PREM LATA BANGAD vs National Insurance Co. Ltd.

THE complainant is a widow of Shri Bhagwan Swaroop Bangad and opposite parties No. 2 to 6 are her sons and daughters, residents of Madanganj-Kishangarh. THE deceased Shri Bhagwan Swaroop Bangad got himself insured against personal accident risk in the sum of Rs. 1,00,000/- and paid the premium to opposite party No. 1 (which will hereinafter for the sake of brevity, be referred to as ''the insurer''). THE period of insurance is 27.7.87 to 26.7.88. Interim Protection Note 690002 dated 27.7.87 was issued. Its photostat copy has been filed by the complainant marked as Anx. I. THEre is no dispute that the entire premium has been paid. Shri Bhagwan Swaroop Bangad along with four others and driver were returning in ambassador Car No. RST 7148 from Vrindavan to Kishangarh on 29.7.87 at 8.30 p.m. THE car met with an accident as truck RRG 5925 was coming with fast speed from the front. Shri Bhagwan Swaroop Bangad alongwith other co-passengers and the driver suffered serious injuries on account of the accident. Shri Bhagwan Swaroop Bangad was admitted in the S.M.S. Hospital, Jaipur and succumbed to the injuries on 2.8.87. THE complainant informed the insurer and as required on 1.2.88; she sent the Post-mortem Report, First Information Report etc. Personal accident claim form was filed and sent to the insurer. THE insurer vide letter No. 352703/Dawa/90 informed the complainant that the claim for Rs. 1,00,000/- has been accepted and that the amount will be paid to the legal heirs after the production of the succession certificate. A photostat copy of that letter has been filed by the complainant marked as Anx.-2. THE complainant has averred that the insurer failed to perform its services properly by not making payment to her as she was entitled to the amount. She filed the complaint on 2.5.90 praying that the insurer may be directed to make payment of the sanctioned amount of Rs. 1,00,000/- together with interest @ 18% from 8.12.87. It may be stated here that opposite parties no. 2 to 4 are the sons and 5 and 6 are the daughters of late Shri Bhagwan Swaroop Bangad. THEy have been impleaded as proforma parties. THE complainant filed the affidavits of opposite parties no. 2 to 6 on 17.9.90. In these affidavits, they have deposed that the complainant is entitled to .the insurance amount and they have no objection to it. It has also been stated in those affidavits that they do not claim any share in the sanctioned amount of Rs. 1,00,000/-. THE opposite party insurer filed the version of the case on 15.9.90. A preliminary objection was raised that the insurer has accepted the claim of Rs. 1,00,000/- and conveyed to the complainant that on production of the succession certificate amount will be paid to the legal heirs of Shri Bhagwan Swaroop Bangad and therefore, there is no deficiency in service so far as the insurer is concerned. It was submitted that no relief can be granted to the complainant under Sec. 14 of the Consumer Protection Act, 1988 ("the Act" herein). On merits, it was submitted that though in the interim protection note, the complainant has been shown as legal representative (LR) but this does not mean that besides the complainant, there are no legal representatives and if there are other legal representatives then as per the insurance contract, they are also entitled to get the insurance amount. In support of that, it was submitted that opposite-parties No. 2 to 6 (proforma parties) are the legal representatives. In support of the version of the case, an affidavit of Shri S.K. Dadhwal who is Sr. Divisional Manager, was filed. Parties did not produce any evidence.

WE heard Mr. Rajesh Jain, Advocate, for the complainant and Mr. Sanjeev Arora, Advocate for the opposite party-insurer and considered the complaint, the version of the case and two documents filed by the complainant and the affidavit of Shri S.K. Dadhwal in support of the version of the case. Interim Protection Note No. 690002 dated 27.7.87 which has been produced by the complainant marked as Anx. 1 mentions on the clause of risk as "personal accident risk" and in the subject-matter of insurance, it is mentioned amongst others "L.R. Smt. Premlata Bangad" who is the complainant before us. It is an admitted case that no insurance policy was issued in pursuance of the interim protection note. That note also mentions period of insurance from 27.7.87 to 26.7.88. The accident had taken place two days after the insurance of the interim protection note and Shri Bhagwan Swaroop Bangad succumbed to the injuries on 27.7.87. As the policy was not issued, the name of nominee could not find place. It is contended on behalf of the complainant that though there are other legal heirs of Shri Bhagwan Swaroop Bangad, the name of the complainant has only been mentioned as the legal representative and, therefore, she is nominee and the insurer should have made payment to her. It was urged that there was no justification on the part of the insurer to have asked by letter Anx. 2 to produce the succession certificate entitling the persons to get the sanctioned sum insured Rs. 1,00,000/-. It appears clearly from the interim protection note that L.R. is Smt. Premlata Bangad and that in case of contingency, the amount will be paid to her. In other words, in the absence of the policy, she is to be considered as the nominee of Shri Bhagwan Swaroop Bangad. A somewhat similar question arose before the Bombay High Court. In AIR 1990 Bom. 255. wherein, the learned Judge considered Sec. 39(5) of the Insurance Act which deals with the nominees. It was observed that even if, in the policy, the category of person to whom the amount shall be paid has been restricted, it is not open to the Insurance Corporation to say that they would only pay to the persons as are mentioned in the policy and not to anybody else mentioned in the statute and in such a situation, the statute prevails over the contract. Sec. 39(5) of the Insurance Act was noticed and it was observed that the statute has taken care of all the categories of persons who are entitled to claim the amount and it does not mean that even though there is no dispute as to who are heirs and legal representatives, they must still obtain the succession certificate to get the proper discharge as far as the Corporation is concerned. The following may be usefully quoted:- ".....It does not mean that even though there is no dispute as to who are heirs and legal representatives, they must still obtain the succession certificate to get a proper discharge as far as the Corporation is concerned. It is only where there is a dispute amongst the heirs and legal representatives, the Corporation would be justified in insisting on their or any of them getting a suitable representation, and pay the amount to such a person."

