Karnataka

Kolar

CC/3/2019

Kashinath S.Biradar - Complainant(s)

Versus

The Manager, Life Insurance Corporation of India - Opp.Party(s)

Sandhya T.S & T.R.Jayarama

30 May 2019

ORDER

Date of Filing: 09/01/2019

Date of Order: 30/05/2019

BEFORE THE KOLAR DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, D.C. OFFICE PREMISES, KOLAR.

 

Dated: 30^th DAY OF MAY 2019

PRESENT

SRI. K.N. LAKSHMINARAYANA, B.Sc., LLB., PRESIDENT

SMT. A.C. LALITHA, BAL, LLB.,  ……  LADY MEMBER

 

CONSUMER COMPLAINT NO. 03 OF 2019

Kashinath S. Biradar,

S/o. Shiva Gangappa Gouda,

Aged About 57 Years,

R/at: Sadashivanandanagara,

Bhairdevarakoppa,

Hubli, Navanagar.                                                 ….  COMPLAINANT.

(Rep. by Sri.T.R. Jayarama, Advocate)

 

- V/s -

1) The Manger,

Life Insurance Corporation

Of India, K.G.F Branch,

K.G.F. Kolar District.

(Rep. by Sri.A.V.Ananda, Advocate)

 

2) The Accounts Officer,

C.O & M Division,

BESCOM, K.G.F.

(Exparte)                                                                       …. OPPOSITE PARTIES.

-: ORDER:-

BY SMT. A.C. LALITHA, LADY MEMBER,

01.   The complainant having submitted this complaint as envisaged Under Section 11 & 12 of the Consumer Protection Act, 1986 has sought for issuance of directions to OPs to pay the entire assured amount of the deceased in respect of policy vide No.361676928 along with accidental death benefits with interest.

 

02.   The facts in brief:-

(a)    It is the contention of the complainant that, the deceased Sri. Shidramappa Gouda Biradar was the son of the complainant who was working as lineman in BESCOM, Mulbagal, and was died on 29.06.2016 while in service and he was insured with the OP vide policy No.361676928 on 28.10.2015 and the premium is fixed for Rs.1,256/- per month and the said premium has to be deducted in the salary of the deceased and thus the OP has deducted the premium amount from his salary. 

 

(b)    It is further contended that, after the death of his son, the complainant approached OP to settle the policy claim, but the OP instead of settling the same has issued endorsement dated: 22.02.2017 stating that, the deceased was default in payment of premium amount for the months of December-2015, January-2016 and February-2016.  But it was not noticed to the deceased during his life time and not issued any prior notice or intimation by the OPs in this regard and thus OPs have rendered due negligence in their service.  So contending, the complainant has come up with this complaint by seeking the above set-out reliefs.

 

03.   In response to the notice issued by this Forum, OP No.1 has put in its appearance through its learned counsel and submitted written version.  On perusal of the order-sheet it reveals that, OP No.2 has placed exparte.

 

04.   It is contention of the OP No.1 that, by denying the pleadings of the complainant it is specifically contended that, Life Insurance Corporation of India was created under LIC Act, 1956.  It has floated a scheme “Salary savings Scheme” which envisaged a Life insurance Policy for the Salaried Class Employees both Government and Non-Government.  A Tripartite Agreement will be entered between Life Insurance Corporation of India, Employer and Employee (to be insured).  It is simple, economical plan whereby employees may obtain Life Insurance Protection for their families and retirement income for themselves under advantageous conditions which might not be available to them otherwise.  This is accomplished by saving automatically deducted from their pay/salary and remitted to Life Insurance Corporation of India once in a month.  This is not a Group Insurance.  Each Employee owns his Policy individually and he is entitled to all its Benefits and can continue policy even in the event of any change in employment.  As per Tripartite Agreement the Demand Invoice will be sent to the Employer every month to deduct the monthly premiums agreed upon by the Employees as per the Authorization Letter and Addendum signed by each Employee.  The Employer accepts the responsibility of deducting the premiums from the Salaries and sends the same to the Life Insurance Corporation of India by one cheque.  The Employer will be paid 1/8% commission for the above act.  As per the Agreement no form of individual premiums due Notice or Receipts will be sent to the concerned Employees by the Life Insurance Corporation of India (Corporation), which clearly shows that, the entire responsibility was thrust upon the Employer by the Corporation. 

