Karnataka

Chitradurga

CC/240/2018

Imthiyaz Khan - Complainant(s)

Versus

The Manager,LIC - Opp.Party(s)

Abdul Jaleel Zulfquar

20 Jul 2019

ORDER

COMPLAINT FILED ON:19/11/2018

DISPOSED      ON:20/07/2019

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA.

CC.NO:240/2018

 

DATED: 20^th JULY 2019

PRESENT :-         SRI.T.N.SREENIVASAIAH      :   PRESIDENT                                                     B.A., LL.B.,

SMT. JYOTHI RADHESH JEMBAGI

BSc.,MBA., DHA.,         :     LADY MEMBER

                             SRI. SHIVAKUMAR.K.N         :     MEMBER

                                      M.Com., LL.B.,

……COMPLAINANT/S	Imthiyaz Khan, S/o Rahim Khan, Age: 55 Years, R/o Darji Colony, Gopalpur Road, Chitradurga (Nominee of LIC Policy Holder Bearing Policy No.629998031)   (Rep by Sri.Abdul Jaleel Julfiquar, Advocate)
V/S
…..OPPOSITE PARTIES	1. The Manager, Life Insurance Corporation of India, Branch Office, Branch Office, Chitradurga (700), P.B. Road, Chitradurga-577 501.   2. The Block Education Officer, Chitradurga.   (Rep by Sri.L. Madhusudan, Advocate for OP No.1 and OP No.2 in-person)

ORDER

SRI. T.N. SREENIVASAIAH:   PRESIDENT

The above complaint has been filed by the complainant u/Sec.12 of the C.P. Act, 1986 for the relief to direct the OP No.1 to settle the benefits of the death claim under Policy No.629998031 with interest and to grant such other relief.

2.      The brief facts of the case of the above complainant are that, he is the husband of policy holder by name late Smt. Annapurnamma, who insured her life with the OP No.1 under policy No.629998031 covering the risk for the sum assured.  The complainant is a nominee under the said policy.  The policy is a monthly installment basis remitting the installment through salary of the policy holder.  It is further submitted that, unfortunately on 06.02.2018, the wife of the complainant was expired.  From the date of commencement of the policy i.e., 06.09.2016 till October 2017, the installment amount of Rs.1,742/- has been duly deducted from the salary of policy holder.  After her death, the complainant presented the claim form, claiming benefits of the policy being a nominee before the OP No.1 with all necessary documents.  OP No.1 has given letter dated 31.05.2018 stating that, no claim is admissible on the lapsed policy.  It is further submitted that, there were no dues in respect of payment of installments as it is internal arrangement and management from the Education Department to the OP No.1.  Neither the policy holder nor the complainant have received any notice from the OP No.1 with regard to lapse of policy.  Thereafter, the complainant has issued letters to the office of the Insurance Ombudsman, Bangalore and the Grievance Redressal Officer, LIC of India, Mumbai informing about the non-settlement of the claim made by him through RPAD, the same have been duly served, but no reply have been received by the complainant.  The complainant being the nominee of the policy holder is duly entitled for the claim and benefits from the OP No.1 under the above said policy, therefore, the complainant is a consumer under OP No.1.  Non settlement of the policy benefits in favour of the complainant amounts to deficiency in service, which caused heavy loss, pain and inconvenience to the complainant.  It is further submitted that, it is the bounden duty of the OPs to intimate to the policy holder about nonpayment of the installments towards the policy, as it was an internal arrangement between two Departments through official communication.  Non intimating or informing the fact of installment dues and loss of pay by the OPs to the policy holder during her life time or before presentation of the claim petition amounts to default on the part of OPs and they cannot take shelter under the pretext for non-settlement of the policy benefits, therefore, the OP No.1 is legally bound to settle the claim of the complainant.  The cause of action arose within the jurisdiction of this Forum and prayed for allow the complaint.

 3.     On service of notice, OP No.1 appeared through Sri. L. Madhusudhan, Advocate and filed version.  OP No.1 appeared in person but not filed version, therefore, the version of OP No.2 is taken as not filed. 

