Shyamala vs United India Insurance Co Ltd

BASAVARAJ Vagadale, husband of Shyamla, Complainant/petitioner No. 1 herein, had a joint Premium Saving Account with ING Vysya Bank, respondent No. 2 herein and by virtue of opening of the said Premium Saving Account, had obtained a life insurance policy. Respondent No. 2, the Bank, had taken a group insurance policy from United India Insurance Company Limited, respondent No. 1 herein. As per policy, holders of Premium Saving Account were insured for a sum of Rs. 3 lacs. Basavaraj had died in a road accident on 20.4.2003. Petitioner No. 1-the wife-along with her minor children, i.e. petitioner Nos. 2 and 3 approached the bank respondent No. 2 for closing of the Account and for payment of the insurance sum. Respondent No. 2 closed the Account, but did not arrange the insurance sum. Petitioners after waiting for some time themselves lodged the claim with the Insurance Company, which repudiated the same on the ground that the claim was barred by time as the petitioners had not lodged the claim within 90 days of the death of the account holder. Aggrieved by this, petitioners filed the complaint before the District Forum.

DISTRICT Forum partly allowed the complaint and directed the Insurance Company to pay Rs. 1,50,000 to the complainants by taking the view that both the deceased and complainant No. 1 were jointly covered for Rs. 3,00,000 and on death of one of them the complainants were entitled to get 50% of the covered amount. Rs. 1000 were awarded towards compensation and costs.

COMPLAINANTS not satisfied with the order passed by the District Forum, filed the appeal before the State Commission taking the ground that they were entitled to the full sum of Rs. 3,00,000 from the Insurance Company. The State Commission has dismissed the appeal by observing thus: "The complainants/appellants have not produced before us copy of the policy to show that on the death of any one of the insured under the policy, the Insurance Company is liable to pay the full sum assured. Under such circumstances we find no reason to interfere with the impugned order. The appeal, therefore, fails. Hence, present revision petition before us by the petitioners.

HEARD learned Counsel for the petitioner as well as respective Counsels for the respondent Nos. 1 and 2.

IT is not disputed before us that as per policy premium receipt Ex. P-5 each of the account holders was required to pay Rs. 100. Since the deceased Basavaraj and the petitioner No. 1 opened a joint Account, the bank had charged Rs. 200. In case of Joint Account Holders, terms and conditions applicable to the joint holders provides "all Account holders necessarily be covered under this policy by paying prescribed insurance charges of Rs. 100 per head (subject to revision). On the death of the Account holder, the Insurance Company was liable to pay Rs. 3 lacs. In the present case, petitioner No. 1 opened the Account with her husband jointly. The bank had charged Rs. 100 from each of the joint Account holders towards the insurance charges. Under the policy Insurance Company was required to pay Rs. 3 lacs in case of death of the Account holder. Since the respondent bank had charged premium @ Rs. 100 from each of the depositors, the liability of the Insurance Company would be Rs. 3 lacs to each of the Account holders. The fora below have erred in holding that in case of joint Account holders, only 50% of the covered amount was to be paid to the legal representatives of the deceased. The State Commission in its order has observed that the policy was not produced which is factually incorrect. Terms and conditions of the policy were given in the policy premium receipt Ex.P-5. Fora below without referring to the terms and conditions of the policy have held that since the account was a joint account, on the death of one of the joint account holders, the Insurance Company was liable to pay only 50% of the risk cover. Since Rs. 100 were charged from each of the account holders to get the risk covered, Insurance Company is liable to pay Rs. 3 lacs to the complainants

FOR the reasons stated above, the revision petition is allowed with additional costs of Rs. 5,000 by the Insurance Company respondent No. 1

THE impugned order of the State Commission and the District Forum are set aside. Respondent No. 1 Insurance Company is directed to pay the sum of Rs. 3 lacs along with awarded interest accrued thereon after deducting the amount, if any already paid, to the petitioners within eight weeks. Revision Petition allowed.