Complaint filed on: 05.05.2016

                                                                                                                             Complaint Disposed on:21.10.2017

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT CHICKMAGALUR.

COMPLAINT NO.57/2016

DATED THIS THE 21^st DAY OF OCTOBER 2017

:PRESENT:

HON’BLE SRI RAVISHANKAR, B.A.L, LL.B., - PRESIDENT

HON’BLE SMT B.U.GEETHA, M. COM., LL.B., -MEMBER

HON’BLE SMT H. MANJULA, B.A.L., LL.B., - MEMBER

COMPLAINANT/S:

1. Smt Sumithra W/o Chandrappa,

    Aged about 52 years, Housewife,

    R/o M.L.Thandya, Muttanagere

    Post, Kadur Taluk.

2. Smt Manjamma W/o Ranganatha,

    Aged about 32 years, Housewife,

    R/o Anegere Village, Kadur Taluk.

3. Sri Rama Naika S/o Gopya Naika,

    Aged about 60 years, Agriculturist,

4. Sri Chidananda M S/o Malledevaru,

    Aged about 34 years, Agriculturist,

5. Smt Parvathamma W/o Bheemanaika,

    Aged about 51 years, House wife,

6. Smt Seethabai W/o Chandyanaika,

    Aged about 60 years, House wife,

Complainants 3 to 6 are R/o M.L.

Thandya, Muttanagere post, Kadur Taluk.

7. Sri Kiran Kumar S/o Revanna,

    Aged about 31 years, Agriculturist,

8. Sri M.R.Prakash S/o M.G.Revanna,

    Aged about 29 years, Housewife,

9. Smt.Lakshmamma W/o Chikkanna,

    Aged about 48 years, Housewife,

Complainant no.7 to 9 are R/o

Maravanji village, Kadur Taluk.

10. Smt Mangalamma W/o Kotturappa,

      Aged about 46 years, House wife

      R/o Anegere village, Kadur Taluk.

11. Smt Lalithamma W/o Late Malleshappa,

      Aged about 51 years, House wife,

      R/o Narayanapura, Anegere village, Kadur.

12. Suma D/o Somashekarappa,

      Aged about 26 years, Student,

13. Smt Lakkamma W/o Rudrappa,

      Aged about 52 years, House wife,

14. Smt Parvathamma W/o Bettappa,

      Aged about 57 years, Housewife,

15. Sri Somashekarappa S/o Gurubasappa

      Shetty, Aged about 58 years, Agriculturist,

16. Sri Marulappa S/o Malappa Shetty

      (Thandaga), Aged about 55 years,

      Agriculturist,

17. Smt Meenakshamma W/o Kotturappa,

      Aged about 31 years, House wife,

18. Smt Rathnamma W/o Basavarajappa,

      Aged about 45 years, House wife,

19. Smt Lakshmamma W/o Rameshappa,

      Aged about 47 years, House wife,

20. Smt Rangamma W/o Mudlappa,

      Aged about 56 years, House wife,

21. Smt Bharathi D/o Puttarangamma,

      (Tailor Rangappa) Aged about 32

      Years, House wife,

22. Smt Devamma W/o Jatappa,

      Aged about 55 years, House wife,

23. Smt Shshikala W/o Manjunath A.O.,

      Aged about 34 years, House wife,

24. Smt Lakshmidevamma W/o Kariyappa,

      Aged about 56 years, House wife,

25. Smt Manjamma W/o Puttarangappa,

      Aged about 38 years, House wife,

26. Sri Chandrappa S/o Chaluvappa,

      Aged about 53 years, Agriculturist,

27. Sri Rangappa S/o Bhimappa,

      Aged about 55 years, Agriculturist,

Complainant no.12 to 27 are R/o Anegere

Village, Kadur Taluk.

