BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PONDICHERRY

C.C.No. 9/2013

Dated this the 12^th day of September, 2018

(Date of Institution: 01.03.2013)

Ilango S/o. Radhakrishnan,

Residing at Plot No.11, 4^th Street

Extention, Mothilal Nagar,

Moolakulam, Pondicherry – 605 010                   ….     Complainant

Vs

1. The Commissioner,

Employment  Provident Fund Organization,

Sub Regional Office,

Sri Venni Commercial Complex,

No.101, 1^st floor,

100 feet Road, Sozhan Nagar,

Puducherry-605 004

2. The Branch Manager,

The Life Insurance Corporation of India,

CB O-12, No.47, Armenian Street,

Chennai – 1                                                          ….     Opposite Parties

BEFORE:

          THIRU A. ASOKAN, B.A., B.L.,

          PRESIDENT 

Thiru V.V. STEEPHEN, B.A., LL.B., 

MEMBER

Tmt. D. KAVITHA, B.A., LL.B.,

           MEMBER

FOR THE COMPLAINANT:  Thiru  A. Karunamoorthy,  Advocates           

FOR THE OPPOSITE PARTY: Thiru K. Ravikumar, Advocate for O.P.1

                                                     Tvl. S.P. Vassudevan and T. Gurumoorthy

     Advocate for O.P.2

O R  D  E  R

(by Thiru D. Kavitha)

              This is a complaint filed by the complainant u/s 12 of Consumer Protection Act, to direct the Opposite Parties jointly and severally to pay Rs.4,750/- towards the interest @ 9.5% for the year 2001 to 2006 for the amount of Rs.10,000/-; to direct the opposite party to pay a sum of Rs.1,00,000/- towards the compensation and for mental agony and deficiency of service; to pay a sum of Rs.10,000/-  towards costs of the proceedings.

2.       The case of the complainant is as follows:

          The Complainant is a subscriber under the Employees Provident Funds Scheme from first opposite party.   His Provident Fund Account No.PC/20/12410.   The second opposite party collected insurance premium through first opposite party for complainant under Money Back Policy No.730731382.   He joined under the above said EPF scheme on 28.8.1996.   Second opposite party collected the said premium.   The complainant took money back policy for a sum of Rs.50,000/- on 28.8.1996.   Accordingly as on 28.8.2011 as per the above said scheme a sum of Rs.10,000/- has to be credited to complainant's account.   But second opposite party credited the said amount of Rs.10,000/- only in the year 2006 without adding interest @ 9.5% for the year 2001 to 2006.   The complainant made representation to first opposite party on 8.1.2007 demanding for belated interest during the period of the year 2001 to 2006.   For complainant above said representation the first opposite party had clearly6 admitted complainant's demand of the said interest and forwarded the same to second opposite party vide its letter dated 27.12.2007.    Even in spite of the above said requisition made by the first opposite party the second opposite party has not duly complied the said demand.    The complainant regularly approached the first opposite party to comply his demand, but first and second opposite parties so far comply and paid the said interest for the said period.   At last that on 31.5.2012 second opposite party simply refused the complainant's lawful demand which is nothing but deficiency of service on the part of the opposite parties.   Hence the complainant issued notice on 9.10.2012 to both the opposite parties to comply his lawful demand of the said interest for the said period.   But the second opposite party issued reply notice on 15.10.2012 with untenable claim.   The first and second opposite parties are jointly and severally liable to pay for compensation for their deficiency in service to the complainant.   Hence the complainant filed this complaint.

3.       The reply version filed by the O.P.1, briefly discloses the following:

           The first opposite party denies all the allegations leveled against him in the complaint.   The complaint is not maintainable either on facts or under law but liable to be dismissed as the mis-joinder of the party.   The first opposite party had neither received any consideration or any indirect commission from the complainant for under taking this work to attract the consumer protection Act.   The first opposite party purely works for the welfare of the employees and free of cost and consideration.   Hence first opposite party squarely falls out of the ambit of the consumer protection Act.   Hence first opposite party is a misjoinder of the necessary party and liable to be deleted from this case.   The complainant is the member of the Employees Provident Funds Scheme, 1952 from 01.12.1982.   there-by he was allotted with EPF Account No. PC/20/12410.   The complainant has taken a Life Insurance Policy from the second opposite party in No.730731382 as provided under para 62 of the EPF Scheme 1952.   The policy is a money back policy with survival benefit of 20% of the sum assured on completion of each five years.   According to the above referred para 62 of the EPF Scheme 1952, the first opposite party has to release insurance premium money to second opposite party based on the demands of opposite party No.2.   On perusing the policy, the second opposite party has released the first survival benefit on 28.8.2006 vide cheque No.404650.   Hence there is no deficiency of service on the part of first opposite party to attract the Consumer Protection Act.    Hence first opposite party is the mis-joinder of the necessary party and liable to be deleted from this case.  

