State Consumer Disputes Redressal Commission
Kursheed Jahan Begum, Hyderabad-59. vs State Bank Of India, Hyderabad on 23 November, 2011
BEFORE THE A BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. F.A.No.293/2010 against C.C.No.598/2009, District Forum-II, Hyderabad. Between Kursheed Jahan Begum, W/o.Khaja Aliuddin, Age about : 53 years, Occ:Household, H.No.18-8-241/5, MCH 1422, Moin Bagh, Santoshnagar, Riyasat Nagar, Hyderabad-59. Appellant/ Complainant And 1.State Bank of India, Edi Bazara Branch (08026) I.S.Sadan X Road, Santoshnagar, Hyderabad 500 059. 2. SBI Life Insurance Co.Ltd., Rep. by its Manager (Claims) Parishram Bhavan, Basheerbagh, Hyderabad-AP. 3. SBI Life Insurance Central Processing Centre, Kapas Bhavan, Plot No.3A, Sector No.10, CBD Belapur, Navi, Mumbai 400 614. . Respondents/ Opp.parties Counsel for the Appellant : M/s. Mohd.Muneeruddin Counsel for the respondents : M/s.C.S.Chakravarthy-R1 M/s.G.Anand Kumar-R2 & R3 - QUORUM: THE HONBLE JUSTICE SRI D.APPA RAO, PRESIDENT, AND SMT.M.SHREESHA, HONBLE MEMBER
WEDNESDAY, THE TWENTY THIRD DAY OF NOVEMBER, TWO THOUSAND ELEVEN.
(Typed to dictation of Smt.M.Shreesha, Honble Member) **** Aggrieved by the order in C.C.No.598/2009 on the file of District Forum-II, Hyderabad, the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant, her husband Khaja Aliuddin and her son Khaja Ahmed Raziuddin are joint account holders of Savings Bank A/c.No.10114941377 (old a/c.No.01190016033) of opp.party no.1 since several years. Opposite parties offered insurance coverage under Super Suraksha for the account holders of State Bank of India and the complainants son obtained policy no.82001228910 annexed to his account no.10114941377 and he authorized opp.party no.1 to directly debit from his said account number for first premium and all the premiums every year on the Annual Renewal Date(ARD) .
Opposite parties 2 and 3 issued Certificate of Insurance valid w.e.f.
30.9.2004. Opposite party no.3 handed over the brochure of the policy to the complainants son which clearly stipulates that the premium payment shall be debited to the account of the consumer. The complainants son was a practicing advocate and he died on 8.2.2009 in a road accident at Kotwalguda, Himayatsagar Tank Road, Shamshabad, R.R.District. The complainant as a nominee of the insurance policy which was taken by her son filed the claim before the opp.parties. The opp.parties received the claim request of the complainant and acknowledged it vide letter dt.31.3.2009. The complainant received a letter dt. 21.5.2009 from the opp.parties stating that the policy of the deceased lapsed for non payment of premium. The opposite parties agreed for payment of premiums by way of direct debit to the account no.10114941377 and first two premiums were debited by opp.party no.1 by way of direct debit on 30.9.2004 & 1.9.2005. Thereafter opp.party no.1 failed to debit the premium from the complainants account which constitutes deficiency in service on behalf of the opp.parties. The complainant submits that the opp.parties are one and the same and they are operating as a single unit and opp.party no.1 neglected to debit the premium to the account of the deceased inspite of the fact that sufficient balance was available in his account on the date on which the premium was due. Opp.parties 2 and 3 neither issued any letter to the deceased to pay the premium nor advised the opposite party no.1 to remit the premium and hence all the opposite parties are guilty of negligence. Hence the complaint seeking direction to the opp.parties to pay Rs.2 lakhs towards policy amount with interest @ 24% from the date of claim till the claim amount is paid , to pay compensation of Rs.1 lakh and to pay Rs.10,000/- towards costs.
Opp.party no.1 filed counter stating that there is no procedure of standing instructions in SBI to debit the amount directly as stated by the complainant and ECS was not provided by the consumer for auto debit. Both the opposite parties 1 and 2 are separate entities and opposite party no.3 is a processing center connected to opp.party no.2 but not to opp.party no.1 and the document filed by the complainant is a brochure of SBI Life i.e. opp.party no.2.
The complainants son died on 8.2.09 but as can be seen from the records the last premium was paid on 1.9.2005 and thereafter no premium was paid and it clearly indicates that policy expired w.e.f. 1.9.2006. The premiums for the years 2006 to 2008 were not paid and the complainant did not questioned opp.party no.1 about the same from 2006 to 2008 .
