BEFORE THE DISTRICT CONSUMER’S FORUM: KURNOOL
Present: Sri.S.Niranjan Babu, B.A., B.L., President (FAC),
And
Smt. S.Nazeerunnisa, B.A., B.L., Lady Member
Friday the 14th day of August, 2015
C.C.No.101/2013
Between:
V.Bhagyalakshmamma,
W/o V.Ankanna,
H.No.20/37A, Peta, Poolabazar,
Kurnool-518 001. …Complainant
-Vs-
1. The Branch Manager,
SBI Life Insurance,
H.No.40/58, 2nd Floor,
1-A, S.V. Complex,
Railway Station Road,
Kurnool-518 003.
2. The Branch Manager,
State Bank of Mysore,
D.No.52/72, Mayuri Heights,
Ground Floor, Opposite King Market,
Kurnool-518 001. …OPPOSITE PARTIES
This complaint is coming on this day for orders in the presence of Sri.P.Siva Sudarshan, Advocate for complainant and Sri.M.Syam Kumar Reddy, Advocate for opposite party No.1 and Sri.M.D.V.Jogaiah Sarma, Advocate for opposite party No.2 and upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Smt. S.Nazeerunnisa, Lady Member)
C.C. No.101/2013
1. This complaint is filed under section 11 and 12 of Consumer Protection Act, 1986 praying to direct the opposite parties:-
(a)To pay the policy amount of Rs.3,00,000/- to the complainant with interest at 24% per annum from the date of death of the deceased i.e., 18.05.2013 to till the date of realization with benefits (OR) Waive the loan amount of complainant son and refund the balance insurance amount to the complainant.
(b)To pay a sum of Rs.50,000/- towards mental agony.
(c)To pay a sum of Rs.10,000/- towards costs of this complaint.
And
(d) To grant any other relief as the Honourable Forum deems fit and proper in the circumstances of the case.
2. The case of the complaint in brief runs as follows:- The complainant is the mother of Insured. Opposite party No.1 is State Bank of India Life Insurance and opposite party No.2 is the State Bank of Mysore. The late C.V.Rama Krishna worked as a line man in A.P. Electricity department and during his life time he availed a loan for a sum of Rs.3,00,000/- from opposite party No.2 loan account No.64081636225 and at the time of disbursement of loan, opposite party No.2 recovered a sum of Rs.4071/- towards State Bank of India Life Insurance premium from his State Bank Account on 05.11.2011. On 05.11.2013, while he was on duty accidently fell down from the electricity pole and immediately he admitted in Viswa Bharati Hospital, Kurnool and later shifted to Global Hospital, Hyderabad and died on 18.05.2013. The complaint is the nominee under the policy and submitted the claim to opposite party No.1 on 18.06.2013. The opposite party No.2 issued a letter to the complainant for payment of loan due amount. The complainant requested opposite party No.1, to settle the policy claim amount, but the opposite party No.1 repudiated the claim on the ground that the policy lapsed as the premium amount not paid up to 30.11.2012 and the death of insured is 18.05.2013. As per the conditions of policy. In the event of death of an insured when the cover is lapsed due to non-payment of premium during the first three years from the date of cover, continues to remain lapse on the death of insured no death benefit is payable. But it is the duty of opposite party No.2 to deduct the premium amount from the complainant’s account and remitted to opposite part No.1, towards the premium and opposite party No.1 did not issued notice to insured about nonpayment of premium amount. Therefore the complainant need not to pay loan amount. There is a deficiency of service on the part of opposite parties and caused mental agony to the complainant.
3. Opposite party No.1 filed written version stating that the complaint is unjust, illegal and frivolous and liable to be dismissed. It is admitted that the deceased insured obtained insurance master policy bearing No.86000045305 under Swadhan Group Insurance scheme with its date of commencement from 01.12.2011 for a period of 10 years for an assured sum of Rs.3,00,000/- by paying the annual premium of Rs.4071/-. Neither the master policy holder opposite party No.2 not the deceased/Insured paid the premium and it was due on 01.12.2012 hence the policy lapsed with effect from 01.12.2012 and grace period of 30 is allowed for payment of premium if the grace period is expired automatically the policy would lapsed. The insured died on 18.05.2013. As per the policy condition in the event of death of on Insured when the policy lapsed due to nonpayment of premium during the first three years, continues to remain lapse on the death of insured. No benefit is payable under the policy. The contract of Insurance is reciprocal. If the insured not fulfill his part in payment of premium, the insurer need that pay any benefits under the said contacts. The Insurer has no liability to send renewal premium notice as per the master policy. It is the duty of Insured to ensure that when the premium is paid in time or not. The Opposite party No.1 rightly repudiated the claim of the complainant as per the terms and conditions of policy. There is no deficiency of service on the part of opposite party No.1 and the complaint is liable to be dismissed against opposite party No.1.