The principle laid down in the aforesaid decision is that when there is no dispute as to who are heirs and legal representatives of policy holder, the Corporation cannot insist on the production of succession certificate. In this case, the name of Smt. Premlata Bangad has been mentioned in the interim protection note. She produced the required documents and filed the personal accident claim and the form on 1.2.88. By letter dt. 14.3.90, (Anx. 2) the complainant was informed that the claim for Rs. 1,00,000/- has been sanctioned and it will be paid to the heirs and so a succession certificate may be sent for making the payment of the amount. We have already held that in the interim protection note the only legal representative mentioned is Smt. Premlata Bangad, who is undoubtedly one of the heirs of Shri Bhagwan Swaroop Bangad and as the policy was not issued, she is to be considered as the nominee. Under Sec. 39 of the Insurance Act, a nominee or person who is mentioned as legal representative in the interim protection note can give a valid discharge so far as the Corporation is concerned. It was ruled in AIR 1984 SC 346 that the nomination only indicates the hand which is authorised to receive the amount on the payment of which the insurer gets a valid discharge of its liability under the policy. The nomination is only for the purpose of giving a valid discharge to the Corporation. This, however, does not preclude the other heirs of the deceased to claim the amount assured in accordance with the law of succession governing them.

A Division Bench of the Karnataka High Court in AIR 1987 Kar. 216 took the same view which was taken by the Bombay High Court in the aforesaid decision. It follows that if the claim is a statutory liability arising under the Insurance Act, and if there is no dispute as to the heirs and legal representatives of the policy holder, it cannot be understood as to how the Corporation could even insist that party must necessarily obtain a succession certificate.

FOR the aforesaid reasons there was no justification on the part of the insurer to have asked by its letter dated 14.3.90 to the complainant for the payment of the sanctioned amount, succession certificate should be produced. It should have paid the amount to the complainant though the matter admitted of no dispute still the insurer could safeguard its interest by asking the complainant to furnish an indemnity bond to the effect that in case any dispute is raised by any other heir in regard to the sum assured, for paying the amount or that she will indemnify the insurer for any loss on that account. The complainant has claimed interest @ 18% on the sum assured i.e. 1,00,000/- from 8.12.87. It may be recalled that Shri Bhagwan Swaroop Bangad met with an accident on 29.7.87 and died on 2.8.87. She informed the insurer and it asked her on 8.12.87 to submit post-mortem report. First Information Report etc. The complainant submitted them and also filed the accident claim form and sent it on 1.2.88. As it appears from the letter dated 14.3.90, claim for Rs. 1,00,000/- was sanctioned on 14.3.90. This is the reasonable period which the Insurance Company had taken for sanctioning the claim after the filing of the claim form by the complainant So, no interest in the shape of compensation can be awarded to the complainant from 8.12.87 to 14.3.90. The complaint was filed before the State Commission on 2.5.90. The version of the case justifying the action on the part of the insurer was filed on 15.9.90. A sum of Rs. 1,00,000/- which was payable by the insurer was not paid to the complainant and the complainant could not get the return of the amount. It remained with the Corporation. Therefore, we are of opinion that some interest should be awarded to the complainant from the insurer. We consider interest @ 12% p.a. as reasonable compensation from 14.3.90 (date on which the sanction was communicated by the letter to the complainant) until the amount is paid to her. The complainant shall be entitled to get interest by way of compensation @ 12% p.a. from 14.3.90 until the amount is paid to the complainant

WE direct the Insurer (National Insurance Company Ltd., Branch Manager, Madanganj-Kishanganj, Ajmer) to pay a sum of Rs. 1,00,000/- together with interest by way of compensation @ 12% p.a. from 14.3.90 until payment within one month from the date of the receipt of this order. Rest of the claim of the complainant is dismissed. Parties shall bear their respective costs of this complaint. Complaint dismissed.