation floated a “Salary Savings Scheme” under which Bhim Singh, an employee of the DESU took an insurance policy for an amount of Rs.50,000/- with the Life Insurance Corporation.  The Insurance policy was to commence on January 28, 1992.  The amount of the premium was deducted by the DESU from the salary of Bhim Singh and remitted by it to the Life Insurance Corporation.  It appears that that premium for the subsequent months was deducted by the DESU from the salary of Bhim Singh but was not remitted to the Life Insurance Corporation.  In the meantime Bhim Singh died on August 17, 1992. It is thus, the sole responsibility of the DESU to collect the premium from all the employees and remit the same by means of one cheque.  A reconciliation statement is also to be sent in the form prescribed by the Life Insurance Corporation.  No individual premium notice is to be sent by the Life Insurance Corporation to any employees and no receipt is to be given to him for the premium received.  It is the DESU which is to inform the Life Insurance Corporation of all the changes in the staff as soon as they occur, so also the fact when any employee leaves the service of the DESU.  An employee is kept ignorant of the happenings between the Life Insurance Corporation and the DESU except that he is made aware of deduction of premium from his salary every month.  An employee is not being given any separate premium notice nor is he given any receipt for the premium received.  If a condition is now placed on the employee that it is he who is to intimate the Life Insurance Corporation if there is no remittance of the premium deducted by DESU it will be too onerous a condition to be any validity.  Considering the scheme such a condition cannot be imposed on an employee.  It is impracticable.  A purpose interpretation has to be given to the endorsement and it has to be held that since payment of premium after deducting from the salary of the employees is between the DESU and the Life Insurance Corporation, it will not be for the employee to intimate the Life Insurance Corporation about non-remitting of the premium.  DESU is not remitting the premium in time.  In these circumstances the Life Insurance Corporation was wrongly discharged of its liability under the insurance policy taken out by Bhim Singh.  Proceedings have arisen under the Act, which was enacted to provide protection to the interests of consumers and under Section 3 the provisions of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.  In these circumstances we do not think we should deprive Basanti Devi of her right, which admittedly she has, holding on the one hand the DESU is not liable and on the other hand her not challenging the order of the State Commission discharging the Life Insurance Corporation.  We, therefore, direct the Life Insurance Corporation shall pay to Basanti Devi the insurance amount of Rs.50,000/- with interest at the rate of 15% p.a from December 17, 1992,till payment, thus substituting the Life Insurance Corporation of India for the Delhi Electric Supply undertaking, as ordered by the State Commission and upheld by the National Commission.       

10. The Advocate for the OP No.3 also cited a judgment passed by the Hon’ble National Commission, New Delhi reported in 2000(1) CPR 57 (NC) in the case of Smt. C. Rajeswari Vs. LIC of India and another wherein the Hon’ble National Commission come to the conclusion that, if the employer not deducted premium amount from the salary of the employee, he is held responsible to pay the amount to the LR’s of the deceased.  But the Hon’ble Supreme Court of India clearly explained that, the Insurance Company is held responsible.  So, we have to give more respect to the decision of the Hon’ble Supreme Court.  Accordingly, this Point No.1 is held as partly affirmative to the complainant.          

            11.     Point No.3:- As discussed on the above point and for the reasons stated therein we pass the following:-

ORDER

The complaint filed by the complainant U/s 12 of CP Act 1986 is hereby partly allowed.

It is ordered that, the OP No.3 is hereby directed to pay a sum of Rs.1,00,000/- to the complainant along with interest at the rate of 9% p.a from 24.08.2014 till realization. 

It is further ordered that, the OP No.1 and 2 are hereby directed to pay Rs.10,000/- towards mental agony and Rs.5,000/- towards costs of this proceedings to the complainant.  

It is further ordered that, the OPs are hereby directed to comply the above order within 30 days from the date of this order.

(This order is made with the consent of Member after the correction of the draft on 8/03/2019 and it is pronounced in the open Court after our signatures) 

 

                                     

MEMBER                                                   PRESIDENT

-:ANNEXURES:-

Witnesses examined on behalf of Complainant:

PW-1:  Complainant by way of affidavit evidence.

Witnesses examined on behalf of OPs:

DW-1:  Sri. Y.C. Krishna Shetty, the Manager and PA Holder by way of affidavit evidence. 

DW-2: Sri. B. Shamanna, the Administrative Officer of OP No.3 by way of affidavit evidence. 

Documents marked on behalf of Complainant:

01	Ex-A-1:-	LIC policy
02	Ex-A-2:-	LIC letter dated 08.01.2016
03	Ex-A-3:-	Letter dated 05.06.2017
04	Ex-A-4:-	PKGB letter dated 15.06.2017
05	Ex-A-5:-	Legal Notice dated 15.09.2018
06	Ex-A-6:-	RPAD receipts dated 15.09.2018
07	Ex.A-7:-	3 Postal Acknowledgements
08	Ex.A-8:-	Reply notice dated 25.09.2018
09	Ex.A-9:-

Documents marked on behalf of OPs:

01	Ex-B-1:-	Policy
02	Ex.B-2:-	Letter of authorization
03	Ex-B-3:-	Letter of employer to complainant dated 15.06.2017
04	Ex-B-4:-	Stop recovery advise under Policy No.623117464
05	Ex-B-5:-	Copy of inclusions and exclusions sent to employer
06	Ex-B-6:-	Letter dated 05.06.2017 of complainant
07	Ex.B-7:-	Legal notice dated 25.09.2018
08	Ex-B-8:-	Reply to legal notice by the employer
09	Ex-B-9 to 13:-	Salary details of deceased Hanumantha Reddy

 

 

 

MEMBER                                                   PRESIDENT

Rhr**