The complainant came before this court with a belated complaint and barred by limitation.     Hence prayed for dismissal of the complaint with exemplary cost.

4.                The reply version filed by the O.P.2, briefly discloses the following:

           The second opposite party denies all the allegations leveled against him in the complaint.            It is admitted facts that the complainant had taken a Life Insurance Policy with this opposite party corporation on 28.8.1996 vide policy No.730731382 under plan and term 75/20 (Money back Policy) for sum assured Rs.50,000/-.   It is also true that the yearly premium if Rs.3,260/- and it is assigned to Regional Provident Fund Authorities.    Even though it is assigned to Regional Provident Fund Authorities, this opposite party did not receive the yearly premiums continuously from the Regional Provident Fund Authorities.   The yearly premium of Rs.3,260/- payable for the due on 28.8.1998 received from said authorities only on 30.3.1999 and furthermore this opposite party did not receive yearly premium due on for the year 1999.   This opposite party is furnishing the dates on which the premiums were received from the Regional Provident Fund Authorities: A sum of Rs.3,260/- received on 29.1.2003, 13.7.2004, 15.10.2004, 15.9.2005 and a sum of Rs.6,520/- received on 18.10.2005, 18.10.2005.   The Provident Fund Authorities send the premium amount belatedly without any interest and further this opposite party adjusted all the aforesaid amounts upto August 2005.   On 31.3.2006 the opposite party herein settled survival benefit due only after adjustment of premiums.   The opposite party did not receive the premium for first five years continuously from the said authorities.   Therefore the first survival benefit payable on completion of first five years was settled belatedly to the complainant account.   Further this opposite party settled the first Survival benefit due on 28.8.2001 by way of Cheque No.404651 dated 31.7.2006 and the Survival Benefit due on 28.8.2006 by way of Cheque No.404650 dated 28.8.2006.   The provident fund authorities were not settled the premium amount in time and also they send the premium amount belatedly without any late fee, hence this opposite party could not settle the survival benefit to the complainant within a time.   This opposite party has received cheque from Provident Fund Authorities for the dues August 2007 and August 2009 only on 01.10.2007 and 04.09.2009 respectively, in such circumstances without receiving regular premiums from Provident Fund Authorities, the survival benefit for the appropriate could not be made to the complainant.   As per non forfeiture regulations, since the policy is in default, the policy is not in full force and only a reduced paid up amount 9i.e. for the premium paid for four years) can be paid as maturity benefits to the complainant.   Hence prayed for dismissal of the complaint with exemplary cost.

5.                 Points for determination are :

1. Whether the Complainant is the Consumer?
2. Whether the opposite parties attributed any deficiency in service?
3. To what relief the complainant is entitled for?

6.                Point No.1:

                   The complainant had taken a life insurance policy with first opposite party on 28.8.1996, vide policy No.730731382 under the plan (Money Back Policy) for a sum of Rs.50,000/- vide Ex.C1.   Since the complainant is a subscriber under the Employment Provident Fund Scheme 1952 with the first opposite party, he had assigned his policy to the first opposite party.   As per the assignment the second opposite party collected the insurance premium through first opposite party for the complainant.   Hence the complainant is considered to be a consumer to the opposite parties 1 and 2, as per the Consumer Protection Act.

7.                Point No.2:

The complainant was examined as CW1 and Ex.C1 to Ex.C8 and Ex.R1 were marked.   On the side of opposite party No.1, one Mr. O. Ram Mohan Accounts Officer was examined as RW2 and on opposite party No.2 side one Mr. Alexander Devadoss, Administrative Officer was examined as RW1 and marked Ex.R2 to Ex.R3.  

