Punjab

Ludhiana

CC/15/416

Surinder Singh - Complainant(s)

Versus

LIC of India - Opp.Party(s)

Sharwan Sehgal Adv.

09 Jan 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. 416 of 09.07.2015

Date of Decision            :   09.01.2018

 

Surinder Singh Arora aged about 70 years son of Shri Dharam Singh, resident of B-X-245, Chowk Neem Wala, Ludhiana. 

….. Complainant

                                                         Versus

 

1.LIC of India, Opp. Bhadaur House, CPO Road, Ludhiana through its Branch Manager.

2.Punjab National Bank, Karimpur Bazaar, Ludhiana through its Manager.

Opposite parties

 

 

             (Complaint U/s 12 of the Consumer Protection Act, 1986)

 

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.VINOD GULATI, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant            :         Sh.Sharwan Sehgal, Advocate

For OP1                         :         Sh.Rajeev Abhi, Advocate 

For OP2                         :         Sh.R.K.Chauhan, Advocate

 

PER G.K.DHIR, PRESIDENT

 

1.                Complainant got his daughter namely Ms.Anukirat Kaur, resident of B-X-245, Street Jat Buta Singh, Neem Wala Chowk, Ludhiana insured with OP1 by paying premium amount through ECS mandate from his saving account No.028100010017935 existing with OP2. Monthly premium installment of Rs.1021/- was used to be credited through ECS mandate. Complainant is nominee of his daughter. Policy No.302312904 was issued. Premium for more than one year was regularly paid. Complainant received letter dated 3.5.2014, which was received by him on 3.7.2014 from OP1 containing averments that premium amount has not been received from the bank. Writing was given by OP2 to OP1 in that respect, through which it was disclosed as if complainant is not having account No.028100010179735 with OP2. On 5.7.2014, the daughter of complainant expired unfortunately. Complainant informed the whole set of circumstances to Op1 on 23.7.2014. Notice through counsel was issued to OP2 on 22.7.2014. Problem regarding non-deposit of premium occurred due to some lapse on the part of OP1 or OP2. Account number as mentioned in the letter sent by OP1 to OP2 was 028100010179735, albeit the correct account number was 0281000100179735. For this lapse on the part of OPs, complainant cannot be made to suffer, particularly when he is having the above said account for the last 25 years. After receiving letter from the complainant, OP1 issued one letter dated 24.7.2014 for calling upon the complainant to deposit the amount of Rs.4133/-, which was duly deposited on 26.7.2014 by the complainant. Complainant was required to submit the documents regarding claim pertaining to the death of his daughter and formalities in that respect were complied with. Again complainant  received letter dated 3.9.2014 regarding payment of premium, despite the fact    that the same had already been paid on 26.7.2014. Reminder dated 10.10.2014 was sent by the complainant, but he was shocked to receive letter dated 6.12.2014, through which it was disclosed as if premium has not been deposited by the complainant since from April 2014 to July 2014. Repudiation of claim alleged to be illegal, being violative of the principles of natural justice. By pleading deficiency in service on the part of OPs, prayer made for directing OPs to pay the insured amount of Rs.2,50,000/- with compensation for mental pain, agony and harassment of Rs.7,50,000/-.

