State Consumer Disputes Redressal Commission
The Chief Manager Lic Of India vs 1.Karengula Rama Laxmi on 21 September, 2022
DISPUTES
BEFORE THE TELANGANA STATE CONSUMER
REDRESSAL COMMISSION: HYDERABAD.
FA.NO.255 OF 2017
AGAINST ORDERS IN CC.NO.215 OF 2013, DISTRICT
CONSUMER COMMISSION-KARIMNAGAR
Between:
The Chief Manager,
L.I.C. of India,
Peddapalli Branch,
Peddapalli Proper,
Karimnagar District, A.P.
..Appellant/Opposite Party No. 1
And
1.Karengula Rama Laxmi,
W/o.Late Komuraiah,
Aged about 44 years, Oc:House Wife,
R/o.Peddakalwala Village,
Peddapalli Mandal,
Karimnagar District.
..Respondent/Complainant
2.Divisional Electrical Engineer,
Northern Power Distribution Company of A.P, Ltd.,
Operation, Peddapally,
Dist. Karimnagar.
Respondent/Opposite Party No.2
Counsel for the Appellant/Opp.Party No.1: Ms. T.V.Sridevi
Counsel for the Respondent/Complainant: : M/s.Gopi Rajesh &
Associates -R1
Notice served R2
QUORAM: SRI JUSTICE M.S.K.JAISWAL, HON'BLE PRESIDENT,
HON BLE SMT.MEENA RAMANATHAN..LADY MEMBER
HON BLE SRI K. RANGA RA0, MEMBER-JUDICIAL WEDNESDAY, THE TWENTY FIRST DAY OF SEPTEMBER TWO THOUSAND TWENTY TWO Order:(Per Smt.Meena Ramanathan, Hon'ble Lady Member)
1. This is an appeal filed by the appellant/opposite party No. 1 U/s.15 of Consumer Protection, 1986, against the order dt.19.4.2017 of the District Consumer Forum, Karimnagar made in C.c.No.215/2013.
22. For the sake of convenience, the parties are described ass arrayed in the complaint.
3. The brief facts of the case as set out in the complaint are as follows: the complainant's late husband Sri K.Komuraiah was an employee of the opposite party no.2. During his life time he insured his life under Jeevan Saral with Accident Benefits and Profits Scheme of opposite party no.1 vide policy no.685793656 and the complainant is the nominee under the said policy. The complainant's husband died in a motor vehicle accident. The complainant as a nominee submitted her claim for the insured amount, but the opposite party no.l repudiated the claim vide Ir.dt.24.5.2013 stating that the death claim is in lapsed condition (nothing is payable) as per DO decision. The deceased had authorized opposite party no.2 to deduct monthly premiums through his salary every month and remit the same party no.1 and he had also submitted to opposite the said authorization letter to opposite party no.1 to be forwarded to opposite for effecting deductions from his party no.2 salary. Opposite party no.1 did not take any steps for deduction of monthly premiums from the salary of the insured/deceased and repudiated the claim of the complainant on the ground that the policy was in lapsed condition as on the date of death of the policy holder. Alleging deficiency in service on the part of the opposite party no.1 the complainant approached the District Forum to direct the opposite party no.1 to pay to the complainant Rs.5 lakhs with all benefits and interest 12% p.a. from the date of death of the insured till realization and to pay Rs.50,000/- towards mental agony and inconvenience caused.
4 The opposite party no.1 filed written version admitting that the complainant's husband took the insurance policy under Salary Savings Scheme. The life assured paid only two monthly premiums at the time of taking the policy and further from 5/2011 were not received.
premiums Recovery of premiums have not yet commenced from the salary and not remitted and hence SSS TOvisions are not operative and applicable to the said poiicy pOucy was under lapsed condition as on the date of death o e te assured i.e. 6.5.2013 due to non payment of premiums rom /2011 Hence as per the policy oonditions nothing is pavable ander the policy. The opposite party no.1 submits that there is no deiciency in service on their part and prared for dismissal of the complaint.
