The Divisional Manager LIC of India V/S Smt. Parvatamma W/o. Yellappa Angadi - Consumer Court Case

Karnataka

Raichur

DCFR 50/07

Smt. Parvatamma W/o. Yellappa Angadi - Complainant(s)

Versus

The Divisional Manager LIC of India - Opp.Party(s)

Mallanagouda

26 Dec 2007

ORDER

DIST. CONSUMER DISPUTES REDRESSAL FORUM
DIST. CONSUMER DISPUTES REDRESSAL FORUM,DC Office Compound, Sath Kacheri
consumer case(CC) No. DCFR 50/07

Smt. Parvatamma W/o. Yellappa Angadi						...........Appellant(s)
Vs.
The Branch Manager LIC of India The Divisional Manager LIC of India The General Manager Hutti Gold Mines Co. Ltd.,						...........Respondent(s)

BEFORE:

Complainant(s)/Appellant(s):

OppositeParty/Respondent(s):

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ORDER

This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Smt. Parvathamma against Respondents-(1) Divisional Manager LIC of India Raichur, (2) Branch Manager LIC of India Branch Office Sindhanoor, and (3) General Manager Hutti Gold Mines Company Ltd., Hutti Tq. Lingasugur, for deficiency of service by the Respondents. The brief facts of the complaint is as under: The complainant is the mother of late Thippanna S/o. Yellappa Angadi who was an employee working as General Labour in under-ground under employment of Respondent NO-3. The said Thippanna during his service had opted LIC Policy No. 661450931 dt. 28-03-06 for assured sum of Rs. 50,000/- for a period of (20) years from Respondent NO-2 under Salary Saving Scheme. The Respondent NO-3 his employer had undertaken for making payment of premium of the said policy out of the salary amount of said Thippanna. Her son Thippanna died on 01-06-06 leaving behind him, the complainant who is the legal heir and nominee of the said policy as such she is entitled to receive the said policy amount. After the death of her son Thippana, she did make several requests to the Respondent No- 1 &2 for payment of the policy amount and also through letter dt. 10-05-07 sent by Courier Service. But in-spite of said letter Respondents have not taken any steps for settlement of her claim. So she got issued legal notice through her counsel on 25-06-07 through RPAD which was also served on them. But the Respondents have not at all settled her claim. This attitude of the Respondents 1 & 2 amounts to deficiency in service. Due to non-settlement of her claim the complainant has been put to mental torture and agony. Hence for all these reasons she has sought for direction to the Respondents 1 & 2 to make payment of policy amount of Rs. 50,000/- along with bonus, interest and other benefits and for compensation of Rs. 10,000/- towards damages and cost. 2. In-response to service of notice the Respondents 1 to 3 appeared through respective counsel Respondent No-1 has filed written version which has been adopted by Respondent NO-2. Respondent NO-3 has filed a separate written version. In the written version the Respondents 1 & 2 have admitted the policy in-question, having been taken by late Thippanna along with other four more policies under Salary Saving Scheme. The premium of the policy in-question and other policies are not recovered from May-2006 onwards and thereby the policies are in lapsed condition. As per the Authorization letter, the late life assured shall be entirely responsible for keeping the policy in-force by ensuring the payment of periodical premium within the stipulated time and in case of non-payment of the premiums by the employer for what- ever may be the reason, it shall be responsibility of the life-assured to make the payment of premium directly to the Respondents Corporation together with any additional charges as may applicable. The insurance is a contract between the Corporation and life assured. It is the duty and responsibility of the insured to pay the premium whenever it falls due and non-payment of the premiums leads the policy in lapsed condition. Every month details of salary paid and deductions made therein under different heads are given to the employee by their employer. It is evident that employee is aware of the fact that the premiums are not paid towards insurance policy. Therefore it is the bounden duty of life assured to arrange for payment of premium which would become due. Since the premiums are not paid/recovered through salary from May-2006 onwards thereby the policy in-question is in lapsed condition. In case of death of policyholder, a requisite claim form with all requirements should be submitted to the Insurance Corporation. But in this case no such steps are taken by the complainant and without complying with all requirements and exhausting all the remedies before the Respondent Corporation, the complainant has approached this Forum. So the complaint is liable to be dismissed. Hence for all these reasons Respondents 1 & 2 