8.               The case of the complainant is that he is working as a Supervisor in Anglo French Textiles, Canvas Mill, Iyankuttipalayam, Pondicherry.   The complainant is a subscriber under the Employees Provident Fund Scheme with the first opposite party.   The complainant has taken a life insurance policy on 28.8.1996, vide policy No.730731382 under the plan (Money Back Policy) for a sum of Rs.50,000/- vide Ex.C1 and  Ex.C8.    Being as a member of Employment Provident Fund Scheme 1952, the complainant had assigned his policy to first opposite party as security for payment of insurance premium.   As such the second opposite party collected the insurance premium through first opposite party for complainant under money back policy.   As per the terms and conditions of the policy a sum of Rs.10,000/- has to be credited to the complainant account on 28.8.2001.   But the second opposite party credited the said amount of Rs.10,000/- only in the year 2006 without adding interest at 9.5% for the year 2001 to 2006.   Therefore the complainant issued a letter to the first opposite party demanding the interest for the year 2001 to 2006, for the belated payment of Rs.10,000/-, which was credited in the year 2006 instead of 2001, vide Ex.C2 dated 8.1.2007.   For which, the first opposite party admitted the complainant's demand and forwarded the same to the second opposite party vide its letter dated 27.11.2007 (Ex.C7).   Even after that second opposite party did not come forward to comply the said demands.   However the complainant regularly approached the first opposite party vide Ex.C3.  But no steps taken by both the opposite parties with regard to the interest for payment of belated amount of Rs.10,000/-.   On 31.5.2012 the second opposite party  simply refused the complainant's lawful demand.   Therefore the complainant issued a lawyer's notice on 9.10.2012 to both the opposite parties vide Ex.C4.   Ex.C5 and Ex.C6 are the acknowledgment proof for Ex.C4.   For which second opposite party issued reply notice on 15.10.2012 Ex.R1 with untenable claim.   Therefore the complainant approached this Forum to redress his grievance as against the opposite parties.       

9.               The first opposite party admitted in their reply version that the complainant had taken a life insurance policy with the second opposite party and his policy number is 730731382 under the plan (Money Back Policy), with survival benefit of 20% of the sum assured on completion of each five years.   The complainant is a member of Employment Provident Fund Scheme 1952 from 1.12.1982 and his E.P.F. Account No.PC/20/12410.   Being as a member of the Employment Provident Fund Scheme, the complainant had assigned the policy to first opposite party as provided under para 67 of the Employment Provident Fund Scheme 1952.    As per the assignment first opposite party has to release the insurance premium to second opposite party based on the demand letter from second opposite party.   On pursuing the policy the second opposite party has released the first survival benefit on 28.8.2006, vide cheque No.404650.   Hence there is no deficiency in service on the part of first opposite party to attract the Consumer Protection Act, since the first opposite party had neither received any consideration nor any indirect commission from the complainant.   The first opposite party purely works for the welfare of the employees and free of costs and consideration.  Hence prayed for, first opposite party is the misjoinder of the necessary party and liable to be deleted from this complaint and no deficiency in service on the part of first opposite party.  

10.             The second opposite party also admitted that the complainant had taken the life insurance policy with the second opposite party on 28.8.1996 vide policy No.730731382 under plan and term 75/20 money back policy for a sum assured Rs.50,000/- and its yearly premium is Rs.3,260/- and the same is assigned to first opposite party.   Even though the policy is assigned to first opposite party, the second opposite party did not receive the yearly premiums regularly from first opposite party, vide Ex.R1, dated 15.10.2012.   The first opposite party sent the premium amount belatedly without any interest and the second opposite party adjusted all the belated amounts upto 2005.    On 31.3.2006, the second opposite party settled survival benefits due only after adjustment of premiums.   Since the first opposite party failed to pay the premiums for the first five years continuously, the second opposite party could not pay the first survival benefit in time to the complainant.   Therefore the second opposite party was settled the survival benefits due on 28.8.2001 by way of cheque No.404651 dt.31.7.2006 and the survival benefits due on 28.8.2006 by way of cheque No.404650, dt.28.8.2006.  Ex.R2 is the copy of the status report and Ex.R3 is the copy of the statement of account.   Therefore second opposite party prayed to dismiss the complaint as against them.   

11.             This Forum has gone through the complaint, reply version, Exhibits marked by the parties and arguments submitted by the counsels.   Upon perusal of Ex.C1, clearly shows that the complainant had taken a life insurance policy with the second opposite party on 28.8.1996 vide money back policy No.730731382 under the plan (Money Back Policy) for a sum of Rs.50,000/- vide Ex.C1 and its yearly premium Rs.3,260/-.   Being as a member of the Employment Provident Fund Scheme, the said policy had assigned by the complainant to first opposite party as security for payment of insurance yearly premiums.   Wherein, there is no dispute in respect of insurance policy taken by the complainant with the 2^nd opposite party, the dispute is only with regard to belated payment of Rs.10,000/- as survival benefits for the year 1996 to 2001 paid in the year 2006 instead of 2001 without adding interest 9.5%.    The complainant argued that as per para 67 of the Employment Provident Fund Scheme 1952, once the policy is assigned to first opposite party and there is sufficient amount available in the member's share then it is the duty to pay premium to second opposite party in time and he is also liable to collect all the benefits from second opposite party and credit the same to the members accounts.   This Forum observed that the first opposite party did not pay the premiums for the first five years regularly and it is proved by Ex.R1 through second opposite party.   But first opposite party contended that first opposite party purely works for the welfare of the employees and free of costs and consideration and hence first opposite party squarely falls out of ambit of the Consumer Protect ion Act and first opposite party is the mis-joinder of the necessary party and is liable to be deleted from this case.   To refute the contention of first opposite party, the complainant relied upon a judgment held by the Hon'ble Supreme Court, Regional Provident Fund Commission Vs. Shivkumar Joshi (2000) 1 SC 331. 