2.                In written reply submitted by OP1, it is pleaded interalia as if complaint barred in view of section 26 of the Consumer Protection Act (hereinafter in short referred to as ‘Act’); in view of involvement of intricate question of law and facts requiring elaborate evidence, the matter needs be got decided from the Civil Court of competent jurisdiction; complaint bad due to non-joinder of necessary parties because  legal heirs of deceased Anukrit Kaur are     not impleaded as party; complainant has no locus standi to file the present complaint; complainant is estopped by his own act and conduct from filing this complaint, more so when he has concealed the material facts from this Forum. OP1 after receipt of the claim, duly registered, entertained and processed the same. Admittedly, Ms.Anukrit Kaur had obtained LIC Jeevan Saral with profits policy bearing No.302312904 with validity from 28.1.2013 with plan Table 165 Term 35 for insured sum of Rs.2,50,000/- on payment of monthly installment of     Rs.1021/-, but subject to the conditions and privileges mentioned in the policy. Condition No.3 provides for revival of discontinued policy during lifetime of the assured, but within a period of 5 years from the date of first unpaid premium and before the date of maturity, subject to the submission of proof of continued insurability to the satisfaction of OP1 as well as payment of all the arrears of premium together with interest compounding half yearly at such rate as may be fixed by the insurance corporation from time to time. Payment of premium as such is a pre-requisite for subsistence and validity of the insurance policy. At the time of obtaining the insurance policy, the life assured and the complainant had submitted Annexure I with OP1, which was containing mandate form for paying premium through electronic clearing service(debit clear-ECS mode). That ECS mandate was to be honoured on account of the funds in account of complainant available with OP2. That mandate form was duly signed by the life assured Anukrit Kaur along with complainant and thereafter, the same was countersigned by the bank officials with their seal and stamp. Said form clearly mentions that premium will be paid every month through ECS mode. In Annexure I itself, it was mentioned that mandate will remain the integral part of the policy. So OP2 was to deduct the sum of Rs.1021/- every month for transmitting the same as premium to Op1. It was the  duty of the assured to arrange the regular payment of premium to LIC of         India before its due date, herself or through account of third party namely complainant. If the premium is discontinued from ECS, then the premium to be paid or deposited at the cash counters through cheque or cash. LIC of India is not to call upon the banker of the complainant or the life assured to arrange for deducting the premium every month from the account of the complainant. OP2 paid the premium from the date of inception of the policy namely 28.1.2013 till March 2014 through ECS mandate, but thereafter, OP2 stopped making payment from April 2014 onwards resulting in lapse of the policy from the date of death of the assured Anukrit Kaur namely 5.7.2014. It is also admitted by the complainant in his letter received on 23.7.2014 that the complainant was under impression as if bank is regularly transferring the payment of monthly installments of premium to OP1. There is negligence and deficiency in service on the part of life assured and the complainant in paying the premium regularly since from April 2014 onwards. One cannot get benefit of his own wrong. Due to non-receipt of premium for the month of April to July 2014, LIC enquired from OP2 for getting knowledge as if no such account available with them. OP2 discontinued the payment and as such negligence and deficiency in service is on the part of OP2 because payment of premium stopped without checking the record. OP1 informed immediately the life assured vide letter dated 3.9.2014 that ECS mandate for payment discontinued due to reason of non-existence of account. Admittedly, complainant submitted the requisite documents required for processing the claim including claim form No.3816 and the record of diagnosed illness in CMC Hospital, Ludhiana,      where the assured was taken on 3.7.2014. As assured took poison and as such finding the case in question to be a case of committed suicide, repudiation of claim is justified as per terms and conditions of the policy and the same was disclosed through letter dated 6.11.2014. There is no illegality in repudiating the claim. Complainant has not submitted undertaking through complaint that on receipt of the insurance amount, his liability for disbursement to the legal heirs will be there. No valid discharge document submitted in this respect. Each and every other averment of the complaint denied by praying for dismissal of the complaint, but by admitting that amount of Rs.4133/- deposited on 26.7.2014. That amount was deposited after death of assured on 5.7.2014 and the policy had already lapsed.

3.                In separate written reply filed by OP2, it is claimed that complaint is not maintainable. ECS debit and credit is not done at Karimpura Branch of Punjab National Bank, but the same is done at Chandigarh by National Clearing Cell, Chandigarh. Transactions are governed by the rules and regulations of Reserve Bank of India in this respect. In the ECS debit and credit transaction, OP2 has no role. The invoice is sent by LIC of India to National Clearing Cell at Chandigarh for payment, which is run by Reserve Bank of India. The account number was wrongly mentioned and that is why National Clearing Cell, Chandigarh returned the invoice with reason of dishonour “no such account”. The information in that respect was sent to LIC of India on same day and as such, there is no deficiency in service on the part of OP2. Present complaint alleged to be misconceived, groundless and unsustainable as per law. Moreover, the complaint alleged to be frivolous and vexatious. It is claimed that plea regarding receipt of letter dated 3.5.2014 on 3.7.2014 is not believable because the said letter has not been produced on record by the complainant. It is claimed that the correct account number, from which, the earlier premium installments were used to be debited was 0281000100179735. That account number was wrongly mentioned in invoice and that is why, the same was returned by the National Clearing Cell at Chandigarh. Kesar Ganj branch of OP1 stood merged with Karimpura Ludhiana Branch on 21.7.2014. Account of the complainant is in running condition and there is balance amount of Rs.90,839/- on 1.9.2015. Other averments of the complaint denied by claiming that there is no deficiency in service on the part of OP2.

4.                Complainant to prove his case tendered in evidence his affidavit Ex.CA along with documents Ex. C1 to Ex.C16 and thereafter, counsel for complainant closed the evidence.