have sought for dismissal of the complaint with cost. 3. In a separate written version the Respondent No-3 Hutti Gold Mines Company Ltd., Hutti has contended that they have regularly remitted the premiums of late Thippanna to the LIC whenever his wages were sufficient. Thereafter due to non availability of the sufficient wages of said Thippanna to pay the premium the premium could not be remitted to the LIC. The said fact was being regularly informed to late employee and he had also knowledge of non-payment of premiums when he took his monthly wage slip. The Respondent No-3 H.G.M Company could not deduct the premium regularly from the salary of said employee because his earnings were not enough to recover the premium since the deductions of premium of the said employee did not fall in the order of priority as per clause-1 of Sub-Section 2 of Section 7 of the Payment of Wages Act. The Respondent NO-3 is neither negligent nor violated any alleged undertaking given to the LIC so Respondent NO-3 is not liable either for damages or compensation. Hence for all these reasons Respondent NO-3 has sought for dismissal of the complaint with cost. 4. During the course of enquiry the complainant has filed her sworn-affidavit by way of examination-in-chief and got marked (4) documents at Ex.P-1 to Ex.P-4. In rebuttal the affidavit of Respondent No-1 has been filed by way of examination-in-chief on behalf of Respondents 1 & 2 and got marked one document at Ex.R-1. On behalf of Respondent No-3 the affidavit of Executive Director of Hutti Gold Mines Company Ltd., has been filed by way of examination-in-chief and got marked (3) documents at Ex.R-2 to Ex.R-4. 5. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1.Whether the complainant proves deficiency in service by the Respondents 1 & 2 in not settling her claim under the policy, as alleged.? 2.Whether the complainant is entitled for the reliefs sought for? 6. Our finding on the above points are as under:- 1.In the affirmative. 2. As per final order for the following. REASONS POINT NO.1:- 7. It is not in dispute that late Thippanna who was an employee working under Respondent NO-3 had taken the policy in-question under Salary Saving Scheme and the present complainant being his mother is the nominee of the said policy and that the said Thippanna died on 01-06-06. The complainant has produced Insurance Policy Bond at Ex.P-1. It shows that the Insurance policy was taken on 28-03-06 and premium payable was Rs. 279/- per month. The Respondent NO- 1 & 2 Insurance Company have contended that monthly premium from May-2006 is not paid and thereby the policy is in lapsed condition. Further, as per Authorization letter the life assured Thippanna had under taken for keeping the policy in-force by making payment of premium regularly and in case of non- remittance of premium by his employer from his salary for what ever may be the reason it shall be his responsibility to make payment of premium directly to the Insurance Corporation. Since no payment has been made from May-2006 the policy is in lapsed condition. So the Respondent Corporation is not liable for payment of policy amount. They have produced the Authorization letter at Ex.R-1 dt. 11-01-06. A perusal of this undertaking at Ex.R-1 it shows it is in English Printed form issued by Respondents Corporation to be filled-in by the proposer in duplicate and to be sent along with proposal papers as seen from this Form. This Form further discloses the address of the Respondent No-3 and the office address of Respondent No-2, date & place has been filled-in English and it also shows that late life-assured Thippanna has put his signature in Kannada Language at the place shown by Cross Mark. On the second page of this form the Particulars of the policyholder such as full name of the policyholder, his occupation/employment particulars and name of the pay drawing officer etc., have been filled-in English. It also shows Certain particulars to be/duly filled-in by LIC (Respondent) such as the Branch Office address of Respondent NO-2, Policy No, Pay Authorization No, Policy assured sum, the monthly premium amount and the date of commencement of the deduction of premium and the date of maturity of the policy. A cursory look at this table in this document, it shows that it has been singed by the Senior Branch Manager of the Respondent Corporation on 13-05-06. Strangely enough this filled-up form shows the sum assured at Rs. 279/- and monthly premium at Rs. 50,000/- which is contrary to the Insurance policy issued at Ex.P-1. This in-turn shows how lightly this Form has been filled-in by the Corporation authorities. It appears that they have filled the form in a casual manner and taken the signature of the life assured Thippanna in a casual manner without informing the contents of the Authorization/undertaking letter regarding his responsibility for payment of monthly premium in-case of non-remittance premium from his salary due to any other reasons. If this is so, then how can it be said that it is an Authorization/undertaking given by late life-assured understanding his responsibility to make payment of premium amount in-case of non deduction/remittance of LIC monthly premium from his salary. 