State Consumer Disputes Redressal Commission
P. Radhamani Amma, vs Life Insurance Corporation Of India, on 5 March, 2011
Daily Order
Complaint Case No. CC/02/2 P.Radhamani Amma Vs. LIC of India,Rep.by Divisional Manager and Others BEFORE: HONARABLE MR. JUSTICE SHRI.K.R.UDAYABHANU PRESIDENT PRESENT: Dated : 05 Mar 2011 ORDER Disposed as Allowed
KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM.
OP No. 02/2002
JUDGMENT DATED: 05-03-2011
PRESENT:
JUSTICE SHRI. K.R. UDAYABHANU : PRESIDENT
SHRI. S. CHANDRA MOHAN NAIR : MEMBER
COMPLAINANT
P. Radhamani Amma,
W/o Kochaniyan Pillai,
Ooppanvilayil Veedu, Vadakkumthala East P.O.,
Karunagappally
(Rep. by Adv. Sri. S. Reghukumar)
Vs
OPPOSITE PARTIES
1. Life Insurance Corporation of India,
Rep. by its Divisional Manager, Thiruvananthapuram.
2. The Branch Manager,
LIC of India, Karunagappally.
3. B. Mukundan Pillai,
Agent of LIC, Palottu Veedu,
Mukundapuram P.O., Kollam.
4. Pramod, Development Officer,
LIC of India, Karunagappally.
(R1 & R2 rep by Adv. Sri. S.S. Kalkura, Sri. G.S. Kalkura &
Sri. R.S. Kalkura )
(R3 rep by Adv. Sri. P. Rajmohan )
(R4 rep by Adv. Sri. Narayan. R & others )
JUDGMENT
JUSTICE SHRI. K.R. UDAYABHANU : PRESIDENT The complainant is the mother of the deceased Anil Kumar who died in a motor vehicle accident on 18-05-2001. The complaint is filed seeking a sum of Rs. 10,00,000/-, the assured amount with interest at 12% from 18-05-2001 and a compensation of Rs. 21,00,000/-.
2. The case of the complainant is that her son employed abroad was aged at 30 years and that as persuaded by the 3rd opposite party/LIC agent and 4th opposite party the Development Officer the deceased availed an LIC Policy of the opposite party when he was at the hometown on leave. He was scheduled to return abroad by flight on 21-05-2001. Double accident policy on life for a sum of Rs. 5,00,000/- was availed and a sum of Rs. 6,525/- was remitted towards the first quarter premium by remitting the same in cash at the second opposite party branch of LIC. The receipt issued contains the BOC Number, agent's code and other relevant details. The deceased also underwent an exhaustive medical check up. All papers demanded by the second and 3rd opposite parties like proof of age, copy of passport etc were also collected on 02-05-2001 along with the proposal form. It was assured that once the medical examination is completed and the relevant papers are received at the office of the opposite parties the policy will be issued. There was nothing adverse was found in the medical check up. After a week the deceased had telephoned the LIC and was told that every formalities have been completed and the policy number is being allotted. After the death of her son on 18-05-2001 a representation was made in writing to the second opposite party and sent on registered post on 30-05-2001 claiming the amount. The complainant is the nominee of late Anil Kumar. There was no credible response from the second opposite party. Subsequently a cheque was received for a sum of Rs. 6,475/-. The letter accompanying the cheque was a cavalier and cunning communication. They pretended passivity and adopted a blatantly false reasoning to deny the benefits of the policy. It was assured at the time of submitting the proposal that the issuance of the policy will be quick and the policy number will be available within a couple of days from the date of receipt of doctor's certificate on medical examination. The medical examination was conducted by the empanelled medical practitioner of the opposite parties. On 02-05-2001 itself one Dr. Ahmed Kunju an empanelled doctor conducted the medical examination and on the same day the premium was deposited. Later Mr. Anil Kumar himself contacted the LIC of India Thiruvananthapuram and the policy number was conveyed to him. The complainant is not in a position to furnish the above number since it was known only to the deceased. The deceased had also made arrangements to remit the second quarterly premium on the due date. Later the return ticket by Gulf Air to Dammam was confirmed and was scheduled to leave on 21-05-2001. Being aware of the accident and death on 18-05-2001 the opposite parties have concealed the policy. A concluded contract has come into existence prior to 18-05-2001. The assured was told about the policy number by the LIC's Thiruvananthapuram/Karunagapally office a week after the medical examination. The medical report has reached the second opposite party's office on 02-05-2001 itself. After coming to know about the news of death of the complainant's son the policy that had ripened to be mailed has been suppressed. With the computerisation in the LIC, the process of issuance of the policy is streamlined at the Divisional Office and designated branches and the process is very quick. On coming to know of the death, opposite parties have returned Rs. 6,475/- after deducting Rs. 50/-. The opposite parties have not taken any steps so far to settle the claim. No reason has been explained in the letter returning the amount by cheque. So far no reason has been furnished for not honouring the claim. It is alleged that there is deficiency of service on the part of the opposite parties 1 and 2. The death of the assured was not due to any other reasons other than the serious motor accident in which he died.