28. Smt Meenakshi W/o Jayappa,

      Aged about 32 years, House wife,

29. Smt Bhagya @ Bhagyamma W/o Sidlappa,

      Aged about 39 years, House wife,

30. Smt Puttamma D/o Narasimhappa,

      Aged about 31 years, House wife,

31. Smt Dakshayanamma W/o Govindaraju,

      Aged about 38 years, House wife,

32. Smt Bhagyamma W/o Dasappa,

      Aged about 58 years, House wife,

33. Smt Renukamma W/o Chandrappa,

      Aged about 34 years, House wife,

34. Smt Omkaramma W/o Shankarappa,

      Aged about 40 years, House wife,

35. Sri Murthappa S/o Siddappa,

      Aged about 53 years, Agriculturist,

36. Smt Sidlamma W/o Doddappa,

      Aged about 39 years, House wife,

37. Sri Manjunath M.E. S/o Erappa,

      Aged about 34 years, Agriculturist,

38. Smt Shivamma W/o Hattigappa(Poojari)

      Aged about 43 years, House wife,

39. Smt Suma W/o Thimmappa,

      Aged about 46 years, House wife,

Complainant no.28 to 39 are R/o

M.Gollarahatti, Muthanagere post, Kadur(T).

40. Smt Doddamma W/o Rajappa,

      Aged about 50 years, House wife,

41. Smt Renukamma W/o Rameshappa

      (poojari),Aged about 43 years, House wife,

42. Smt Manjamma W/o Nagaraju,

      C/o Revanna, Aged about 32 years,

      House wife,

Complainant no.40 to 42 are R/o Maravanji,

Village, Kadur Taluk.

43. Smt Chandramma W/o Gurulingaiah,

      Aged about 51 years, House wife,

44. Kamala Bai W/o Ramanaik,

      Aged about 60 years, House wife,

Complainant no.43 & 44 are R/o M.L.Thandya,

Muttanaegere post, Kadur Taluk.

45. Smt Jayanthi M.R W/o Marulasiddappa M.S.

      Aged about 32 years, Agriculturist,

      R/o Muttanagere village, Kadur Taluk.

46. Smt Bharathi W/o Erappa,

      Aged about 32 years, Agriculturist,

      R/o M.Gollarahatti, Muttanagere post,

      Kadur Taluk.

47. Smt Siddamma W/o Hanumantappa,

      Aged about 56 years, House wife,

      R/o Maravanji village, Kadur Taluk.

48. Smt Radhamma W/o nagaraja,

      Aged about 40 years, House wife,

      R/o Anegere village, Kadur Taluk,

49. Smt Renukamma W/o Hattigappa,

      Aged about 46 years, House wife,

      R/o M.Gollarahatti, Mutanagere post,

      Kadur Taluk.

50. Smt.H.S.Shivakumari W/o Annappa,

      Aged about 25 years, House wife,

      R/o M.L.Thandya, Muthanagere post,

      Kadur Taluk.

51. Smt.Meenakshamma W/o Narasimhappa,

      Aged about 49 years, House wife,

      R/o M.Gollarahatti, Muthanagere post,

      Kadur Taluk.

52. Smt Bhagyamma W/o Ranganatha A.E.,

      Aged about 30 years, House wife,

      R/o Anegere village, Kadur Taluk.

53. Smt Bhagyamma W/o Rajappa,

      Aged about 54 years, House wife,

54. Smt Suma W/o Late Basavaraju,

      Aged about 26 years, House wife,

Complainant no.53 and 54 are R/o

M.Gollarahatti, Muthanagere village,

Kadur Taluk.

55. Smt.Jayamma W/o Shivakumara,

      Aged about 31 years, House wife,

56. Smt Bhagyamma W/o Rangappa,

      Aged about 52 years, House wife,

57. Smt Gangamma W/o Dasappa,

      Aged about 56 years, House wife,

Complainant no.55 to 57 are R/o

Muthanagere village, Kadur Taluk.

58. Smt Neela Bai W/o Kumaranaik,

      Aged about 33 years, House wife,

59. Mallanaik W/o Bhimanaik,

      Aged about 56 years, Agriculturist,

Complainant no.58 & 59 are R/o M.L.

Thandya, Muthanagere village, Kadur (T).

