DATE OF FILING: 20.02.2013
DATE OF DISPOSAL: 24.06.2017
Dr. N.Tuna Sahu, Presiding Member:
The complainant has filed this consumer dispute under Section 12 of the Consumer Protection Act 1986, alleging deficiency in insurance service against the Opposite Parties ( in short the O.Ps) and for redressal of her grievance before this Forum.
2. Briefly stated the case of the complainant is that the complainant is a widow and wife of deceased late G.Raghunatha. As per her complaint, the complainants are the successors of G. Raghunatha, S/o G.Appa Rao. The husband of the complainant was insured his life by procuring a policy bearing No.570014223 from the O.Ps. The O.P.No.3 is the nominee of the said policy in dispute bearing No. 570014223. The O.P.No.1 is to make new policy, issue policy bond, receiving of premiums, settlement of claims etc and the O.P.No.2 is the Divisional Heads of the East Zone Branch offices of LIC of India. After the death of husband of the complainant No.1 on 21.12.2010, she performed the obsequies of her husband deceased G.Raghunath as per customs and traditions of her in-laws by borrowing hand loan from the local money lenders. To redeem the huge hand loan incurred by the complainant No.1 being the successor-in-interest of the deceased G. Raghunatha, made a demand with O.P.No.1 to settle the claim against the said policy by sending a registered notice on 04.01.2012 vide postal receipt No.A2166. Acknowledging the said notice, the O.P.No.1 expressed helplessness to settle the claim and advised the complainant No.1 to intimate the nominee of the policy i.e. the O.P.No.3 on dated 10.01.2012. After the death of the husband of the complainant No.1, she asked O.P.No.1 to furnish the amount due to be paid against the Policy bearing No.570014223 through R.T.I. Act but O.P.No.1 so far has not supplied the required information as sought for by the complainant No.1 under the said RTI Act. Thereafter the complainant No.1 preferred an appeal under the RTI Act to the first Appellate Authority of O.P.No.1 but so far no communication is received from the Firsts Appellate Authority. The O.P.N o.3 is also not co-operating the complainant No.1 & 2 for settlement of the claims. Being the successor-in-interest of the deceased policy holder the complainants even if not the nominee are claiming to settle the claim of the deceased policyholder even if they do not have any succession certificate. But the O.Ps did not give any heed to her grievances and not settled the claim of the complainants hence alleging deficiency in insurance service on the part of the O.Ps the complainant prayed to direct the O.Ps to return the amount of Rs.1,00,000/- towards insurance and to pay 18% interest, compensation of Rs.1,00,000/- towards agonies suffered by complainants physically, mentally and financially together with litigation cost of Rs.2000/- in the best interests of justice.
3. Upon notice the O.P.No.1 and 2 filed version through his advocate. It is stated the case is not maintainable because the complainant is not a consumer as per the provisions of CP Act, 1986. The allegation made in Para No.1 of the complaint is not known to O.Ps. It is all about their family history and subject to strict proof by the complainant. In response to Para No.2 the O.Ps stated that O.P.No.1 i.e. LIC of India, Branch-1, Berhampur is the Branch office of O.P.No.2 i.e. LIC of India, Division Office, Khodasingh, Berhampur. The prime function of the O.Ps is to transact life insurance business throughout the jurisdiction of Berhampur Division as stipulated in Life Insurance Act, 1956 of Govt. of India. The policy No. 570014223 has been issued by O.P.No.1 in the name of one G. Raghunath under plan & Term 111-30(30) for sum assured Rsa.50,000/- with dates of commencement 15.12.1995. G.Appa Rao, father of the life assured is the nominee under the policy and rest of the allegations made in Para No.3 are denied by the O.Ps. The O.P.No.1 informed G.Adilaxmi complainant on 10.01.2012 by registered post that valid nomination exists under the policy in favour of G.Appa Rao, who is the father of the deceased life assured. Rest of the allegations in Para No.4 is denied. All the allegations in Para No.5 are denied in toto. The O.Ps have informed to the complainant that the claim is admissible and an amount of Rs.51,701/- approximately (Sum assured + 25% of all premium paid excluding extra premium) is payable under the policy to the nominee G. Appa Rao, on compliance of all the claim forms and relevant documents. The allegations made in Para 6 are not pertaining to O.Ps, hence denied. The allegations made in Para No.7 are denied. The citation made by the complainant is out of context and not applicable to this disputes as because valid nomination exists under the policy as per Section 39 of Insurance Act, 1938. There does not arise any such question of succession. The complaint is not in time and barred by limitation. The Honorable Forum has no jurisdiction to entertain the complaint and the C.P. Act, 1986 is not applicable. There is no cause of action. There is no scope for any compensation and value of service claimed by the complainant rather the complaint may be dismissed with exemplary cost as because it is a vague complaint which has wasted the valuable time of the O.Ps as well as of the honorable Forum. There is no question of any physical, mental and financial agony suffered by the complainant and no litigation arises at all. Hence the O.P.No.1 and 2 prayed to dismiss the complaint with exemplary cost and compensation for the ends of justice.
