Challenging the order dated 28.8.2008 of the State Consumer Disputes Redressal Commission, Delhi, (in short ‘the State Commission’) passed in consumer complaint No.C-109/05 complainants  have filed FA No.504 of 2008 and opposite party No.3 has filed FA No.536 of 2008.

2.      Brief facts of the case are that the complainant R.K.Sood has filed a complaint before the State Commission alleging that the daughter of the complainants had taken gold card from opposite party No.1 City Bank and had obtained Citibank Suraksha Card No.46379054881006 with effect from June 2002 which was valid till June 2004.  Under this scheme, the card holder was covered with Insurance of credit shield of Rs.2.5 lacs and personal accident cover of Rs.25 lacs.  Opposite party No.2 Tata AIG Life Insurance Co. was responsible for insurance in respect of credit Shield and opposite party No.3 Royal Sundaram Insurance Company was responsible for personal accident cover. This was a group Insurance Scheme for credit card members of opposite party No.1.  It is the case of the complainants that his daughter Akansha Sood met with an accident on 26.07.2003 and was admitted in hospital and died on 31^st July, 2003.  Opposite party No.1 was informed on 20.8.2003, and after receiving the claim forms from opposite party No.2 and opposite party No.3 the complainants submitted the same along with documents to opposite party No.1.  The complainants received a letter dated 30.08.2003 from opposite party No.1 stating  that the charge facility was withdrawn from the credit card with  effect from 09.01.2001 and therefore the card holder was not covered under any insurance.  As the card was only issued in the year 2002 the opposite party No.1 issued another letter dated 13.09.2003 stating that the charge facility was withdrawn with effect from 16.6.2003  as no insurance premiums were paid by the card holder and her outstanding exceeded the credit limit of Rs.63,000/-.  It was finally stated in this letter that the card holder was not entitled to any benefit under the Citibank Suraksha Scheme.  The complainants then issued legal notice dated 16.05.2004 upon the opposite party No.1 and the same was replied vide letter dated 27.05.2004 by opposite party No.1 stating the same facts and repudiating the claim under any of the Insurance covers.  Aggrieved the complainants filed a consumer complaint before the State Commission against all the opposite parties.  Opposite party No.1 resisted the complaint on the ground that facility was withdrawn with effect from 16.6.2003 and therefore, the insurance covers were not available to the card holder on the date of her death.  Opposite Party No.2 rejected the claim on the ground that it had not received any claim documents in respect of the complainants’ claim.  The complaint was also rejected by opposite party No.3 on the ground that there was no privity of contract between the opposite party No.3 and the complainants and that it was informed by the opposite party No.1 to opposite party No.3 that record was not valid on the date of the death of the card holder.  Both opposite party No.2 and opposite party No.3 stated that premiums were not received for the month of June and July 2003 hence there was no question of paying any Insurance claim.  State Commission after considering contentions of all the parties and evidence on record allowed the complaint as under:-

“27.   Taking over all view of the matter, we deem that complainants are entitled for the insurance amount less the dues to OP No.1.  In the result we allow the complaint in the following terms:-

(i)     OP No.2 is liable to only to the extent of arrears of payment which were shown in the statement and to be paid to the OP No.1.

(ii)     OP No.3 is liable to pay insurance cover of Rs.3 lacs minus the premium which was due as on date.

28.    Payment shall be made within one month from the date of receipt of this order.

29.    Complaint is allowed and disposed off in the aforesaid terms.”

3.      Hence, the present appeals by the complainants and by the opposite party No.3.

4.   Heard the learned counsel for the parties and perused the record.

5.      The learned counsel for the complainants stated that the State Commission has allowed Insurance claim of Rs.3 lacs only in respect of the personal accident cover whereas the scheme provides for an insurance cover of Rs.25 lacs.  It is not clear as to on what basis the State Commission has arrived at a figure of Rs.3 lacs.  Nothing is mentioned in this regard in the Judgment and Order of the State Commission.  It was further stated by the learned counsel for the complainants that the opposite party no.1 had sent a letter dated 13.9.2003 in the name of the card holder that she should deposit the remaining dues or at least the minimum payable amount.  This clearly shows that the card was valid till then and no withdrawal of charge facility had happened before that as no notice was received by the card holder before her death or even before 13.9.2003 in this regard. Clearly the story of withdrawal of charge facility from the card is only applied to deny the insurance benefits to the card holder.  It is also clear from the fact that first the opposite party No.1 informed by their letter dated 30.08.2003 that the charge facility has been withdrawn with effect from 09.01.2001 and as this date was prior to even issuance of the card the opposite party no.1 changed this date vide their letter dated 13.09.2003 and communicated that charge facility was withdrawn with effect from 16.6.2003.  Not only this, in the written statement submitted by the opposite party No.1 it has been stated that the charge facility has been withdrawn from 16.6.2006 which has been submitted along with the affidavit.  Thus, the opposite party No.1 is giving three dates for withdrawal of the charge facility and this clearly means that they are not sure as to when the charge facility was withdrawn or whether it was withdrawn on any date. 