According to the version filed by the OP No.1, it is submitted that, the deceased M. Annapurnamma was proposed for insurance for a sum of Rs.3,00,000/- under salary savings mode with date of commencement as 06.08.2016 for a premium amount of Rs.1,742/- by signing a proposal on 01.09.2016 along with authorization letter addressed to her employer i.e., BEO, Chitradurga regarding monthly recovery and remittance of installment from her salary and remit the same to LIC.  The OP No.1 has considered her proposal for insurance under non-medical scheme and granted the policy No.629998031.  The complainant is the nominee under the said policy.  The deceased Annapurnamma is also having one more insurance policy bearing No.623955088 for a sum of Rs.1,00,000/-, the same has been settled by the OP No.1 for a sum of Rs.1,91,532/- even though the premiums were not received from 11/2017 as the premiums were received for more than five years.  It is denied that, there was an arrangement of remitting the premium from Bank from the salary of deceased policy holder.  The recovery of premiums by the employer based on the authorization letter and remittance to LIC is an arrangement between the employer and employee for the welfare of his employee and LIC has nothing to do with it except to send the authorization letter collected while issuing the policy and adjust the premiums as and when received through the employer to the respective policies.  Clause No.22, it is mentioned that, in the event of premium dues not remitted to the Corporation either by the employer or the Life Assured/Proposer and the policy becoming lapsed the liability of the Corporation under the mentioned policy will be restricted to the extent of the premiums actually received by it, no further relief for any claim shall lie with the corporation.  The life assured has consented this Clause 22, which is binding on her, hence, the OP No.1 is not responsible for non-receipt of the premiums from November 2016 onwards.  Further it is submitted that, OP No.1 has received the premiums under the policy from September 2016 to October 2017 through the employer and it came to know that, Smt. Annappurnamma, the life assured under the policy died on 03.02.2018 as she was suffering from Renal Cell Carcinoma with brain metastasis, the death is within 01 year 05 months from taking the policy, which attracts Sec.45 of the Insurance Act where under the claim is liable to be repudiated.  It is further submitted that, the policy was in lapsed condition as on the date of death of life assured i.e., on 06.02.2018, due to non recovery and remittance of premium from 11/2017 onwards.  As per condition No.4 mentioned on the policy bond, if less than three years premium have been paid in respect of this policy and any subsequent premium be not duly paid, all the benefits under this policy shall cease after the expiry of grace period from the date of first unpaid premium and nothing shall be payable.  Therefore, the OP No.1 informed the complainant through letter dated 31.05.2018 that as the death of the life assured during the period of lapse and without acquiring any paid up value, nothing is payable as death claim under the policy.  It is further the deceased was well within the knowledge that, she was on sick leave and salary for the respective month is not paid, hence the deductions which are liable to be made from salary are not done. The policy is in lapsed condition and hence, the OP No.1 is not liable to pay the amount as claimed by the complainant as there is no deficiency of service on their part and hence, prayed for dismissal of the complaint.     

      4. Complainant himself has examined as PW-1 by filing affidavit evidence and the documents Ex.A-1 to A-6 were got marked and closed his side. On behalf of OP No.1, one Sri. B. Shamanna, the Administrative Officer has examined as DW-1 by filing the affidavit evidence and Ex.B-1 to Ex.B-6 documents have been got marked and closed their side.  

 

5.      Arguments heard.

6.      Now the points that arise for our consideration for decision of above complaints are that;

(1)  Whether the complainant proves that the OP No.1 has committed deficiency of service in settling the claim under the above said insurance policy and entitled for the reliefs as prayed for in the above complaint?

              (3) What order?

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

                    Point No.1:- Partly in Affirmative. 

Point No.2:- As per final order.

 

REASONS

8.      Point No.1:- There is no dispute between the parties that, the wife of the complainant by name late Smt. Annapurnamma has insured her life with the OP No.1 under policy No.629998031 and the complainant is a nominee under the said policy.  The monthly premium amount has been remitted through salary of the policy holder.  Unfortunately on 06.02.2018, the life assured was died.  From the date of commencement of the policy i.e., 06.09.2016 till October 2017, the installment amount of Rs.1,742/- has been duly deducted from the salary of policy holder.  After her death, the complainant presented the claim form, claiming benefits of the policy being a nominee before the OP No.1 with all necessary documents.  But, the OP No.1 repudiated the claim stating that, no claim is admissible as the policy is in lapsed condition.  Complainant argued that, there were no dues in respect of payment of installments as it is internal arrangement and management from the Education Department to the OP No.1.  Neither the policy holder nor the complainant have received any notice from the OP No.1 with regard to lapse of policy.  The duty of the insurance company is to inform them about non receiving of the premium amount.   The complainant being the nominee of the policy holder is duly entitled for the claim and benefits from the OP No.1 under the above said policy.  It is the bounden duty of the OPs to intimate to the policy holder about nonpayment of the installments towards the policy, as it was an internal arrangement between two Departments through official communication.  Non intimating or informing the fact of installment dues and loss of pay by the OPs to the policy holder during her life time or before presentation of the claim petition amounts to default on the part of OPs and they cannot take shelter under the pretext for non-settlement of the policy benefits.  When the Insurance company accepted the policy from the life assured, it is the duty of the Insurance company to settle the amount under the policy, but the OP/Insurance company failed to settle the claim of the complainant, which is a deficiency of service.  It is argued by the OP No.1 that, the wife of the complainant deceased Smt. M. Annapurnamma has obtained insurance policy for a sum of Rs.3,00,000/- under salary savings mode with date of commencement as 06.08.2016 for a premium amount of Rs.1,742/- by signing a proposal on 01.09.2016 along with authorization letter addressed to her employer i.e., B.E.O, Chitradurga regarding monthly recovery and remittance of installment from her salary and remit the same to LIC.  The OP No.1 has considered her proposal for insurance under non-medical scheme and granted the policy No.629998031.  The complainant is the nominee under the said policy.  The deceased Annapurnamma is also having one more insurance policy bearing No.623955088 for a sum of Rs.1,00,000/-, the same has been settled by the OP No.1 for a sum of Rs.1,91,532/- even though the premiums were not received from 11/2017 as the premiums were received for more than five years.  The recovery of premiums by the employer based on the authorization letter and remittance to LIC is an arrangement between the employer and employee for the welfare of his employee and LIC has nothing to do with it except to send the authorization letter collected while issuing the policy and adjust the premiums as and when received through the employer to the respective policies.  Clause No.22, it is mentioned that, in the event of premium dues not remitted to the Corporation either by the employer or the Life Assured/Proposer and the policy becoming lapsed the liability of the Corporation under the mentioned policy will be restricted to the extent of the premiums actually received by it, no further relief for any claim shall lie with the corporation.  The life assured has consented this Clause 22, which is binding on her, hence, the OP No.1 is not responsible for non-receipt of the premiums from November 2016 onwards.  OP No.1 has received the premiums under the policy from September 2016 to October 2017 through the employer and it came to know that, Smt. Annappurnamma, the life assured under the policy died on 03.02.2018 as she was suffering from Renal Cell Carcinoma with brain metastasis, the death is within 01 year 05 months from taking the policy, which attracts Sec.45 of the Insurance Act where under the claim is liable to be repudiated.  The policy was in lapsed condition as on the date of death of life assured i.e., on 06.02.2018, due to non recovery and remittance of premium from 11/2017 onwards.  As per condition No.4 mentioned on the policy bond, if less than three years premium have been paid in respect of this policy and any subsequent premium be not duly paid, all the benefits under this policy shall cease after the expiry of grace period from the date of first unpaid premium and nothing shall be payable. 

