BEFORE THE DISTRICT FORUM: KURNOOL
Present: Sri K.V.H.Prasad, B.A., LL.B., President
Smt C.Preethi, M.A., LL.B., Member
Sri R.Ramachandra Reddy, B.Com., LL.B., Member
Tuesday the15th day of November, 2005
CD No. 91/ 2005
1. Smt B. Giddamma,
W/o. B. Ullakki,
R/o. H.No. 4-134,
Maddikera (PO) & (M),
Kurnool Dist.
2. B.V.S Prakash Babu (Minor), S/o. B. Yellapa,
R/o. H.No. 1-15, Maddikera (PO) & (M), Kurnool Dist.
Rep by its natural guardian grand-
Mother i.e first complainant. . . . Complainants.
-Vs-
1. The Divisional Manager,
LIC of India,
Cuddapah.
2. The Branch Manager,
LIC of India, Yemmiganur Branch, Kurnool.
3. B. Yellappa, S/o. B. Ullakki,
R/o. 1-15, Maddikera (PO) & (M), Kurnool Dist. . . Respondents.
This complaint coming on 9.11.2005 for arguments in the presence of Sri A. Rama Subba Reddy, Advocate, Kurnool for complainant, Sri M.L. Sreenivasa Reddy, Advocate, Kurnool for opposite party No.1 and 2 and Sri K. Raja Mohan Reddy, Advocate, Kurnool for opposite party No.3, and stood over for consideration till this day, the Forum made the following.
O R D E R
(As per Smt C.Preethi, Member)
1. This CD complaint of the complainant is filed under section 12 of C.P. Act, seeking a direction of the opposite parties to pay insured amount of Rs.95,000/- with bonus along with interest at 24% per annum, Rs.10,000/- as compensation, interest on Rs. 1,09,875/- at 24 % per annum from 7.11.2003 to 7.1.2005 on policy bearing No. 651795609, costs of the complaint and any such other relief or reliefs which the complainant is entitle in the circumstances of the case.
2. The brief facts of the complainants case is that the complainant No.1 is the mother of B. Mallaiah @ B. Malleshu, who insured his life with opposite parties under 4 policies bearing No.s 651795609, 652891035, 652894972 and 652896421. The complainant No.2 is the son of the brother of insured. The insured nominated the complainant No.1 in the first policy, and nominated the complainant No.2 in the remaining three policies. The insured Malliah died on 6.9.2003 due to T.B and all the four policies were in force on the date of death of insured. The complainants submitted claim form on 3.10.2003 and complied all the required formalities. But the opposite parties settled the first policy bearing No.651795609 and paid the policy amount of Rs. 1,09,875/- on 7.1.2005 to complainant No.1. There is an inordinate delay of one year two months in settling the said policy as the reasonable time for settlement is two months and there is deficiency of service in delaying the settlement of said policy. Therefore the complainant is entitled for interest on the said amount from 7.11.2003 till payment i.e 7.1.2005.
3. The other contention of complainants is that the opposite parties did not settle the remaining three policies without any reason, hence, there is deficiency of service on part of opposite parties in not settling the claim of said three policies.
4. In support of their case the complainant relied on Ex A.1 i.e Form of declaration relinquishing claim form under A for policy bearing No.s 652891035, 652894972 and 652896421 of the deceased, besides to the sworn affidavit of the complainant No.1 in reiteration of her complaint averments and caused interrogatories to opposite parties.
5. In pursuance to the notice of this Forum as to this case of the complainant the opposite parties appeared through their standing counsel. The opposite party No.1 filed its written version and opposite party No.2 adopted the written version of opposite party No.1.
6. The written version of opposite parties denies the complaint allegations as not maintainable either in law or on facts. But admits the deceased B. Mallaiah has taken four policies with them and nominated the complainant No.1 for the first policy and the complainant No.2 for the remaining three policies.
7. It also further admits the complainant submitted claim form along with death certificate and original four policies bonds on 3.10.2003. The complainant also submitted abridged claimant’s statement Form A on 7.1.2005 and a Notarized affidavit on 10.1.2005, as there is some discrepancy in the name of the deceased. There after, within three days from the date of submission of last requirement by the complainant the opposite parties settled the policy bearing No. 651795609 for Rs. 1,09,875/- vide cheque No. 37139 date 13.1.2005. Hence, there is no reasonable delay in settling the claim amount for the said policy as such there no deficiency of service on part of opposite parties in settling the said claim.