Opposite party No.2 filed written version stating that the complaint is neither just nor maintainable either in law or an facts. It is admitted that the deceased Insured availed a personal loan of Rs.3,00,000/- from opposite party No.2. It is denied that the opposite party No.2 recovered a sum of Rs.4,071/- towards the State Bank of India Life Insurance premium, except advice the loanee to obtain insurance. The opposite party No.2 did not play any role for recovering of any amount for State Bank of India Life Insurance premium amount. The opposite party No.2 not known about the particulars of policy issued by opposite party No.1 and original policy document is also available with the loanee only. The opposite party No.2 came to know about the death of loan only after the notice issue to loanee for nonpayment of the loan Installment in the month of June, 2013. The opposite party No.2 not aware of the submission of claim form by the complainant to opposite party No.1 and it was repudiated by opposite party No.1. The loanee had given a written Authorized in his policy Application itself to directly debit the premium amount, when it fall due from saving Bank Account of the loanee lying in opposite party No.2 bank, without any role of the opposite party No.2. Opposite party No.1, had failed to enforce the said authorization and collect the premium amount directly from the saving Bank Account of the loanee. Therefore the claim of the complainant for payment of policy amount or waiver of the loan amount against the opposite party No.2 is baseless. There is no deficiency of service on the part of opposite party No.2 and the complaint is liable to be dismissed.
4. On behalf of the complainant Ex.A1 to Ex.A9 are marked and sworn affidavit of the complainant is filed. On behalf of opposite parties Ex.B1 to Ex.B4 are marked and sworn affidavit of opposite parties 1 and 2 are filed.
5. Both sides filed written Argument.
6. Now the points that arise for consideration are:
- Whether there is deficiency of service on the part of opposite parties?
- Whether the complainant is entitled for the reliefs as prayed for?
- To what relief?
7. POINTS i and ii:- Admittedly the deceased availed a personal loan of Rs.3,00,000/- from opposite party No.2 loan account No.64081636225 Ex.A1 is the photo copy of Pass Book issued by opposite party No.2 bank. Admittedly the deceased C.V.Rama Krishna insured his life with opposite party No.1 under master policy bearing No.86000045305 for an assured amount of Rs.3,00,000/- by paying annual premium of Rs.4,071/-with its date of commencement is 01.12.2011. Ex.A9 is the photo copy of member details. It is also admitted fact that the Insured worked as line man, while he was on duty, accidently fell down from the electric pole and during the course of treatment he died on 18.05.2013. Ex.A3 is the Death Certificate issued by Municipal Corporation, Hyderabad. Ex.A4 is the photo copy of Death Report of Global Hospital, Hyderabad. Ex.A5 the photo copy of Certificate of Cause of Death and Entitlement, Ex.A6 is the photo copy of Preliminary Report of Electric Accidental of Insured issued by Electricity Department. It is the case of the complainant that at the time of disbursement of loan amount of opposite party No.2 deducted a sum of Rs.4,071/- towards State Bank of India Life Insurance premium. After the death of Insured the complainant being the nominee submitted claim from to opposite party No.1. The photo copy of Claimants Statement-Death Claim is marked as Ex.A2. On 18.07.2013 the opposite party No.1 repudiated the claim on the ground that the date of commencement of policy is 01.10.2011 and the premium received up to 30.11.2012 and the date of death is 18.05.2013 due to nonpayment of premium amount, the said policy cover lapsed. Ex.A8 is the photo copy of repudiation letter. The opposite party No.2 did not deduct the premium amount from saving Bank Account lying in opposite party No.2 Bank and remitted to Insurance Company and the original policy is under the custody of opposite party No.2. The policy was lapsed due to nonpayment of premium. The opposite party No.1 also not informed to the insured or opposite party No.2 for renewal of premium amount. Ex.A7 is the photo copy of letter issued by opposite party No.2 to insured for payment of loan due amount dated 18.06.2013. The learned counsel appearing for the complainant argued that opposite party No.1 repudiated the claim of the complainant without any lawful cause, the deceased C.V.Rama Krishna insured his life with opposite party for the payment of personal loan. The complainant need not to pay the loan amount to opposite party No.2. It is the duty of opposite party No.2 to deduct the premium amount and remitted the same to opposite party No.1. Due to the negligent attitude of opposite parties the complainant suffered mental agony.
