DATE OF FILING:  09.01.2014

        DATE OF DISPOSAL: 22.07.2016

Dr. N.Tuna Sahu, Member:

            The complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986 alleging deficiency in insurance service against the Opposite Parties (in short, O.Ps) and for redressal of her grievances  before this Forum.

            2. Brief facts of the case of the complainant are that she is the widow of late R. Ramudu Reddy of Rickapalli, Chhatrapur, Dist. Ganjam, who was working as a Helper under O.P.No.1. For remaining absence from duty, the services of the husband of complainant was terminated vide office order Memo No. 8975 dated 14.10.2003 issued by the O.P.No.1. In course of his employment, the complainant’s husband had insured his life with the Life Insurance Corporation of India (LIC) as detailed given below:

As stated in the complaint, the authorities of the L.I.C. of India have issued the policy Bonds on being satisfied with the proposal forms submitted by the husband of the complainant. As per her complaint, all aforesaid policies were deducted under Salary Saving Scheme (SSS) while the husband of the said complainant was in service. In the meantime, the husband of the complainant died on 26.12.2005 and after his death the complainant obtained the Death Certificate from the competent authority on 6.1.2006 and also obtained the Legal Heir Certificate from the Tahasildar, Chhatrapur, Ganjam. The complainant thereafter filed a consumer dispute before this Forum for settlement of employees’ provident fund and Family Pension in C.C.No.84 of 2011, which has already been disposed on 18.3.2013. While the aforesaid case was pending before this Forum, the complainant filed an application under R.T.I. Act, 2005 before the O.P.No.1 to seek information with regard to pay and deduction details of her deceased husband through her advocate. In reply to the said application under R.T.I. the O.P.No.1 (i.e. Executive Engineer, G.N.E.D. Chhatrapur) intimated the details of deductions in his office letter No.2895 dated 18.10.2012. In the aforesaid letter dated 18.10.2012 the O.P.No.1 informed that a sum of Rs.775/- from the salary of her husband was used to deduct. The complainant being an illiterate lady and having no sources of living with family/dependants ran to the doors of O.P.No.2, 3 and 4 for payment of the sum assured as per the conditions of the policies but there was none to respond. The complainant filed another application under R.T.I. before the O.P.No.1 and requested to intimate the details of deposit from salary of the husband in respect of the policy bonds. On 26.7.2013 and in response to the same, the Public Information Officer requested to contact the L.I. C. Branch vide  his office letter No. 1936 dated 27.8.2013. Thereafter the complainant filed an application under RTI Act before the LIC of India, Berhampur requesting for the details of the deposit particulars on 30.8.2013 but the O.P.No.3 kept silent without any intimation. Being the nominee in all the policies issued by the O.P.No.2, 3 and 4 the complainant filed this consumer case before this Forum with a prayer to direct the O.Ps to liquidate the money in respect of all above policies along with compensation of Rs.30,000/- for harassment and mental agony and to grant a sum of Rs.5000/-towards cost of litigation to the complainant in the best interest of justice.