60. Basavalingashetty S/o Veeranna Shetty,

      Aged about 63 years, Agriculturist,

61. Smt Indramma W/o Suresh A.T.,

      Aged about 45 years, House wife,

62. Parvathamma W/o Chikkanna,

      C/o Ranganath, Aged about 56 years,

      Agriculturist,

Complainant no.60 to 62 are R/o Anegere

Village, Kadur Taluk.

63. Smt Geetha S.K. W/o Nagarajappa N.A.,

      Aged about 24 years, Agriculturist,

      R/o Nagavedhi Post, Arasikere Taluk.

64. Smt Vinodhamma H.L. W/o Ningappa,

      Aged about 46 years, House wife,

      R/o D.Hosalli, Anegere Village, Kadur (T).

(By Sri/Smt. Hareesh Singatagere., Advocate)

V/s

OPPONENT/S:

1. The Life Insurance Corporation of India,

    Micro Insurance Division, Division office,

    Banni Mantapa, Mysore city.

2. The Life Insurance Corporation of India,

     U.B.Road, Kadur Town, Chikmagalur

     District. Represented by its Manager.

3. Life Insurance Corporation of India,

    Micro Insurance Division, Division office,

    Ajjarakadu, Udupi city.

(Op 1 to 3 By Sri.H.C.Krishna, advocate)

By Hon’ble President Sri. Ravishankar,

:O R D E R:

The complainant 1 to 64 have filed this representative complaint U/s 12 of the Consumer Protection Act 1986 against Op 1 to 3 alleging a deficiency in service in not repaying the entire premium amount paid by complainants towards micro insurance policies. Hence, prays for direction against Op 1 to 3 to refund entire premium amount along with compensation of Rs.3,000/- each for deficiency in service in the interest of justice and equity.

2. The brief facts of the complaint is that:

        The complainants are residence of Anekere, Muthanagere, Narayanapura and Maravanji village of kadur taluk and they are not able to file individual case against Ops. Hence, they have filed this representative complaint against Op 1 to 3. The Op 1 to 3 have approached the complainants through their agent Samanvaya Health and Education Society, Tiptur and obtained proposal for Jeevan Maddhura micro insurance policy and received the first premium from complainants, after receipt of the first premium the Op 1 to 3 have issued Jeevan Maddhura policy to all the complainants, the sum assured under the policy is Rs.5,000/- to 30,000/-. The policy number, total premium paid by each complainant and its date of commencement are shown as below:

The said agents of Op 1 to 3 used to collect the monthly, quarterly and yearly premium from complainants by visiting their houses, accordingly, the complainants also paid premiums to their respective policies without any fault. But all of sudden the agent of Op 1 to 3 have stopped collection of premium from complainants without assigning any reason since may 2014, the complainants astonished by the act of the said agent of the Ops and subsequently complainants have approached Ops through complainant no.10, 11, 33, 37, 52 and 63 with respect to the non-receipt of the premiums by agent of the Ops and also requested the Ops to receive the regular premium due under policies. But Ops have refused to receive the premiums and asked the complainants to pay the premiums to their agents only at Tiptur, but the said agent of the Ops have closed all its branches and now the whereabouts of the said Samanvaya Health and Education Society is not known to the complainants, thereafter these complainants came to know that Op 1 to 3 have terminated the agency with Samanvaya Health and Education Society in the month of August 2014.

        There afterwards, complainants approached Ops once again in the month of August 2014 and requested to make arrangements for receipt of the regular premiums and also demanded for regularize the policies issued by Ops, but Ops refused to make alternative arrangements to receive the premiums in their branches. Once again the complainants approached the Ops in the month of January 2015 and requested the Ops to refund the entire premium paid by them as they fail to continue the said insurance scheme. But instead of refunding the entire premium amount paid by complainants Ops have for one or other reasons postponed to settle the matter. There afterwards, on 12.03.2016, 21.04.2016 and 15.04.2016 Ops have issued a letter stating that the complainants are not eligible for payment of surrender value, in fact the complainants have not demanded for payment of surrender value, they have demanded for payment of entire premiums paid towards micro insurance. But Ops have not made any arrangements to refund the premium amount paid by complainants. Hence, Op 1 to 3 rendered a deficiency in service in not refunding the entire premium amount paid by them.