3. Opposite parties 1 and 2 representing LIC of India, Thiruvananthapuram and the Branch Manager LIC of India Karunagapally has filed joint version contending that the LIC had not received any proposal from Mr.K. Anil Kumar before 18-05-2001 the date of his death and hence there was no contract of insurance between LIC of India and the above person. Further, no policy of insurance had been issued to him. An amount of Rs. 6,525/- has been remitted on 02-05-2001 as proposal deposit and the receipt has been issued. No proposal has been received on the above date. On 23-05-2001 the 3rd opposite party agent submitted a proposal of insurance dated 02-05-2002 on the life of K. Anil Kumar under cover of his letter dated 23-05-2001 stating that even though the medical examination of Sri. Anil Kumar was arranged on 02-05-2001 the proposal could not be registered with the LIC as he could not get certain details regarding the address of Anil Kumar in the Gulf and regarding the details of passport of Anil Kumar as well as his employment details. It is also stated in the letter that the proponent has not executed the said details in the relevant form Tr 228 and the said Anil Kumar died on 18-05-2001 without executing the said Form 218. The above proposal was received by the LIC only on 23-05-2001 whereas the person died on 18-05-2001. It is denied that the policy number was conveyed to the deceased. It is contended that a contract of insurance can be concluded only if the acceptance of the proposal and the risk is signified in writing or by issuance of a policy of insurance. The LIC is not bound by the alleged assurances made by opposite parties 3 and 4. The proposal deposit was refunded to the mother of the proponent as requested by the agent in his letter dated 23-05-2001.
4. 3rd opposite party has also filed version mentioning that the deceased had expressed his desire to join Jeevan Shree Policy. The form was given to him and the necessary particulars were filled by the agent based on information supplied by Anil Kumar. The policy form for registration was given by the 3rd opposite party/agent to the second opposite party/Branch Manager promptly and without delay. The 3rd opposite party took Anil Kumar to the branch office of LIC and in his presence deposited Rs. 6,525/- as policy premium. The deceased was asked by the Regional Office to give a copy of the passport along with the proposal form. He was also advised to undergo medical check up. It is learnt that the deceased went to the Regional Office on 17-05-2001. It is learnt that the complainant's son did not submit the copy of passport to the second opposite party. The agent came to know about the death of Anil Kumar only on 19-05-2001 from local newspapers. It is for the doctor to furnish the medical report to the LIC. As a direct result of non production of passport details the policy form of the complainant's son was not registered by the second opposite party as the proposal was an incomplete one. It is contended that the 3rd opposite party is not a necessary party as there is no allegations in the complaint against him.
5. The 4th opposite party has filed version contending that he is an unnecessary party. He has stated that it was one Pradeep who is the Development Officer with that the particular code number. He has also produced documents in support of his case that it is not his code number that is seen in the proposal form. He has sought for dismissal of the complaint against him with cost.
6. We find that IA 1131/2002 is seen filed to strike out his name by the Counsel for the complainant and the same is not seen pursued.
7. Evidence adduced consisted of the testimony of PW1, RWs 1 to 3, Exts. A1 to A10 and Exts. B1 to B16.
8. PW1 is the mother of the complainant who has filed the complaint. She has filed proof affidavit as per the averments in the complaint and was cross examined. RW1 is the Manager of the Legal and HPF Divisional Office, Thiruvananthapuram. RW2 is OP3 the agent. RW3 is the 4th opposite party who has contended that he is an unnecessary party.