8. Regarding the claim for the remaining three policies, as the claim arosed within 2 years from the date of commencement of policy investigation was conducted which revealed that the deceased was not maintaining good health prior to date of proposal and was suffering from T.B for last 2 years before to the date of death of deceased. The deceased declared himself, tobe quite healthy as per his answers to the question No. 11 in the proposal form and the investigation revealed that the deceased was suffering from T.B and he underwent medical examination for the said illness prior to submitting the said proposals. As per the policy condition No.5 all the premiums paid shall stand forfeited to the corporation as the contract become null and void. It lastly submits that the appointee B. Yellappa who is the brother of deceased gave Notarized form of Declaration Relinquishing claims under the three policies of the deceased life assured, as the deceased obtained the above three policies by suppressing material information regarding his health and he relinquished and renounced all his claims in respect of the said three policies. Hence, seeks for the dismissal of complaint with costs.
9. In support of its case the opposite parties relied on the following documents Viz (1) Original Abridged Claimants statement Form ’A’ dt 7.1.2005 submitted by the First complainant (2) Original notarized affidavit duly executed by the complainant dated 10.1.2005 (3) Policy bond bearing No. 652891035, dated 28.1.2005 (4) Policy bond bearing No. 652894972, dated 28.3.2002 (5) Policy bond bearing No. 652896421 (6) Original Notarized Declaration Relinquishing of claim dt 4.1.2005, besides to the sworn affidavits of the opposite parties 1 and 3 and the above documents are marked as Ex B.1 to B.6 for its appreciation in this case and opposite party No.1 suitably replied to the interrogatories by the complainant.
10. Hence the point for consideration is to what relief the complainants are entitled alleging deficiency of service on part of opposite parties?:-
11. It is not in dispute that the deceased B. Mallaiah has taken four policies by submitting proposal forms. On the death of the deceased on 6.9.2003 due to TB the opposite parties settled the first policy bearing No. 651795609 for Rs. 1,09,875/- and paid the said amount to the complainant No.1 on 13.1.2005. The complainant alleges that she has submitted claim form on 3.10.2003 itself, but the opposite parties alleges that the complainant submitted only intimation letter, xerox copy of death certificate and four original policy bonds on 3.10.2003 and the complainant submitted required claim form i.e Abridged
claimants statement vide Ex B.1 on 7.1.2005 and the opposite parties settled the claim and paid insured amount on 13.1.2005.
12. Now the point for consideration is delay in settling the claim, whether the delay in such a context would defeat the very purpose of the insurance. It
appears that the explicit condition of the insurance is that it must settle the claims with utmost expedition either by way of accepting or repudiating of the same, what ever may be merit of the claim, it is certainly not open to the insurer to sit smugly over the same for years. It this case the opposite parties alleges the Abridged claimants statement was submitted on 7.1.2005, but the opposite parties No 1 and 2 did not place any such circumstances of accepting abridged claim statement for setting the claim, when already the required material is placed before the opposite parties No.1 and 2 on 3.10.2003 for consideration, there is no necessity for the opposite party 1 and 2 to wait till 7.1.2005 and to accept abridged claimants statements and settle the claim. What ever may be situation earlier it appears that with the present technological advances, which are truly available to the large insurance corporations, it would not be difficult for them to either settle or repudiate an insurance claim within a reasonable period of three months, a delay beyond three months would in essence be a deficiency of service under taken to be rendered by the insurance corporations at least within the Consumer Jurisdiction as per the decision of State Consumer Disputes Redressal Commission Haryana, between Surrinder Kaur Vs The Oriental Insurance Co Ltd reported in CPR, 1993 (III) Pg 438. The other decision relied by complainant is that of National Commission between Mau Aima Sankari Katai Mills Ltd Vs United India Insurance Co. Ltd and Anr reported in 1993 (III) CPR pg 197, wherein it was held that in ordinate delay in payment of insurance amount under a policy, amounts to deficiency in service and the insurance company is liable to pay interest for the delayed period. Following the afore mentioned decisions, the reasonable time frame within which the nationalized insurance companies must settle or repudiate the claims would normally be a period of three months. Hence, there arises liability on opposite parties 1 and 2 to pay interest on assured amount of Rs. 1,09,875/- under policy bearing No. 652891035, because of deficiency in service due to its negligence for taking one year five months for settling the claim.