The terms and conditions are between the deceased and the opp.party no.2 but not with opp.party no.1. Opp.party no.1 sent request of the complainant to opp.party no.2 and opp.party no.1 is not a proper party to decide the request made by the complainant. Para No.C of SBI Life Super Suraksha reads as follows:
C. Procedure for recovering the renewal premium at the branch (for existing members):
Xviii The branch will receive one month before the Annual Renewal Date, a Statement Premium Claim (SPC) from SBI Life. The SPC will list the names of insured depositors at the branch and their account number, and the amount of premium due for the following year from each insured depositor according to the age group to which he belongs (i.e. age ground of 19-39 or 40-60). SBI Life will send the statement to the branch as a hard copy and also by floppy diskette.
xix)The branch will acknowledge receipt of the SPC and advise any change or correction in the death to SBI Life within 10 days of receipt by letter/e-mail.
xx)The branch will debit the insured depositors accounts on the Annual Renewal date with the amount as indicated in the SPC.
xxi)The branch will send the gross premium amount by way of draft along with a letter (specimen 9) .
xxii) The branch will send the draft within 10 days from the date of ARD along with the hard copy of SPC with any changes marked therein, and the floppy, duly up dated xxiii)The branch should not include the list of new depositors enrolled during the month of Annual Renewal, in the SPC. The procedure for new member joining will be the same as that specified in Section B above. A separate bank draft should also be sent.
From the aforementioned it is clear that the opposite party no.1 can debit the amount only with the instruction of opposite party no.2, whether the policy holder has dropped from the Scheme or changed to some other Scheme it will be known to opp.party no.1 only with the instruction of opp.party no.2. Opposite party no.1 has no instructions either from the policy holder or opposite party no.2 to debit the amount from 2006 onwards till the date of death of the complainants son .
Opposite parties 2 and 3 filed written version admitting that the complainants son was admitted under the SBI Deposit Holders Group Insurance Scheme vide Master Policy No.82001228910 with the date of commencement as 30.9.2004 for a sum assured of Rs.1 lakh. No premium has been received from 2006 onwards and hence the policy was lapsed with effect from 30.9.2006. In the statement of account of DLA it is clear that the first premium was debited on 30.9.2004 and the second premium was debited on 30.9.2005 and no premium has been debited afterwards and it is clear that the opposite parties 2 and 3 have not received any premium since 30.9.2006.
It is the duty of the policy holder to ensure that the premiums are paid in time and the policy is kept in force.
Opp.parties cannot provide insurance cover without the receipt of premium. It is submitted that it is the sole responsibility of the Life Assured to ensure that the policy is kept in force by timely remittance of renewal premium and opp.parties 2 and 3 cannot be blamed for non payment of the renewal premium. It is clearly stipulated in the policy conditions as mentioned that the premium payment should be made in time to keep the insurance in force for the life assured to be eligible for the risk cover. The complainant is not entitled to any relief whatsoever because the contract of insurance per se lapsed due to non receipt of premium by opp.parties 2 and 3 .The opp.parties prayed for dismissal of the complaint with costs.
The District Forum based on the evidence adduced i.e. Exs. A1 to A10 and B1 to B5 and pleadings put forward dismissed the complaint without costs.
Aggrieved by the said order the complainant preferred this appeal.
The learned counsel for the appellant/complainant contended that the opposite party obtained consent of the deceased as per Schedule 1 Clause 3 of Ex.B1 and that Ex.A3 is the format of Express Authorisation given by the account holders authorising opp.party no.1 to debit the accounts of account holders in their respective accounts. Opposite party no.1 debited account no.10114941377 of the deceased for the first and second premiums on 30.9.2004 and 1.9.2005 on the annual renewal date which is the condition precedent for the Group Insurance Policy. The deceased has no role in payment of premium except having sufficient balance in his account which was present in the instant case.
The facts not in dispute are that one Kaja Ahmed Raziuddin i.e. the complainants son was having a joint account of saving bank account no.10114941377 and the opp.parties offered insurance coverage under name Super Suraksha for which the complainant is the nominee. It is also not in dispute that the complainants son Kaja Ahmed Raziuddin died in a road accident on 8.2.09. The complainant made a claim vide Ex.A8 dt.31.3.09 for which the opp.parties replied vide their letter dt.21.5.09 (Ex.A9) stating that the policy of the deceased was lapsed due to non payment of the premium. It is the case of the respondents/opp.parties that the date of commencement of the policy is 30.9.04 , the premium was received upto 30.9.05 and the date of death is 8.2.09 and therefore the policy was in a lapsed condition.