9. It has to be noted at the outset that the second opposite party Branch Manger of LIC Karunagappally was not examined. Hence there was no direct evidence as to what transpired on 02-05-2001 when an amount of Rs.6,525/- was deposited and Ext.A1 proposal deposit was made. The Counsel for the complainant has stressed the contention that the every particulars required were provided to the second opposite party and the proposal duly filled up and signed was handed over at the time of deposit of the amount at the second opposite party branch of LIC. It is stressed that the covering letter as per which Ext.A3 cheque for Rs. 6,475/- was sent to the complainant ie, Ext. A7 dated 29-05-2001/Ext.B3 did not mention any reasons for the non acceptance of the proposal. It is also pointed out that the office seal in the above letter is dated 09-07-2001. Further, the amount refunded is mentioned as Rs. 6,525/- in Ext. A7 whereas Ext.A3 cheque is for a sum of Rs. 6,475/- and dated 29-06-2001. The explanation of RW1 is that it is in a computer generated format. We find that the explanation appears not sufficiently explanatory. It is to be noted that the complainant had already submitted Ext.A4 letter dated 30-05-2001 seeking the benefits of the policy. There is no case that opposite parties did not receive Ext.A4 letter of the complainant. It is pointed out that Ext.A7 is sent much subsequent (09-07-2001), subsequent to the date of Ext.A4 claim did not mention anything about the claim and non mentioning of the reasons for not accepting the proposal indicted the attitude of the opposite parties 1 and 2 and the attempt to disclaim the benefits to which the complainant is entitled to. Although Ext.A7/B4 is dated 29-05-2001 the same has been evidently dispatched only on 09-07-2001 as noted above. It was also pointed out that it is pertinent to note that no other communications has been sent to the complainant repudiating the claim. The complaint has been filed on 08-01-2002. There is nothing in the version filed by opposite parties 1 and 2 also with respect to the claim made by the complainant. It is also pointed out that in Ext.A4 claim letter the complainant has enclosed Ext.A1 copy of the receipt of payment of Rs. 6,525/- and the death certificate. There is merit in the above points raised by the Counsel for the complainant.
10. As pointed out that the 3rd opposite party LIC agent has specifically mentioned in the version that the policy form for registration was given by him to the second opposite party branch of LIC promptly and without delay and it was in his presence that the amount was deposited. It is also stated by him that all his transactions with the deceased was confined only to 02-05-2001 the date of Ext.A1 receipt. Subsequently in his evidence he has stated that the proposal form was given to the 4th opposite party Development Officer on 03-05-2001. The same is contrary to his statement in the version.
11. It is further stressed that there is no inward number noted in Ext.B2 the alleged letter from OP3/the agent to the second opposite party dated 23-05-2001. It is the contention that the above letter is a fabricated one as a result of the collusion among the opposite parties. In Ext.B2 the agent has written that the amount was deposited on 02-05-2001 for the purpose of submitting the proposal for the Jeevan Shree Policy and that the medical check up was conducted on the same day. The person died on 18-05-2001 in accident. It is further mentioned in Ext. B2 letter that as the passport details and the proper address in the Gulf could not be obtained. Tr 228 Form could not be attached and hence the proposal could not be registered. He has sought for providing whatever benefits available to the mother of the deceased and to refund Rs. 6,525/- to the mother of the deceased. It is contended that the above document has been procured by opposite parties 1 and 2 from the 3rd opposite party agent inorder to evade payment. The above circumstances brought out appears significant and render the case of the complainant much stronger.