5. Opposite party no.2 filed written version denying the allegations made in the complaint and admitting that the complainant's husband obtained LIC policy vide policy no.685793656 under Salary Savings Scheme and the opposite party no.2 was informed to deduct the monthly premium amount from his salary. The opposite party no.1 has not furnished the authorization letter of the complainant's husband. Opposite party no.2 further submits that though they made correspondence with opposite parry no.l and the policy holder to provide authorization letter, neither of them submitted the same and hence amount was not deducted from the monthh' salayof the policy holder. Opposite parry no.2 submits that it is the duy of the opposite party no.l to inform and send the authorization letter of policy holder to deduct the policy amount from their monthly salary. As the opposite party failed to do so, ther is negligence and deficiency in service on the part of the opposite party no. l1. Opposite party no.2 is a formal pargy to the suit and there is no deficiency in service or negligence on their part. The opposite party no.2 prayed to pass an appropriate order in favour of the complainant .
6. Evidence Afidavit of the complainant filed and Exs.Al to A6 are marked on her behalf. Evidence Afidavit of Mr.Y.T. Williams Manager (L&HPF) DM of opposite party no.1 filed. Exs.BI & B2 are marked on behalf of the opposite party no.1.
The District Forumn allowed the complaint directing the opposite party no.1 to pay the complainant a sum of Rs.5,00,000 under Jeevan Saral with Accident Benefits and Profits for policy bearing no.685793656 with interest 9% p.a. from the date af tiling the complaint i.e. 16.12.2013 and costs of Rs.5,000/-
within one month from the date of receipt of the order. The claim against the opposite party no.2 was dismissed.
7. Aggrieved by the order of the District Forum, the opposite party no. l preferred this appeal with the following grounds:
The Forum below failed to consider that the policy obtained by the deceased bearing no.685793656 had lapsed and was thus repudiated by the appellant/insurance company.
.The initial two monthly
premiums were paid at the cash
counter of the appellant/insurance company and the
deccased policy holder had failed to submit the
authorization form to the
respondent/opposite party no.2 for deducting the premiums from his salary.
The 2nd respondent/opposite party no.2 did not produce any cvidence or correspondence th this appellant/opposite party no.1 for producing the letter of authorization of deceased policy holder for salary deduction towards premium installments.
The Forum ought to have seen that to get the death coverage for sum assured along with accident benefit, the policy needs to be kept in force by paying premiums and the Forum below erred in allowing the complaint for Rs.5 lakhs by granting the accident benefit and bonus under the lapsed policy.
8. The present complaint is filed seeking a direction for payment of Rs.5 lakhs towards the sum assured along with accident benefit in respect of life insurance policy obtained by the policy holder K.Komuraiah under the Salary Saving Scheme. The fact that the policy Ex.A1 was issued bearing no. 685793656 is not in dispute. The Forum below observed that the policy was obtained under SSS as the policy holder was working in NPDCL Respondent no.2/opposite party no.2 company. At the time of taking the policy an undertaking was given for deduction of monthly premiums from the salary of the respondent no.1/complainant. Forum further stated that when the premium S Is not received by way of salary deductions, it is the duty of the appellant/opposite party no.1 to inform the policy holder about non receipt of premiums.
9. In the present case, appellant/opposite party Insurance company had floated a SSS (Salary Savings Scheme) under which K.Komuraiah - an employee had taken an insurance policy which commenced on 3.3.2011. Only two premiums were paid and subsequent premiums were not paid.
The insured died on 19.7.2011 and the nominee submitted the claim for payment of sum assured along with accident benefits but the claim was not settled.
