MANAGING DIRECTOR, N.E.K.R.T.C. & ANR. vs RADHA & ANR.

This revision petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 3.8.2011 in First Appeal No. 1871 of 2011 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (herein after referred as ''the State Commission'') whereby the State Commission dismissed the appeal and confirmed the order of District Consumer Disputes Redressal Forum, Bellari fastening the liability on the part of the petitioners to pay a sum of Rs.3 lakh with interest @ 18% per annum from the date of the complaint till realization to the respondent No. 1-complainant on account of alleged deficiency in service on the part of the petitioners.

The brief facts are that the husband of complainant No. 1, Smt. Radha, was working as a bus conductor under the Divisional Controller, North Eastern Karnataka State Road Transport Corporation (NEKSRTC), Bellari, Division of Karnataka/OP 2/petitioner No. 1 herein. During his employment, he was insured under the Group Insurance Scheme with OP 3/respondent No. 2-Bajaj Allianz Life Insurance Co. Monthly premium of Rs. 50/- per month was deducted as a premium from his salary. The benefit under the said policy was that in case of death of particular employee, Rs. 3 lakhs will be paid to the deceased''s family. The scheme was effective from 1.8.2006. The husband of complainant died on 28.5.2007, therefore, the wife of the deceased filed a claim with OP-3/insurance company to pay a sum of Rs. 3 lakhs alongwith accrued benefits. The OPs 1 and 2 did not settle her claim, therefore, she filed a complaint before the District Forum, Bellari.

The OP-3 resisted the complaint by filling written version and contended that it was time barred complaint. It was Group Term Life Insurance cover policy for employees of the Karnataka State Road Transport Corporation. The policy could be extended for a period of four years with mutual consent at the time of renewal. OPs 1 and 2 have paid Rs. 63,33,330/- as a full premium, alongwith lists and details of employees. The master policy was issued by OP 3 alongwith the list of employees covered under the said policy. During various communications between OP 1 and OP 3, it was found that due to over sight, names of 70 employees including name of Shri Hanhumantha Bylapattar were left out. Therefore, immediately on 20.02.2007, OP 1 made request to OP 3 to include 70 members'' name in the scheduled policy alongwith the name of deceased/Shri Hanhumantha Bylapattar, which was not listed. In the meantime, said Mr. Hanhumantha Bylappattar died on 28.5.2007. On 12.2.2008 and 18.2.2008, OP 2 wrote letters to insurance company (OP No. 3) to settle the claim but OP 3 refused to settle it on the ground that deceased''s name was not in the list and hence, there is no liability of insurance agency to pay the amount. It was contended that the contract of insurance was not between the deceased and OP 3. Accordingly, OPs 1 and 2 prayed for dismissal of complaint. OP 3 also resisted the complaint on the ground that the complaint was filed beyond two years. The claim was repudiated because the name of deceased was not mentioned in the policy details and the death certificate was not furnished to the company to process the claim. Thus, there was no cause of action for the complainant to file the complaint and no deficiency in service on the part of OP 3.

The District Forum considering the pleadings and evidence of both the parties, partly allowed the complaint against OPs 1 and 2 whereas dismissed the complaint against OP 3. It directed OPs 1 and 2 to pay Rs.3 lakh with interest @ 18% p.a. from the date of filing the complaint. It awarded compensation of Rs.10,000/- for mental agony and Rs.5,000/- towards costs.

Aggrieved by the order of District Forum, the OP/petitioner filed first appeal before the State Commission, Karnataka. The appeal was dismissed. Hence, being aggrieved by the impugned order, the petitioners filed this instant revision petition.

We have heard the learned counsel for the parties. Learned counsel for the petitioners submitted that there was no lapse on the part of petitioners but the insurance company/OP 3 failed to honor the claim. Learned counsel for insurance company, Mr. Pankul Nagpal submitted that the employer has not sent the name of the deceased, therefore, there is no question of settlement of claim by insurance company.

After our thoughtful consideration and perusal of record, evidence on file, it is an admitted fact that the deceased, Sh. Hanhumantha Bylapattar was an employee of petitioner and subscribed for Group Insurance Scheme. The premium used to be collected from his salary as Rs.50/- per month. The scheme was introduced by the OPs 1 and 2 by an agreement with OP 3. As per the scheme, the employer is bound to pay Rs. 3 lakh to the deceased''s family. The husband of complainant died on 28.5.2007 while in service. It is also an admitted fact that due to over sight, the names of 70 employees were left out, which includes the name of husband of complainant and later on another list was prepared for inclusion of the names of left over members.

We have perused the order of District Forum, the findings of District Forum are more relevant that the OPs 1 and 2 (petitioners) have not produced the Group Term Life Insurnace Policy before the Forum and failed to show any evidence that another list was sent and which was acknowledged by the insurance company. Therefore, it is clear that OPs 1 & 2 were deficient in their duty for not sending the name of Sh.Hanhumantha Bylapattar to OP 3, despite the fact that Rs.50/- was regularly deducted from his monthly salary and hence, he was one of the beneficiaries.

It is also pertinent to note that, in the instant case, why the OP 3/insurance company retained the entire premium received from OPs 1&2, knowingly fully well that the list was short of 70 members. It was the duty of the insurance company to refund the excess premium received. The OP 3 has not refunded the said excess premium without any cogent reason and kept silent over the issue. This also amounts to unfair trade practice and deficiency in service on the part of OP 3. Therefore, OP 3/insurance company is also liable to some extent.

On the basis of entirety of our discussion, we dismiss the instant revision petition, with certain modification that OPs 1, 2 and 3 shall pay Rs. 3 lakhs with interest @ 18% per annum from the date of filing of the complaint. The extent of liability shall be 75 % on OPs 1 and 2 whereas remaining 25% shall be paid by OP 3.

The revision petition stands disposed of with above terms. There shall be no order as to costs.