BEFORE THE DISTRICT FORUM (UNDER CONSUMER PROTECTION ACT, 1986) SANGAREDDY, MEDAK DISTRICT.
Present: Sri P.V.Subrahmanayma, B.A.B.L., PRESIDENT
Smt U.Sunita, M.A., Lady Member
Sri Mekala Narsimha Reddy, M.A.,LL.B.,
P.G.D.C.P.L. Male Member
Friday, the 19th day of June, 2009
CC.No.1 of 2009
Between:
Smt Rukkamma W/o Linga Reddy,
Aged about 48 yrs, Occu: Household,
R/o Chapta (K) Village, Narayankhed Mandal,
Medak District.
… Complainant
And
1. The Life Insurance Corporation of India
Rep.by its branch Manager, Branch Office
At Zaheerabad, Medak District,
H.No.3-4-6 Main Road, Zaheerabad, Medak district.
2. The Senior Divisional Manager,
Life Insurance Corporation of India,
Divl.office at H.No.1-8-179, Lakpath Building,
S.D.Road, Secunderabad – 500 003.
….Opposite parties
This case came up for final hearing before us on 11.6.2009 in presence of Sri. Anantha Rao Kulkarni, advocate for complainant, Sri M.Prabhakar Gupta, advocate for opposite party No. 1 and 2, upon hearing arguments on both sides, on perusing the record and having stood over for consideration till this day, this forum delivered the following
O R D E R
(Per Sri. P.V. Subrahmanyam, President)
1. This complaint is filed Under Section 12 of Consumer Protection Act, 1986 to direct the opposite parties No.1 and 2 to pay to the complainant the assured amount of the policy i.e. Rs.50,000/- with interest at 18% p.a., from the date of death of Pogula Ashok Reddy on 16.5.2007 and to award compensation of Rs.50,000/- for deficiency in service and to award costs.
The averments in the complaint in brief are as follows:
2. The complainant is a resident of Chapta-K village of Narayankhed Mandal, Medak District. Her son Pogula Ashok reddy, while studying intermediate, had taken a policy of life Insurance vide policy No.601802683, dt.28.3.2005 for Rs.50,000/- for an yearly premium of Rs.3,263/- and the date of maturity of the policy is 28.3.2025 vide Table & Term 075 20.20. The policy was issued from Zaheerabad branch (60C) in which the complainant herein is shown as nominee.
3. The policy holder Ashok Reddy paid premium amount of Rs.3,263/- on 10.4.2006 and next premium amount fell due on -3-2007. As the life assured Ashok Reddy was busy in preparation of intermediate examinations during the month of March, 2007 and due to busy schedule of work, he could not pay the premium amount during the month of March, 2007. Non payment of premium was not intentional or with any motive. Unfortunately on 08.05.2007 the life assured Ashok Reddy sustained grievous injuries due to burst of gas cylinder and while undergoing treatment succumbed to the injuries on 16.5.2007. After the death of her son the complainant approached opposite party No.1 and preferred a claim for payment of policy amount. On instructions of the concerned officers in the office of the opposite party No.1, the complainant obtained death certificate, LIC certificate and other necessary documents and submitted to opposite party No.1 for settlement of claim. The opposite party No.1 postponed settlement of the claim on one pretext or other, therefore the complainant got a legal notice issued to opposite party; No.1 on 10.11.2008, for which there is no reply which clearly shows deliberate negligence and breach of trust and it amounts to deficiency in service, hence the complaint.
4. The claim is resisted by the opposite parties by filing a counter to the following effect:
Taking of Life Insurance Policy by Mr.P.Ashok Reddy from the office of opposite party No.1 on 28.3.2005 for Rs.50,000/- is true. As on the date of death of the life assured, the policy was in lapsed condition due to non payment yearly premium on 28.3.2007. As per policy contract the corporation agrees to pay the sum assured subject to receipt of subsequent premiums as set out in the schedule to consider death claim. If the policy has acquired any paid up value as on the date of death, in terms of provisions under the Non Forfeiture Regulations-4 of conditions and privileges with in referred to in the policy document, in such case only paid up value is payable provided the claim is admitted. The opposite parties have not received any intimation in writing of the death of the assured and the claim forms as well. LIC’s usual procedure is that on receipt of intimation of death in writing and claim forms duly filled in by the claimant, the LIC would conduct enquiry into the bonafides of the claim in respect of early claim arising within 3 years of the commencement of policy and based on the enquiry report, information given by claimant in the claim forms and on the basis of proposal made for issuance of the policy, takes a decision with regard to payment of claim. In the instant case though nothing is payable under the policy as per the provisions of the terms of insurance contract, there is discretion of the competent authority to consider the claim on exgratia provided the claim enquiry report and duly filled in claim forms in relation to the material facts about the life assured’s health that were stated by the deceased life assured in the proposal form for insurance and the claim is admissible, as Life Insurance contracts are contracts of uberrimae fides. The allegations that the opposite parties are deliberately and intentionally avoiding to pay the policy amount is denied. Intimation of death of life assured was not at all received in writing from the climant with proof of death and claim forms. There is no negligence nor there is deficiency in service on the part of the opposite parties. The complaint may there fore be dismissed.
5. Evidence affidavits of both parties filed to prove their respective contentions. Exs.A.1 to A.6 are marked on behalf of the complainant and Exs.B.1 to B.3 are marked on behalf of the opposite parties. No written arguments are reported for the complainant. Memo is filed by the counsel for the opposite parties to treat the evidence affidavit as written arguments. Oral arguments of both sides heard. Perused the record.