 

(a)    It is further contended that, the complainant has not at all exhausted all the remedies available to him before approaching the Hon’ble Forum.  On this ground it is liable to be dismissed with cost.  There is an internal mechanism established by the OP No.1 for settlement of claims and it also provides for representation to be made to the Zonal Office at Hyderabad in case claimant is dissatisfied with the decision taken by the Senior Divisional Manager.

 

(b)    The OP No.1 admits the pleadings partly as Shidramappa Gouda Biradar during his life time had availed Life Insurance policy while he was working as a Lineman at BESCOM, Mulbagal, details furnished hereunder:-

Policy No.	Sum Assured	Date of Commencement	Plan & Term	Premium	Mode of payment
361676928	3,00,000	28.10.2015	814-20-20	1256.00	Mly-SSS

 

This OP does not agree with the allegations made in complaint that Premiums were deducted by the Employer from the Salary of deceased Life Assured Shidramappa Gouda Biradar.  The monthly SSS Demand Invoice had been sent to the Employer as there was a Tripartite Agreement between Life Insurance Corporation of India (OP No.1), BESCOM (Employer-OP No.2) and Shidramappa Gouda Biradar (Employee) intimating that, the due premiums to be recovered from the Salary of employee and remitted to Life Insurance Corporation of India within scheduled time on the basis of Authorization Letters and Addendum submitted by the Employee at the inception of the Salary Savings Scheme.

 

(c)    It is further contended that, the letter of intimation of death due to accident on account of electrocution on 29.06.2016 was received along with original Death Certificate on 27.01.2017.  While processing the death claim OP No.1 noticed that, there were gaps in the premiums for the months of December-2015, January-2016 and February-2016 on account of same the policy resulted in to lapsed condition.  The deceased Life assured expired on 29.06.2016 within a span of about eight months after taking the policy.  As per the policy conditions and the privileges applicable to the policy, it has not acquired any paid-up-value and no concession and relaxations are applicable, as such nothing was payable under the policy and the same was intimated to the claimant vide letter dated: 22.02.2017 and so there is no deficiency in service on their part.  Therefore OP No.1 has prayed for dismissal of the complaint with exemplary cost. 

 

05.   The complainant has submitted his affidavit evidence by way of examination-in-chief and also submitted the below mentioned documents and citations:-

(i) True Copy of the FIR and complainant charge-sheet – Annexure-1 to 8.

(ii) True copy of the Post-mortem report – Annexure-9 & 10.

(iii) Copy of the Death Report – Annexure-11.

(iv) Copy of endorsement dated: 22.02.2017- Annexure-12.

(v) Copy of LIC – Annexure-13.

(vi) Copy issued by the BESCOM department dated: 04.05.2017-Annexure-14.

(vii) Copy of salary certificate from December-2015 to May-2016 – Annexure-15 to 20.

(viii) Judgment copy of Hon’ble National Commission in R.P. No.4150/2007 between Life Insurance Corporation Of India & Others –V/s- Smt. Ram Sakhi & Others dated: 08.02.2007.

 

06.   Sri. V. Narayan, S/o. Vonappa, Manager of OP No.1 has sworn to his affidavit and submitted by way of examination-in-chief and also submitted below mentioned documents:-

(i) Copy of Authorization Letter – Exhibit-D.1

(ii) Copy of Addendum to the application for Insurance under SSS – Exhibit-D.2

(iii) Copy of letter addressed to the complainant by the employer – Exhibit-D.3

(iv) Copy of Policy Bond No.361676928 – Exhibit-D.4

 

07.   Heard arguments of both counsel appearing for both parties and also submitted written arguments of both Learned counsel too.

08.   Therefore the points that do arise for our consideration are that:-

(1) Is there any deficiency in service on the part of OPs as alleged by the complainant?

 

(2) If so, whether the complainant is entitled for the relief as he sought?

 

(3) What order?

 

09.   Our findings on the above stated points are:-

POINT Nos.(1) & (2):-       Are in the Affirmative

POINT No.(3):- As per the final order

for the following:-

REASONS

POINTS Nos.(1) & (2):-

10.   To avoid repetition in reasonings and as these points do warrant common course of discussion, the same are taken up for consideration at a time.

