Life Insurance Corporation of India vs KAKALI DEBNATH

THIS appeal is directed against the judgment and order dated 12. 8. 2005 under which a complaint lodged by Smt. Kakali Debnath and Master Abhishek Debnath (the present respondents) was allowed on contest against O. P. No. 1, L. I. C. I. , Habra Branch and ex parte against O. P. No. Sri Asish Debnath with cost of Rs. 500. The Forum directed the O. P. No. 2 to refund the amount received by him from the L. I. C. I. in respect of 2/3rd share owned by the complainants. The Forum further directed the O. P. No. 1 to take necessary steps and render all sorts of assistance to the complainants in the matter of getting refund of the said money within a period of two months from the date of the order. It was enjoined in this order that the amount which would fall to the share of the complainant No. 2 i. e. the minor Abhishek Debnath along with interest would be deposited in a nationalised bank in fixed deposit or would be invested in approved securities till the said minor attained majority. It was further clarified that the interest on the said amount so invested would be withdrawn by the complainant No. 1 being the mother of the complainant No. 2 for the latter''s maintenance or benefit from time-to-time. Further more, the Forum also awarded a sum of Rs. 5,000 towards compensation payable to the complainants within the said period.

BEING aggrieved by this order the O. P. No. 1, L. I. C. I. , has preferred this appeal challenging the said order as erroneous, illegal and unsustainable. The case of the complainants was that their predecessor Arun Debnath, since deceased invested his money in 3 LIC Policies for Rs. 50,000 dated 20. 11. 1993, Rs. 1,00,000 dated 28. 6. 1992 and Rs. 1,00,000 dated 28. 5. 1992 with the Howrah Branch Office of the LICI. When he purchased these policies he was unmarried and he made his brother Asish Debnath (O. P. No. 2) the nominee in respect of these amounts of the policies. Subsequently he married the complainant No. 1 - Kakali Debnath and out of their wedlock a male baby was born and that male baby named Abhishek Debnath is the complainant No. 2. Arun Debnath after his marriage tried his best to change the name of the nominee in favour of his newly married wife but could not succeed and unfortunately he expired on 1. 8. 2004 leaving behind him these two complainants as his legal heirs. After his death the complainants tried to convince the LICI authorities that they were the rightful claimants of the LIC money left by the deceased, but the LICI Authorities ultimately handed over the money to the O. P. No. 2 Asish Debnath on the ground that he was the nominee. Then they were compelled to file this case before the Consumer Forum.

O. P. No. 2, Sri Asish Debnath did not appear or did not contest the case before the Forum. The O. P. No. 1, LICI, contested the case before the Forum. Their contention was that in view of the provision of Section 39 of the Insurance Act they had no other alternative but to give the money to the recorded nominee and it might be a duty of that nominee to disburse the amount amongst rightful legal heirs of the deceased, but they had no such duty in the face of the nomination that had been made by the deceased in the policy and from that point of view they had not committed any act of deficiency in service and the case against them was liable to be dismissed.

THE Forum after considering the materials on record and the argument of both sides came to the view that the provisions of Section 39 of the Insurance Act would only suggest that the nominee had a right to receive and collect the money on behalf of the rightful claimants or legal heirs of the deceased-life assured. The Forum found that it was true no doubt that the O. P. No. 2 as a nominee had a right to collect the money but he was to collect on behalf of the legal heirs of the deceased, Arun Debnath, but the laches of the O. P. No. 1-LICI lies in the fact that they did not ensure that the money taken by the nominee as trustee ultimately went to the hands of the legal heirs of the deceased that is the present complainants. They failed to take appropriate undertaking or indemnity bond from the O. P. No. 2 before giving him the money in their over-zeal. They handed over it to him without taking any such steps in view of the counter-claim made by the present complainants and this, according to the Forum, constituted deficiency in service on the part of the LICI Authorities and, therefore, the above order has been passed directing the LICI to make payment an amount of compensation and cost and also to ensure that the O. P. No. 2 refunded the amount taken by him. Giving our careful thought and consideration to all the aspects of the matter we are inclined to hold that first part of the Forum''s order is not at all justified under the mandatory provision of Section 39 of the Insurance Act. The LICI had no other alternative but to hand over the money to the nominee of the deceased as recorded in the policy and by following the provision of law they cannot be said to have committed any wrong or any deficiency in service. So it would be unjust to saddle them with the payment of any compensation or cost.

BUT, however, the other part of the order of the Forum is not disapproved by us. It goes without saying that the complainants were the legal heirs of the deceased in the first class along with, of course, the widow mother of the complainant who was still living. The O. P. No. 2 Asish Debnath being a brother of the deceased Anun Debnath was not a legal heir in the first class. Therefore, according to the rules, the legal heirs of the first class wi11 be first entitled to get the properties left by the deceased in equal shares. From that stand point the Forum''s finding that two complainants would get 2/3rd share of the LIC money that has been already received by the O. P. No. 2 is correct, the remaining l/3rd being admissible to the mother. Now the question arises as to how in a consumer case the O. P. No. 2 Asish Debnath can be made liable for refunding the money in question to the complainants. The LIC having given the money to the nominee under Section 39 of the Insurance Act may of course plead their non-involvement in the matter, but the person to whom they gave the money as nominee should be taken as a trustee and in that capacity he is to be recorded as the official successor of the LICI holding the money in trust on behalf of the rightful claimants. From that point of view it can be very well said that the complainants stepped into the shoes of consumer vis-a-vis this O. P. No. 2. If that be so, the O. P. No. 2 who took the money as a trustee on behalf of the complainants and whose duty was to disburse the same amongst those complainants has indulged in deficiency in service having not actually given the money to them and on this score the case under the Consumer Protection Act against this O. P. No. 2 becomes maintainable in law. This O. P. No. 2 thus being liable to refund the money to the complainants but having not actually performed his duty can certainly be directed by the Consumer Court to disburse the money to them. Therefore, in these premises, the findings of the Forum are perfectly justified and it has rightly passed the award against the O. P. No. 2. We do not find any fault with this order which, therefore, should be sustained. Accordingly, it is ordered that the appeal be allowed in part on contest against the respondent Nos. 1 and 2 and ex parte against the respondent No. 3. The part of the order under which the appellant (O. P. No. 1 of the complaint) was directed to make payment of the amount of cost and compensation and also to ensure compliance of the order by the O. P. No. 2 Asish Debnath be set aside. The remaining part of the order of the Forum under challenge be affirmed. The amount of compensation of Rs. 5,000 and cost of Rs. 500 shall be payable by the O. P. No. 2 (the present respondent No. 3) Asish Debnath alone. The said respondent Asish Debnath shall make payment of the entire awarded amount within 30 days from the date of communication of this order, failing which it would carry interest @ 8% p. a. for the period of default. A copy of this order be handed over to each of the parties forthwith. Appeal partly allowed.