State Consumer Disputes Redressal Commission
Niacl vs Nirmal Gupta on 11 December, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 330 of 2012 Date of Institution : 27.09.2012 Date of Decision 11.12.2012 New India Assurance Company through its Manager, SCO No.36, Sector 17A, Chandigarh. Appellant/Opposite Party. VERSUS Smt. Nirmal Gupta widow of Late Sh. Ravinder Mohan Gupta, resident of House No.1254, Sector 8-C, Chandigarh. Respondent/Complainant. Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. MRS. NEENA SANDHU, MEMBER.
Argued by: Sh. Vinod Chaudhari, Advocate for the appellant along with Ms. Jyotsna Sukhija, Branch Manager of the appellant Company.
Sh. Vishal Gupta, Advocate for the respondent.
PER MRS. NEENA SANDHU, MEMBER.
This appeal is directed against the order dated 07.08.2012, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which it accepted the complaint qua the Opposite Parties, and directed them, as under:-
7. In the light of above observations, we find a definite deficiency in service on the part of the Opposite Parties No.1 and 2. The present complaint of the Complainant succeeds against the Opposite Parties No.1 and 2, and is allowed. Hence, the Opposite Parties No.1 and 2 are directed:-
[a] To pay Rs.15.00 lacs due towards the Complainant;
[b] The Opposite Parties are also saddled with a consolidated amount of compensation to the tune of Rs.50,000/- on account of deficiency in service and causing mental & physical harassment to the Complainant;
[c] To pay Rs.10,000/- as cost of litigation;
8. The above said order shall be complied within 45 days of its receipt by Opposite Parties No.1 & 2; thereafter, they shall be liable for an interest @18% per annum on the amount mentioned in sub-para [a] & [b] of para 7 above, apart from cost of litigation of Rs.10,000/-, from the date of lodging of the claim i.e.28.06.2010, till it is paid.
2. The facts, in brief, are that Late Sh. Ravinder Mohan Gupta (husband of the complainant) subscribed for a Personal Accident Policy No.350102/42/09/01/00000094 for the period from 1.1.2010 to 31.12.2010, for himself, and his wife Smt. Nirmal Gupta (complainant). Sh. Ravinder Mohan Gupta remained a subscriber for the said accident policy, without any break, since 1986 and regularly paid the premium. Both the husband and wife were insured for Rs.5.00 lacs and Rs.10.00 lacs respectively. It was stated that both were entitled to the additional amount to the extent of 50% of the insured amount, as cumulative bonus, and in this way, they were insured to the extent of Rs.15 lacs and Rs.7.50 lacs respectively from 1.1.2010 to 31.12.2010. It was further stated that, unfortunately, on 11.06.2010, Sh. Ravinder Mohan Gupta expired in a road accident, and Smt. Nirmal Gupta (complainant) became the assignee to get the benefits of Insurance Policy. It was further stated that on 28.06.2010, the complainant filed a claim with Opposite Party No.1, vide application dated 15.6.2010 (Annexure C-1). It was further stated that she also received a letter dated 27.7.2010 from Opposite Party No.2 whereby she was asked to submit additional documents, and also to fill up the claim form, which were duly submitted by her, vide application dated 29.7.2010 (Annexure C-2). It was further stated that the Opposite Parties appointed a Surveyor, who visited the complainant on 21.10.2010 and demanded some more documents, which were handed over to him vide letter dated 26.10.2010 (Annexure C-4). It was further stated that the Opposite Parties, vide their letter dated 17.2.2011, intimated the complainant, that a claim of Rs.12.65 lacs had been approved and she was called upon to sign the enclosed No Claim Disbursement Voucher and to submit her PAN Card alongwith it. It was further stated that since the claim settled by the Opposite Parties, amounting to Rs.12.65 lacs, instead of Rs.15 lacs, was not in consonance with the terms and conditions of the policy, the Complainant made a representation dated 01.03.2011 (Annexure C-6). It was further stated that the complainant received a letter dated 7.3.2011 (wrongly mentioned as 7.3.2010) whereby a cheque of Rs.12.65 lacs, alongwith Settlement Intimation Voucher was sent to her, but she returned the original cheque alongwith a letter dated 13.3.2011 (Annexure C-7), as the same was not in consonance with the terms and conditions of the Policy.