            3. Upon notice being served on O.P.No.1, he appeared and filed version and arguments through his learned counsel Mr. F.M. Pattnaik.  As per his written version/arguments, he while denying all allegations made in the complaint petition, admitting stated that complainant is the widow of late R. Ramudu Reddy who was working as an NMR employee under erstwhile O.S.E.B. from 01.05.1983 and while working there was regular deduction of EPF dues from his monthly salary which was deposited with the RPF Commissioner, Berhampur-1. The husband of the complainant was allotted an EPF Account No. OP/99/1901 since the said O.S.E.B. being covered establishment under the provision of the EPF and MP Act, 1952 and the husband of the complainant was receiving the yearly accounts slips from O.P. No.1. Thereafter the husband of the complainant was issued with yearly account slips with audited account slips from O.S.E.B. EPF Trust Board, GRIDCO, Bhubaneswar and then SOUTHCO Trust Board from time to time indicating deduction of EPF dues under E/G Code No. 26704 Unit Code No. 310.  While the matter stood thus, the complainant’s husband was ‘dismissed’ from the service vide office Memo No. 8975 dated 14.10.2003 with retrospective effect from 21.11.2002. In due process, in the mean time the O.P.No.1 (EE, GNED, Chhatrapur) has paid entire Provident Fund dues of Rs.1,63,355/- towards full and final settlement of his dues being credited in SBI A/c No.32011720917, State Bank of India, Chhatrapur, vide office order No.8179 dated 29.6.2013 of Deputy Manager (Finance) EPF Trust, SOUTHCO, Berhampur, Ganjam.  It is also admitted by O.P.No.1 that in course of employment, the complainant’s husband had insured his life with the Life Insurance Corporation of India (LIC) as detailed given bellow:

Against SL. No. 3 policy number is 570051113 and the other two policy numbers could not trace out. The O.P. No.1 was Drawing and Disbursing Officer at the time of execution of insurance policy by deceased R. Ramudu Reddy, husband of the complainant. The deceased has requested to this division for the deduction of his LIC premium of the above policies from his monthly salary and a letter of authority was given by the LIC to this Division and requested for deduction of premiums of late R. Rammudu Reddy from his salary. Accordingly, the O.P.No.1 has deducted the premiums from his salary and was used to deposit the same with LIC of India during the course of his employment. The O.P.No.1 further submitted that the claims of death benefit, if any, by the complainant can be asked for from the concerned branch of LIC of India but not to Executive Engineer, GNED, Chhatrapur, and she is at liberty to recover the claim amount of the above LIC policies only from the related Branch of LIC of India office. The O.P.No.1 further submitted that since the suit is bad for mis-joinder of parties and it is barred by the limitation and since there is no cause of action arose against the O.P.No.1, the case should be dismissed in the interest of justice as it is not maintainable.  

            Similarly, on notice, O.P.No.2, 3 and 4 appeared and filed written version/ arguments through their learned counsel Mr. B.K. Mohanty denying the allegations made in the complain petition.  While admitting the fact that during his life time deceased R. Ramudu Reddy had taken five insurance policies from these O.Ps under a Salary Saving Scheme bearing policy Nos.581204917 commenced on 19.9.1994, Policy No. 581256790 commenced on 28.10.1994, Policy No. 581063971 commenced on dated 28.10.1996, policy No. 581063944 commenced on 12.11.1996 and Policy No. 570363006 commenced on 28.6.2000 and Smt. R. Saraswati Reddy the wife of the policy holder was the nominee therein.  The O. Ps No.2,3 & 4 denied that  after commencement of the policy not a single premium has been paid by the life assured during his life time. As per the policy status the total premium for all the 5 policies comes to Rs.898/- only per month but as per the description in the Para, the deduction was made for Rs.775/- in toto. So it clearly indicates that the policy holder by not paying the subsequent premiums has deliberately allowed the policies to be lapsed at the earliest possible time and the policies under the scheme lapsed automatically due to non-payment of further premium within the grace period.  It is further submitted that they have received the premium at the time of submission of proposal only but due to non-payment of subsequent premiums the policies lapsed. The life assured died on 26.12.2005 and the same was not intimated to these O.Ps. So, as on the date of the death of the policy holder i.e. on 26.12.2005 the policies were lapsed and under the contract of insurance these O.Ps are not liable to pay anything under these policies. On the date of death i.e. 26.12.2005 the policy was not in force and as such the benefits granted under the policy are not payable. Moreover, the cause of death and the circumstances under which the policy holder died has not been disclosed before these O.Ps or in the complaint filed before this Forum. The deceased life assured never intended to continue the contract of insurance through these five policies with these O.Ps.  So, he deliberately allowed the policies to be lapsed and during his life time never tried to revive those policies. The complainant by creating some documents is now trying to take the benefits without performing the part of the contractual obligation which was to be performing by the life assured. The life assured has never paid the subsequent premiums directly or through his employer i.e. the O.P. No.1. So, this claim is not maintainable under the law of insurance and contract.  There is no deficiency of service caused by the O.Ps as because “the above policies stands lapsed due to non-payment of monthly premium from the beginning”. As per terms and conditions of policy nothing is payable. Once a policy has been issued, it is the responsibility of the policy holder to ensure that the premium is regularly deposited/ remitted to these O.Ps to keep the policy in force. The policy holder being a literate and salaried person knowingly allowed the policy to lapse due to non-payment of premium. So, these O.Ps have rightly refused the claims of the complainant with reference to the disputed policy and the complainant is not at all entitled to receive any benefit. Further the complaint case is not maintainable, as it is barred by the law of limitation, hence prayed to dismiss the case.