8. Now coming to the contention of the Respondent No-3 Employer, the salary/pay-slips produced at Ex.R-2 to Ex.R-4 shows the deduction column of LIC premium is kept blank and do not whisper any remarks or note for non-deduction of LIC premium. Then how can it be said that the employee/ policyholder had knowledge that his premium amount has not been deducted on priority basis due to insufficient of his salary amount. Further this pay slip is in English showing various column duly filled-in through Computer. So it cannot be said that the employee/policyholder was in knowledge of non-deduction of insurance premium out of his salary especially when the policyholder Thippanna was an employee working as labour in underground under the employment of Respondent NO-3. It also discloses that how the employer Respondent No-3 have taken so lightly regarding non-deduction of premium of the policy of its employee leaving the consequences of lapsing of policy to the fate of its employee. When Respondent NO-3 employer of the deceased employee policyholder have undertaken for deduction of the monthly premium then a duty cast upon them either to deduct the policy premium regularly or to intimate in writing to its employee and to the insurance corporation regarding non-deduction/remittance of premium amount due to meager amount of the salary of the policyholder. Further a cursory look at the pay slips at Ex.R-2 to Ex.R-4 show column for the deduction of LIC premium under the heading standard deductions at Sl.No.3 and this column as stated supra has been kept blank without making any note for non-deduction/remittance of monthly premium. So the contention of the Respondent NO-3 that the deceased employee/policyholder had knowledge of non-deduction/remittance of premium amount from his salary when he took his monthly wage/salary slip, does not stand to reason. Even there is no evidence that the Respondent No-3 employer had intimated the non-deduction of LIC premium either to the employee/policyholder or/and to the LIC Corporation. Similarly there is no evidence that the Respondents Insurance corporation had made any correspondence to the employer-Respondent No-3 or/and to the policyholder regarding non-remittance of insurance premium for the month of May-2006. According to Ex.R-1 the deduction of monthly premium was to be commenced from May-2006. When this Ex.R-1 having been produced by Respondent No- 1 & 2 it is evident that the Respondent NO- 1 & 2 had knowledge of commencement of deduction of premium of deceased policyholder from May-2006. So in their usual course of business they ought to have made correspondence with Employer/Respondent No-3 and/or to the employee/policyholder in order to avoid lapsing of policy. Since the Symbol Yogakshemamvahamyaham is the object of safeguarding the interest of the policyholder and not keeping mum for lapsing of policy and its consequences to the fate of policyholder or his nominee. Hence for all these reasons we hold that the insurance corporation/Respondents are deficient in service and thereby we hold that the complainant has proved deficiency of service by the insurance corporation in not settling her claim. Therefore Point NO-1 is answered in the affirmative. POINT NO.2:- 9. The complainant has claimed for payment of policy amount of Rs. 50,000/- along with bonus interest and other benefits thereon together with Rs. 10,000/- towards damages and cost. So far as the first relief is concerned, in-view of our discussion and finding on Point NO-1 the complainant is entitled to receive the policy amount along with its benefits in-so far as payment of Rs. 10,000/- by way of damages and cost is concerned, having regard to the facts and circumstances of the case, we feel it just and proper to award Rs. 2,000/-. In this view of the matter we pass the following order: ORDER The complaint of the complainant is allowed in part. The Insurance Corporation/Respondent No-1 & 2 shall pay policy amount of Rs. 50,000/- together with all benefits there under along with Rs. 2,000/- towards damages and cost. The Respondents 1 & 2 shall comply this order within (6) weeks from the date of receipt of copy of this order. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 26-12-07) Sd/- Sd/- Sd/- Smt.Pratibha Rani Hiremath, Sri. Gururaj Sri. N.H. Savalagi, Member. Member. President, Dist.Forum-Raichur. Dist-Forum-Raichur Dist-Forum-Raichur.

