State Consumer Disputes Redressal Commission
Manager ( L & Hpf) L.I.C.Of ... vs . Indumati Dhondiram Yadav. on 18 December, 2012
1 F.A.No. : 706/2008
MAHARASHTRA STATE CONSUMER DISPUTE REDRESSAL
COMMISSION, MUMBAI.
CIRCUIT BENCH AT AURANGABAD.
First Appeal No. A/706/2008
(Arisen out of Order Dated 28/04/2008 in Case No. 167/2007 of District Latur )
1. Manager ( L & HPF) L.I.C.of India,Through
Prakash Laxman Kulkarni.
R/o.L.I.C.Quarters,Adalat Road,Aurangabad. ...........Appellant(s)
Versus
1. Indumati Dhondiram Yadav.
Janta Vidyalaya Lodga,Tq.Ausa,Dist.Latur.
2. Head Master,Janta Vidyalaya Lodga.
Tq.Ausa,Dist.Latur. ...........Respondent(s)
BEFORE:
HON'ABLE MR. B.A.SHAIKH PRESIDING MEMBER
HON'ABLE MR. K.B.GAWALI MEMBER
PRESENT:Shri.N.V.Mande., Advocate for the Appellant 1
Shri.P.P.Dudile., Advocate for the Respondent 1
ORDER
Date : 18.12.2012 Per Mr.K.B.Gawali Hon`ble Member.
1. Manager, L.I.C.of India, original opponent No.1 has preferred this appeal directing against the judgment and order dated 28.4.2008 passed Dist.Forum Latur in C.C.No.167/07, whereby the appellant is held liable to pay amount of insurance policy alongwith compensation. Respondent No.1 is original complainant( hereinafter referred as "complainant") whereas respondent No.2 is the original opponent No.2.
2. Briefly stated fact of the case are that respondent No.1/complainant`s deceased husband namely Dhondiram Yadav was in service as a teacher with respondent No.2 herein and had obtained 2 F.A.No. : 706/2008 two insurance policies bearing No.981017505 and 981051584 for the insured sum of Rs.50,000/- and Rs.40,000/- respectively under the "Salary Savings Scheme" from the present appellant. The respondent No.2 herein being the employer of deceased husband had deducted the amount of premium of both the policies from the salary of the deceased Dhondiram and remitted to the appellant Insurance Company. That, her husband Dhandiram died due to cancer on 1.4.1993. It was contended that the fact of insurance policies came to the knowledge of complainant in the year 2005 and therefore she had applied to the appellant Insurance Company on 13.5.2005 for granting the amount of insurance under both the policies. However the Insurance Company did not pay the amount. Therefore she had issued legal notice dated 13.7.2006 demanding the amount of insurance policy as well as cost of the notice. But the appellant Insurance Company did not pay any heed to her notice and therefore she filed complaint before Dist.Forum alleging deficiency in service on the part of appellant as well as respondent No.2 seeking directioin to pay her amount of both the policies i.e. Rs.90,000/- along with interest @ 12% p.a. from the date of death of her husband till the realization of that amount. She also sought direction to pay her amount towards mental agony as well as cost of said complaint.
3. The appellant as well as the respondent No.2 appeared before the Forum and resisted the claim. Appellant Insurance Company submitted that both the policies of the deceased Dhondiram were in lapsed condition. Respondent No.1/complainant was not entitled to any benefit under those lapsed policies. It was also contended that complaint filed by respondent was barred by limitation as same was filed after 14 years from the death of policy holder. Therefore on these two grounds Insurance Company had denied the claim of the 3 F.A.No. : 706/2008 complainant and had requested to dismiss the complaint. Respondent No.2 i.e. original opponent No.2 submitted that deceased husband of respondent had obtained policies under the salary savings scheme and amount of premium was deducted from the salary of deceased and was regularly remitted to the Insurance Company. It further contended that respondent No.1/complainant was appointed their establishment on compensate ground and she was given information about those policies. It was further contended that even by it`s letter dated 30.3.2006 it was requested to appellant Insurance Company to pay the amount of insurance to complainant. It was therefore contended that responsibility of paying insurance sum was on the Insurance Company and hence complaint be dismissed to the extent of respondent No.2.
4. Dist.Forum on the basis of record available and after hearing parties has partly allowed complaint and directed Insurance Company to pay amount of insurance in respect of both the policies along with all benefits with interest @ 9%p.a. from 13.7.2006 within a period of 30 days. It was further directed to get amount of premium deducted from amount payable to respondent No.1/complainant. In addition, it was also directed to pay Rs.2000/- towards mental agony and Rs.1000/- towards cost of complaint.
5. Aggrieved by the said judgment and order present appeal is filed by LIC i.e. original opponent No.1.
This appeal was finally heard on 2.11.2012. Adv.N.M.Mande was present for appellant whereas Adv.Shri.P.P.Dudile was present for respondent. We heard both the counsels at length and appeal was reserved for judgment and order.
4 F.A.No. : 706/20086. Learned counsel for the appellant pleaded the same ground which were raised in defence before Dist.Forum i.e. point of limitation and lapsed status of policy and contended that on these two grounds Dist.Forum ought to have rejected the complaint. However ignoring completely defense of the appellant, Dist.Forum has wrongly held the appellant as liable to pay insurance amount as well as compensation. Hence he requested to quash and set aside the impugned judgment and order passed by Dist.Forum by allowing the appeal.
