BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT  HYDERABAD.

F.A.  935/2007 against C.C.  54/2006,  Dist. Forum, Chittoor

Between:

Smt. A. Sunitha

W/o. G. Ashok

Age: 28 years, House wife

D.No. 3-123,  Bazar Street

Pichatur (V&P)

Chittoor Dist.                                              ***                           Appellant/

            Complainant.    

                                                                    And

The Life Insurance Corporation of India

Rep. by its  Senior  Divisional Manager

Dargamitta, Nellore.                                    ***                         Respondent/

                                                                                                Opposite Party

Counsel for the  Appellant:                         M/s.  T. Ramulu

Counsel for the  Respondent:                     Mr.  Karra Srinivas.

CORAM:

HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.

                                                                   &

                                 SMT.M.SHREESHA, LADY MEMBER.
                                                         

TUESDAY, THIS THE TWENTY NINETH  DAY OF JUNE  TWO THOUSAND TEN

ORAL ORDER:  (Per Hon’ble Sri Justice D.Appa Rao, President.)

***

1)                Appellant is unsuccessful complainant.

2)                The case of the complainant  in brief is that  her father  Krishnam Naidu had taken two policies  for Rs. 50,000/- each,  another policy for Rs. 4 lakhs  and yet another policy for Rs. 5 lakhs  on  28.4.2002 and 28.4.2003 respectively keeping her as his nominee.    Under the above policies,  the insurance company had  undertaken to pay the sum assured and  in case of accidental death of assured,  besides the above amount accident benefit and accrued bonus.   While so,   her father died on 2.8.2003 due to electric shock.  On report the police registered a case in crime No. 28/2003 u/s 174 of  Cr.P.C.   The medical officer also conducted post-mortem examination  and opined that he died of electric shock.   When the insurance company declined to pay the amount  on flimsy grounds, she filed a complaint before the  Ombudsman  who on enquiry  directed the insurance company to pay the  amount assured under the policies within 15 days.      However, it had paid  only assured sum after a lapse of two months that too without paying  either accident benefit or accrued bonus under the policies.    Therefore she filed the complaint  claiming the said amounts  together with compensation and costs.

3)                The insurance company resisted the case.    However, it admitted issuance of policies  and later settling the amount.   It had paid Rs. 4 lakhs and Rs. 5 lakhs respectively, for which,  the complainant had executed a valid discharge voucher Dt. 15.7.2006.   The death of the assured  due to electric shock is not proved.   FIR, Post-mortem report etc. were all manipulated.    The assured had suppressed his ill-health at the time of submitting the proposal.    He was suffering from heart ailment.    The claim was repudiated by its letter Dt. 31.3.2004.    The discharge summary issued by  Sri Ramchandra Hospital, Chennai  about the admission and discharge  of the life assured would prove that he had suppressed his health  condition.   Since policies of Rs. 50,000/- each  were old long prior to ailment,  they were settled.    The Ombudsman  on the complaint made by the complainant directed  them to pay the amount towards full and final settlement  within 15 days.    However it was not a pre-condition.  The complainant was estopped from claiming the accident benefit.    Due to administrative delay the amounts were sent belatedly.   She received the amount without any protest and therefore prayed for dismissal of the complaint with costs.

4)                 The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A5 marked while the  insurance company filed the affidavit evidence of its Assistant Divisional  Manager and got  Exs. B1 to B9 marked. 

5)                 The Dist. Forum after considering the evidence placed on record opined that the complainant having received the amount towards full and final payment estopped from claiming any bonus and accident benefit  and therefore dismissed the complaint. 

6)                 Aggrieved by the said order, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either  facts or law in correct perspective.   The amount claimed towards bonus and accidental benefit  ought to have been allowed.    The insurance company did not pay the amount as directed by  the Ombudsman  which amounts to deficiency in service.    In view of failure to pay the amount within the time frame the Dist. Forum ought to have awarded the above said amount with interest.   

7)                 The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?

8)                It is an undisputed fact that the assured father  of the complainant  obtained two policies   ‘Endowment assurance policy with profits + accident benefit’  for assured sum of Rs. 4 lakhs  in April, 2002  and  ‘Jeevan Anand  with profits  (with accident benefit)’  for assured sum of Rs. 5 lakhs  in April, 2003  vide  Exs. B5 & B6  respectively.    He died on  2.8.2003  due to electric shock.  When claims were made, sum assured was paid, however, denied bonus and accident benefit on the ground that he had  his previous ailment  at the time when the policy was taken vide Ex. B7.    The fact that the assured died of electric shock  was not in dispute  evidenced from  FIR Ex. A1.    The police registered it as crime No. 28/2003.  The post mortem certificate  Ex. A2  confirms the death  was due to electric shock.    The police after thorough investigation filed final report Ex. A3  informing the Magistrate  that the death was due to “passage of high voltage of electric current  through the body”. 

