Date of Filing : 24.12.2008

Notice served on O.P.: 09.01.2009
Order Date:19.03.2009.

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

CHITTOOR

Present:- Sri. V. Parthasaradhi Rao, B.A., L.L.B., President

Kum.S.R.Sumathi, B.A., B.L., Female Member

Sri.K.Subramanyam Reddy, B.A., B.L., Male Member

Thursday, the (19th) Ninteenth Day of March, Two thousand and Nine

C.C. No. 03 /2009


Between


Dr.B.Santhamma, W/o Dr.G.Mruthyunjaya, Hindu,
aged about 60 years, Doctor by profession and
retired employee, residing at D.No.7-58/1,
Vasavi Nagar, Tirupati, Chittoor District.

… Complainant.


And

Andhra Pradesh Government Life Insurance
Represented by its Deputy Director, District
Insurance Office, Chittoor.

… Opposite party.

This complaint coming on before us for final hearing on 06.03.2009 and upon perusing the complaint, written versions, affidavits, material documents and on hearing Sri K.Suresh, counsel for the complainant and Sri B.V.Krishnamoorthy, counsel for the Opposite party and having stood over till this day for consideration, the Forum made the following:-

ORDER

DELIVERED BY KUM.S.R.SUMATHI, B.A., B.L., FEMALE MEMBER

ON BEHALF OF THE BENCH


This is a complaint filed by the complainant U/Sec. 12 of Consumer Protection Act to direct the Opposite Party to pay interest at 12% p.a. on Rs.42,615 /- for a period of 7 months which amounts to Rs.2,983/- and to pay compensation of Rs.10,000/- towards mental agony and damages and to pay Rs.2,500/- towards cost of the complaint.

The brief facts of the complaint are that the Complainant worked as Assistant Professor in S.V.Medical College, Tirupati and retired on 31.07.2006. During her services, she subscribed 2 Insurance Policies bearing No.474589-A, 474589-B with Opposite Party. The said policies were matured on 03.07.2006. The Complainant made an application dated 22.05.2006 for refund of the Insurance amount through her employer that is The Principal, S.V.Medical College, Tirupati vide letter dated 07.07.2006 and the said application was received by Opposite Party on 18.07.2006.

The Opposite Party has not settled the maturity amount. The Complainant and her husband approached the Opposite Party by coming to Chittoor from Tirupati at least 10 to 15 times, but Opposite Party has not settled the Policy amount. Having frustrated with the attitude of Opposite Party in refund of the matured amount, the Complainant and her husband stopped approaching the Opposite Party since April, 2007. At last a D.D. dated 25.05.2007 bearing No.169923 for a sum of Rs.42,615/- was dispatched on 14.06.2007 by Opposite Party to the Complainant. Though D.D. was purchased on 25 .05.2007 the same was dispatched after 20 days that is 14.06.2007. This shows
the negligent, irresponsible, careless and deficient acts of Opposite Parties in sending the amount to the Complainant.

The Complainant on 06.07.2007 sent a letter through her husband to the District Insurance Officer stating the above acts of its employees and her mental agony and her lost of considerable amount in the form of interest. In that letter, the Complainant also made request under Right to Information Act by enclosing a D.D. to know the reasons for the delay in payment and number of persons retired on or after 31.07.2006 and to how many persons refunded before refunded the Policy amount before 14.06.2007 and reasons for 20 days delay in dispatching the D.D. On 19.07.2007 the Opposite Party gave a reply with vague and unclear reasons for the delay occurred in refunding the maturity amount.

After lot of correspondence between the Complainant and Opposite party dated 04.08.2007, 13.08.2007 and 15.10.2007 the Opposite Party on 06.11.2007 by its letter stated that due to some irresponsible persons in its office the delay was occurred in sending the D.D. and explanation was called for from the persons who are responsible for causing delay. For the said delay in refunding the matured amount the Complainant has lost the interest for a period of 11 months. Even the 3 months has taken for refunding the matured amount by Opposite Party as reasonable time, the Complainant has lost interest for 7 months which amounts to Rs.2,983/- at 12% p.a. The Complainant claiming damages of Rs.10,000/- as compensation for mental agony and torture and for negligent and deficient acts of the Opposite Party and its employees. The Complainant has addressed two letters on 24.11.2007 and on 07.01.2008, demanding the Opposite Party to pay interest for a period of 7 months but there is no reply from the Opposite Party. Hence the complaint is filed seeking direction against the Opposite Party to pay interest of Rs.2,983/- for a period of 7 months and to pay Rs.10,000/- towards compensation and Rs.2,500/- towards cost of the complaint.

The brief facts of the written version are that the opposite party denied all the material allegations stated in the complaint and stated that the refund form of the complainant was received on 17.07.2006. At that time the workload was heavy with large number of refund cases and there is no sufficient staff to attend the work. The delay of 20 days in sending the Bank Draft of the complainant was due to lack or Service Postage Stamps in the office. As per A.P.G.L.I. Fund Rules and Government orders payment of interest on the A.P.G.L.I. amount does not arise. The Department is sending the Policy amount to the Policy Holders by way of D.D. to their residence by post. The Policy Holder need not approach the office for the Insurance amount. The office of the opposite party gave reply to the letters of the Husband of the complainant stating the above said circumstances and she is aware of the same. The complainant is a retired Assistant Professor and the Insurance amount of Rs.42,000/- is a small amount to her. Therefore all her financial commitments postpone are all false. The complainant is not entitled to any of the reliefs and there is no deficiency in service on the part of opposite party and the complaint is liable to be dismissed.