5.                On the other hand, counsel for OP1 tendered in evidence affidavit Ex.RA of Sh.Suresh Chander Sharma, Marketing Manager of OP1 along with documents Ex.R1 to Ex.R12 and thereafter, closed the evidence.

6.                Counsel for OP2 tendered in evidence affidavit Ex.R2/A of Sh.Sushil Gupta, Manager of OP2 along with documents Ex.R13 to Ex.R16 and thereafter, closed the evidence.

7.                Written arguments in this case submitted by OP1 alone, but not by complainant and OP2. Oral arguments of counsel for the parties heard. Records gone through carefully.

8.                It is vehemently contended by counsel for complainant that fault in mentioning the account number in the ECS mandate is either of OP1 or OP2 and as such, complainant must not be made to suffer, particularly when sufficient balance in the account of complainant was there at relevant time. Moreover, it is contended that the complainant did not furnish any new account number after mentioning the same in the mandate form and as such, role of complainant does not remain anywhere in non-disbursement of premium  after April 2014. Counsel for OP2 contends        that it was OP1, who sent wrong account number resulting in dishonour of ECS mandate and as such, fault on the part of OP2 cannot be found, particularly when OP2 has no role in honouring the ECS mandate. Rather, it is contended that ECS mandate to be honoured by the National Clearing Cell at Chandigarh and as such, for the fault of OP1, OP2 cannot be made liable. However, counsel for OP1 vehemently contends that notice of dishonour Ex.C16 dated 3.5.2014 was duly sent by OP1 to the assured and as such, fault with Op1 cannot be found. Admittedly, Ms.Anukirat Kaur was insured with Op1 through policy on payment, of premium of Rs.1021/- per month. Ex.C2 and Ex.C3 are receipts of payments whereas Ex.R3 is the policy schedule containing terms and conditions of the issued policy. Proposal form Ex.R5 was submitted by the assured and there is no dispute regarding fact that on death of the assured having taken place on 5.7.2014, claimant’s statement Ex.C11 was submitted on 8.9.2014 by the complainant   under his signatures. Certificate of identity and burial or cremation also produced on record as Ex.C12=Ex.R8. Processing of claim was done, but the same was repudiated vide letter dated 6.10.2014 Ex.C1=Ex.R10 on the ground that payment of premium for the period from April 2014 to July 2014 not made, but the same deposited on 26.7.2014 after the death of the assured.

9.                Complainant in para no.3 of the complaint itself admitted having received letter dated 3.5.2014 Ex.C16 on 3.7.2014 by claiming that death of assured took place on 5.7.2014. No proof produced to show that said letter actually was received on 3.7.2014 by the assured. The above pointed admission of complainant in para no.3 of complainant enough to establish as if letter Ex.C16 was received by the complainant for giving intimation as if dishonour of ECS mandate took place due to non-existence of account mentioned in the mandate. In absence of any proof qua receipt of this letter Ex.C16 on 3.7.2014, it has to be held that the complainant unable to establish that this letter actually was received by him on 3.7.2014, more so when in the ordinary course of business, this letter bound to be received within few days or at the most within one month from the date of posting namely 3.5.2014. So, contents of this letter Ex.C16 bound to be in the knowledge of the assured as well as her nominee namely complainant by 3.6.2014 at least. After receipt of this letter Ex.C16, what steps were taken by the complainant for deposit of due premium in time, qua that no explanation offered at all anywhere in the complaint or affidavit submitted by the complainant. In absence of such explanation, it has to be held that complainant or the assured themselves were negligent in not taking steps for paying the premium of April 2014 to July 2014 onwards in time. There is also fault on the part of      complainant in depositing the premium amount of Rs.4133/- after issue of letter Ex.C4=Ex.C5 dated 24.7.2014 because though death of assured took place on 5.7.2014, but despite that said fact not disclosed to OP1 at the time of depositing of this premium amount of Rs.4133/- on 26.7.2014. Factum regarding death of assured on 5.7.2014 bound to be in the knowledge of the complainant, being father of assured. So, even if letters Ex.C4=Ex.C5 may have been issued by Ops for calling upon the complainant to deposit the amount of Rs.4133/-, despite that it was the duty of complainant to disclose the factum of death of assured to OP1 at the time of paying the demanded premium amount of Rs.4133/-. That is not shown to be done and as such, virtually the complainant has actively concealed a material fact while paying the premium of Rs.4133/-. Active concealment of a material fact by a person having exclusive knowledge of the same, amounts to mis-representation within the meaning of Section 18 of the Indian Contract Act and as such, consent of OP1 in matter of revival of policy on payment of premium of Rs.4133/- virtually was obtained by mis-representation by the complainant. When consent to an agreement is obtained by mis-representation, then the contract is voidable at the option of the party, whose consent obtained by mis-representation in view of Section 19 of the Indian Contract Act. So, OP1 certainly can repudiate the contract of revival on ground of its being voidable. Section 64 of Indian Contract Act provides that when a voidable contract is rescinded, then the benefits got under such contract liable to be restored to the person, from whom those were received. In view of this, OP1 certainly is under obligation to return the received premium amount of Rs.4133/- with interest @6% per annum w.e.f.8.9.2014 till the date of payment. Date 8.9.2014 taken into consideration by keeping in view the fact that claims statement Ex.C11 was submitted on that date.