4. Upon notice the O.P. No.3 filed written version through his advocate. It is stated that the allegations made in the complaint are all not true and the complainant is put to strict proof of the same by adducing clear and cogent documentary evidence to that effect. The policy concerned was taken by the policy holder prior to his marriage and as such this O.P.No.3 was made the nominee and as such the present complainant has no role to play so far as the present policy is concerned. The deceased during his life time has obtained the policy securing the life of this O.P.No.3 and the present claim advance by the complainant is therefore not maintainable and the complainant is entitled for any claim arising out of the impugned policy and rather any/all benefits arising out of the subject policy is to be redeemed to the benefits and accounts of this O.P.No.3. The allegations made under Para 6 is absolutely not true and ill intended. The policy being taken prior to the marriage of the deceased, the question of successor in interest as has been raised by the complainant is nothing but misleading this Hon’ble Forum and the right of this O.P.No.3 cannot be under-dued in view of the fact that the impugned policy was made prior to the marriage of the insured with this O.P.No.3 as the nominee. The notice of the proceeding not being served upon this O.P.No.3 is the look out of this Hon’ble Forum and as such this O.P.No.3 cannot be penalized for not appearing in time. In view of this submission made herein before, it is submitted that the O.P.No.3, the nominee in the policy, is therefore, the only beneficiary under the subject policy and as such is only entitled to the policy benefits. Hence this O.P.No.3 prayed to direct the O.P.No.1 (LIC of India) to pay the policy benefits along with the accrued interest in favour of the O.P.No.3 in the best interest of justice.
5. On the date of hearing of the consumer dispute we heard the arguments from the learned counsel for the complainants as well as for the O.Ps. We have also carefully perused the submissions made by learned counsel for the parties and also verified the relevant documents placed on the case record. On perusal of the complaint and documents it appears that the present complainant No.1 is the widow and wife of deceased G. Raghunatha who had obtained a life insurance policy from the O.Ps vide policy No.570014223 which has been admitted by the O.P. Life Insurance Corporation of India. As admitted by the O.Ps, under the said policy a sum of Rs.50,000/- was proposed to be assured on payment of Rs.162/- as quarterly installment by the deceased policyholder towards the policy premium with accident benefit. It is also an admitted fact that the O.P.No.3 was nominated as nominee of the aforesaid policy in dispute by the deceased G. Raghunatha at the time of procuring the policy from the O.Ps since at that point of time he was unmarried. Therefore, he nominated his father G. Appa Rao (the present O.P.No.3) as nominee of the said policy as is evident from Annexure -1 of the documents filed by the O.P. No.1 &2 placed on the case record. There is no dispute or doubt that the deceased G. Raghunatha died on 21.12.2010 leaving his legally married wife (complainant No.1) and his son G. Jagadishwar Rao (complainant No.2) as the legal heir and successor and it is manifestly clear from the documents placed on the case record. The complainant No.1 on 04.01.2012 through a letter requested the O.P. No.1 to settle the death claim of her husband and the O.P. No.1 in his letter dated 10.01.2012 informed the complainant No.1 that the nominee under the policy is Sri G.Appa Rao(father) and requested the complainant No.1 to contact the O.P.No.1 for processing the claim. It is also seen from the case record that the learned counsel for the O.P. No.1&2 filed a petition on 8.03.2013 regarding non-maintainability of the case in this Forum on the ground that the nominee of the policyholder is entitled to get the amount of the policy although there remains persons in category of successors in interest and the O.Ps are duty bound to pay the amount to the nominee and that can’t be treated as deficiency in service. It is also contended that since the complainant No.1 has filed a RTI application before 1st Appellate Authority of O.Ps under Right to Information Act, this Forum can’t entertain this case. In the counter reply the learned counsel for the complainants stated that the successor in interest of the deceased can claim to settle the claim even if they are not the nominees of the policy in dispute without obtaining a succession certificate in view of the decision of Hon’ble State Commission, Rajasthan in the case of Indian Farmers Corporation Ltd Vs. Jitendra Kumar reported in 2012 CPJ 223. During the course of argument of the consumer dispute the learned counsel for the complainants also contended that in view of the Section -39 of Insurance Act, nomination is a norm under a life insurance policy to nominate a person for receiving the money secured by the policy and accordingly the deceased policyholder when he was single/unmarried nominated the O.P.No.3 as nominee of the said policy just to fulfill the requirement under Section 39 of the Insurance Act but that does not confer the nominee