It was further stated that the original policy, effective for the period from 1.1.2010 to 31.12.2010, was submitted to the Opposite Parties, on their demand, alongwith other claim related documents, which have been in their possession since then. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.
3. The Opposite Parties, in their written version, took up some preliminary objections, to the effect, that the complaint, being not framed in accordance with the Rules, deserved to be dismissed; that no cause of action had arisen in favour of the complainant; that the complaint involved disputed question of facts, which required extensive evidence, cross-examination of witnesses etc., and hence the same deserved to be adjudicated upon by a Civil Court. However, on merits, the factum with regard to the issuance of policies in favour of the complainant, as also her late husband was admitted. It was also admitted that the claim of the complainant was settled at Rs.12.65 lacs, as full and final settlement of her claim, on the basis of calculations, which were made available to her. It was further stated that the settled amount of Rs.12.65 lacs, included the sum assured, as well as the cumulative bonus, that was admissible to the life assured (late husband of the Complainant). It was further stated that there was no deficiency, in rendering service, on the part of the Opposite Parties. The remaining allegations, contained in the complaint were denied.
4. The parties led evidence, in support of their case.
5. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to above, in the opening para of the instant order.
6. Feeling aggrieved, the appellant/Opposite Party No.2, has filed the instant appeal.
7. We have heard the Counsel for the Parties, and, have gone through the evidence and record of the case, carefully.
8. The Counsel for the appellant/Opposite Party No.2 submitted that the Insurance Company released a sum of Rs.12,65,000/-, as per the terms and conditions of contract of indemnity, but the District Forum, while allowing the complaint, did not consider this aspect. He further submitted that the Opposite Parties, rightly calculated the claim amount as Rs.12,65,000/-, as per the terms and conditions of the policy, because the complainant had deposited the amount of Rs.5 Lacs in one go and kept on enhancing the Capital Sum Insured, from time to time. He further submitted that as the complainant had deposited the amounts, on different intervals, therefore, the cumulative bonus was applicable to the Capital Sum Insured, which was renewed from time to time. The Counsel further submitted that had the complainant/respondent deposited the amount in one go, the matter would have been different.
9. Ms. Jyotsna Sukhija, Branch Manager of the appellant, who also appeared on the date of final hearing i.e.04.12.2012, referred to the condition under the heading CUMULATIVE BONUS, which reads as under:-
CUMMULATIVE BONUS Compensation payable under clauses (a), (b), (c) and (d) of the Policy viz. death, loss of limbs(s) or sight and Permanent Total Disablement arising out of accidental injuries shall be increased by 5% thereof in respect of each completed year during which the Policy shall have been in force, prior to the occurrence of an accident for which capital sum becomes payable but amount of such increase shall not exceed 50% of the Capital sum Insured stated in the Schedule herein. This Cumulative Bonus is applicable to CSI which is renewed continuously.
She submitted that as per this condition, there would be no cumulative bonus for the initial year, on the amount invested by the insured, and, thereafter, the cumulative bonus shall be increased by 5% thereof, in respect of each completed year, during which, the Policy was in force but the amount of such increase shall not exceed 50% of the Capital Sum Insured. Referring to Annexure C-11, she submitted that the complainant, took policy of Rs.5 Lacs under Table-D, in the year 2000, and, the cumulative bonus of 5% was applicable to the Capital Sum Insured from 28.12.2001 to 27.12.2002, which was to be renewed continuously. She further submitted that since the complainant was subscribing to the policy since 1994, and being a committed customer, as a goodwill gesture, he was given 50% C.B. on Rs.3 Lacs and 20% on the remaining Rs.2 Lacs for the period from 1.1.2005 to 31.12.2005, instead of 20% to which he was entitled. However in Annexure C-11, under the column C.B. given, at Serial No.4, against Table-D for Rs.5 Lacs, inadvertently, 50% C.B. was mentioned. She further submitted that in the year 2008, the insured enhanced the Capital Sum Insured to Rs.7.5 Lacs, by adding Rs.2.5 Lacs. In this very Annexure C-11, at Sr. No.7, the cumulative bonus was shown as NIL, as per the condition of the cumulative bonus and, subsequently, the cumulative bonus was increased by 5%, as shown at Serial Nos.7 and 8. She further submitted that in the year 2010, the insured again enhanced the Capital Sum Insured to Rs.10 Lacs, by adding Rs.2.5 Lacs more and the cumulative bonus qua this amount had been shown NIL, at Serial No.9, and in this way the total sum insured including cumulative bonus, came out to be Rs.12,65,000/-. The Counsel for the appellant/Opposite Party No.2, finally submitted that the impugned order dated 07.08.2012, suffers from inherent anomalies and liable to be set aside.