6.      It was further stated by the learned counsel for the complainants that the order of the State Commission has become final qua opposite party No.1 and opposite part No.2 as they have not preferred any appeal against that order. 

7.      Learned counsel for the opposite party No.1 stated that it was inadvertently informed earlier that the charge facility was withdrawn from 09.01.2001 whereas the fact is that the same was withdrawn with effect from 16.6.2003 because the card holder had not paid even the minimum amount required to sustain the card and also did not pay the required premiums for the two insurance covers under the scheme.  As the card holder has last paid only an amount of Rs.700/- on 5.5.2003 which is reflected in the statement dated 14.5.2003 which also mentions the renewal premium for the two insurance covers.  The next statement dated 14.6.2003 clearly indicates that the outstanding exceeded the credit limit of Rs.63,000/- and also indicates the renewal fees of Rs.2000/- due for renewal of the card with effect from July, 2003 till June, 2004.  No payments have been made either in June or July 2003 by the card holder.  As neither the minimum amount or any amount was paid by the card holder in June 2003 nor the Insurance premiums were paid therefore, the charge facility was withdrawn with effect from 16.6.2003 and the card holder was not entitled to any benefits under the scheme after this date.  The opposite party No.1 had to pursue with the card holder for getting the payment of the outstanding amount which was about Rs.76,000/- by the end of July and therefore, the letter dated 13.9.2003 was issued.  Clearly this does not mean that the card was valid till that date.  The statements sent on 16^th July and 13^th August, 2003 do not indicate any figures for two premiums and the same clearly speaks of the fact that the insurance cover was not there after 16^th June 2003.  Moreover, the renewal fee of Rs.2,000/- was not paid and therefore, the card was not renewed with effect from July, 2003 till June 2004.  It is clear that the card holder was not a valid card holder and was not covered under the Citibank Suraksha Scheme on her death on 30^th July, 2003. 

8.      The learned counsel for opposite party No.2 stated that he agrees with the contentions made by the learned counsel for opposite party No.1.

9.      The learned counsel for opposite party No.3 stated that he also agrees with the contentions raised by the learned counsel for opposite party No.1.  It was further stated by the learned counsel that there was no privity of contract between the card holder and opposite party No.3 as this was a group Insurance Scheme which was given by opposite party No.3 to opposite party No.1.  Once opposite party No.1 communicated to the opposite party No.3 that charge facility was withdrawn on the said card therefore, there could be no liability attached with the opposite party No.3 for paying any insurance amount.  Clearly the card holder did not pay any amount after 5^th May 2003 and even the premium was not paid from June 2003, therefore, the Insurance cover of the card holder had already lapsed as under the Scheme, monthly premium was to be paid.  The State Commission has wrongly allowed payment of Insurance claim by the opposite party No.3 to the complainants for Rs.3 lacs because the cover was not valid on the date of death of the card holder.   

10.    I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on the record.  The complainants have not denied the statements of accounts submitted by the opposite party No.1.  As per the statement of account dated 14.5.2003 it is revealed that there is an outstanding of Rs.65,870.15 and only payment of Rs.700/- has been made on 5.5.2003.  Premiums for the two insurance covers have been billed for Rs.62.56 and Rs.73.50.  Similarly in the bill dated 14^th June, 2003 the total outstanding has been stated to be Rs.70,846.39, which is more than the credit limit of Rs.63,000/-.  Two premiums of Rs.64.55 and 75.60 are also mentioned in this statement.  In the statement dated 16^th July, 2003 outstanding is stated to be Rs.73,751.34 as against the credit limit of Rs.63,000/- and there is no mention of any billing in respect of the two premiums.  Similar is the position in respect of the statement dated 13.8.2003.  These statements clearly show that the insurance premium have been paid only upto May, 2003.  There has been no payment for the months of June and July, 2003.  As the monthly premium was required to be paid under these two insurance policies and the premium was not paid for the month of June, 2003 clearly the policy would have stood lapsed for the card holder in July, 2003.  Moreover, the renewal fees of Rs.2,000/- has not been paid by the card holder and therefore, there was no renewal of the card with effect from July 2003 till June, 2004.  In effect it means that the card was not valid when the card holder died on 30^th July, 2003.  Consequently, the insurance covers were also not available to the card holder at the time of death of the card holder.

11.    Based on the above discussion, the appeal filed by the opposite party No.3 bearing No.536 of 2008 is allowed and the order of the State Commission dated 28.8.2008 is set aside qua the opposite party No.3.  However, opposite party No.3 is directed to pay Rs.1.5 lacs to the complainants as cost for condoning the delay in filing the present appeal.  In the light of the decision taken in FA No.536 of 2008 the appeal filed by the complainants being FA No.504 of 2008 stands dismissed.