absolute right over the entire money payable under the policy. Accordingly, the O.P. No.1&2 have shown their interest to disburse the claim amount to the nominee in accordance with Section 39 of the Insurance Act. It is also contended the Hon’ble Apex Court of India in Smt. Sarbati Devi & Another Vs. Smt. Usha Devi reported in AIR 1984 SC 346 held that a ‘mere nomination made under Section 39 of Insurance Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. Nomination only indicates the hand which is authorized to receive the amount on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them’. Similarly, he has also cited another authority of the Hon’ble State Commission of Maharashtra in the case of Rahul Chandrakant Modi Vs. Reliance Life Insurance Co. Ltd reported III (2011) CPJ 73 where it was held nominee is never an owner of said money. Further, he submitted that as per the authority of Hon’ble National Commission in the case of Oriental Insurance Co. Ltd Vs. Chhattisgarh State Power Holding Co. Ltd reported in II (2012) CPJ 303 held that ‘legal heirs of deceased were entitled to lodge complaint and there is no necessity of obtaining succession certificate’. In view of above, the learned counsel for the complainant, therefore, contended that the complainants are being the legal heirs of the deceased policy holder are entitled to receive the claim amount and the O.P.No.3 although was nominated as the nominee of the policy in dispute but not entitled to any amount under the policy.
6. From the foregoing discussion and in view of the above fact and circumstances, the only point which has been arisen for our consideration in this case as to whether the present complainants are entitled for the assured amount under the policy in dispute in spite of the fact that O.P.No.3 was being kept as nominee of the said policy of deceased policyholder?
7. To address the only pertinent point in dispute, we would like to discuss the fact that there is no doubt or dispute that the O.P.No.3 is nominee of the policy in dispute as nominated by the deceased policyholder while he was unmarried. It is also an admitted fact that the present complainants are wife and son of the deceased life assured and as such they are legal heirs/successors of the deceased policyholder which is not denied or disputed by the insurer i.e. O.P. No.1&2, since the complainant No.1 is legally married wife of the deceased policyholder and complainant No.2 is the offspring of the deceased policyholder and his wife. According to Hindu law of succession, the wife and son both are Class-I legal heirs and shall be entitled to one share each equally from the property of a deceased. The self acquired property of deceased Hindu shall be devolved in accordance with Section-8 read with the schedule of the Hindu Succession Act, 1956. As per the schedule of the said Act, wife and mother, daughter and son of a male Hindu dying intestate comes in the category of Class-I heirs but father is a Class-II heir of such a male Hindu. As per Section 10, Rule-1 & 2 of the aforesaid Act, the wife and son shall get one share each. This way they are entitled to one share each in the property of the deceased Hindu and the father being the Class-II legal heir can get share in the property of the deceased Hindu male after them. In the instant case, the father i.e. O.P.No.3 although was nominated by the deceased policyholder as nominee of the said policy prior to his marriage but the legally married wife and his son both are entitled to the property of the deceased Hindu being the Class-I legal heir. Accordingly, in our considered view we would like to hold that it would be just and proper to declare that in this case the wife and son being the Class-I legal heirs of the deceased policyholder are entitled to 35% of the assured amount by each under the policy and the father being the Class -II legal heir as well as the nominee of the policy in dispute is entitled to 30% of the assured amount. We would also like to make it clear that the O.P.No.3, being the nominee of the policy in dispute though the custodian of the funds of the deceased policyholder but he is not the sole person to receive the assured amount in this case in view of the settled legal principles as discussed herein above. We are also very much agree with the authority of Hon’ble Apex Court of India in the case of Smt. Sarbati Devi & Another Vs. Smt. Usha Devi reported in AIR 1984 SC 346 where it was held that a “mere nomination made under Section 39 of Insurance Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. Nomination only indicates the hand which is authorized to receive the amount on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them”. Accordingly, it would be, equitable to direct the O.P.No.1&2 to pay 35% of the total assured amount each to the wife and son of the deceased policyholder respectively i.e. present complainant No.1&2 and remaining 30% of the assured amount to be paid to the nominee i.e. the present O.P.No.3 who is also the father of the deceased G. Raghunatha. The maintainability petition of learned counsel for the O.P.No.1&2 filed on 8.3.2013 is also accordingly dismissed since the said petition bears no merit in the fact and circumstance of the case as discussed above.