6. The point for consideration is whether the complainant is entitled for the policy amount and compensation as prayed for ?
Point:
The case of the complainant is that her son Pogula Ashok Reddy had taken a life insurance policy from opposite party No. 1 for Rs.50,000/- vide policy No. 601802683, dt. 28.03.2005 and paid the first premium of Rs.3,263/- on 10.04.2006 and the next premium was payable on 28.03.2007. The complainant who is nominee under the policy. As the life assured was busy in preparing for intermediate examinations and due to busy schedule of work, he could not pay the premium amount which was due on 28.03.2007. But unfortunately on 08.05.2007 the life assured Pogula Ashok Reddy sustained grievous injuries due to burst of gas cylinder and while under going treatment he succumbed to the injuries on 16.05.2007. It is the further case of the complainant that non payment of the second premium before the due date i.e. on or before 28.03.2007 was not intentional nor with any motive, therefore she submitted a claim to the opposite parties for payment of the policy amount but the opposite parties refused to pay on the ground that there was no existing policy by the date of death of the life assured. There upon the complainant got Ex.A4 legal notice issued to opposite party No. 1 for which there is no reply and hence the complaint is filed.
7. Reference to Ex.A1 is sufficient for disposal of this case, as facts are not in dispute to refer to the other documents.
8. The opposite parties have not disputed the facts stated by the complainant . Their only contention is that the life assured Pogula Ashok Reddy did not pay the second premium which fell due on 28.03.2007 and died shortly there after on 16.05.2007, therefore in view of condition No. 4 of the “CONDITIONS AND PRIVILLAGES” printed on the back side of Ex. A1, the complainant is not entitled to any amount under the policy. Ex. A1 shows that it is subject to the conditions and privileges printed on the back of it. To better appreciate the same the said condition No. 4 is reproduced here under:
9. “4. Non-Forfeiture Regulations: If, after at least three full years’ premium have been paid in respect of this Policy, any subsequent premium be not duly paid, this Policy shall not be wholly void, but shall subsist as a paid-up policy for a reduced sum payable on the Date of Maturity or at the Life Assured’s prior death provided the paid up sum assured is not less than Rs.250/- the amount of paid-up assurance per integral number of years premiums and will be calculated as per table given below, the policy so reduced shall thereafter be free from all liability for payment of within mentioned premium but shall not be entitled to participate in future profits, the existing bonus additions, if any, will remain attached to the reduced paid-up policy.
Notwithstanding what is above stated, if after atleast three full year’s premiums have been paid in respect of this Policy, any subsequent premium be not duly paid, in the event of the death of the Life Assured within 6(six) months from the due date of the first unpaid premium the Policy moneys will be paid as if the Policy had remained in full force after deduction of (a) the premium or premiums unpaid with interest thereon to the date of death on the same terms as for revival of the policy during such period, and (b) the unpaid premium falling due before the next anniversary of the policy. Notwithstanding what is above stated, if after atleast five full year’s premiums have been paid in respect of this Policy, any subsequent premium be not duly paid, in the event of the death of the Life Assured within 12 months from the due date of the first unpaid premium the policy moneys will be paid as if the policy had remained in full force after deduction of (a) the premium or premiums unpaid with interest thereon to the date of death on the same terms as for revival of the policy during such period, and b) the unpaid premiums falling due before the next anniversary of the policy”.
10. As admittedly second premium was not paid by the due date i.e. 28.03.2007 and as the life assured Pogula Ashok Reddy died on 16.05.2007, in view of condition No. 4 above, it is held that the complainant is not entitled either for the policy amount of Rs.50,000/- under Ex. A1 or for award of compensation of Rs.50,000/- as prayed for in the complainant. The point is answered against the complainant.
11. In the result the complaint is dismissed. In the circumstances there is no order as to costs.
Typed to dictation, corrected and pronounced by us in the open forum this 19th day of June, 2009.
Sd/- Sd/- Sd/-
PRESIDENT LADY MEMBER MALE MEMBER
APPENDIX OF EVIDENCE
Witness examined
For the complainant : For the opposite party:
-Nil- -Nil-
DOCUMENTS MARKED
For the complainant : For the opposite party:
Ex. A1/dt.19.04.2005 - Policy Ex. B1/dt.19.04.2005-
Ex. A2/dt.28.05.2007 - Xerox copy of copy of Ex.A1
Certificate of death.
Ex. B2/dt. – Proposal form for insurance.
Ex. A3/16.05.2007 - Xerox copy of Ex. B3/dt - death intimation by Status report of
Gandhi Hospital, policy No. 601802683.
Secunderabad to
Narayankhed police to
hold inquest.
Ex. A4/dt.10.11.2008 - Office copy of legal
notice.
Ex. A5/dt.30.03.2005and
10.04.2006 - Two receipts one for
payament of proposal
deposit and the other for
payament of renewal premium.
Ex. A6/dt.April,1989 - Hall ticket of the life assured,
issued by Board of Intermediate
Education, A.P. Hyderabad.
Sd/-
PRESIDENT
Copy to:
1) The Complainant
2) The Opposite parties
3) Spare copy
Copy delivered to the Complainant/
Opp.Parties On ___________
Dis.No. /2009, dt.