13. The other contention of the complainant’s is that the opposite parties No.1 and 2 did not pay the assured amount under policies bearing No.s 652891035, 652894972 and 652896421 vide Ex B.3, B.4 and B.5 to the complainant No.2 (minor) represented by complainant No.1. The opposite parties No.1 and 2 alleges that the deceased B. Mallaiah suppressed material facts of his ill health and his suffering from TB prior to taking the said policy, and the deceased brother B. Yellappa gave a relinquishing claim vide Ex B.6 sating that the deceased has obtained the above said three policies by suppressing material information regarding his health and he on behalf of the nominee (minor) relinquishes all the claims in respect of above said policies. The said B.Yellappa who is opposite party No.3 in its written version submits that his brother deceased B. Mallaiah did not appoint him to represent his minor son, and he is not looking after his minor son (nominee) and the said minor is staying with his grand mother (complainant No.1) and lastly submitted that his brother was hale and healthy on the date of submitting proposals. The contention of the opposite parties No.1 and 2 is that the opposite party No.3 is the guardian of the minor (nominee) has relinquished the said claims under Ex B.6. On the other hand the opposite parties No.3 disowns the said execution of relinquishment deed. While such is so, even if the Ex B.6 is to be taken to be a genuine one, it cannot be taken as valid document as no guardian of a minor can act in disadvantage to minor’s interest. Therefore, the Ex B.6 carries no value, accruing any justification for the opposite parties No.1 and 2 to act upon it for not settling the claim under the said polices. The other allegation of opposite parties is that the deceased B. Mallaiah suppressed material information regarding his health, but the opposite parties did not place any material supporting the said allegation. Hence the said allegations remains as allegation for allegation sake with out any merit.
14. To conclude from the above discussion, the executent of Ex B.6 ( relinquishment deed)( father of the minor nominee) has no authority to relinquish the claims against the interest of minor and there appears no suppression of material facts by the deceased. Hence, there appears every justification to the claims made by the complainants and the complainants are certainly remaining entitled to the reliefs made in the complaint.
15. In the result, the complaint is allowed directing the opposite parties No. 1 and 2 jointly and severally to pay to the complainant No.1 on policy No. 651795609 interest at 12% per annum on the assured amount of Rs. 1,09,875/- from 7.12.2003 to 7.1.2005 for delayed payment and to pay to the complainant No.1 guardian of minor complainant No.2 on policy No.s 652891035, 652894972 and 652896421 insured amount of Rs.95,000/- with bonus along with interest at 12% per annum from date of demise of deceased till realization along with Rs.5,000/- as costs within one month from the date of receipt of this order.
Dictated to the Stenographer, transcribed by her, corrected and pronounced by us, open court this the 15th day of November, 2005.
PRESIDENT
MEMBER MEMBER
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant: Nil For the opposite parties: Nil
List of Exhibits Marked for the complainant:-
Ex A.1 Form of declaration relinquishing claim under ‘A’ policy No. 652896421,
652894972 and 652891035.
List of Exhibits Marked for the opposite parties:-
Ex B.1 Original Abridged Claimant’s Statement Form ’A’ dt 7.1.2005 submitted
By the first complainant.
Ex B.2 Original notarized affidavit duly executed by the complainant dt
10.1.05.
Ex B.3 Policy bond bearing No. 652891035 dated 28.1.2002.
Ex B.5 Policy bond bearing No. 652894972, dated 28.3.2002.
Ex B.6 policy bond bearing No. 652896421, dated 8.5.2002.
PRESIDENT
MEMBER MEMBER
Copy to:
1. Sri A. Ramasubba Reddy, Advocate, Kurnool.
2. Sri M.L. Sreenivasa Reddy, Advocate, Kurnool.
3. K.Raja Mohan Reddy, Advocate, Kurnool
Copy was made ready on:
Copy was dispatched on:
Copy was delivered to parties:
