State Consumer Disputes Redressal Commission
Andhra Bank vs Smt. Machu Marri Mastanamma on 8 July, 2011
BEFORE THE A BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. FA 877 of 2009 against C.C. 269/2008, Dist. Forum, Ongole Between: The Branch Manager Andhra Bank Addanki, Prakasham Dist. *** Appellant/ Opposite Party And Smt. Machu Marri Mastanamma W/o. Late Konda Reddy House Wife R/o. Chinna Kottapalli (V) Addanki (M) Prakasham Dist. *** Respondent/ Complainant Counsel for the Appellant: M/s. CH. Siva Reddy Counsel for the Respondent: M/s. Venkateshwarlu S. CORAM: HONBLE SRI JUSTICE D.APPA RAO, PRESIDENT. SMT. M. SHREESHA, LADY MEMBER.
& SRI R. L. NARASIMHA RAO, MEMBER FRIDAY, THIS THE EIGTH DAY OF JULY TWO THOUSAND ELEVEN ORAL ORDER: (Per Honble Sri Justice D. Appa Rao, President) ***
1) This is an appeal preferred by the opposite party bank against the order of the Dist. Forum directing it to pay Rs. 2 lakhs covered under A.B. Jeevan Abhaya Scheme together with compensation of Rs. 2,000/- and costs of Rs. 1,000/-.
2) The case of the complainant in brief is that her husband late Mutchumari Konda Reddy opened a savings bank account on 26.5.2006 with the appellant bank wherein she was kept as nominee.
As per the conditions in case of natural death of account holder an amount of Rs. 1 lakh would be paid and in case of accidental death double the benefit would be paid. It had a tie up with the insurance company which would provide the insurance facility to the customers for their welfare. The bank had to pay the premium to the insurance company and had to renew it periodically. The complainants husband opened an account, and as such she is entitled to the benefits. While so on 27.12.2007 her husband died in an accident at Addanki. Basing on which a case was registered by the police in crime No. 175/2007 u/s 304 (A) of IPC. Despite submission of the claim by her it was postponed on one pretext or the other. On that she got issued a legal notice for which it did not evoke any reply. Alleging it amounts to deficiency in service, she filed the complaint claiming Rs. 2 lakhs with interest @ 12% p.a., together with compensation of Rs. 1 lakh and costs.
3) The appellant bank resisted the case. However, it admitted that the complainants husband had opened an S.B. account on 26.5.2006 with Rs. 1,500/- and that it had remitted insurance premium of Rs. 217/- on the same day. The scheme no doubt stipulates that on the death of account holder an amount of Rs. 1 lakh will be paid in case of natural death Rs. 2 lakhs in case of accidental death to the nominee. However the account holder had to maintain minimum balance in order to remit the insurance premium. It had to remit the insurance premium immediately after opening the account with prorata for the period till 31st October, and then the regular payment for every year shall commence from 1st November. The premium has to be paid from out of the balance. In the pass book terms and conditions were made a mention. A minimum balance of Rs. 1,000/- has to be maintained with no maximum ceiling. The insurance cover is covered under the policy on payment of prescribed insurance charges. The insurance risk cover shall commence from the date of payment of insurance premium to the insurance company. The insurance charges would be debited to the account on the date of opening and subsequently on 31st October every year towards insurance premium and bank service charges which are subject to revision every year. In case the premium is not remitted by the bank due to lack of sufficient balance in the account, the insurance cover will not be available. As on 31.10.2006 a minimum balance of Rs.
242/- was only available in the account of the deceased. Since no adequate amount was available to remit insurance premium, there was no coverage of insurance. This was due to negligence of the account-holder. He ought to have kept minimum balance, and therefore prayed that the complaint be dismissed.
4) The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A7 marked while the appellant bank filed Ex. B1 statement of account of the deceased.
5) The Dist. Forum after considering the evidence placed on record opined that a balance of Rs. 3,249/- was available by 15.7.2008 as per the entries in the pass book Ex. A1, however in the ledger extract Ex. B1 filed by the bank a balance of Rs. 258/- was shown as on 6.8.2008. Assuming that the account holder was not having requisite balance it was the bounden duty of the bank to intimate and explain the consequences. Since it was not done the appellant bank was directed to pay Rs. 2 lakhs as the assured died in an accident together with compensation of Rs. 2,000/- and costs of Rs. 1,000/-.
6) Aggrieved by the said decision, the bank preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the account that was opened was Andhra Bank Jeevan Abhaya scheme wherein the account-holder would be entitled to insurance coverage provided he maintains minimum balance. The premium was payable in the month of October every year. What all the bank would consider is whether the required amount is available by the said date, and not in the month of July, 2008. When no amount was admittedly available it cannot be directed to pay insurance coverage amount, and therefore prayed for dismissal of the complaint with costs.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that complainants husband M. Konda Reddy opened A.B. Jeevan Abhaya Scheme account wherein he would be entitled to the benefit of insurance coverage viz., Rs. 1 lakh in case of natural death and Rs. 2 lakhs in case of accidental death. It is not in dispute that he died in an accident on 27.12.2007 evidenced under copy of FIR Ex. A3 followed by inquest Ex. A5, post-mortem examination report Ex. A7 and charge sheet Ex. A8. Ex,. A1 pass book containing conditions which obviously, the complainant had removed. The bank has filed Ex. B1 pass book containing conditions. The account was opened under the name and style of A.B. Jeevan Abhaya Savings Account which provides insurance coverage for natural death as well as accidental death. Condition No. 3 stipulates minimum balance : The minimum balance to be maintained in the account is the same as in case of savings bank account plus two applicable annual premia.
Clause-10 stipulates premium payable:
A very nominal premium is payable per annum in advance as below. First premium is payable on pro-rata basis depending on the month of joining the scheme.
Insurance coverage starts from the date of payment of premium. A nominal amount will be debited to the account every year as scheme administration charges by the bank.
Different rates are provided for the minimum balance to be maintained for A.B. Jeevan Abhaya Accounts in regard to Rural, Semi-urban, Urban and Metro.
A perusal of Ex. A1/B1 shows that since he opened the account on payment of Rs. 1,500/- a pro-rata premium of Rs. 217/- had been deducted.
9) In the very pass book Ex. A1/B1 it was mentioned that the account holder had to maintain Rs. 1,000/-. The deceased undoubtedly could not maintain the minimum balance right from 15.7.2006 evident from Ex. B1 statement of account. Therefore the appellant bank could not have deducted the premium amount of Rs. 217/- from his account. He had to maintain minimum balance plus two applicable annual premia as evidenced from stipulation mentioned in the pass book vide Ex. B1. We may also mention that same conditions finds place in Ex.
A1 pass book filed by the complainant. Therefore, we are of the opinion that the deceased is guilty of not maintaining the minimum balance plus two annual premia in order to enable the bank to deduct the amount towards premium payable to the insurance company for the said year. While he had to pay Rs. 744/- towards premium in order to claim Rs. 1 lakh in case of natural death and Rs. 2 lakhs in case of accidental death, the deceased did not maintain the minimum balance in order to enable the bank to pay the premium. When the premium is not paid necessarily there is no insurance coverage. Therefore the complainant is not entitled to any amount. The Dist. Forum did not consider this aspect of the matter.
10) In the result the appeal is allowed setting aside the order of the Dist. Forum. Consequently the complaint is dismissed. However, in the circumstances no costs.
1) _______________________________ PRESIDENT
2) ________________________________ MEMBER
3) ________________________________ MEMBER 08/07/2001 *pnr UP LOAD O.K.