State Consumer Disputes Redressal Commission
National Insurance Company Ltd ... vs Podila Umarani And 4 Others Khammam on 23 September, 2008
A
BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
AT HYDERABAD.
F.A. 1479/2007
against C.D. 13/2007, Dist. Forum,
Khammam
Between:
National
Insurance Company Ltd.,
Division-III,
Koti,
Hyderabad.
Rep.
by its Divisional Manager *** Appellant/
O.P.
No. 2
And
1. Podila
Umarani
W/o.
Late Satyanarayana
Age:
28 years,
2.
Podila Sandhya Rani
D/o.
Late. Satyanarayana
Age:
11 years
3.
Podila Swarnalatha
D/o.
Late. Satyanarayana
Age:
8 years
4.
Podila Arun Kumar
S/o.
Late. Satyanarayana
Age: 6 years.
(R2
to R4 being minors represented
by
their Mother, natural guardian)
All
are R/o. Laxmipuram
Mudigonda
(M, Khammam Dist. *** Respondents/
Complainants
5.
The Branch Manager
Andhra
Bank, Paloncha Branch
Khammam
Dist. *** Respondent/
O.P.
No. 1
Counsel
for the Appellant: Mr.
P. Phalguna Rao
Counsel
for the Resp: Mr.
S.R. Cherukuri (R1 to R4)
Mr.
Sridhar Rao (R5)
QUORUM:
HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT
SMT. M. SHREESHA, MEMBER
& SRI G. BHOOPATHY REDDY, MEMBER TUESDAY, THE TWENTY THIRD DAY OF SEPTEMBER TWO THOUSAND EIGHT Oral Order: (Per Honble Justice D. Appa Rao, President) ***** This is an appeal preferred by the insurance company against the order of Dist. Forum, Khammam in directing it to pay Rs. 1 lakh under Abhaya Gold Saving Bank account which was covered by an insurance policy.
The parties are described as arrayed in the complaint for felicity of expression.
The case of the complainants in brief is that the husband of the first complainant and father of complainant Nos. 2 to 4 late Satyanarayana during his life time opened Abhaya Gold Savings Account with Andhra Bank.
It was covered by an insurance policy issued by the appellant. It agreed to pay Rs. 1 lakh in case of death or permanent disability during the period of policy. While so on 21.12.2002 Satyanarayana died of electric shock, and the same was informed to the appellant as well as to Andhra Bank. They have also immediately informed to the police, who conducted inquest, and later referred to post mortem examination. When the claim application was made to release the amount covered under the scheme, followed by legal notice Dt. 4.11.2003 the appellant repudiated the claim under Ex. B2 letter. Therefore, the complainants claimed the amount covered under the policy be paid with interest and compensation of Rs. 10,000/-
Andhra bank admitted opening of Abhaya Gold Savings Bank account by the deceased. It alleged that it was having tie up agreement with the appellant insurance company for all the accountholders. They were collecting the premiums from the account of the accountholders and crediting the same to the insurance company. They collected the premium from the account of the deceased on 10.12.2002, and immediately credited to it, therefore, it was insurance company that was liable to pay the amount.
The appellant insurance company resisted the case. However, it admitted the agreement between them, and Andhra Bank with certain terms and conditions. The agreement provides that Courts at Hyderabad had exclusive jurisdiction to entertain the disputes. The banker has to credit the insurance premium of the account holder into the main account of the insurance company, and the risk would be covered from the date of crediting of the premium. They have received the premium on 13.2.2003, while the account holder died on 21.12.2002.
Since the premium was received subsequent to the death, they were not liable to pay the amount, and therefore prayed for dismissal of the complaint.
The complainants though filed, xerox copies of FIR, panchanama, post-mortem certificate, death certificate, legal notice, pass book of the deceased etc., they were not marked, equally the bank filed the telegram issued by it to the appellant insurance company, accounting opening form for Abhaya Gold Savings account, statement of account, and driving licence of the deceased, they were also not marked. The appellant filed affidavit evidence of Sri D. Veera Raju, Senior Assistant along with Ex. B1 policy and Ex. B2 repudiation letter Dt. 13.6.2003. The Dist. Forum after considering the evidence placed on record opined that as per the terms of the agreement, the bank had collected the premium amount from the accountholder on 10.12.2002, and credited the same into the account of appellant. Since the collection was prior to the death of the deceased, the insurance company was liable to pay the sum with interest @ 7.5% p.a. Aggrieved by the said decision, the insurance company preferred this appeal contending that the Dist. Forum did not appreciate either the facts or law in correct perspective. It did not consider the question of territorial jurisdiction to entertain the matter.
The policy covers the risk of the deceased from 1.11.2002 to 30.10.2003. The deceased died on 21.12.2002 while the premium was received on 13.2.2003 i.e., two months after the death, therefore they were not liable, at the most the bank is liable to pay the said amount.
