1.       Challenge in this Revision Petition is to the order dated 25-03-2013, passed by Andhra Pradesh State Consumer Disputes Redressal Commission at Hyderabad (hereinafter referred to as ‘the State Commission’) in FA No.335 of 2012, against order dated 04-04-2012 in CC No.53 of 2009, passed by District Consumer Disputes Redressal Forum at Srikakulam (hereinafter referred to as ‘the District Forum’).

2.       Vide the impugned order, the State Commission has modified the order of the District Forum to the extent of the liability of the Revision Petitioner (hereinafter referred to as ‘the LIC’) and directed the Petitioner herein to pay an amount of Rs.2,00,000/- towards accidental benefit under the Policy together with interest @ 6% p.a. from the date of filing of the claim till the date of realization. The liability which was fastened on the Bank by the District Forum has been set aside.

3.       The facts, in brief, are that the Complainant’s husband by name, Sri Darapu Naidu, has opened an S.B. Account A.B. Jeevan Abhaya – 301234 with the second Opposite Party (hereinafter referred to as ‘the Bank’). It is averred that all Account Holders were offered life insurance cover with sum assured of Rs.1,00,000/- in the event of natural death of the Account Holder and Rs.2,00,000/- in the event of an accidental death. It was averred that the Account Holder, Sri Darapu Naidu, died in a road accident on 12-12-2008. The same was intimated to the Bank and a claim was also made on 16-02-2009 for an amount of Rs.2,00,000/-. Despite repeated requests the claim was not settled and the Complainant got issued a legal notice on 03-07-2009 to both, the LIC and the Bank, to pay the claim amount of Rs.2,00,000/-, but received no response.

4.       The LIC filed their Written Version admitting the receipt of legal notice dated 03-07-2009 and stated that a reply was issued on 04-07-2009 to the notice indicating that they did not receive any claim form from the Bank. A copy of the reply to the legal notice was also sent to the Bank. It was averred that, under Rule 28 of the Memorandum of Understanding (MoU) entered into between the Bank and the LIC, the claim was to be received within 180 days of the date of death failing which the claim cannot be considered for settlement. As no claim has been received within the stipulated period of time, the non settlement of the claim is justified. In the case of death due to accident, apart from the Death Certificate, the FIR, the Inquest Report, the Final Investigation Report and the Post Mortem Report are also to be submitted along with the claim form, which would be sent by the Bank to the LIC, through an authorized signatory of the Bank and the settlement of the claim would be considered after submission of all these documents. It was also averred that accidental cover under the Scheme was available only for three months i.e. from 01-12-2007 to 29-02-2008 and, in this case, since the Member/Account Holder died on 12-12-2008, the accidental benefit of additional sum assured is not available as per the MoU. Hence, the payment of Double Benefit Accident of Rs.2,00,000/- does not arise.

5.       The Bank filed a Written Version admitting that the Complainant’s husband had opened an Account under the Scheme called “A.B. Jeevan Abhaya”, the Bank Account Number being ABJ-301234. It was pleaded that the premium could not be collected for the coverage of insurance from this Account under prorata basis as the Complainant’s husband did not maintain the minimum balance with the Account as on 30-11-2008. The Complainant had also failed to submit the record, which is mandatory, as per the terms & conditions of the Policy; no claim was made by the Complainant to them in that regard; reply was also issued to the legal notice dated 25-07-2009; the terms & conditions of the Policy were violated and, therefore, the claim could not be settled and there is no deficiency on their behalf.

6.       The District Forum, on the basis of the evidence adduced, allowed the Complaint by directing the Bank to pay Rs.2,00,000/- to the Complainant towards Accidental Benefit under the Policy with interest @6% p.a. from the date of filing of claim till realization together with compensation of Rs.3,000/- and costs of Rs.1,500/-. The District Forum while allowing the Complaint observed as follows:

            “Evidence affidavits and brief written arguments of both sides filed. We heard both sides. Posted for orders. Orders are as follows. The learned counsel for both the parties advanced their brief written arguments reiterating what they have stated in the Complaint, Counter, Evidence Affidavits and brief written arguments. As per Rule 7 of the Memorandum of Understanding, the scheme envisages admission of members during the policy year irrespective of the entry date, premia are to be paid by way of proportionate premium from the first of month of joining till the close of the Policy year namely 30^th November every year. The proportionate rate are given in the Memorandum of Understanding and as per Rule 8, No Member shall withdraw from the scheme while he is still an eligible accountholder satisfying the conditions of eligibility described in Rule (4) until a letter is received from him in writing by the branch of the  bank where he was originally enrolled as a member, expressing his intent to withdraw from the scheme. Such a withdrawal will be effective from the next annual renewal date and similarly when an account holder closes his account, the coverage would be available to  him until the next annual renewal date. As per Rule 10 regarding payment of contributions the bank shall maintain a non-operative Jeevan Abhaya Premium collection account in their branches. As and when an account holder opens an ‘AB Jeevan Abhaya (ABJ), SBABJ and AB Jeevan Abhaya-Special Accounts’, the premium is debited from his account and credited to this non-operative J.A. collection account in the bank branch. The life insurance coverage in respect of any member will commence from the date of crediting the premium in the respective NOPC account and bank is solely responsible for recovering the premium and effecting the transfer of funds intra-bank to Nodal Branch on monthly basis and Corporation will not accept short payment of premium and the Corporation will not be liable to pay any claim in respect of a Member for whom the premium was not credited to the N.O. Jeevan Abhaya Collection Account in the Bank Branch.

                        On perusal of the entire material available on record, the arguments advanced from the Complainant’s side and both the opposite parties, it is very clear that the fault lies with the Andhra Bank and there is a clear deficiency of service on the part of the 2^nd opposite party i.e. Andhra Bank as it is the bounden duty of the Andhra Bank to collect the premium and remit to the LIC and even when there is no minimum balance in the account of the complainant, the Andhra Bank will have to remit the premium to LIC by debiting the account of the complainant and also issue notice to that effect but the 2^nd opposite party has miserably failed in discharing their duty, which amounts to deficiency in service.”

7.       Aggrieved by the said order, the Bank preferred an Appeal being FA No.335 of 2012 before the State Commission. The State Commission, placing reliance on the judgment of the Supreme Court in Delhi Electric Supply Undertaking Vs. Basanti Devi, AIR 2000 SC 43, exonerated the Bank and fastened the liability on the LIC.

8.       The learned counsel appearing for the LIC, vehemently, argued that the claim was never submitted to the LIC and that as per the Clause 10 of the MoU entered into between the Bank and the LIC, the Bank was solely responsible for recovering the premium and effecting transfer of funds intra Bank to Nodal Branch on monthly basis and also, as per the terms of the MoU, it was the Bank which has to forward the claim along with relevant documents, in case of accidental death, which was not done in the instant case; that in the absence of any claim which was required to be made within 180 days of the date of cause of action i.e. the date of accidental death, the claim could not be settled; that the State Commission has erred in fastening the liability on the LIC when the Bank did not forward the claim to the LIC as the premium itself was not deducted on account of lack of minimum balance in the Account of the  Account Holder.

9.       None appeared for the Bank despite receipt of notice.

10.     The learned counsel for the LIC has also relied upon the judgment of the National Commission in RP No.878 of 2007, LIC of India Vs. Jadhav Vijay Laxmi, dated 09-11-2012, in which it was held that the judgments relied upon by the State Commission cannot be squarely applied on the cases of Group Insurance Scheme.

11.     In the instant case, it can be observed from the record that the Bank had not deducted the premium and remitted the same to the LIC; that the MoU which was entered into between the Bank and the LIC clearly stipulated that the Bank alone is responsible for the deduction of the premium or remitting the same to the LIC and also for forwarding the claim with mandatory documents to the LIC within the time frame stipulated in the MoU, which we observe from the record that the Bank has not discharged.

12.     We find force in the contention of the learned counsel appearing for the LIC that they had no role to play since the claim was not received by them and that they were intimated only after the receipt of the legal notice on 03-07-2009. It is pertinent to note that Clause 10(3) and Clause 10(4) of the MoU entered into between the LIC and the Bank specifies that the Corporation/the LIC will not accept part/short payment of premium and that they will not be liable to pay any claim in respect of a member for whom the premium was not credited. The aforesaid Clauses make it very clear that the State Commission has erred in modifying the order of the District Forum and fastening the liability on the LIC.

13.     We are, therefore, of the considered view that the District Forum has rightly appreciated the facts and circumstances of the case and, relying upon the terms & conditions of the MoU, has rightly fastened the liability on the Bank.

14.     For all the aforenoted reasons and also the decision of the National Commission in RP No.878 of 2007, LIC of India Vs. Jadhav Vijay Laxmi dated 09-11-2012, we are of the considered view that the State Commission has erred in fastening the liability on the LIC. The Revision Petition is, therefore, allowed; the order of the State Commission is set aside and that of the District Forum is restored. Needless to add that the amount of Rs.2,56,800/- deposited before the District Forum, along with interest accrued, if any, shall be released to the Revision Petitioner herein.

15.     The Revision Petition stands disposed of with the aforenoted observations.