10. On the contrary, the Counsel for the respondent/ complainant submitted that the impugned order, passed by the District Forum, in awarding Rs.15 Lacs, as the total sum insured including commulative bonus, being just, fair and legal, is liable to be upheld.
11. Admittedly, policy No.350102/42/0/01/282, under Table-D, for a sum of Rs.5 Lacs was purchased by Sh. Ravinder Mohan Gupta (now deceased) for the period from 28.12.2001 to 27.12.2002 and the cumulative bonus @5%, as per the terms and conditions of the policy, accrued to him, for the first time in the year 2002. Thereafter, in the year 2003, the cumulative bonus on this sum, became 10% and in the year 2004, the cumulative bonus became 15%. It is evident, from the chart (Annexure C-11), submitted by the Opposite Parties, that in the year 2005, they bifurcated the Capital Sum Insured into Rs.3 Lacs and Rs.2 lacs respectively. Since, Sh. R. M. Gupta was a valuable customer of the Opposite Party, as a goodwill gesture, he was given cumulative bonus to the tune of 50%, which was the maximum limit instead of 20%, which otherwise accrued to him, as per the terms and conditions of the policy, on the Capital Sum Insured of Rs.3 Lacs, whereas on the remaining Capital Sum Insured of Rs.2 Lacs, as per the terms and conditions of the policy, the cumulative bonus came to be 20%. In the year 2006, the cumulative bonus became 25%, whereas in the year 2007, it became 30%. In the year 2008, the cumulative bonus became 35%, in 2009 it became 40% and in the year 2010, it became 45%. Thus, the deceased became entitled to a sum of Rs.7,40,000/- on the aforesaid bifurcated C.S.I (i.e. Rs.3,00,000/- + Rs.1,50,000/- as cumulative bonus and Rs.2,00,000/- + Rs.90,000/- as cumulative bonus). Again in the year 2008, Sh. R.M. Gupta deposited a sum of Rs.2,50,000/-, which was considered to be the Capital Sum Insured. On this amount, the cumulative bonus, which accrued to him, for the first time in the year 2009, was to the tune of 5%. In the year 2010, when Sh. R. M. Gupta died, the cumulative bonus on the amount of Rs.2,50,000/- became 10%. Thus, he became entitled to a sum of Rs.2,75,000/-. Again Sh. R. M. Gupta (now deceased) deposited a sum of Rs.2,50,000/- as Capital Sum Insured in the year 2010 i.e. for the period from 1.1.2010 to 31.12.2010. Since, he died in that year, he did not become entitled to any cumulative bonus, on the amount of Rs.2,50,000/-. Thus, in all, at the time of his death, Sh. R. M, Gupta became entitled to a sum of Rs.12,65,000/- i.e. (Rs.4,50,000 + Rs.2,90,000 + Rs.2,75,000 + Rs.2,50,000).