It is an undisputed fact that insurance policy was issued covering the risk of the deceased from 1.11.2002 to 30.10.2003 evidenced under Ex. B1. It is also not in dispute that the deceased died on 21.12.2002 due to electric shock evidenced under FIR, panchanama, post mortem and death certificate etc. The deceased had an Abhaya Gold Savings account vide pass book wherein the Andhra Bank opened his account. The appellant insurance company issued an insurance policy wherein they agreed to pay Rs. 1 lakh if it is covered by death or permanent disability during the period of policy.
The short question for adjudication is whether the insurance company is liable solely on the ground that amount was credited subsequent to the death of the deceased. The bank alleges that on 10.12.2002 when the deceased had opened the account the premium was credited to the account of the insurance company. When once premium was credited to the account of the insurance company, the risk is deemed to have been covered from 10.12.2002. Therefore, the contention that the premium was received on 13.2.2003 after the death of the policyholder was not valid. The appellant insurance company contends that crediting premium amount on 13.2.2003, after the death of the deceased shows deficiency in service on the part of bank. Therefore it need not pay the said amount.
In order to resolve the question some of the terms and conditions of the policy would germane for consideration.
Clause 3(a) of the policy reads as follows:
Mode of payment of premia and coverage of risk:
The payment of premium in respect of Abhaya Gold Savings Bank account shall be made by crediting the premium to the non-operative current account of the insurance maintained/opened with the branches of the banker and such crediting of the premium shall be deemed to be the payment of the premium by the banker, to the insurer in advance within the meaning of Section 64 VB of the Insurance Act. The risk coverage shall commence from the date of crediting the premia in the account of the insurer with the branch of the banker notwithstanding any delay in the transfer of the premia to the main account of the insurer as state below and subject to availability of balance in advance deposit of premium account in item 6 of clause below.
Cl.3 ( c ): Risk cover in respect of each Abhaya Gold Saving Bank account holder shall be from the date of crediting of the insurance premium in respect of such account holder to the insurer account with the concerned branch of banker, till the expiry of the policy period i.e., 31.10.2003.
Clause 6 of the policy further clarifies that :
Advance deposit of premium :
Not withstanding anything in Cl. 3(a) and (b) of this agreement, the banker made a deposit of Rs. 1 lakh vide D.D. No. 672329 Dt. 31.10.2002 with the insurer with intent to cover any delay in payment of premia/remittance of premium by branches in the non-operative current accounts of the insurer maintained in the branches of the banker and for all practical purposes the said amount of Rs. 1 lakh shall be deemed to be advance payment of the insurance premium in respect of the accounts within the meaning of Section 64 (VB) of the Insurance Act and insurer shall not reject any claim on the ground of delay/default in payment of premium or remittance of premium by any of he banks branches as the bank guarantees the payment of premium in terms of Section 64VB of the Insurance Act, 1938 and rule 58 & 59 of Insurance Rules, 1939 provided such delay default is within the advance deposit premium of Rs. 1 lakh.
When the bank alleges that premium was collected on 10.12.2002, and credited to the account of the insurance company as per Clause 3(a) & 3(c), the risk is deemed to have been covered from 10.12.2002. The delay on the part of bank in transferring the premium amount to the account of the insurer cannot be a ground to repudiate the claim.
Apart from this, as per Clause 6 of the policy, the bank had already deposited a sum of Rs. 1 lakh as advance deposit of premium. Importantly the insurance company did not produce any evidence before the Dist. Forum that such default was not within the advance deposit of premium of Rs. 1 lakh. Therefore, we do not see any merit in the contention of the appellant in this regard. The other contention that was raised is as per Clause 12 of the agreement, the Courts at Hyderabad was only having jurisdiction to try the dispute, since the complaint was filed at Dist. Forum, Khammam, it has no jurisdiction to entertain the same.
It is settled proposition of law that the parties cannot confer the jurisdiction on a court not having jurisdiction vide 1992 CPJ 830 (SC). The Supreme Court in Patel Roadways Ltd., Bombay Vs. M/s.
Prasad Trading Co. JT 1991 (3) SC 337 held that the parties cannot confer jurisdiction on a Court which has no jurisdiction to try the suit and consequently, the agreement between the parties conferring exclusive jurisdiction on such Courts is of no avail. Admittedly the deceased is a resident of Khammam. He opened the account in Andhra Bank branch at Khammam. The deceased died at Khammam. Therefore the cause of action arises at Khammam, and the Dist. Forum at Khammam has undoubted jurisdiction to entertain the claim. By introducing a clause, contrarily, cannot confer jurisdiction in a place where the parties have no concern. Therefore, this objection has no basis.
In view of the above discussion, we do not see any merits in the appeal. In the result the appeal is dismissed with costs computed at Rs. 1,000/-. Time for compliance four weeks.
PRESIDENT LADY MEMBER MALE MEMBER Dt. 23.
9. 2008 *pnr CORRECTED O.K.