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ANDHRA PRADESH STATE CONSUMER DISPUTES REDRESSAL COMMISSION HYDERABAD
T. Sunil Chowdary, President, P. Mutyala Naidu, Member
ADMIRAL SUPERINTENDENT, NAVAL DOCKYARD - Appellant
Versus
BANGARI KUMARI & ANR. - Respondents
FA 530 of 2016
Decided On : 09-04-2019
For the Appellant :Mr. Josyula Bhaskara Rao, Advocate.
For the Respondent:Dr. P.P. Ramayya, Mr. G. Anand Kumar, Advocate.
The obligation of the employer to deduct premiums from the employee's salary and the duty of the insurance company to inform the insured about lapsed policies.
Headnote:
Insurance - Claim Settlement - Indian Evidence Act, 1872, Sections 101 and 102; Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policy) Regulations, 2010, Conditions 4 and 5 - The court discussed the obligation of the employer to deduct premiums from the employee's salary, the sufficiency of the salary for premium deduction, and the duty of the insurance company to inform the insured about lapsed policies. The court found deficiency of service on the part of both the insurance company and the employer, and upheld the lower forum's decision to award the claim amount with interest and compensation.
Fact of the Case:
The deceased employee had two insurance policies, and the employer deducted premiums from the salary. After the employee's death, the insurance claim was not settled due to lapsed policies and non-recovery of premiums.
Finding of the Court:
The court found deficiency of service on the part of both the insurance company and the employer, and upheld the lower forum's decision to award the claim amount with interest and compensation.
Issues: Non-settlement of insurance claim due to lapsed policies and non-recovery of premiums.
Ratio Decidendi: The employer's obligation to deduct premiums, sufficiency of salary for premium deduction, and the duty of the insurance company to inform the insured about lapsed policies.
Final Decision: The appeal was dismissed, and the lower forum's decision to award the claim amount with interest and compensation was upheld.
ORDER :
P. Mutyala Naidu, Member (Oral)—Aggrieved by the order dated 18.5.2016 in CC No. 399/2014 on the file of District Consumer Disputes Redressal Foram-I, Visakhapatnam, the appellant/Admiral Superintendent, Naval Dockyard (Opposite Party No. 2) preferred this appeal.
2. The parties are referred to as they are arrayed in the order of the Forum.
3. One Bangari Pydiraju who is the husband of the complainant worked as Lascar in Naval Dock Yard, Visakhapatnam (Opposite Party No. 2). He took one insurance policy bearing No. 692834023 from LIC of India, Yellammathota, Port branch, Visakhapatnam (Opposite Party No. l) for an assured sum of Rs. 50,000 on payment of monthly premium of Rs. 486 on 11.11.2008 and the period of policy is for ten years, i.e., from 1.11.2008. He took another policy bearing No. 69286285353 from the 1st opposite party for an assured sum of Rs. 1,50,000 on payment of monthly premium of Rs. 612 on 28.1.2010 and the maturity date is January, 2025. The 2nd opposite party consented to recover the monthly premiums in every month from the salary of the said Pydiraju. According to the complainant, the 2nd opposite party deducted the premiums under the two policies till August 2011. Subsequently the husband of the complainant, Pydiraju died on 11.8.2011 at railway loco shed in the water ditched bushes. A complaint was lodged with the Station House Officer, 5th Town Police Station, Visakhapatnam on the same day and FIR No. 331/2011 was registered. During investigation the said S.H.O. conducted investigation, post-mortem was conducted and in the final report the cause of death is mentioned as drowning in consumed alcohol condition. The complainant submitted claim form with relevant documents to the 1st opposite party for settlement of the assured sum of Rs. 2,00,000 with interest.
4. Having received the documents as required by the Insurance Company, the claim was not settled by the 1st opposite party. The 2nd opposite party had a legal obligation to process the claim which has remitted the premiums from the salary of the insured under the two policies and both the opposite parties have committed deficiency in service and therefore, the claim is laid.
5. The 1st opposite party Insurance Company has not disputed the issuance of the insurance policies in favour of Pydiraju and the insurance claim of his wife who is the complainant being a nominee. It is admitted that the claim form submitted by the complainant was received and found that both the policies are in lapsed condition due to gap premium due for the months of October, 2009 and June 2010 for the first policy bearing No. 692834023 and there is a due for payment of premium during the month of June 2010 for the second policy bearing No. 692862853. The complainant was asked to submit a record for leave application and medical certificates with reasons for applying leave availed for different periods from 31st March, 2008 to 16th November, 2008 and 8th March, 2009 to 26th October, 2009 on or before 15.1.2014 to process the claim, but the said information was not submitted. The 1st opposite party received leave card of the insured from 2008 to 2013 from the 2nd opposite party, but medical certificate for the reasons for applying leave was not submitted and the police final report is not received from the complainant. Therefore, in the absence of the said documents, the 1st opposite party could not proceed further in settlement of the claim when the claim is under process for want of the said requirement. Therefore, it is contended that there is no deficiency of service on the part of the 1st opposite party.
6. The 2nd opposite party admitted about the taking of two policies by Pydiraju and it is also admitted that basing on the letter issued by the 1st opposite party, it has deducted the monthly premiums from the salary of the employee concerned (Pydiraju). It is also admitted that the premium of Rs. 486 in respect of the first policy was deducted from the salary of the i