12. The contention of the Counsel for the respondent/ complainant to the effect that the deceased became entitled to Rs.15 Lacs i.e. (Rs.10 Lacs deposited by him on different intervals + Rs.5 Lacs as 50% cumulative bonus thereon), is not correct, as the same is contrary to the terms and conditions of the policy. It was not that, Sh. R. M. Gupta deposited a sum of Rs.10 Lacs, at the very outset, in the year 2001. Since, he deposited the aforesaid amount, in different years and, as such, the cumulative bonus separately accrued on the amounts, as and when the same were deposited by him, as per the terms and conditions of the Policy. Therefore, the submission of the Counsel for the appellant/Opposite Party No.2, to the effect that the claim of the respondent/complainant to the extent of Rs.15 lacs, was not justified, appears to be correct. We are, therefore, of the considered view that the appellant/Opposite Party No.2, rightly calculated the claim amount as Rs.12,65,000/- (in terms of Annexure C-11), as per the terms and conditions of the Policy, whereas this fact was not considered by the District Forum in proper perspective. Thus, the order of the District Forum, in awarding Rs.15 Lacs, on this account, is liable to be modified to the extent that the complainant is held entitled to a sum of Rs.12,65,000/-, as offered to her by the Opposite Party.
13. The next issue, raised by the Counsel for the appellant/Opposite Party No.2, was that there was no delay, on its part, in settling the claim of the complainant, and, the District Forum wrongly awarded compensation of Rs.50,000/- vide the impugned order, which was liable to be set aside. On the contrary, the Counsel for the respondent/ complainant submitted that the complainant lodged the claim with the Opposite Parties on 26.08.2010 and the same was settled in March 2011 and they sent a cheque of Rs.12,65,000/-, as full and final settlement of the claim, to her, vide letter dated 7.03.2011 (Annexure R-2) (wrongly mentioned as 7.03.2010), but the said cheque was returned by her vide letter dated 13.3.2011 (Annexure C-7). He further submitted that as per the IRDA guidelines, the claim was required to be settled within six month from the date of filing the same. As such, there was a delay of two months, in settling the claim, of the complainant, for which, the District Forum rightly compensated the complainant.
14. Certainly, there was delay of two months, in settling the claim, of the complainant, and she was entitled to compensation on this account. However, the compensation awarded to the tune of Rs.50,000/-, seems to be on the higher side, and the same if reduced to Rs.25,000/-, shall meet the ends of justice for the delay of just two months, in settling the claim.
15. The order awarding costs of litigation to the tune of Rs.10,000/- is just and proper and hence, warrant no interference. However, the interest @18% per annum, awarded by the District Forum, in case of non-compliance of the order, within the stipulated time, seems to be on the higher side, which deservs to be reduced @12% per annum.
16. No other point, was urged, by the Counsel for the parties.
17. For the reasons recorded above, the appeal filed by the appellant/Opposite Party No.2, is partly accepted, with no orders as to costs. The impugned order passed by the District Forum, is modified to the extent as under: -
(a) The Opposite Parties are directed to pay a sum of Rs.12,65,000/- to the complainant, as assessed by them, vide Annexure C-11, instead of Rs.15 Lacs awarded by the District Forum;
(b) The Opposite Parties are further directed to pay a sum of Rs.25,000/- to the complainant, as consolidated compensation, on account of deficiency in service and for causing mental & physical harassment to her, instead of Rs.50,000/- awarded by the District Forum;
(c) The Opposite Parties shall pay interest @12% per annum, instead of 18% per annum, on the amounts mentioned at (a) & (b) above,
(d) The other reliefs granted and directions given by the District Forum, subject to the modification, indicated above, shall remain intact.
18. Certified Copies of this order be sent to the parties, free of charge.
19. The file be consigned to Record Room, after completion.
Pronounced.
11th December, 2012.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[NEENA SANDHU] MEMBER AD STATE COMMISSION (First Appeal No.330 of 2012) Argued by:
Sh. Vinod Chaudhari, Advocate for the appellant along with Ms. Jyotsna Sukhija, Branch Manager of the appellant Company.
Sh. Vishal Gupta, Advocate for the respondent.
Dated the 11th day of December, 2012.
ORDER Vide our detailed order of even date, recorded separately, this appeal filed by the appellant/Opposite Party has been partly accepted, with no orders as to costs, as per directions.
(NEENA SANDHU) MEMBER (JUSTICE SHAM SUNDER(RETD.)) PRESIDENT Ad