The Complainant filed her affidavit and the same is marked as PW.1 and filed 15 documents which are marked as EX.A1 to A15.

EX.A1 is the Copy of Policy bearing No.474589-A issued by the Opposite Party. EX.A2 is the Copy of Policy bearing No.474589-B issued by the Opposite Partry. EX.A3 is the Copy of the Refund application dated 22-05-2006 made by the Complainant through her employer to the Opposite Party. EX.A4 is the Copy of the letter dated 07-07-2006 forwarded by the Principal, SV MC, Tirupati. EX.A5 is the Cover sent by the Opposite Party. EX.A6 is the O/c of letter dated 06-07-2007 addressed by the husband of the complainant to the Opposite Party. EX.A7 is the letter dated 19-07-2007 sent by the 1st Opposite Party. EX.A8 is the O/c of letter dated 04-08-2007 addressed by the husband of the Complainant to the Opposite Party. Ex.A9 is the letter dated 25-08-2007 sent by the 1st Opposite Party. EX.A10 is the O/c of letter dated 31-08-2007 addressed by the husband of the Complainant to the Opposite Party. EX.A11 is the letter dated 29-09-2007 sent by the 1st Opposite Party. EX.A12 is the O/c of letter dated 15-10-2007 addressed by the husband of the Complainant to the Opposite Party. EX.A13 is the letter dated 06-11-2007 sent by the 1st Opposite Party. EX.A14 is the O/c of letter dated 24-11-2007 addressed by the husband of the Complainant to the Opposite Party. EX.A15 is the letter dated 07-01-2008 sent by the 1st Opposite Party.
Basing on pleadings and material available on record the points that arise for consideration are

1)Whether the Complainant is not a Consumer and Whether this Forum has no jurisdiction to entertain the complainant ?

2)Whether the Complainant is entitled to interest of Rs.2,983/- on
Rs.42, 615/- at 12% p.a. for a period of 7 months?
3)Whether there is any deficiency in service on the part of Opposite Party?

4)Whether the Complainant is entitled Rs.10,000/- towards deficiency of service?

5)To what result?

Point No.1 :-
The counsel for the opposite party argued that the complainant is not a consumer and this Forum has no jurisdiction to entertain the complaint and the consumer Protection Act is not applicable to the A.P.G.L.I.Rules. In this regard he relied on the decision reported in FA 197/01 in C.D No. 479/2000 – A.P.State Consumer Disputes Reddressal Commission, Hyderabad where in their lordships held that

“In this appeal preferred by the opposite party, it is firstly submitted that there is no question of hiring of service of opposite party by the complinant and it cannot be said that the complainant paid any consideration to the opposite party for rendering any service. We see sufficient force in the aforesaid contention. Being an employee in accordance with the rules and regulations an amount of Rs. 2/- per month was deducted from the complainant’s salary towards insurance. But when the opposite party sent the amount due, by cheque under registered post, it is merely discharging its official functions. Hence there is no question of payment of consideration by the complainant to the opposite party and hiring of the services of the opposite party for consideration. We therefore hold that the complainant is not a consumer”.

He also relied on the decision reported in FA 8/03 in C.D.No. 313/02 – on the file of A.P.State Consumer Disputes Redressal Commission, Hyderabad following the above said decision. According to me the above deicisions are not applicable to the present case in view of the rule laid down in 1998 – ALD – (Cons.) - 24 – at Page No.25 A.P.State Consumer Disputes Redressal Commission, Hyderabad delivered on the basis of 3 judges of Hon’ble Supreme court and 7 judges of Hon’ble Supreme Court and it reads as follows :-

“……In our view, the service of insurance cover being rendered by the Government of Andhra Pradesh cannot be considered as a free service or an incident of contract of personal service because the monthly premium was being collected by deducting the same from the salary of late Harikrishna……..”







In the said decision at page No.26 it was also relied on the decision reported in 1998 – ALD – 24 – Director of Insurance, A.P.Government, Hyderabad Vs G.Vijaya Lakshmi in FA No.749/1997 –in the above case their lordships held as follows :-

….it cannot be held that the A.P.Government Life Insurance Department was performing any sovereign function. Therefore, it must be treated as doing the business of insurance for remuneration because premium is being charged which is being collected by deduction from salary. In fact the reason given for refusing to pay the insurance amount on the basis of monthly premium of Rs. 50/- to the claimant was not that no consideration was received for the service but that proposal form signed by late Harikrishna was not furnished after the premium deduction was increased to Rs. 50/- per month.”
In the above decision their lordships considered the 3 judges bench of the Hon’ble Supreme Court in General Manager, Telecom Vs A.Srinivas Rao and others -1997 –S.C – 767 and also considered the 7 judges bench of Supreme Court in Bangalore Water supply and sewerage Board Vs A. Rajappa and came to conclusion that A.P.Government Life Insurance Department was not performing any sovereign function and it is doing business of Insurance for remuneration, because the premium is being charged. So in view of rule laid down in the above decision in this case the complainant is a subscriber of A.P.Government Life Insurance Department and the facts of the above case are directly applicable to the facts of this case and she is a consumer. Therefore this Forum has jurisdiction to entertain this complaint.
This point is answered accordingly.
Points 2 to 4 :-