7. On the other hand, learned counsel Shri.P.P.Dudile for respondent No.1/complainant submitted that respondent No.1/complainant had received information about the disputed insurance policy only in the year 2005 and immediately after having knowledge she had approached to respondent No.2 and also opponent No.1 i.e. appellant. However no action was taken regarding payment of insurance sum. Therefore she issued notice dated 13.7.2006 to opponent No.1 i.e. appellant Insurance Company for the payment of policy amount under both the policies. Insurance Company did not pay any heed to her notice and therefore Insurance Company committed deficiency in service.
The grounds on which appeal is filed in this Commission are baseless and appeal be dismissed. In support of his claim he relied on following two decisions.
i) Delhi Electric Supply Undertaking -Vs- Basanti Devi and another reported in III(1999) CPJ 15(SC) in which the Hon`ble Supreme Court has held that under salary saving scheme the employee is implied agent of the Insurance Company and he is authorized to collect premium from 5 F.A.No. : 706/2008 employees on behalf of LIC. Employer rendering service free of cost to employees and hence as the agent he is not liable to pay insurance sum but Insurance Company i.e. LIC under reference is liable to pay.
ii) Block Development Officer - Vs- Smt.Rajalaxmi Satapathy & Anr., reported in II(2002) CPJ 455 in which Orissa State Commission has held that for insurance policy under salary savings scheme, the employer is agent of LIC and hence though the policy is lapsed due to non-payment of premium by the employer it is deemed to have been made even if employer fails to remit. Therefore LIC is liable for inaction of employer and it is liable to pay insured amount with interest.
It is therefore submitted by learned counsel of respondent No.1 that Dist.Forum has rightly considered these aspects and rightly passed the impugned judgment and order and the same may be confirmed.
8. We have perused the record and considered in detail the oral submissions as put forth by the learned counsels of both the parties. The fact of issuance of said two insurance policies to the deceased husband of the respondent No.1/complainant under salary saving scheme has not been disputed by appellant Insurance Company . Appellant Insurance Company has denied the claim of the complainant on the grounds i) the lapse condition of these policies and ii) point of limitation. It is found that appellant Insurance Company has for the first time in it`s written version has raised these grounds for rejecting the claim of the complainant and he had not replied to the legal notice dated 13.7.2006 issued by the respondent to it. Respondent No.2 i.e. employer in it`s written version as referred 6 F.A.No. : 706/2008 by Dist.Forum has contended that amount of premium in respect of both the policies was deducted from the salary of the deceased husband of the complainant and was remitted to the appellant Insurance Company .
9. However even if we accept the stand of the appellant Insurance Company that the policies were in lapsed condition, the deceased policy holder cannot be made responsible for the same because of inaction on the part of employer remitting premium, as held so by the Forum below since these policies were taken under " Salary savings scheme". Further as held by Hon`ble Supreme Court in the above judgment as referred to by the Forum below and also relied upon by the appellant`s counsel that the "Employer" is implied agent of LIC to collect premium from it`s employees under salary savings scheme. Thus employers act as an agent of Insurance Company under section 182 of Contract Act. In case under citation appellant "Delhi Electric Supply Undertaking" was the employer which was at fault in not remitting the premium in time, and it was not held liable as it was acting agent of the LIC i.e. principal. Thus Hon`ble Supreme Court held that LIC is liable to pay insurance sum as payable under the said policy and employer was made liable to pay cost of proceedings as it had failed to remit the amount of premium though deducted from the salary of its employee. The ratio laid down in these citations is exactly applicable to the present case. The appellant Insurance Company in the present case therefore ought not to have denied the claim of complainant, for the inaction on the part of employer. In fact the Insurance Company being the principal, it was responsible for inaction on part of it`s agent. Therefore liability to pay the sum insured under the said policies has to be borne by Insurance Company(appellant).
7 F.A.No. : 706/200810. Second ground of denial of claim i.e. limitation, also appears to be ill-founded, as is evident from the record. Complainant was given employment by respondent No.2 on compensating ground. She after having received information, immediately wrote letter dated 13.05.2005 and demanded insurance sum from the appellant. It has also come on record that respondent No.2 i.e. employer by it`s letter dated 30.03.2006 had requested the Insurance Company to pay sum insured under both the policies to the complainant. Insurance Company avoided to take any steps in this regard. As there was no response complainant issued legal notice dated 13.7.2006 to appellant. But appellant did not pay any heed to the said notice. Hence it is evident that she was constrained to file the complaint. Thus the complaint is quite within limitation.
11. In view of above said facts and circumstances we find that Dist.Forum has rightly held appellant Insurance Company as liable to pay the insurance sum under both the policies after deducting there from instalments which were due till the death of complainant`s husband. However as regards compensation towards mental agony and cost of the complaint we hold that the employer i.e. respondent No.2 should be held responsible as it has also committed deficiency in service by not remitting the amount of premium to the appellant Insurance Company and also by not intimating about said insurance policy to the complainant after death of her deceased husband who was it`s employee till the year 2005.
We therefore pass following order by modifying impugned order of the Dist.Forum.
8 F.A.No. : 706/2008O R D E R 1. Appeal is partly allowed.
2. The impugned order is modified to the extent of Clause No.4 to the effect that instead of appellant LIC, the respondent No.2 i.e. employer shall pay to the complainant Rs.2000/- towards mental agony and Rs.1000/- towards cost of the complaint.
3. Clause Nos.1, 2 & 3 of the impugned operative order are confirmed.
4. No order as to cost of this appeal.
5. Copies of the order be sent to both the parties.
Pronounced on 18.12.2012.
[HON'ABLE MR. B.A.SHAIKH] PRESIDING MEMBER [HON'ABLE MR. K.B.GAWALI] MEMBER Mane