This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Smt. Parvathamma against Respondents-(1) Divisional Manager LIC of India Raichur, (2) Branch Manager LIC of India Branch Office Sindhanoor, and (3) General Manager Hutti Gold Mines Company Ltd., Hutti Tq. Lingasugur, for deficiency of service by the Respondents. The brief facts of the complaint is as under: The complainant is the mother of late Thippanna S/o. Yellappa Angadi who was an employee working as General Labour in under-ground under employment of Respondent NO-3. The said Thippanna during his service had opted LIC Policy No. 661450931 dt. 28-03-06 for assured sum of Rs. 50,000/- for a period of (20) years from Respondent NO-2 under Salary Saving Scheme. The Respondent NO-3 his employer had undertaken for making payment of premium of the said policy out of the salary amount of said Thippanna. Her son Thippanna died on 01-06-06 leaving behind him, the complainant who is the legal heir and nominee of the said policy as such she is entitled to receive the said policy amount. After the death of her son Thippana, she did make several requests to the Respondent No- 1 &2 for payment of the policy amount and also through letter dt. 10-05-07 sent by Courier Service. But in-spite of said letter Respondents have not taken any steps for settlement of her claim. So she got issued legal notice through her counsel on 25-06-07 through RPAD which was also served on them. But the Respondents have not at all settled her claim. This attitude of the Respondents 1 & 2 amounts to deficiency in service. Due to non-settlement of her claim the complainant has been put to mental torture and agony. Hence for all these reasons she has sought for direction to the Respondents 1 & 2 to make payment of policy amount of Rs. 50,000/- along with bonus, interest and other benefits and for compensation of Rs. 10,000/- towards damages and cost. 2. In-response to service of notice the Respondents 1 to 3 appeared through respective counsel Respondent No-1 has filed written version which has been adopted by Respondent NO-2. Respondent NO-3 has filed a separate written version. In the written version the Respondents 1 & 2 have admitted the policy in-question, having been taken by late Thippanna along with other four more policies under Salary Saving Scheme. The premium of the policy in-question and other policies are not recovered from May-2006 onwards and thereby the policies are in lapsed condition. As per the Authorization letter, the late life assured shall be entirely responsible for keeping the policy in-force by ensuring the payment of periodical premium within the stipulated time and in case of non-payment of the premiums by the employer for what- ever may be the reason, it shall be responsibility of the life-assured to make the payment of premium directly to the Respondents Corporation together with any additional charges as may applicable. The insurance is a contract between the Corporation and life assured. It is the duty and responsibility of the insured to pay the premium whenever it falls due and non-payment of the premiums leads the policy in lapsed condition. Every month details of salary paid and deductions made therein under different heads are given to the employee by their employer. It is evident that employee is aware of the fact that the premiums are not paid towards insurance policy. Therefore it is the bounden duty of life assured to arrange for payment of premium which would become due. Since the premiums are not paid/recovered through salary from May-2006 onwards thereby the policy in-question is in lapsed condition. In case of death of policyholder, a requisite claim form with all requirements should be submitted to the Insurance Corporation. But in this case no such steps are taken by the complainant and without complying with all requirements and exhausting all the remedies before the Respondent Corporation, the complainant has approached this Forum. So the complaint is liable to be dismissed. Hence for all these reasons Respondents 1 & 2 have sought for dismissal of the complaint with cost. 3. In a separate written version the Respondent No-3 Hutti Gold Mines Company Ltd., Hutti has contended that they have regularly remitted the premiums of late Thippanna to the LIC whenever his wages were sufficient. Thereafter due to non availability of the sufficient wages of said Thippanna to pay the premium the premium could not be remitted to the LIC. The said fact was being regularly informed to late employee and he had also knowledge of non-payment of