ANDHRA BANK vs MUDUNURI BABY SAROJINI

THIS revision petition is filed by Andhra Bank against the judgment and order dated 3.11.2004 passed by the State Consumer Disputes Redressal Commission, Andhra Pradesh, in Appeal No. 732 of 2002. By the impugned order the State Commission affirmed the order dated 6.8.2002 passed by the District Forum, West Godawari at Eluru in C.D. No. 16 of 2002. By the said order the District Forum has directed the petitioner, Andhra Bank, to pay a sum of Rs. 5 lakh to the complainant on the basis of insurance cover given to the assured on the basis of the deposit of Rs. 5,200.

IT is the case of the complainant that her husband, late Naga Perraju, joined as a member of the ''Abhaya Platinum Scheme'' on 27.7.2000 floated by the Andhra Bank and deposited an amount of Rs. 5,200. As per the terms of the scheme, the Andhra Bank assured the depositors coverage of Rs. 5,00,000 for a period of one year from the date of opening of account. The complainant''s husband died on 10.7.2001 due to snakebite. The complainant being the legal heir and nominee requested the Andhra Bank to settle the claim through her letter dated 27.7.2001. The Andhra Bank gave the reply dated 30.7.2000 stating that ''Abhaya Platinum Scheme'' was closed on 16.12.2000 and expressed its inability to send the claim form. Hence, the complainant addressed a letter dated 28.8.2001 to the Insurance Company, opposite party No. 2 before the District Forum, to send the claim form but the Insurance Company has informed that the period of the policy has expired by 31.5.2001 and did not send the claim form. The complainant, therefore, got issued legal notices to the bank and the Insurance Company on 3.10.2001. The Insurance Company sent a reply dated 15.10.2001 infoming that the scheme was closed on 16.12.2000 as per the settlement between the bank and the Insurance Company. The complainant, therefore, approached the District Forum, Eluru, for appropriate relief.

In our view, the order passed by the State Commission cannot be justified in view of the scheme framed for giving insurance coverage to account holders.

ON record there is an agreement between the Andhra Bank and the New India Assurance Co. Ltd. It specifically provides as under : "(1) Scope, duration and commencement of the agreement : (i) This agreement shall cover all persons opening accounts with the banker under ''Abhaya Platinum Savings Bank Accounts and Platinum Current Deposit Accounts'' who have opted/deemed to have opted to become insured person under the Group Janata Personal Accident Policy being operated by the insurer and more fully described under the categories in Clause (2)(a) below :

(ii) Eligibility : Account holders who have attained the age of 5 (five) years, and have not completed the age of 70 years shall be eligible to be covered by the insurer under the scheme;

(iii) This agreement shall be in force for the period of 5 (five) years commencing from 1.6.1998 unless terminated by notice by either party of the agreement in accordance with the provisions in Clause 16 below :

(iv) ON commencement, the risk coverage initially shall be for a period of one year, which may be subsequently extended for further period of one year each, during the period the agreement is in force by mutual agreement between the parties and upon such mutually agreed terms and conditions as the parties may decide at the time of each renewal."

Para 3 provides for risks to be covered which reads as under : "3(c). Risk cover in respect of each Abhaya Platinum Savings/Platinum Current Deposit Account holder shall be from the date of the crediting of the insurance premium in respect of such account holders to the insurer''s account with the concerned branch of the banker, till expiry of the policy period, i.e., 31st May, of the following year."

IT has been pointed out that the aforesaid agreement was terminated by the Insurance Company as provided in Clause 16 which provides that agreement can be cancelled at the option of either of the parties subject to an advance notice of at least 6 months and the agreement would stand cancelled w.e.f. 1st June of the following year. Further, as per scheme, the insurance cover was there only upto 31st May, 2001 and the insurance cover was to be renewed on further payment of premium of Rs. 200. However, the said scheme was discontinued in December, 2000. For this a general notice was affixed at the notice board of the branch. Therefore, the bank had not recovered the amount of premium of Rs. 200 for the succeeding years from the respective account holders for paying the insurance premium. From para ''C'', as quoted above, it is apparent that risk covered in respect of each of the account holder was from the date of crediting of the insurance premium in respect of such account holders to the insurers account with the concerned branch of the banker till the expiry of the policy period, i.e., 31st May of the following year. Hence, the insurance cover was only upto 31.5.2001.

IN the present case, as stated above, the complainant''s husband died on 10.7.2001. At that time insurance policy was not in existence, because, the scheme was cancelled by the bank and the INsurance Company. IN such set of circumstances, it cannot be said that as the husband of the deceased had deposited the amount on 27.7.2000 he is entitled to the benefit of insurance coverage, as it was a group Janata Personal Accident Policy. The terms were settled by the bank and the INsurance Company. And, on the basis of that agreement offer was made to the public or to the account holders.

FURTHER, for the insurance charges, Clause (8) of the scheme which is specifically mentioned in the Abhaya Platinum Savings Account Pass Book and it provides that : "Insurance Charges : Insurance charges at the rate of Rs. 200 per head shall be debited to the account on the date of its opening and subsequently on 31st May every year towards insurance premium and bank''s service charges. These charges are subject to revision every year. In case the premium is not remitted by bank due to lack of sufficient balance in the account, or for any reason beyond the scope of the bank insurance cover will not be available as stated above." It appears that attention of the State Commission was not drawn to this specific clause. From the scheme it is apparent that the insurance policy was required to be renewed every year by paying the premium before 31st May of each year. In the present case, that was not done, because the scheme was cancelled by mutual agreement. Hence, the insurance cover was not in existence on the date of the death of the complainant''s husband. And, therefore, the complainant is not entitled to get any reimbursement either from the bank or from the Insurance Company.

In the result, this revision petition is allowed. The impugned order passed by the State Commission confirming the order passed by the District Forum in C.D. No. 16 of 2002 is set aside and the complaint is dismissed. There shall be no order as to costs. Revision Petition allowed.