        The Ops with a collusion with their agent in order to make wrongful gain have stopped to receiving the premiums from complainants, due to which the complainants suffered financial loss, all the complainants are belongs to economical weaker section. Hence, complainants filed this complaint and prays for direction against Op 1 to 3 to refund the entire premium amount paid by complainants along with compensation of Rs.3,000/- for deficiency in service to each complainant as prayed above.

3. After service of notice Op 1 to 3 appeared through their counsel and filed their version and contended that, the complaint filed by complainants are not maintainable either in law or on facts and same is devoid of merits and liable to be dismissed.

        Micro Insurance Agent bearing Agency code No.83011R072 M/s Samanvaya Educational and Rural Development Society, a Non-Governmental Organization cum Micro Insurance Agent, who introduced policies under schedule A annexed is a necessary party to the complaint. However the complainants concerned have not made him a party in the complaint. Hence, the complaint is liable to be dismissed for non-joinder of the necessary parties.

        Micro Insurance Agent with Agency code No.83012R062 M/s Samanvaya Educational and Rural Development Society, a Non-Governmental Organization cum Micro Insurance Agent, who introduced policies under schedule B annexed is a necessary party to the complaint. However the complainants concerned have not made him a party in the complaint. Hence, the complaint is liable to be dismissed for non-joinder of the necessary parties.

        Ms. M.H.Pushpalatha, Mr. Raghu and Mr.S.H.Udayakumar, the specified persons of the micro insurance agency, have introduced the complainants to this Op for granting insurance cover under the micro insurance product. Further they have also facilitated the subsequent servicing of the policies. These specified persons are necessary parties to the complaint. However the complainants have not made them as parties in the complaint. Hence, the complaint is liable to be dismissed for non-joinder of the necessary parties.

        Op 1 to 3 further contended that, these complainants have approached this Ops with their proposal for insurance cover under micro insurance product along with necessary consideration to that effect, in the response to the same this Ops have issued insurance policy bond to the complainants bearing numbers and mentioning the assured amount. This Ops have granted the micro insurance product of Life Insurance Corporation through a micro insurance agency cum non-governmental organization bearing agency code no.83011R072 M/s. Samanvaya Educational and Rural Development Society under an agreement with this Op 1 to 3 to that effect. Similarly, another micro insurance policies are also granted to the complainants through a micro insurance agency cum non-governmental organization bearing agency code no.83012R062 M/s. Samanvaya Educational and Rural Development Society under an agreement with Op 1 to 3 to that effect. Subsequently, the said micro insurance agencies are suspended by this Ops for the breach of agreement and said suspension of the agency was also published in daily news paper for the information to the general public at large.

        Op 1 to 3 further contended that, it is false to say that the premium under these policies were paid up to may 2014, these Ops have received and adjusted the premium under the policies only up to date mentioned in the head first unpaid premium noted against the corresponding policies issued to the complainants. Further it is true that all the policies issued to the complainants are in pure lapsed status without acquiring any value for non-receipt of installment premiums due under the policies and this Ops has not received the premium due under the policy for the minimum duration of two years from the date of commencement. Hence, the policies issued to the complainants have not acquiring any value in tune with the conditions and privileges of the policy as noted in the policy bond.

        Op 1 to 3 further contended that, they have issued certificate of confirmation at the periodical intervals for having receipt of the premium under the policy, the said certificate issued to each micro insurance policy holders who have paid the installments premium due, they have made alternative arrangements for collection of the premiums at their branch offices and division office after suspension of the agency and they have also issued public notice in all leading news papers, apart from that they have made alternative arrangements to collect the premium under micro insurance policies, multiple outlets for collection of the premium were thrown open to the policy holder, but these complainants have not made any attempts to pay the subsequent premiums to this Op 1 to 3.