 

(a)    OP No.1 has contended that, it has repudiated claim of complainant vide letter dated: 22.02.2017 as the policy was lapsed due to non-remittance of premiums for the period of December-2015, January-2016 and February-2016.

 

(b)    Contrary to this, the learned counsel for complainant contended as, if so as contended by OP No.1, it has not given any notice to him for the same and it has accepted the rest of the premiums with death of the insurer.  In support of it the said counsel has submitted citation of Hon’ble National Commission, New Delhi, in Revision Petition No.4150/2007.

 

(c)    On perusal of entire records of the case of both parties, there is nothing document nor evidence by the side of OP No.1 to show that prior to lapse of the policy through notice for communication asking to pay the premium to the deceased.  And if it was the case of lapse of policy, why were payments of rest of premiums was accepted by OP No.1 would be the question?  The letter dated: 22.02.2017 clearly reveals that, there was deduction of amount from deceased payment towards LIC premium by OP No.2 and remitted to OP No.1.  The three months non-remittance was the fault of OP No.2 and not by deceased/insurer.  Therefore it cannot be said that, policy holder was in default.  Thus OP No.2 has rendered deficiency in service of non-remittance of premium after deduction, hence liable to pay the compensation for it.

 

(d)    Here it is worth to note the principles enunciated in the citation submitted by the learned counsel appearing for complainant reads thus:-

Revision Petition No.4150/2007:-

“Default and Final Lapse Notice:-

“Any default in payment of premia should be communicated to the employer on a special form No.5227.  If the premiums remain unpaid for 06 months, a lapse intimation should be sent to the employee.  A lapse register is also to be maintained for preparing statistics in respect of lapses.

 

“Section 50 of the Insurance Act, 1938”

“An Insurer shall, before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid, give notice to the policy holder informing him of the options available to him unless these are set forth in the policy”.

 

“On non-receipt of the premium the Insurance company since not followed see 50 and its failure to do so could not deprive the insured of the benefits under the policy.  Hence liable to pay the assured claim”.

 

(e)    Therefore we consider that with the above discussion this citation is directly applicable to the present case on hand as, the OP No.1 has not followed Section 50 of Insurance Act and also accepted rest of the premiums and also on perusal of insurance policy vide No.361676928 revealed “Period during which premium payable - Till the stipulated due date of the payment of last premium or earlier death of the Life Assured”.  Hence in the present case since the insured person died and premiums paid till his death.  Therefore as per this condition the policy is in active condition itself.  On perusal of the entire complaint the complainant has not at all stated who are all the legal representatives of the deceased and all the legal representatives are entitle for equal share in the award amount.

(f)     Thus in the present case insured was died on 29.06.2016 and by the aforesaid discussion the said policy is in active status and cannot be consider as lapsed and the OP has intimated about declined the amount as per the letter dated: 22.02.2017.  By repudiating claim on this ground OP No.1 has rendered deficiency in service and liable to pay the assured sum as per policy vide No.361676928 as well as accidental death benefits of insured to the nominee of the said policy. Accordingly we answer point Nos.1 & 2 are in the affirmative.

POINT (3):-

11.   In view of the above discussions on Point Nos. (1) & (2) we proceed to pass the following:-

ORDER

01.   For foregoing reasons this complaint stands allowed with cost of Rs.2,000/- as against OP Nos.1 & 2 as hereunder:-

 

(a)    The OP No.1 is herewith directed to pay the assured sum of the insurance policy vide No. 361676928 as well as accidental death benefits of insured and compensation of Rs.5,000/- together with interest @ 6% p.a. from the date of repudiation till realization to the complainant within 30 days from the date of communication of this order.

(b)    OP No.2 is herewith directed to pay the compensation of Rs.3,000/- to the complainant.

 

(c)    All the legal representatives of the deceased are entitle for the equal share of the said award amount.

 

05.   Send a copy of this order to both parties free of cost.

(Dictated to the Stenographer, transcribed by him, corrected and then pronounced by us on this 30^th DAY OF MAY 2019)

 

 

 

LADY MEMBER                         PRESIDENT