State Consumer Disputes Redressal Commission
Deputy General Manager, Uttarakhand ... vs Smt. Hansi Suyal on 15 September, 2010
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
FIRST APPEAL NO. 124 / 2009
1. Deputy General Manager, Uttarakhand Power Corporation Limited
Opposite St. Paul School
Kathgodam, Nainital
2. Sub-Divisional Officer, Electricity Distribution Division
Tanakpur, Uttarakhand Power Corporation Limited
Champawat
......Appellants / Opposite Party Nos. 1 and 2
Versus
1. Smt. Hansi Suyal W/o late Sh. Harish Chandra Suyal
R/o Village Sitapur, P.O. Kishanpur, Golapar
Tehsil, Haldwani, District Nainital
......Respondent No. 1 / Complainant
2. Divisional Manager, Life Insurance Corporation of India
Kathgodam, Nainital
3. Branch Manager, Life Insurance Corporation of India
Lohaghat, District Champawat
......Respondent Nos. 2 and 3 / Opposite Party Nos. 3 and 4
Sh. J.K. Jain and Sh. Sunil Kumar Kharkwal, Learned Counsel for the
Appellants
Sh. Harish Chandra Pandey, Learned Counsel for Respondent No. 1
Sh. Rahul Sharma, Learned Counsel for Respondent Nos. 2 and 3
Coram: Hon'ble Justice Irshad Hussain, President
C.C. Pant, Member
Dated: 15/09/2010
ORDER
(Per: C.C. Pant, Member):
This appeal is directed against the order dated 21.05.2008 passed by the District Forum, Nainital, partly allowing consumer complaint No. 57 of 2007 and directing the opposite party Nos. 1 and 2 (appellants before us) to pay to the complainant sum of Rs. 2,06,000/- together with interest @9% p.a. from the date of filing 2 of the consumer complaint till payment and Rs. 2,000/- as litigation expenses, within a month from the date of the order. The consumer complaint was dismissed against the opposite party Nos. 3 and 4.
2. Briefly stated, the facts of the case are that the complainant - Smt. Hansi Suyal had submitted with the opposite party Nos. 3 and 4 a claim for the insured amount against two insurance policies for sum of Rs. 1,01,000/- and Rs. 1,05,000/- respectively purchased by her husband late Sh. Harish Chandra Suyal, who had expired on 24.11.2005. The insured was an employee in the office of S.D.O., Electricity Distribution Division, Tanakpur, District Champawat - opposite party No. 2. The premium against the policies was being paid to the opposite party No. 4 - Branch Manager, Life Insurance Corporation of India, Lohaghat, District Champawat by the employer of the insured under "Salary Saving Scheme". The complainant has alleged that the opposite party Nos. 3 and 4 did not take any action on the claim submitted by her. Original policy bonds were also submitted and all other formalities were completed by her. Upon this, she sent a notice to the opposite parties through her counsel, but her claim was not settled. This led the complainant to file a consumer complaint before the District Forum, Nainital, which was partly allowed by the District Forum vide order dated 21.05.2008 in the above terms. Aggrieved by the said order, the opposite party Nos. 1 and 2 have filed this appeal. The appeal has been filed with a delay of 388 days and the appellants have filed an application for condonation of delay in filing the appeal.
3. We have heard the learned counsel for the parties on the application for condonation of delay as well as on the merits of the case and perused the material placed on record in the light of the legal aspects of the case.
34. We went through the facts narrated in the application for condonation of delay and the evidences filed in support thereof. It appears that the delay in filing the appeal was caused due to the negligence of an assistant in the office of the appellant No. 2, who was involved in a criminal case. The delay has also been caused due to wrong legal advice for filing an application before the District Forum for condonation of delay and for setting aside the impugned order dated 21.05.2008, which was, as per the provisions of the Consumer Protection Act, 1986, was not maintainable before the District Forum and was dismissed by the District Forum vide order dated 29.06.2009. The appeal was filed on 13.07.2009. In our opinion, appellants should not suffer for the mistakes committed by any person acting on their behalf and also due to the wrong legal advice given to them. For these reasons, we condone the delay in filing the appeal and the appeal is admitted for decision on merit.
5. The District Forum has held the appellants (opposite party Nos. 1 and 2) liable to pay the insured sum against the policies and has absolved the opposite party Nos. 3 and 4 from paying any amount. Before the District Forum, the appellants failed to contest the proceedings. However, the opposite party Nos. 3 and 4 had apprised the District Forum with the facts that the employer had not remitted the premium of the policies purchased by the insured for the period from September, 2005 till his death. Thus, the policies had lapsed due to non-payment of the premium. The opposite party Nos. 3 and 4 had not made any deficiency in service by not paying the insured amount against the policies as claimed by the complainant. The employer of the deceased on 15.12.2005 had remitted the premium of the policies of all those employees, who had opted for the Salary Saving Scheme of the Life Insurance Corporation of India, but the premium to be paid 4 by the deceased late Sh. Harish Chandra Suyal was deducted from the sum remitted to the Life Insurance Corporation of India and the complainant was informed accordingly on 05.03.2007.