10.              ECS mandate form duly signed by the complainant and assured is produced on record as Ex.R2. It is on the basis of this ECS mandate form that Punjab National Bank, Mandi Kesar Ganj, Ludhiana was to honour the mandate. After going through declaration made in Ex.R2, it is made out that in view of the willingness expressed by the policyholder, the ECS mandate will be honoured through National Clearing Cell of Reserve Bank of India. Moreover, as per this declaration, if any transaction of ECS mandate is delayed or not effected for the reason of incomplete or incorrect information or non-availability of funds or closure of accounts etc., then the assured and the complainant not to hold LIC responsible. That declaration reads as under:-

“I/we hereby declare that the particulars given above are correct and complete. I/we being the holder/s of the above policy/policies express my/our willingness to remit the premium/s referred to above through participation in ECS of National Clearing Cell of Reserve Bank of India and hereby authorize me The Life Insurance Corporation of India to raise the debits on my/our Bank Account towards the said premium/s due referred to above. If any transaction is delayed or not effected at all for the reasons of incomplete or incorrect information or non-availability of funds or closure of Accounts etc., I would not hold LIC responsible. I also understand that I can pay the premium only on behalf of my near relatives as prescribed by the Income Tax Act, 1961.”

In view of above referred declaration, it is obvious that if for any reasons, the ECS mandate not honoured, then complainant or assured cannot hold LIC responsible because exclusive responsibility of paying the premium in time remains of assured. Being so, after receipt of letter Ex.C16 of 3.5.2014, it was the duty of the complainant or the assured to ensure that premium for dishonoured ECS mandate of April 2014 is paid within the grace period. Ex.R2 is signed by complainant & assured each.

11.              Clause 2 of the terms and conditions of insurance agreement endorsed on policy schedule Ex.R3 provides that a grace period of one month but not less than 30 days will be there for payment of yearly, half yearly or quarterly premiums. Further, as per this clause, if a premium has not been paid before expiry of the days of grace period, then policy will lapse. After going through Ex.R3, it is made out that the premium payable by 28^th of every month. So, for the premium of April 2014, the grace period as per clause 2 of the terms and conditions of Ex.R3 was to lapse on 28.5.2014. That premium paid on 26.7.2014 only after issue of letter Ex.C4 and Ex.C5, but without disclosing the factum of death of assured and as such, virtually the policy stood lapsed due to non-payment of premium on 28.5.2014.

12.              Revival of discontinued policy governed by clause 3 of the terms and conditions of the policy Ex.R3. That clause 3 read as under:-

“Revival of discontinued policies:- If the policy has lapsed, it may be revived during the life time of the life assured but within a period of five years from the date of first unpaid premium and before the date of maturity, on submission of proof of continued insurability to the satisfaction of the corporation and the payment of all the arrears of premium together with interest compounding half-yearly at such rate as may be fixed by the Corporation from time to time. The Corporation reserves the right to accept or accept with modified terms or decline the revival of a discontinued policy. The revival of a discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the proposer life assured.”

13.              In view of this clause no.3, it is obvious that revival of policy permissible only during the lifetime of the assured, but within a period of five years from the date of first unpaid premium. However, death of assured in this case took place on 5.7.2014 as per claim of the complainant and the submitted document of certificate of history treatment Ex.R7 and certificate of identity and burial or cremation Ex.R8=Ex.C12 and also as per contents of letter Ex.R9 sent by the complainant to OP1 and as such, payment of premium on 26.7.2014 of Rs.4133/- was made after the death of the assured. Being so, the policy could not be revived as per clause 3 of the terms and conditions endorsed on the back of Ex.R3. So, revival premium of Rs.4133/- accepted by OP1 under mis-notion or due to mis-representation by complainant, cannot be formed the basis for finding that policy stood revived on payment of this premium on 26.7.2014. As one of the condition precedent for revival of discontinued policy not fulfilled in this case due to deposit of premium after the death of the assured and as such, present is not to be treated as a case of revival of policy at all.