premiums when he took his monthly wage slip. The Respondent No-3 H.G.M Company could not deduct the premium regularly from the salary of said employee because his earnings were not enough to recover the premium since the deductions of premium of the said employee did not fall in the order of priority as per clause-1 of Sub-Section 2 of Section 7 of the Payment of Wages Act. The Respondent NO-3 is neither negligent nor violated any alleged undertaking given to the LIC so Respondent NO-3 is not liable either for damages or compensation. Hence for all these reasons Respondent NO-3 has sought for dismissal of the complaint with cost. 4. During the course of enquiry the complainant has filed her sworn-affidavit by way of examination-in-chief and got marked (4) documents at Ex.P-1 to Ex.P-4. In rebuttal the affidavit of Respondent No-1 has been filed by way of examination-in-chief on behalf of Respondents 1 & 2 and got marked one document at Ex.R-1. On behalf of Respondent No-3 the affidavit of Executive Director of Hutti Gold Mines Company Ltd., has been filed by way of examination-in-chief and got marked (3) documents at Ex.R-2 to Ex.R-4. 5. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1.Whether the complainant proves deficiency in service by the Respondents 1 & 2 in not settling her claim under the policy, as alleged.? 2.Whether the complainant is entitled for the reliefs sought for? 6. Our finding on the above points are as under:- 1.In the affirmative. 2. As per final order for the following. REASONS POINT NO.1:- 7. It is not in dispute that late Thippanna who was an employee working under Respondent NO-3 had taken the policy in-question under Salary Saving Scheme and the present complainant being his mother is the nominee of the said policy and that the said Thippanna died on 01-06-06. The complainant has produced Insurance Policy Bond at Ex.P-1. It shows that the Insurance policy was taken on 28-03-06 and premium payable was Rs. 279/- per month. The Respondent NO- 1 & 2 Insurance Company have contended that monthly premium from May-2006 is not paid and thereby the policy is in lapsed condition. Further, as per Authorization letter the life assured Thippanna had under taken for keeping the policy in-force by making payment of premium regularly and in case of non- remittance of premium by his employer from his salary for what ever may be the reason it shall be his responsibility to make payment of premium directly to the Insurance Corporation. Since no payment has been made from May-2006 the policy is in lapsed condition. So the Respondent Corporation is not liable for payment of policy amount. They have produced the Authorization letter at Ex.R-1 dt. 11-01-06. A perusal of this undertaking at Ex.R-1 it shows it is in English Printed form issued by Respondents Corporation to be filled-in by the proposer in duplicate and to be sent along with proposal papers as seen from this Form. This Form further discloses the address of the Respondent No-3 and the office address of Respondent No-2, date & place has been filled-in English and it also shows that late life-assured Thippanna has put his signature in Kannada Language at the place shown by Cross Mark. On the second page of this form the Particulars of the policyholder such as full name of the policyholder, his occupation/employment particulars and name of the pay drawing officer etc., have been filled-in English. It also shows Certain particulars to be/duly filled-in by LIC (Respondent) such as the Branch Office address of Respondent NO-2, Policy No, Pay Authorization No, Policy assured sum, the monthly premium amount and the date of commencement of the deduction of premium and the date of maturity of the policy. A cursory look at this table in this document, it shows that it has been singed by the Senior Branch Manager of the Respondent Corporation on 13-05-06. Strangely enough this filled-up form shows the sum assured at Rs. 279/- and monthly premium at Rs. 50,000/- which is contrary to the Insurance policy issued at Ex.P-1. This in-turn shows how lightly this Form has been filled-in by the Corporation authorities. It appears that they have filled the form in a casual manner and taken the signature of the life assured Thippanna in a casual manner without informing the contents of the Authorization/undertaking letter regarding his responsibility for payment of monthly premium in-case of non-remittance premium from his salary due to any other reasons. If this is so, then how can it be said that it is an Authorization/undertaking given by late life-assured understanding his responsibility to make payment of premium amount in-case of non deduction/remittance of LIC monthly premium from his salary. 