8. As far as the claim amount of the deceased policy holder is concerned, as admitted by the O.Ps, under the said policy an assured sum of Rs.50,000/- was proposed to be paid to the deceased policyholder with accrued bonus if any and other benefits as per the conditions of the policy in the event of death or maturity of the policyholder along with accidental benefits. In this case the deceased policy holder was died due to heart attack so he is not entitled to any accidental benefit under the said policy. Hence, the O.P. No.1&2 are liable to pay the assured sum of Rs.50,000/- along with accrued bonus if any plus other benefits as per the policy conditions along with interest as applicable since the O.P.No.1&2 have retained the amount of the deceased with them. We are, therefore, interested to direct the O.P. No.1&2 to pay 6% interest per annum on the assured amount as entitled by the complainants and nominee. However, in this case, the complainants have claimed a sum of Rs.1,00,000/- towards their insurance claim along with 18% interest per annum but we are unable to find any cogent and convincing documentary evidence against their claim so we are unable to accept the same hence rejected. That apart, the complainants have also claimed a sum of Rs.1,00,000/- along with 10% interest per annum towards compensation for agonies suffered physically, financially and mentally and Rs.2,000/- towards cost of litigation. But, on careful perusal of the materials, we found that there is nothing placed on the case record to prove that the complainant have incurred a loss of Rs.1,00,000/- since the complainants have filed no documentary evidence to establish their claim. We feel that the claim of compensation made by the complainants is speculative and imaginary in nature so we are not inclined to accept the same hence rejected. However, we are interested to award a moderate amount towards cost of litigation to be paid by the O.P.No.1&2 since the complainants have hired the services of an Advocate to proceed with their case. As far as the cost of litigation is concerned, we feel that it would just and proper to award Rs.1,000/- towards legal expenses as per the fact and circumstances of the case and to be paid to the complainants. In the light of the foregoing discussion and considering the fact and circumstances of the consumer dispute, we partially allowed the case of the complainants against O.P.No.1&2 and dismissed against O.P. No.3.
9. Resultantly, the O.P.No.1& 2 are directed to disburse 70% of the assured amount along with accrued bonus plus other benefits if any to the complainants and to pay the remaining 30% of the assured amount with accrued bonus plus other benefits if any to the nominee of the policy in dispute along with interest @6% per annum on the whole amount from the date of filing this complaint i.e. 20.02.2013 till actual payment is made. The O.P. No.1&2 are also liable to pay a modest sum of Rs.1,000/- towards cost of litigation to the complainants as discussed above. The O.Ps are directed to comply the above orders within two months from the date of receipt of this order failing which the whole amount shall carry 7% interest and complainants are at liberty to recover the same under the relevant Sections of Consumer Protection Act, 1986. The case of the complainants is disposed of accordingly. No order as to compensation.
10. The order is pronounced on this 24th day of June 2017 under the signature and seal of this Forum. The office is directed to supply copy of order to the parties free of cost and a copy of same be sent to the server of