  9. We have gone through the entire documents filed by the complainant and the OP No.1.  The Ex.A-4, the policy shows that, the deceased A. Annapurnamma has obtained insurance policy for a sum of Rs.3,00,000/- and she was paying monthly premium amount of Rs.1,742/- through her salary regularly.  Ex.B-4 shows that, the deceased life assured was died on 06.02.2018, the salary has not been drawn during the period from 30.10.2017 to 28.02.2018 as she was under LWP for her health reason.  Ex.B-5, the certificate of Hospital Treatment shows that, the deceased life assured was admitted to the Hospital on 03.02.2018 and died on 06.02.2018.  The contention of the OP No.1 is that, there was a due in paying the premium amount and the life assured was died within 1 year 05 months and therefore, the complainant is not entitled for the insured amount as per the terms and conditions, which is not sustainable under law and further the OP argued that, in case of failure to pay the premium amount, the policy of the life assured automatically lapsed, but the same is not correct because, the insurance policy is a life assured policy.  When the life assured was suffering from illness, how can she attend her duties and to pay the premium amount under the policy.  When the policy was accepted and the premium amount has been received from the life assured from the life assured, the duty of the OP/insurance company is to settle the claim of the complainant.  Therefore, viewed from any angle, we find that, the OP No.1 has committed deficiency of service in settling the claim of the complainant under the insurance policy.  Accordingly, this Point No.1 is held as partly affirmative to the complainant.          

            10.     Point No.3:- As discussed on the above point and for the reasons stated therein we pass the following:-

ORDER

The complaint filed by the complainant U/s 12 of CP Act 1986 is hereby partly allowed.

It is ordered that, the OP No.1 is hereby directed to pay a sum of Rs.3,00,000/-, the sum assured under Policy No.629998031 to the complainant along with interest at the rate of 2% p.a from the date of commencement of the policy till realization. 

It is further ordered that, the OP No.1 is hereby directed to pay Rs.20,000/- towards mental agony and Rs.10,000/- towards costs of this proceedings to the complainant.  

The complaint filed as against OP No.2 is hereby dismissed.

It is further ordered that, the OP No.1 is hereby directed to comply the above order within 30 days from the date of this order.

(This order is made with the consent of Member after the correction of the draft on 20/07/2019 and it is pronounced in the open Court after our signatures)        

 

                                     

LADY MEMBER           MEMBER          PRESIDENT

-:ANNEXURES:-

Witnesses examined on behalf of Complainant:

PW-1:  Complainant by way of affidavit evidence.

Witnesses examined on behalf of OPs:

DW-1:  Sri.B. Shamanna, the Administrative Officer of OP No.1 to 3 by way of affidavit evidence. 

Documents marked on behalf of Complainant:

01	Ex-A-1 & 2:-	Copy of notices
02	Ex-A-3:-	Postal receipts
03	Ex-A-4:-	Policy
04	Ex-A-5:-	Claimants statement
05	Ex-A-6:-	Certificate by employer

Documents marked on behalf of OPs:

01	Ex-B-1:-	Policy
02	Ex.B-2:-	Proposal form
03	Ex.B-3:-	Letter of authorization
04	Ex.B-4:-	Endorsement dated 20.04.2018 by BEO, Chitradurga
05	Ex.B-5:-	Medical attendants certificate
‘06	Ex.B-6:-	Copy of premium ledger

 

 

 

LADY MEMBER           MEMBER                      PRESIDENT

Rhr**