                   It is clearly and unambiguously indicates that it is service within the meaning section 2(1) of the Consumer Protection Act.   The benefits of the Provident Funds Scheme are "Service" and the employees are "Consumers" under the Consumer Protection Act.  

Further first opposite party argued that they cannot make payment as suo motto unless and otherwise a demand is raised every year by second opposite party to first opposite party through statement of demand as per the functional order and procedure of the department and its basic rules and regulations.   But first opposite party admitted in his cross examination:

There is no demand clause in para 67 of the Employment Provident Fund Scheme 1952 from second opposite party to first opposite party".

Hence this Forum finds that issue of demand notice by second opposite party is not mandatory.  

12.             Second opposite party stated that since first opposite party failed to make premium for the first five years regularly, the second opposite party could not pay the survival benefits for the year 1996 to 2001 in stipulated time.   As per the LIC conditions No.2, a grace period of one month, but not less than 30 days, will be allowed for the payment of yearly premium.   If the premium is not paid before the expiry of the days of grace the policy lapses.   While so second opposite party neither complied with the condition No.2, nor revived the policy as per condition No.3.   Hence this Forum found that the second opposite party should have either returned the late premium or collected the late fees from the first opposite party.   On contrary second opposite party accepted all the belated premiums as policy deposit in second opposite party account for more than five years.   Further second opposite party did not inform the same (Policy deposit) either to the first opposite party or to the complainant.   On their own discretion second opposite party converted all the policy deposit (Belated premium) as policy premiums without claiming interest or late fees from first opposite party.   Further RW1 admitted in his evidence :

I admit that it is our fault not to have asked for belated interest from the E.P.F. Office."

Hence this Forum observed that both the opposite parties were failed to follow the normal official procedures.

13.             From the above discussions, this Forum found that it is the duty of the first opposite party to pay the policy premium of the complainant to the second opposite party, since the policy is assigned by the complainant to first opposite party under para 67 of the Employment Provident Fund Scheme 1952.   At the same time, second opposite party also should have returned the belated premiums or collected the late fees from first opposite party.   At least second opposite party should have given information about the belated premium to the policy holder.   But both the opposite parties failed to follow their formal duties.  Hence this Forum comes to the conclusion that the complainant clearly established his case and proved the negligent act and deficiency in service of the opposite parties.   Therefore the complainant is entitled for claims and the opposite parties are jointly and severally liable for the same.  

14.              POINT No.3:

                   In view of the decision taken in point No.2, this complaint is hereby allowed and the OPs are jointly and severally liable and hence they are directed:

1. to pay Rs.4,750/-, towards the interest at 9.5% for the year 2001 to 2006 for the belated payment of survival benefit forRs.10,000/- to the complainant
2. to pay a sum of Rs.20,000/- as compensation for the loss and injury and mental agony suffered by the complainant due to deficiency in service of Opposite Parties. 

3. to pay a sum of Rs.5,000/- towards cost of this proceedings. 

     Dated this the 12^th September, 2018.

1. ASOKAN)

PRESIDENT

(V.V. STEEPHEN)

   MEMBER

(D. KAVITHA)

MEMBER

COMPLAINANTS' WITNESS:

CW1           15.10.2014           Ilango

OPPOSITE PARTY'S WITNESS:

RW1           18.5.2016             C. Alexander Devadoss

RW2           25.1.2017             O. Rammohan     

COMPLAINANTS' EXHIBITS:

OPPOSITE PARTY'S EXHIBITS:

Ex.R1         15.10.2002           Letter sent by the second opposite party to the

complainaint 

Ex.R2                   31.12.2013           Statement of payment issued by the second

opposite party

Ex.R3                   31.12.2013           Status Report of the Policy No.730731382

LIST OF MATERIAL OBJECTS:  NIL

1. ASOKAN)

PRESIDENT

(V.V. STEEPHEN)

   MEMBER

(D. KAVITHA)

MEMBER