12. It is pointed out that RW1 is not in a position to state as to how the second opposite party received Ext.B2 letter as he has no connection directly with the facts of the case. It is further stressed that neither in Ext.B1 proposal nor in Ext. B2 there is no inward number of the LIC. There is no explanation in this regard from RW1. Further it is pointed out that the 3rd opposite party/agent has specifically mentioned in the version that Rs. 6,525/- was deposited as policy premium on 02-05-2001. The same statement does not tally with the statement in Ext.B2 letter allegedly sent by the agent wherein it is mentioned that the proposal could not be registered for want of details. It is contended that the case with respect to the requirements vide Tr 228 etc. has been built up subsequently. It is pointed out that there is no reason as to why the passport details were not available with the deceased. The complainant has produced the copy of the air ticket as per which the deceased was to leave abroad on 21-05-2001. Further in Ext.B1 proposal form the required details as to his employment as per the proposal form has been mentioned. It is pointed out that the case of the complainant that the entire details required was submitted on 02-05-2001 itself has to be relied. Further, the 3rd opposite party has mentioned that the Regional Office had asked the complainant to furnish the passport details and that the deceased went to the Regional Office on 17-05-2001. It is pointed out that there is no case that the 3rd opposite party agent was unaware of the requirement of passport details and Form Tr 228. There is no explanation as to why the agent could not obtain the passport details required for Tr 228 on 02-05-2001 itself. Certainly the deceased would be having the passport with him. The case in this regard advanced by the 3rd opposite party appears not true.
13. It is further stressed that OP3 has mentioned in the version that the policy form was handed over to OP2 on 02-05-2001 itself. The version of OPs 1 and 2 is that Ext.B1 proposal was received only on 25-03-2001. The office seal in Ext.B1 that bear the date 23-05-2001 has been subsequently affixed, it is alleged.
14. Another relevant fact is that the opposite parties 1 and 2 have not informed the deceased as to the need of any details or requirements for proceeding with the matter. Of course it is pointed out that the above question does not arise as the case of the opposite parties is that they received the proposal only on 23-05-2001. It is pertinent to note that RW2/OP3 has deposed that the deceased is his relative but in the version it is mentioned that he came to know the death of the deceased from local newspapers. The evidence of RW2/OP3 is not at all convincing.
15. Further, nothing is mentioned about the receipt or non receipt of the report of medical check up. The opposite parties/LIC has not produced any relevant office files in this regard also. It is also highlighted that the death in the instant case is the result of a serious motor accident and the same has not been disputed. The complainant has also produced the FIR in the matter. The deceased died on the same day of the accident.
16. We find that the circumstances brought out in the evidence as pointed out above are totally adverse the case set up by the opposite parties as pointed out. The absence of inward number in Ext.B2 letter allegedly sent by OP3/LIC and in Ext.B1 proposal render suspicious the genuineness of the date and seal contained therein. The case advanced by the 3rd opposite party agent that the passport details could not be obtained cannot be believed. From 02-05-2001 to 18-05-2001 the deceased was alive. There was no explanation as to why the 3rd opposite party could not obtain the passport details required for Tr 228 form. As pointed out above, there are discrepancies in the version of OP3 agent and his evidence. The second opposite party was not examined. The fact that Ext.A7/B4 letter did not mention any reason about the non acceptance of the proposal and that nothing is mentioned about the repudiation of the claim are also circumstances that render suspicious the truth of the stance of the LIC. It is also to be noted that Ext.A7/B4 has been dispatched subsequent to the date of A4 letter dated 30-05-2001 claiming the assured sum.
17. Of course, the claim cannot rest on the contention that on deposit of the amount vide Ext.A1 the contract has been concluded. The law in this regard is well settled. That acceptance is complete only when it is communicated to the offeror so far as the insurance policy is concerned (LIC of India Vs R. Vasireddy AIR 1984 (SC) 1014 etc). But the case of the complainant is that there is serious deficiency in service and hence even if the policy was not issued the opposite parties are liable to pay compensation equivalent to the assured sum. Counsel for the complainant has relied on the decision for the National Commission in SBI Life Insurance Company Ltd. Vs Smt. Asha Lata Parida & Anr. 2010 CTJ 753 (CP) (NCDRC) wherein the National Commission has directed the Insurance Company to pay the entire assured sum. As the Rule has contained in the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interest Regulations 2002 vide Rule 4 clause (6) provides that proposals shall be processed by the insurer with speed and efficiency and all decisions there of shall be communicated by it in writing within a reasonable period not extending 15 days from receipt of proposals by the insurer. The National Commission has held in Gita Devi Aggarwala Vs LIC of India 2 (2008) CPJ 375 that although the above Regulations have come into effect in 2002 after the issue of the policy and the death of the insured the sum and substance of these Regulations were already incorporated in the guidelines issued by the LIC.
18. As already mentioned above, the case of the LIC that it did not receive the proposal form till the death of the deceased and that it received the proposal only on 23-02-2005 after the death of the deceased is totally unbelievable. The case of the complainant in this regard that the proposal form along with the relevant particulars were submitted on 02-05-2001 appears true. As noted above, the relevant records/files in this regard were not produced by the LIC and also there is no inward number in Ext.B1 or in Ext. B2. The circumstances would indicate that the Ext.B2 letter has been subsequently procured and the seal in Ext.B1 proposal was affixed later. The failure to mention any reasons for the alleged non acceptance of the proposal in Ext.A7/B4 letter is also telling the context. In the circumstances we hold that there is serious deficiency in service on the part of the opposite parties. The particulars mentioned in Ext.B1 proposal form would support the case of the complainant that she belonged to the lower strata. The deceased was a fiber glass worker who has studied only up to SSLC and was aged only 30 and having parents and two sisters younger in age. Of course, the same has nothing to do with the merits of the case. The death was accidental. The policy was a double accident policy has not been disputed. In the circumstances, we direct the opposite parties 1 and 2 to pay the entire assured sum ie, Rs. 10,00,000/- to the complainant with interest at 6% per annum from the date of complaint ie, 08-01-2002. The complainant will also be entitled for cost of Rs. 7,000/-. The amounts are to be paid within three months from the date of receipt of copy of this order, failing which the complainant will be entitled for interest at 12% from today 04-03-2011, the date of this order.
In the result, the complaint is allowed as above.
JUSTICE K.R. UDAYABHANU: PRESIDENT
S. CHANDRA MOHAN NAIR : MEMBER
APPENDIX
Witness for the Complainant
PW1 Radhamani Amma
Exts. for Complainant
A1 Proposal deposit receipt dated 02-05-2001 issued by 2nd opposite party
A2 Cover addressed to complainant by 2nd opposite party dated stamped 19-07-2001
A3 Cheque No. 967479 for Rs. 6475/- dated 29-06-2001 drawn on Bank of Madurai Ltd. Issued by 2nd opposite party
A4 Copy of letter dated 30-05-2001 issued by complainant to 2nd opposite party
A5 Death certificate dated 06-06-2001 issued by Corporation dated 21-05-2001
A6 Copy of confirmed Air Ticket No. 0723361535391
A7 Letter dated 29-05-2001 issued by 2nd opposite party to complainant
A8 Photocopy of Passport
A9 Copy of FIR No. 68/2001 dated 18-05-2001 issued by Chavara South Police Station
A10 Receipt issued by LIC of India, Karunagappally
Witness for the Opposite Party
RW1 S. Partha Sarathi
RW2 B. Mukundan Pillai
RW3 Promod. V
Exts. for Opposite Party
B1 Proposal for insurance on own life application
B2 Copy of letter dated 23-05-2001 issued by the 3rd opposite party
B3 Copy of covering letter dated 29-05-2001 issued by the opposite party to the complainant
B4 Copy of letter dated 30-05-2001 issued by the complainant to the opposite party
B5 Copy of status program dated 08-05-1999
B6 Copy of Proposal Deposit Receipt
B7 Copy of Amendments to Financial Powers - Standing Order, 1960, circular dated 09-12-2000
B8 Non-resident India questionnaire form
B9 Specimen copy of questionnaire to be filled up by the non-resident of IndiaB10 Extract of the Agency Register of the 3rd opposite party
B10 Extract of the Agency Register of 3rd opposite party
B11 Letter issued by the Branch Manager, LIC of India, Karunagappally dated 24-12-2008
B12 True copy of letter dated 30-03-2002
B13 Courier Receipt dated 05-04-2002
B14 Courier Receipt dated 05-04-2002 to complainant's Counsel
B15 True copy of letter dated 18-11-2005
B16 Postal receipt dated 21-11-2005
JUSTICE K.R. UDAYABHANU : PRESIDENT
S. CHANDRA MOHAN NAIR: MEMBER
Sr.
[HONARABLE MR. JUSTICE SHRI.K.R.UDAYABHANU] PRESIDENT