            4. On the date of hearing we heard argument from both sides at length. We have also gone through the complain petition, written version, written arguments, documents and citation filed by the learned counsel for the complainant as well as for the O.Ps which is placed on the case record. During course of hearing, on perusal of the case record, we found that it is not in dispute that the present complainant is the widow and nomine of deceased policy holder and the policies mentioned herein above were obtained from the O.P.No.2,3 &4 through O.P.No.1. It also reveals that the O.P.No.1 was deducting the premiums from salary of the deceased policy holder and was used to deposit the same with the Life Insurance Corporation (LIC) of India during the course of his employment. We further found that the O.P. No.1 has disclosed to have deducted Rs.775/- only from the salary of the deceased policy holder from his last pay drawn as revealed through RTI reply of O.P.No.1 vide Letter No.2895 dated 18.10.2012. However, the O.P. No.1 failed to provide information as to how much deductions were made towards payment of policy premiums before 21.11.2002 since the policies were obtained by the deceased policy holder on different dates starting from 1994 up to 2000 respectively. The O.P.No.1 not mentioned any details of deductions made before his termination from service hence it is difficult to hold how much amount was actually deducted from his salary particulars during the course of employment of the deceased policy holder.  On the other hand, as per the documents filed by the learned counsel for the O.P.No.2, 3 &4 pertaining to the policy details, it reveals that policy No.581204917 was obtained on 15.9.1994 for an assured sum of Rs.25,000/- on the date of maturity on payment of monthly premium of Rs.139/- through salary savings scheme and the date of maturity of the policy was on 15.09.2014. Similarly, the policy No.581256790 was commenced on 28.10.1994 for an assured sum of Rs.50,000/- on payment of Rs.345/- towards monthly premium by the policy holder through salary savings scheme and the date of maturity of the policy was on 28.10.2009. Likewise, the policy No.581063971 was commenced on 28.10.1996 for an assured sum of Rs.20,000/- on payment of Rs.142/- as monthly installment and the date of maturity was on 28.10.2011.  Also policy No.581063944 was commenced with effect from 12.11.1996 and a sum of Rs.50,000/- was assured under the policy towards maturity value on payment of Rs.64/- as monthly premium with extra death benefit of Rs.50,000/- and the maturity date was on 12.11.2001. Further, the last policy bearing No.570363006 was taken by the deceased policy holder on 28.06.2000 for an assured sum of Rs.25,000/- on payment of monthly premium of Rs.208/- and the date of maturity of the policy was on 28.06.2020. In all aforesaid policies, the present complainant Smt. R. Saraswati Reddy, wife of the deceased policy holder, was nominated as nominee as per Section 39 of Insurance Act which has already been admitted by the O.Ps in their version as well as arguments.  It is also a fact that as per the policy status report submitted by the O.P.No.2,3 &4, the alleged  policies have been lapsed due to non-payment of premiums on due dates and even after grace periods. Further, it is also a fact that premiums of all the aforesaid policies were deposited through salary savings scheme (SSS) as mentioned in the policy status report by O.P.No.2,3 &4. However, O.P. No.1 though made deductions from the pay drawn by deceased policy holder during his employment but failed to submit details of deductions made by him during his employment except details of his last pay drawn particulars as discussed above i.e. Rs.775/- per month. Moreover, there is no fault of deceased policy holder for non-payment of premiums by his employer O.P. No.1 and as per written version and argument of the O.P. No.1 the employer has deducted the premiums till payment of his last salary up to 21.11.2002. In this context, we would like to say that the O.P. No.1 might have deducted a handsome amount from the salary of deceased policy holder towards payment of premiums which he could not trace out and unable to provide the details of total deductions made as admitted by the O.P.No.1 in his version.  The deceased policy holder in this regard has already authorized his employer to deduct the premiums from his monthly salary as admitted by his employer O.P. No.1 in his written argument also.