14.              As intimation of dishonour of ECS mandate given to the complainant through letter Ex.C16 dated 3.5.2014 by OP1 and as such, in view of non taking of any steps by the complainant or assured after receipt of this letter in attempt of paying premium of April 2014 to July 2014, fault lay with the complainant and not with any of OPs. One cannot be allowed to get benefit of his own wrong and as such, the repudiation of claim in such circumstances is certainly justified, even if submitted mandate was regarding account by disclosing 15 digits instead of actual 16 digits.

15.              After going through Ex.R6, it is made out as if complainant disclosed Op1 that death of assured took place due to taking of some wrong medicine by mistake, but that in fact is not made out from the certificate of history treatment Ex.R7, in which, it is specifically mentioned at three places at least that death occurred due to OPC poisoning. So, it is not a case, in which, death of insured took place due to consumption of wrong medicine, but it is a case, in which, death took place due to consumption of poison by the assured. So, certainly submission advanced by counsel for OP1 has force that the assured committed suicide, due to which, claim is not payable under the policy. Clause 6 of the terms and conditions of the policy Ex.R3 provides as under:-

“Suicide:- This policy shall be void, if the life assured commits suicide(whether sane or insane at that time) at any time on or after the date on which the risk under the policy has commenced but before the expiry of one year from the date of commencement of risk under this policy and the Corporation will not entertain any claim by virtue of this policy except to the extent of a third party’s bonafide beneficial interest acquired in the policy for valuable consideration of which notice has been given in writing to the branch where the policy is being presently serviced (where the policy record s are kept) at least one calendar month prior to death.”

16.              In view of this clause 6 of Ex.R3, it is obvious that as death of assured took place due to commission of suicide after the risk under the policy has commenced and there is nothing on record to show that third party beneficial interest stood acquired in the policy for valuable consideration, of which, notice in writing given to the insurer and as such, certainly claim is not payable. Rather, the complainant mis-represented at the time of deposit of demanded premium of Rs.4133/- by actively concealing the death of assured having taken place at least 20 days prior to deposit of premium meant for revival of the policy and as such, no bonafide beneficial interest acquired by the complainant in the policy. Being so, claim rightly repudiated.

17.              Electronic Clearing Services(ECS) mandate to be honoured through the National Clearing Cell of Reserve Bank of India is a fact borne from the declaration, which is the part of Ex.R2 as referred above and as such, in the absence of National Clearing Cell as party, fault with OP2 cannot be found, more so when intimation of dishonour sent by Op1 to the complainant through Ex.C16 dated 3.5.2014. So, looking from any angle, decision of Op1 in repudiating the claim is not illegal or against the terms and conditions of insurance policy. However, OP1 retained the amount of Rs.4133/- even after getting intimation on 8.9.2014 regarding death of assured and as such, the same caused mental harassment and agony of the complainant, due to which, he is entitled for compensation under that head along with litigation expenses, but from OP1 only.

18.               As per law laid down in case titled as Shanaaz Fatima vs. Unit Trust of India-IV(2016)CPJ-136(N.C.), if the insurance premium not paid in time, then insurer cannot be compelled to perform its part of contract of paying the insured amount. Ratio of this case is fully applicable to facts of the present case, particularly when complainant has not denied about the terms and conditions of the policy Ex.R3. In view of non-payment of premium in time since from April 2014, OP justified in repudiating the insurance claim as per the cited case also.

19.              As a sequel to the above discussion, complaint allowed against OP1 only to the extent that it will refund received amount of Rs.4,133/- with interest @6% per annum w.e.f. 08.09.2014 till payment. Compensation for mental harassment and agony of Rs.5,000/- (Rupees Five Thousand only) and litigation expenses of Rs.5,000/- (Rupees Five Thousand only) more allowed in favour of complainant and against OP1. Complaint against OP2 is dismissed. Payment of these compensation and litigation expenses be made within 30 days from the date of receipt of copy of order. Copies of order be supplied to parties free of costs as per rules.

20.                        File be indexed and consigned to record room.

 

                     (Vinod Gulati)                     (G.K. Dhir)

              Member                                         President

Announced in Open Forum

Dated:09.01.2018

Gurpreet Sharma.