6. The appellants have now contended that the facts narrated by the opposite party Nos. 3 and 4 are not correct. According to the appellants, the sum remitted to the Life Insurance Corporation of India included the premium in respect of the policies purchased by the deceased for the months of September, October and November, 2005. The opposite party Nos. 3 and 4 had never informed the appellants that the premium of the said policies was not paid and the policies had lapsed. The appellants have also pointed out that the Electricity Distribution Division, Tanakpur comes under the jurisdiction of Deputy General Manager, Electricity Distribution Division, Ranikhet and a letter in this regard was sent to Ranikhet office as well as to the District Forum, Nainital on 20.07.2007, but the complainant did not make any amendment in the consumer complaint.
7. There is no dispute in respect of the policies and the insured's option for "Salary Saving Scheme". It is also an admitted fact that the premium for the months of September, October and November, 2005 for the policies under the "Salary Saving Scheme" was remitted to the Life Insurance Corporation of India on 15.12.2005. The appellants have submitted that the total sum to be remitted to Life Insurance Corporation of India was Rs. 2,53,443/-, while the appellants had remitted sum of Rs. 2,50,461/- only. The deduction of Rs. 2,982/- has been explained by the appellants stating that a deduction of Rs. 1,080/- was made in respect of the premium of the policy purchased by Sh. Kamal Kumar Joshi and another deduction of sum of Rs. 1,902/- was made in respect of the premium of the policy purchased by Sh. R.P.S. Karki, who had been transferred from 5 Tanakpur Office. Thus, the deduction of Rs. 2,982/- related to these two employees and not to the deceased. Since the Life Insurance Corporation of India had accepted the premium, the policies were well in subsistence and, therefore, the opposite party Nos. 3 and 4 had made deficiency in service by not paying the insured sum.
8. We are not convinced with the submissions made by the appellants. The premium in respect of the policies purchased by the deceased was remitted after his death on 24.11.2005. No reason for this delay has been explained. Under the Scheme, a grace period of 15 days is allowed for depositing the premium. If the premium is not paid before the expiry of the grace period, the policy lapses.
9. We also perused the list of the employees whose premium was paid by the appellant No. 2 to Life Insurance Corporation of India on 15.12.2005 (Paper Nos. 52 to 57). It includes the name of the deceased, but after including the name of the deceased, it has been struck off. So, the contention of the appellants that the sum remitted to the Life Insurance Corporation of India included the premium in respect of the policies purchased by the deceased, is doubtful.
10. Whatsoever be the case, the fact remains that the deceased had never requested the appellant No. 2 to stop deduction of premium from his salary. If deduction of the premium and remittance thereof to the Life Insurance Corporation of India was not regularly made, then the appellant No. 2 was solely responsible for the same. The complainant should not suffer for the irregularities made by the employer of the deceased. On the point of deciding the liability to pay the insured sum, the law is now very lucid after the decision of the Hon'ble Supreme Court in the case of Delhi Electric Supply Undertaking Vs. Basanti Devi and another; III (1999) CPJ 15 6 (SC). In the said decision, the Hon'ble Supreme Court observed that DESU was certainly not an insurance agent within the provisions of Life Insurance Corporation of India (Agents) Regulations, 1972 because insurance agents are appointed under Regulations 4 and 5 read with Section 42 of the Insurance Act, 1938. The purpose of such an agent is soliciting and procuring life insurance business. DESU was not procuring or soliciting any business for the Life Insurance Corporation of India and, therefore, DESU was not an insurance agent. But the Hon'ble Supreme Court has further observed that DESU was certainly an agent as defined under Section 182 of the Contract Act. In Salary Saving Scheme of Life Insurance Corporation of India, the employer has been assigned the role of collecting the premium and remitting the same to the Life Insurance Corporation of India. Thus, the relationship between the Life Insurance Corporation of India and the employer is that of a "Principal" and "Agent". The Principal is liable for anything done by the Agent. Therefore, the opposite party Nos. 3 and 4 are liable to pay the insured amount to the complainant. If the premium has not been remitted to the Life Insurance Corporation of India by the appellant No. 2, the Life Insurance Corporation of India may ask the appellants to pay the same alongwith interest / penalty, as may be payable in such cases, but the Life Insurance Corporation of India will have to settle the claim as if the premium was regularly paid by the insured. We are of the view that the rate of interest awarded by the District Forum is on the higher side and we, therefore, reduce the rate of interest from 9% p.a. to 7% p.a.
11. For the reasons aforesaid, the appeal is allowed. Order impugned dated 21.05.2008 of the District Forum is modified and the appellants are absolved of the liability to pay any amount to the complainant. The respondent Nos. 2 and 3 are directed to pay the 7 insured amount of Rs. 2,06,000/- to the complainant - respondent No. 1 together with interest @7% p.a. from the date of filing of the consumer complaint till payment and Rs. 2,000/- towards litigation expenses, as awarded by the District Forum. Consumer complaint No. 57 of 2007 is disposed of accordingly. Costs of the appeal made easy.
(C.C. PANT) (JUSTICE IRSHAD HUSSAIN) K