BIRLA SUN LIFE INSURANCE CO. LTD. Vs. LALITHA

JUDGEMENT

(1.) This revision petition has been filed by Birla Sun Life Insurance Company Ltd., Petitioner herein and OP-2 before the District Consumer Disputes Redressal Forum at Dharwad (for short the District Forum) being aggrieved by the order of the Karnataka State Consumer Disputes Redressal Commission (for short the State Commission) which had dismissed its appeal and confirmed the order of the District Forum, directing it to pay Respondent No.1, Complainant before the District Forum, the insured amount of Rs.4,79,659/- besides Rs.500/- as costs of litigation. Syndicate Bank, which was also OP-1 before the District Forum and Respondent No.2 herein, had been directed to pay Rs.5000/- for deficiency in service, which order had been confirmed by the State Commission. However, the present revision petition has only been filed by the Petitioner/Insurance Company.

(2.) The facts of the case are that one Smt. Ratnavva (hereinafter referred to as the life assured) had taken a life insurance policy on 23.07.2007 from the Petitioner/Insurance Company/OP-2 for a sum of Rs.4,99,180/-. The premium under the policy was payable once in a quarter i.e. Rs.23,140/- for the first quarter and also additional sum of Rs.1631/- which was to be kept in the suspense account. Subsequently the second and third quarterly premiums which became due on 23.10.2007 and 23.01.2008 were not paid and therefore the policy lapsed. However, when the life assured paid an amount of Rs.44,649/- on 23.06.2008 in respect of the above two quarterly installments after deducting the amount in suspense account, the policy was revived. Again in the quarter where the premium was due on 23.04.2008 onwards, it remained unpaid and therefore the policy again lapsed. To revive the same, the life assured sent cheque no. 627669 dated 26.08.2008 for Rs.69,420/- in respect of two quarterly premiums which were due from 23.04.2008 and the said cheque was received by the Petitioner/Insurance Company/OP-2 on 30.09.2008. The Petitioner/Insurance Company/OP-2 issued a receipt on that date subject to "realization of the cheque". It also sent a computer generated letter on 06.10.2008 stating that the policy stood revived w.e.f. 05.10.2008 and asked for continued payment of the premium. The said letter was issued on the presumption that the payment would be made through cheque and no problems would be faced with its realization. However, later on the same date i.e. 06.10.2008 the Syndicate Bank/OP-1 informed the Petitioner/Insurance Company/OP-2 that the said cheque had been dishonoured due to insufficient funds. The Petitioner/Insurance Company/OP-2 was informed that the life assured had passed away on 06.10.2008 and, therefore, when the claim was made on 05.12.2008 for the settlement of the policy amount, since the cheque had been dishonoured and therefore premium was not paid as per the terms and conditions of the policy, the Petitioner/Insurance Company/OP-2 did not indemnify the claim and treated the policy as having lapsed. Being aggrieved by this action, a complaint was filed by the Respondent No.1 (daughter of the life assured as nominee in the insurance policy) holding both Syndicate Bank/OP-1 and Petitioner/Insurance Company/OP-2 guilty of deficiency in service. It was contended that the action of the Bank in wrongly informing the Insurance Company that the cheque was dishonoured for want of sufficient funds when admittedly there were adequate funds in the account of the life assured amounted not only to deficiency in service but also gross negligence and it was this misinformation that led to the repudiation and non-payment of the insurance policy without any basis whatsoever. The Petitioner/Insurance Company/OP-2 also committed deficiency in service by first sending a computer generated letter on 06.10.2008 informing the life assured that the policy had been revived and thereafter even though it received information about the dishonouring of the cheque from the Syndicate Bank/OP-1 on 03.10.2008, it did not inform the life assured about the same till several weeks later i.e. 07.01.2009. If the information had been intimated to the life assured even over telephone on 03.10.2008 on which date she was alive, she could have sorted out the matter with the Syndicate Bank/OP-1.

(3.) The District Forum after hearing the parties and on the basis of evidence produced before it allowed the complaint and directed the Petitioner/Insurance Company/OP-2 to pay Respondent No.1/Complainant the insured amount of Rs.4,79,659/- after deducting the money already paid with costs of Rs.500/-. Syndicate Bank/OP-1 was directed to pay Rs.5000/- as compensation for deficiency in service within one month from the date of receipt of copy of that order, failing which the amount would carry interest @ 6% per annum from the date of that order till its realization.