The learned counsel for Complainant argued that the Complainant after her retirement on 13.07.2006 submitted her application to Opposite Party for refund of the Policy amount. Her application was reached to the Opposite Party on 18.07.2006. In spite of several personal approaches by her and her husband, the Opposite Party has not settled the Policy amount. At last after 11 months the Opposite Party sent the Policy amount under EX.A5 on 14.06.2007 by way of Bank Draft dated 25.05.2007. Therefore there is deficiency in service on the part of Opposite Party and the Complainant is entitled to interest and compensation. Evidencing the same, the Complainant filed her affidavit deposing the same facts as stated in the Complaint and EX.A5 the copy of Bank Draft Dt.25.05.2007 with covering letter and EX.A7 the letter from Opposite Party to the Complainant showing the admission by the Opposite Party that due to shortage of postage the Bank Draft was dispatched on 14.06.2007.
The learned counsel for opposite party argued the refund application form of the complainant was received on 17.07.2006 at that time the workload was heavy with large number of refund cases and there is no sufficient staff to attend the work and due to lack of Service Postage Stamps in the office, the Bank Draft of the complainant was send after 20 days. The said fact was intimated to the complainant and there is no deficiency in service on the part of opposite party as per A.P.G.L.I. Fund Rules and Government orders payment of interest on the A.P.G.L.I. amount does not arise.

As per material available on record it is seen that the Complainant sent a letter’s EX.A6, EX.A8 and EX.A10 through her husband to Opposite Party calling for explanation to the delay in settlement of the claim of the Complainant. For the letters EXs.A6, A8 and A10, the Opposite Party sent reply that is EX.A7 letter dated 19.07.2007, EX.A11 letter dated 29.09.2007 and EX.A13 letter dated 06.11.2007. A combined reading of EX.A7, A11 and A13 reveals the explanation offered by Opposite Party for the delay in settling the claim of the Complainant. As seen from EX.A7, it clearly shows 679 cases of the persons retired from 07/06 to 05/07 were settled prior to the date of Complainant’s settlement and offered explanation that some of the cases were settled on Medical priority basis. In EX.A11 the Opposite Party stated that delay was occurred due to non availability of budget and non functioning of Computer system with technical problem. Further in EX.A13, Opposite Party stated that due to some irresponsible persons of this office, the delay was occurred in sending Bank Draft and due to insufficient staff and heavy workload the cases are not settled in time.

All the explanation given by the opposite party was after settling the Policy amount of the complainant not before settling the claim. The explanation given by opposite party is not convincing. The contention of the complainant is that when she or her husband visited the office, the office staff of the opposite party gave blent and careless reply. When the retired people approach the office of opposite party for their claim of Insurance amount the staff of opposite party ought to have give reply modestly and they should not harass the retired people.
The opposite party ought to have settle the claim of the retired persons within 2 or 3 months from the date of Receipt of Refund application form. But it is an admitted fact that the claim of the complainant was settled 11 months after submission of application. Therefore there is delay in settling the claim of the Complainant by Opposite Party which amounts to deficiency in service on the part of Opposite Party. The counsel for the Complainant contends that the complainant lost interest for 7 months due to delay in settling the claim and claimed a sum of Rs. 2,983/- at 12% p.a. being the interest for the 7 months on the Policy amount. The opposite party contends that as per A.P.G.L.I Fund Rules and Government Orders payment of interest on the A.P.G.L.I amounts does not arise. In support of their contention the opposite party has not placed any material before this Forum. Therefore in the absence of material the Complainant is entitled interest at 9% P.A. on the Policy amount. The Complainant admitted 3 months will take for processing application and claimed interest for 7 months and he is entitled to Rs.2238/- for 7 months on Policy amount at 9% p.a. Further the Complainant contended that after submission of application to the Opposite Party the Complainant or her husband approached personally 10-15 times by traveling from Tirupati to Chittoor. But the Opposite Parties have not settled the amount and the Complainant frustrated with the attitude of the Opposite Party. The Complainant being a retired employee suffered lot of mental agony and mental torture. We agree with the contention of the Complainant. Therefore the Complainant is entitled to Rs.3,000/- as compensation for the mental agony suffered by her due to the deficiency in service on the part of Opposite Party.

Point 4:-
In the result the complaint is allowed in part directing the Opposite Party to pay a sum of Rs.2,238 (Rupees two thousand two hundred and thirty eight only) to pay Rs.3,000/- (Rupees three thousands only) towards mental agony and Rs.1,000/- (Rupees one thousand) towards cost of the complaint.