9)                 As usual the insurance company by appointing a surveyor directed him to verify  his health condition  even prior to taking  of the policy.   The surveyor by gathering information from   Sri Ramachandra Hospital, Chennai  opined that he had suppressed his health condition and therefore he was not entitled to the benefits.    Admittedly it had paid the amount covered under the policies and obtained receipt  towards full and final settlement.   The complainant alleges that the full and final satisfaction voucher was signed without knowing the implications.    It is not as if the insurance company did not settle the claims of  other policies which the assured had taken, obviously  as they involved  small amounts.    We may state that it bent upon repudiating  in the first instance the very sum assured.  However  wisdom dawn on them,   when   Ombudsman  directed they  paid the assured sum, however, denied the benefits  accrued under the policies on the ground that he  had with-held the information with regard to health and income etc. 

10)               In fact the complainant approached the Ombudsman  who in turn considered the entire evidence placed on record  and opined that  “I am of the opinion  that the total repudiation of the claims under the present policies is  not justified  and is against  all norms of natural justice.   Though the insurer ventured to  attribute death to  heart attack, they could not produce even an iota of evidence  to support this claim.   Ends of justice therefore be adequately met  if the insurer consider claims  for sum assured under the policies. I direct the  insurer accordingly to consider the claims for the sums assured.”  

 11)              By virtue of  Rule 16(6)  of the  Redressal of Public Grievance Rules, 1998  the insurance company shall comply the award within 15 days  of the receipt of the letter of acceptance of the complainant and shall intimate to the Ombudsman.     Despite the  clear and categorical mention about the rule the insurance company  had paid the amount belatedly on  15.7.2006 on the ground that  “on account of administrative  and for want of information from the branch office, Puttur  to the Divisional  Office at Nellore  a letter Dt. 27.6.2006 was sent   to the  Senior Branch Manager, Puttur  advising him to pay the basic sum assured.   The insurance company contended that  “While  receiving the  amount on 15.7.2006  the complainant did not protest and she has received the amounts towards full settlement, satisfaction and discharge of all her rights  and claims against  the respondent in respect of  both the policies.”   This is a strange argument.  The question of protest will not arise.  When she had received the amount towards the claim will not deter  her from claiming the other benefits which she were entitled to  as of right.    The insurance company cannot  unilaterally  settle the claims for a lesser amount and turn round and contend that since she had received the amount towards full and final settlement she is estopped from claiming the benefits accrued under the policies.    It was not towards full and final satisfaction of the claim.  It cannot blow hot and cold at a time.    Originally it had even repudiated the claims. 

12)               The insurance company in fact issued two more policies.  When claims  were they paid the amounts.  The assured was admitted in  Sri Ramachandra Hospital,  Chennai .   He was inpatient from  12.8.1999 to 16.8.1999.    What all it was stated was “ Mr. Krishnama Naidu aged 50 years a known smoker was admitted on 12.8.1999 with complaints of chest pain for the past 3 days.  No history of syncope, palpitations.  No history of oliguria.”    When he had taken policies he was directed to undergo  special medical tests.   This policies were accepted with  health extra  @ 2.80%.  As rightly pointed out by the Ombudsman   “the life assured underwent special medical as prescribed by the  insurer and then only  was assured for insurance as mentioned above.”

13)               We may state that  in fact there was no complaint  at any time  by the complainant  right from 1999  up to his death  in  August, 2003.    He was hale and hearty.   There was no record to show that  he had suffered from heart related problems between August, 1999 and  August, 2003.   There is no nexus between the his death due to electric shock  and the so called treatment  that he had taken,  way back in  August, 1999.    At the cost of repetition, we may state that  the insurance company had accepted the policies after  special medical examinations.   By virtue of Section  64UM  of Insurance Act, 1938 they cannot re-open the case  after four years and pick up an unrelated  ground for repudiating the benefits accrued under the policies.    This is unjust.  The complainant is entitled to the bonus and accident benefits despite receipt of  sum assured.    She cannot  be denied  to pay  even the  admitted amount  and made her to  complain the authorities without any relief.  Obviously there is no other source livelihood.    The insurance company  must  have paid the amounts.   They denied the benefit taking advantage helplessness of the complainant.    This repudiation is unethical.    We do not agree with the  Dist. Forum in this regard. 

14)               In the result the appeal is allowed  setting aside the order of the Dist. Forum.  The insurance company is directed to pay the benefits accrued under the policies viz., accident benefit + bonus   with interest @ 9% p.a., from the date of repudiation  till the date of realization together with costs of Rs. 5,000/- in the appeal.  Time for compliance four weeks. 

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER           

   Dt.  29. 06.  2010.

*pnr

“UP  LOAD – O.K.”