        Op 1 to 3 further contended that, these Ops are not under any contractual obligations to remind the complainants for payment of premium due, however these Ops have made every efforts to prevail on the micro insurance holder on payment of premiums by sending series of communications, they have sent a specific communication to each micro insurance policy holders for payment of the premiums. But the complainants for the best reason known to them simply ignored the communication documented in the premium pass book about the certificate of confirmation and ignored the public notice given by this Ops towards alternative arrangements for payment of premium towards micro insurance policy. The complainants have allowed the policies to lapse by choosing not remit the installment premiums due, thereby they have breached their contractual obligations and the policies, subsequently became lapsed.

        This Ops apart from public notice they have conducted special revival compaign each year providing special platform to the policy holders of the lapsed policy to bring back their policies into force, this Ops have provided number of concessions who used to revive the insurance cover during the period. But complainants have not come forward to revive their policies for the best reason known to them.

        Op 1 to 3 further contended that this Ops have authorized only nodal agency to receive the premium due under micro insurance policy introduced by them and allotted them to facilitate the servicing of the policies. This authorization was bestowed in tune with the regulations of the insurance regulator. However the said nodal agency was not authorized to keep the money thus collected beyond 24 hours without remitting the collection to the Ops. Hence, there is no any deficiency in service on the part of this Op 1 to 3 and complainants are not entitled to get any refund of the premium amount paid by them. Hence, prays for dismissal of the complaint.

4. All Complainants have filed affidavits and marked their policy bond as Ex.P.1 to Ex.P.64, the pass book for payment of premiums towards policies issued by Op 1 to 3 marked as Ex.P.65 to Ex.P.128. There afterwards complainants produced letter issued by Ops marked as Ex.P.129 to 190 with respect to the status of the policy to each complainants. Another letter dated 11.02.2016 issued by Ops marked as Ex.P.191, Certified copy of the complaint under complaint no.95/2014 before Hassan Consumer Forum marked as Ex.P.192, Cash receipts paid by complainants towards premium of the policies marked as Ex.P.195 to Ex.P.667. Ops also filed affidavits and marked 62 status report of the policy and proposal forms as Ex.R.1, Proforma certificate of confirmation of premium remittance marked as Ex.R.2, proforma of individual receipt sent to the policy holders marked as Ex.P.3, Postal endorsement to show the receipts were sent to policy holders marked as Ex.R.4, Proforma of confirmation/advise send to micro insurance policy holders marked as Ex.R.5, Concession letter issued to the policy holders for lapsed policies marked as Ex.R.6 and also produced copy of the news paper to show they have taken a public notice for cancellation of the agency and invitation for payment of premiums to their branch offices in support of their defence.

5.     Heard the arguments.

6.     In the proceedings, the following points do arise for our consideration and decision:

1. Whether there is a Deficiency in service on the part of Op 1 to 3?
2. Whether complainants entitled for any relief & what Order?

7.     Our findings on the above points are as follows:-

1. Point No.1: Affirmative.
2. Point No.2: As per Order below. 

: R E A S O N S :

POINT NOs. 1 & 2:

8. On going through the pleadings, affidavits and documents produced by both complainants and Op 1 to 3, it is admitted that Op 1 to 3 have issued micro insurance policies called Jeevan Maddura to the complainants through their agency M/s. Samanvaya Educational and Rural Development Society, accordingly the complainants have taken policies from Op 1 to 3 and have paid monthly, quarterly and yearly premiums towards policies as reflected in pass book issued by Ops to their agency marked as Ex.P.65 to Ex.P.128. It is also admitted by Ops that complainants have paid their premiums towards policies to their agent M/s. Samanvaya Educational and Rural Development Society. Ops in their version and affidavit have categorically admits that they have authorized the said agency to collect the premiums from complainants. Accordingly till 2014 the said agencies have collected the premiums towards micro insurance policy from complainants and to that effect, the said agencies have issued receipts bearing name of the Op 1 to 3. After issuance of the said receipts complainants believed that the said payment were remitted to Op 1 to 3 from their agent, but at a utter surprise the said agents were not remitted the collection of the premium to the Op 1 to 3. The learned advocate for Op 1 to 3 vehemently argued that it is the mistake made by their agent Samanvaya Educational and Rural Development Society and for which they have terminated the agency and advised to all policy holders to pay the premiums directly to the branch offices of the Op company. But complainants have not chosen to pay the premiums and even they have not made any arrangements to revive the policies for the best reasons known to them. Hence, Ops declined to pay even the surrender value to the Ops and submit no deficiency in service. In support of their arguments Ops have produced proforma of certificate of confirmation marked as Ex.R.5, proforma of notice for payment of premiums marked as Ex.R.6 and stated that they have intimated individual policy holders and also published in all news papers to that effect, but Ops failed to produce daily news paper circulated within the territory of the complainants. The Ops have produced copy of the Prajavani newspaper published at Madikere and Chithradurga, but mere publication made at different places will not suffice to establish that complainants have knowledge about the termination of the agencies, even the Ops have not produced any piece of documents to show that they have intimated the policy holders personally with respect to the payment of premium and revival of the policy.

9. The learned advocate for Op 1 to 3 also cited number of decisions about liability of Ops with respect to lapsed policies, but the said citations are not applicable to this complaint in hand as the policies of the complainants are lapsed due to non-receipt of premiums by the authorized agents of the Ops. On going through the passbooks produced by complainants, non of complainants made deliberate mistakes in paying premiums. Further we are of the opinion that the authorization for collection of premiums to the agents itself amounts to deficiency in service. Here their own agency have collected the premiums and failed to remit the collection of premium to Ops. The Ops being the master of the said agencies are liable for any act or mistake done by agent. Accordingly the Ops are admittedly rendered deficiency in service in authorizing the agents for collection of the premiums. Further we are of the opinion that the complainants should not suffer any economical loss or financial loss due to fault played by agents of Op 1 to 3.

10. Hence, complainants are entitled for refund of the premium amount paid under their policies. Further the Op 1 to 3 are also liable to pay a compensation of Rs.3,000/- to each complainant for deficiency in service in authorizing the agents for the collection of premiums, along with litigation expenses of Rs.1,000/- to each complainants. As such for the above said reasons, we answer the above point no.1 and 2 in the Affirmative and proceed to pass the following:-  

: O R D E R :

1. The complaint filed by the complainants is partly allowed.
2. Op 1 to 3 are directed to refund an amount of premiums paid by each complainants along with compensation of Rs.3,000/- (Three Thousand Rupees only) for deficiency in service and litigation expenses Rs.1,000/- (One  thousand Rupees only)  to each complainant within one month from the date of receipt of this order, failing which the payable amount shall carry interest @ 9% P.A. till realization.
3. Send free copies of this order to both the parties.

(Dictated to the Stenographer transcribed typed by her, transcript corrected by me and then pronounced in Open Court on this the 21^st day of October 2017).

  (B.U.GEETHA)         (H.MANJULA)      (RAVISHANKAR)

      Member                   Member                President

ANNEXURES

Documents produced on behalf of the Complainant/S:

Ex.P.1  to 64       - Policies issued by Ops.

Ex.P.65 to 128   - Premium paid passbooks.

Ex. P.129 to 190- 62 letters issued by Ops.

Ex. P.191            - Another letter dtd:11.02.2016.

Ex. P.192            - Order copy in Complaint No.95/2014.

Ex. P.193 to 667- Cash paid receipts.

Documents produced on behalf of the OP/S:

Ex.R.1              - 62 Status Report, copy of the policy & proposal forms.

Ex. R.2             - Proforma of Certificate of confirmation.

Ex.R.3              - Proforma of Individual receipts sent to policy holders.

Ex.R.4              - Postal endorsement.

Ex.R.5              - Proforma of confirmation/advice.

Ex.R.6              - Concession letter.

Dated:21.10.2017                         President 

                                         District Consumer Forum,

                                                  Chikmagalur.            

RMA