8. Now coming to the contention of the Respondent No-3 Employer, the salary/pay-slips produced at Ex.R-2 to Ex.R-4 shows the deduction column of LIC premium is kept blank and do not whisper any remarks or note for non-deduction of LIC premium. Then how can it be said that the employee/ policyholder had knowledge that his premium amount has not been deducted on priority basis due to insufficient of his salary amount. Further this pay slip is in English showing various column duly filled-in through Computer. So it cannot be said that the employee/policyholder was in knowledge of non-deduction of insurance premium out of his salary especially when the policyholder Thippanna was an employee working as labour in underground under the employment of Respondent NO-3. It also discloses that how the employer Respondent No-3 have taken so lightly regarding non-deduction of premium of the policy of its employee leaving the consequences of lapsing of policy to the fate of its employee. When Respondent NO-3 employer of the deceased employee policyholder have undertaken for deduction of the monthly premium then a duty cast upon them either to deduct the policy premium regularly or to intimate in writing to its employee and to the insurance corporation regarding non-deduction/remittance of premium amount due to meager amount of the salary of the policyholder. Further a cursory look at the pay slips at Ex.R-2 to Ex.R-4 show column for the deduction of LIC premium under the heading standard deductions at Sl.No.3 and this column as stated supra has been kept blank without making any note for non-deduction/remittance of monthly premium. So the contention of the Respondent NO-3 that the deceased employee/policyholder had knowledge of non-deduction/remittance of premium amount from his salary when he took his monthly wage/salary slip, does not stand to reason. Even there is no evidence that the Respondent No-3 employer had intimated the non-deduction of LIC premium either to the employee/policyholder or/and to the LIC Corporation. Similarly there is no evidence that the Respondents Insurance corporation had made any correspondence to the employer-Respondent No-3 or/and to the policyholder regarding non-remittance of insurance premium for the month of May-2006. According to Ex.R-1 the deduction of monthly premium was to be commenced from May-2006. When this Ex.R-1 having been produced by Respondent No- 1 & 2 it is evident that the Respondent NO- 1 & 2 had knowledge of commencement of deduction of premium of deceased policyholder from May-2006. So in their usual course of business they ought to have made correspondence with Employer/Respondent No-3 and/or to the employee/policyholder in order to avoid lapsing of policy. Since the Symbol Yogakshemamvahamyaham is the object of safeguarding the interest of the policyholder and not keeping mum for lapsing of policy and its consequences to the fate of policyholder or his nominee. Hence for all these reasons we hold that the insurance corporation/Respondents are deficient in service and thereby we hold that the complainant has proved deficiency of service by the insurance corporation in not settling her claim. Therefore Point NO-1 is answered in the affirmative. POINT NO.2:- 9. The complainant has claimed for payment of policy amount of Rs. 50,000/- along with bonus interest and other benefits thereon together with Rs. 10,000/- towards damages and cost. So far as the first relief is concerned, in-view of our discussion and finding on Point NO-1 the complainant is entitled to receive the policy amount along with its benefits in-so far as payment of Rs. 10,000/- by way of damages and cost is concerned, having regard to the facts and circumstances of the case, we feel it just and proper to award Rs. 2,000/-. In this view of the matter we pass the following order: ORDER The complaint of the complainant is allowed in part. The Insurance Corporation/Respondent No-1 & 2 shall pay policy amount of Rs. 50,000/- together with all benefits there under along with Rs. 2,000/- towards damages and cost. The Respondents 1 & 2 shall comply this order within (6) weeks from the date of receipt of copy of this order. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 26-12-07) Sd/- Sd/- Sd/- Smt.Pratibha Rani Hiremath, Sri. Gururaj Sri. N.H. Savalagi, Member. Member. President, Dist.Forum-Raichur. Dist-Forum-Raichur Dist-Forum-Raichur.