The appellant/opposite party no. l resisted the claim on the ground that the policy as mentioned in Exs.BI & B2 reported status as totally lapsed. The respondent no.2/opposite party no.2 also denied the claim of the respondent/complainant on the ground that they are unable to deduct the premiums from the salary of the deceased as they have not received the authorization from the appellant/opposite party no.1 despite several reminders.
10. It would be appropriate to understand Salary Savings Scheme of LIC. It is a simple economical plan whereby employees obtain the life insurance protection for their families and retirement income for themselves under advantageous conditions which might not be available to them otherwise. Having issued insurance policy under the Salary Savings Scheme, the appellant/opposite party no.l cannot escape from the liability to pay the sum assured on the ground of non receipt of monthly premiums. We refer to the judgement cited by Hon'ble National Commission reported in ll (2012)CPJ 422 (NC) wherein it is held as follows:
#It does not make any difference that premium was actually not deducted from salary of deceased employee because authority of PSEB as agent of petitioners was both to collect premium on its behalf and then to remit to LIC LIC would be liable to pay out on the policy even if premium had not been paid due to default of employers- repudiation not justified"
11. We further fortify this view by referring to the judgement of Hon'ble Supreme Court in Appeal (Civil) no.6113 of 1995 in DELHI ELECTRIC SUPPLY UNDERTAKING vs. BASANTI DEVI AND ANR. wherein it was held as follows:
The mode of collection of in the scheme itself and premium has been indicated the role of employer has been assigned collecting premium and remitting the same to the Life Insurance Corporation. As far as the employee as such is concerned, the employer will be agent of the Life Insurance of common Corporation. It is a matter knowledge that Insurance companies employ agents. When there is no insurance defined in the regulations and the agent as Insurance Act, the general principles of the law of agency as contained in the Contract Act are to be applied."
12. The facts and circumstances in the judgement referred to above are exactly the same as the case on hand. In the cited judgement the complaint was filed by Basanti Devi, widow of Bhim Singh who was an employee of DESU. He had taken an insurance policy with LIC which commenced on 28.1.1992.
Rs.636/ was the monthly premium and only two premia were paid. It
appears that premiums for the subsequent months were not remitted to LIC. In the meantime Bhim Singh died on 17.8.1992 and the widow requested for payment of amount due under the policy.
13. There is nothing placed on record to show that the respondent/complainant was never made aware of the fact that the respondent/opposite party no.2 was not acting as agent of the appellant/opposite party no.1 company. Rather in the nature of the Scheme, the employee/complainant was made to believe that it is the duty of the employer to collect the premium by deducting from the salary and remit the same to the appellant/opposite party no.1 company. The respondent no.2/opposite party no.2 company had implied authority to collect premium from the respondent/complainant on behalf of the appellant/opposite party no.1 company. As to what the arrangement was between the respondent no.2/0pposite party no.2 company and the appellant/opposite party no.1 company is not any concern of the respondent/complainant. In these circumstances, the question 1 arises if the widow of the should be left high and dry deceased(respondent/complainant) when it is clear that the insured Komuraiah did pay the premiums and it was_the fault of the "Agent" of LIC i.e. NPDCL in not her suffering and remitting thc premiums. For trauma that shehas had to undergo for the default committed by the NPDCL in not remitting the premiums to LIC., we direct it to pay the complainant costs of the proceedings quantified at Rs.10,000/-.
14. The fact that the Insured was victim of an accident is evidenced vide Ex.A7 to A11. A perusal of the exhibits reveal that the Insured Kanagula Komuraiah died as a result of an accident when the accused lorry driver drove in a rash and negligent manner and dashed his motor cycle. In support of this, the FIR and charge sheet is filed vide Ex.A7 & A8.
15. The Respondent/Complainant has proved that the Insured died in an accident and hence is entitled to the double benefit under the Jeevan Saral Policy issued to him.
16. The impugned has considered all the aspects in the proper perspective and we find there is no reason warranting our interference with the well reasoned order.
17. In the result, the appeal is dismissed. No costs.