5. In the above facts and circumstances of the case, we are convinced that the deceased policy holder has deposited some amounts in shape of premiums with O.Ps (insurer) through deductions made by his employer i.e. O.P. No.1 towards five insurance policies on account of Salary Savings Scheme. Therefore, in our considered view, the deceased policy holder had deposited a handsome amount, deposited through Salary Savings Scheme by his employer O.P. No.1 under above mentioned five insurance policies through salary savings deductions. The policies may be lapsed due to non-payment of premiums by the employer O.P. No.1 and the nominee of the deceased policy holder may not be entitled to receive the sum assured under aforesaid five insurance policies on maturity but the insurance agreement or contract is not unlawful.  We also feel that there is no fault with the deceased policy holder for non-deposit of premiums in time but we also convinced that the deceased policy holder was dismissed from his service by the employer w. e. f. 21.11.2002 and prior to that the employer has deducted a handsome amount from his salary and has deposited the same with O.P. insurance company. The equity, justice and good conscience say that it should be refunded to the nominee complainant window in her crisis period to support her family. This is a welfare state and in a welfare state, the insurance company is to help the legal representatives of the deceased policy holder in their crisis period and not to even digest the deposits made by him on technical and legal grounds. Above all, the nominee complainant is the widow of deceased policy holder who belongs to lower socio-economic strata of the society. It is a social duty and corporate social responsibility of O.Ps to support the widow of deceased policy holder in her crisis period in all possible ways. We, therefore, consider that the nominee complainant widow of deceased policy holder is entitled to get refund of deposited amount from the O.P. insurance company with interest as applicable to savings bank account else the very purpose of consumer justice will be defeated. The claims of the complainant for sum assured under aforesaid five policies are not allowed since the policies are lapsed due to non-payment of premiums as  the employee was dismissed from his service as discussed above. Hence, the citation filed by the complainant in support of her case is not applicable to this dispute hence we are not inclined to accept the same.

6. In the result, we partially allow the case of the nominee complainant against O.P. No.2, 3 &4, who are jointly and severally liable to refund the premiums deposited by the deceased policy holder to the nominee complainant with interest as applicable to savings bank account after making a proper calculation of premiums deposited through his employer O.P.No.1. For this, the O.P. No.2, 3 &4 may also take help of O.P.No.1 (employer) to ascertain the premiums deposited through deductions from his monthly salary. The O.P. No.1 is also directed to cooperate with the LIC authorities, if necessary, to ascertain the premiums deposited through salary deductions. The above direction shall be complied by the O.Ps within 90 days from the date of receipt of this order failing which the entire amount shall be recovered from the O.Ps with 6% interest per annum under the relevant provisions of Consumer Protection Act, 1986. The consumer dispute of the complainant is disposed of accordingly, however, as per the facts and circumstances of the case we are not inclined to impose any cost.     

            7. The order is pronounced on this day of 22^nd July 2016 under the signature and seal of this Forum. The office is directed to supply copies of the order to the parties free of cost.