The learned counsel for the appellant/complainant contended that the first two premiums were debited by opposite party no.1 by way of direct debit on 30.9.2004 and 1.9.05 evidenced under Exs.A1 and A2. A brief perusal of Ex.A1 Pass Book Clause 18 reads as follows:
Standing instructions for periodical payment of insurance premium, membership fees etc. by debit to the account will be accepted for a nominal charge of Rs.10/-
(Rule no.40) It is also the case of the opp.parties that the complainant should be diligent and make sure that his insurance premium is paid through the bank and that the bank cannot be held responsible if the policy lapses due to non payment of premium. The complainant filed Ex.A3 in support of her case which is the format of Authorisation which reads as follows:
I authorize you to debit my Current/Savings Bank Account no.with your branch with Rs..( Rupees .only ) towards the first premium including the administration charges . I also authorize you to debit the above account with Rs (Rupees. only) ( or at such rates as may be revised by SBI Life from time to time ) every year on the Annual Renewal Date (ARD). I also agree to pay any Service Tax or any Government Levies as may be applicable . You may continue to debit my account with the amount of annual premium ( including administration charges and Service Tax, if any ) as applicable to me on every ARD, so long as I am eligible to remain a member of the Scheme, unless I intimate you in writing to cancel this authorization Ex.A4 is the Certificate of Insurance. Ex.A5 which is the Brochure states that the premium payment will be made by debiting to the account holder. It is the case of opposite party no.2 that as per the Schedule II Point no.3 the grace period of 30 days will be allowed for the payment of premium falling due on every premium payment date. In the instant case premium was not received since 30.9.06 and hence the insurance cover was not active as on the date death of the policy holder. The premium is payable every year on 30th September. The learned counsel for opp.party no.2 relied on the following Clause 4 of the terms and conditions which reads as follows:
This policy will be in force for a period of one year from the Effective Date, subject to payment of appropriate premiums and other conditions hereafter contained. The company may extend the validity of the Policy at its option at the request of Grantees for such periods as may be mutually agreed upon.
The learned counsel for the opp.parties contended that opp.parties 2 and 3 are separate legal entities and are not responsible for the action of opposite party no.1.The policy holder has not paid the premium and therefore opposite party no.2 cannot perform its promise. It is the main contention of opposite party no.2 that the complainant did not produce any documents and that he has given standing instructions to the Bank for debiting the premium from his S.B.Account. We observe from the record that Exs.A1 and A2 evidence that premiums were debited from the complainants account on 30.9.04 and 1.9.05 as seen from the pass books. There is no substantial explanation from the opp.parties except stating that there are no standing instructions from the complainant to debit the premium amounts from his S.B. account, for not debiting the insurance premium amounts from the year 2006 onwards. A brief perusal of Ex.B1 which is the Group Insurance Scheme for the account holders of State Bank of India, Schedule 1 Clause 3 reads as follows:
All deposit account holders of the Bank maintaining current, savings, or term deposit accounts at the branch, in single or joint names who fulfil the eligibility criteria of the Scheme and who have duly signed the consent- cum-authorisation letters addressed to the Grantees and whose membership continues to remain in force with the payment of premium and other charges due It is not the opp.partys case that there was no sufficient balance in the policy holders account. The contention of the complainant that there was sufficient balance in the account as on the date on which the payment of premium was due is not reputed by the opp.parties .The format of standing instructions is filed by the complainant as Ex.A3. If the opp.party has debited the premium amounts in first two years then it can be construed that the standing instructions to debit the premium amounts is with them. Moreover condition no.18 of the Pass Book clearly states that standing instructions for periodical payment of insurance premium, membership fees etc. by debit to the account will be accepted for nominal fees of Rs.10/- (Rule no.40 ). If there were no standing instructions issued by the policy holder, then there are no substantial reasons for the opp.parties to debit the premium amounts in the savings account for 2 years. It is pertinent to note that Ex.A5 brochure reads as follows:
Life cover of Rs.1 lakh. In case of death due to accident, Rs.2 lakhs Most cost effective and convenient.
Life insurance cover upto 60 years age.
No medical examination only Good Health Declaration required.
Premium payment by debit to your account .
Premium for 18-39 years of age:Rs.360/- per annum.
Premium for 40-58 years of age:Rs.600/- per annum.
Simple claim settlement process.
It is clear from the points highlighted in this brochure (Ex.A5) that premium payment would be debited to the policy holders account and accordingly Exs.A1 and A2 evidence that premium was deducted on 30.9.04 and 1.9.05. To reiterate, there are no substantial reasons for the opp.parties to have stopped debiting the premium amounts from the policy holders S.B.Account suddenly from the year 2006 onwards when it is not their case that there was no sufficient balance in the policy holders account. Keeping in view the terms in the brochure and the fact that the opp.parties did not give any reasonable explanation for not continuing to debit the premium amounts to the policy holders account, we are of the considered view that there is deficiency of service on behalf of the opp.parties because of which the policy lapsed and the policy holders claim was repudiated. It is not in dispute that the policy holder died in a road accident on 8.2.09 and Ex.B1 clearly stipulates that there is an accidental benefit of double the amount of the sum assured which in the instant case would be Rs.2 lakhs. Hence we are of the considered opinion that the opp.parties should pay the insurance coverage and the accidental death benefits to the complainant i.e. Rs.2 lakhs together with interest at 9% p.a. from the date of repudiation till the date of realization together with costs of Rs.3000/-
In the result this appeal is allowed and order of the Dist. Forum is set aside directing the opp.parties 1 to 3 to pay Rs.2 lakhs together with 9% interest p.a. from the date of repudiation till the date of realization together with costs of Rs.3000/-. Time for compliance four weeks.
PRESIDENT MEMBER Pm* Dt.
23.11.2011.