8. It is the contention of opposite party No.1 that as per the master policy condition clause (iv) a grace period of 30 days is allowed for the payment of premium of each member. If the premium not paid on before the expiry of grace period. The insurance cover for that member will automatically lapse. In the above case the premium due on 01.12.2012 and the death of insured is 18.05.2013 the policy was already lapsed and continues to remain lapse on the death of insured. Ex.B1 is the photo copy of master policy, as per policy terms and conditions. In the event of death of an assured while the policy lapsed due to nonpayment of premium during the first three years from the date of cover continues to remain lapse on the date of insured, no death benefits is payable. Ex.B2 is the photo copy of Membership Form, Ex.B3 is the photo copy of Member Details. Ex.B4 is the photo copy of Repudiation Letter. The opposite party No.1 rightly repudiated the claim of the complainant under Ex.B4=Ex.A8.
9. It is the contention of opposite party No.2 that the relevant entry date 15.11.2011, for Rs.4071/- revealed that the deceased had only obtained a Demand Draft in favour of the opposite party No.1 and opposite party No.2 has no rule in collecting and sending the said amount from the deceased. The insured obtained policy from opposite party No.1 is purely a contract between the insured and insurer (opposite party No.1) without any intervention of opposite party No.2. The opposite party No.2 disbursed the loan amount on 01.08.2011 later on 15.11.2011 the insured paid the premium amount to opposite party No.1. There is no deficiency of service on the part of opposite party No.2.
10. Admittedly the deceased/insured C.V.Rama Krishna availed a personal loan for a sum of Rs.3,00,000/- from opposite party No.2 loan account No is 64081636225 and also he took a Group of Swadhana Master policy bearing No.86000045305 from opposite party No.1. Admittedly while the insured was on duty accidently fell from Electric pole and during the course of treatment he died on 18.05.2013. The complainant made a claim to opposite party No.1. The opposite party No.1 repudiation the claim under Ex.B4=Ex.A8 on the ground that said the policy lapsed due to nonpayment of premium under the said policy cover.
As seen from Ex.B3 under condition 5(ii) it is clearly mentioned that “No benefit is payable in the event of a member if the cover has lapsed due to nonpayment of premium during the first three years from the date of commencement of a cover and continues to remain so lapsed as on the date of his death. In the above case admittedly the insured not paid the premium and the policy cover lapsed on 01.12.2012 and the insured died on 18.05.2013. The grace period of 30 days was also expired. Though it is mentioned under condition 3(iv) that the premium so remitted by master policy holder to the company shall only be collection by the master policy holder through debit to the account of the concerned member. The insured in Ex.B2 (member ship form) agreed that no liability will attach to the Bank, if for any reason the Bank is not in a position to recover the premium amount by debit to my aforesaid account and wherein such cases the Bank is unable to deduct the premiums not remit the same to State Bank of India Life Insurance and he was also agreed that State Bank of India life Insurance shall not be liable to consider the grant of or the continuation of insurance cover. The insured is an educated person and fully aware of all the conditions of above policy. He accepted those conditions in Ex.B2 therefore it is the responsibility of the Insured to verify whether the premium amount is paid or not and to hold the policy inforce. Admittedly the above said policy cover lapsed due to nonpayment of premium. As per the policy conditions the opposite party No.1 rightly repudiated the claim of the complainant. We persued all the material available on record and policy conditions. We found there is no deficiency of service on the part of opposite parties. Hence the complainant is not entitled for any relief as prayed in the above complaint.
11. In the result the complaint is dismissed without costs.
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 14th day of August, 2015.
Sd/- Sd/-
LADY MEMBER PRESIDENT (FAC)
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant: Nil For the opposite parties: Nil
List of exhibits marked for the complainant:-
Ex.A1 Photo copy of Bank Pass Book along with Bank Statement.
Ex.A2 Photo copy of Claimants Statement Death Claim.
Ex.A3 Photo copy of Death Certificate issued by Registrar of Births and Deaths, Municipal Corporation, Hyderabad dated 12.06.2013.
Ex.A4 Photo copy of Death Report dated 18.05.2013 of Global Hospital,
Hyderabad.
Ex.A5 Photo copy of Certificate of Cause of Death and Entitlement.
Ex.A6 Photo copy of Preliminary Report of Electrical Accident issued by
Electricity Department.
Ex.A7 Photo copy of Letter of State Bank of Mysore, Kurnool dated
18.06.2013.
Ex.A8 Photo copy of Claim Repudiation Letter dated 18.07.2013.
Ex.A9 Photo copy of Member details.
List of exhibits marked for the opposite parties :-
Ex.B1 Photo copy of Master Policy bearing No.86000045305 along with terms and conditions.
Ex.B2 Photo copy of Group Insurance Scheme Membership Form.
Ex.B3 Photo copy of Member details.
Ex.B4 Photo copy of Claim Repudiation Letter dated 18.07.2013.
Sd/- Sd/-
LADY MEMBER PRESIDENT (FAC)
// Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties :
Copy was made ready on :
Copy was dispatched on :
