State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India, vs Smt. Janjerla Rajeshwari on 30 June, 2022
BEFORE THE TELANGANA STATE CONSUMER DISPUTESS
REDRESSAL COMMISSION: HYDERABAD.
FA.NO.461 OF 2C18
AGAINST ORDERSIN CC.NO.222/2012 DISTRICT CONSUMER
COMMISSION, KARIMNAGAR
Between:
Life Insurance Corporation of India,
Ramagundam Branch,
Rep. by its Branch Manager,
Ramaundam proper & Mandal,
Karimnagar District.
Appellant/Opposite Party
And
Smt.Janjerla Rajeshwari,
W/o. Late Janjerla Mallesh,
R/o.Ippalapalli Village,
Muthar m Mandal,
Karimnagar District.
Respondent/Complainant
Counsel for the Appellant/Opposite Party: M/s.Srinivas Karra
Counsel for the Respondent/Complainant: Notice served
QUORAM: SRI JUSTICE M.S.K.JAISWAL, HON'BLE PRESIDENT,
&
HON'BLE SMT.MEENA RAMANATHAN...LADY MEMBER
THURSDAY, THE THIRTIETH DAY OF JUNE TWO THoUSAND TWENTY Two Order: (Per Smt.Meena Ramanathan, Hon'ble Lady Member)
1. This is an appeal filed U/s.15 of Consumer Protection Act,1986 against the order dated 18.10.2013 of the District Consumer Commission, Karimnagar, made in Cc.No.222/2012. The Appellant is the Opposite Party and the Respondent is the Complainant in CC.No.222/2012.
2. For the sake of convenience, the parties are described as arrayed in the complaint.
3. Briely stated, the facts are, that the Complainant's husband who was working in Singareni Collieries Company Limited, Godavari Khani had obtained several Life Insurance Policies from the Opposite Party under the Salary Saving Scheme. As per the terms and conditions of the policies, the Opposite Party undertook to pay the basic sum assured in the event of natural death of the to pay a n additional s u m towards policy holder and further agreed accidental benefit in the event of accidentai death of the policy holder.
4. On 09.11.2008, the policy holder died in a road accident and a case was registered by the P.S. Peddapally in Cr.No.248/2010. The Complainant being the nominee under the said policies ed the Opposite Party and submitted the claim by enclosing the relevant documents. Having received the claim, the Opposite Party settled the claim for some policies and promised to settle the balance in the near future. Their failure to settle the other claims has prompted the Complainant to file the present complaint and she is seeking a direction for payment of Rs.9,50,000/- along with interest and compensation.
5. The Opposite Party filed their written version contending that the complaint is barred by limitation as it was not filed within two years from the date of death of the policy holder. They admit that they have issued the following Life Insurance Policies:
S1.No. Policy Number Sum Assured Rs.
682458596 50,000-00
2 683507360 50,000-0G
3 683807882 50,000-00
683817487 35,000-00
683819098 35,000-00
684699223 50,000-00
7 684702460 50,000-00
3 684703108 55,000-00
9 684706305 50,000-00
10 684706304 50,000-000
Total: 4,75,000-00
under the Salary Saving Scheme.
6. The Life Assured was working as a coal filler in SCCL and no intimation about his death was received by them from the Complainant. Out of the ten policien, seven policics were under lapacd condition on the date of death due to non-payment of premiums. Since the 8aid seven policies are under lapsed threc condition, nothing is payuble to the Complainant. The other policics bearing Nos.684703 108, 684706305 and 684706304 arc in force but the claim was not scttled as the Complainant did not With thesc produce the necessary documents as mandated.
scrvice on Submissions they scck that there is no deficiency in thcir part and pray for dismissal of the complaint.
evidence
7. Bcfore the District Forum, the Complainant filcd behalf. Evidence affidavit and Ex.A1 to A10 are markcd on hcr marked on their affidavit of Oppositc Party filed. Ex.B1 to B10 are behalf
8. The District Forum after hearing both sides and considering the complaint directing the the material on record allowed of Rs.4,75,000/-
Opposite Party to pay Rs.9,50,000/- consisting towards Basic Sum and Rs.4,75,000/- towards Sum Assured under accidental benefit coveragec after deducting unpaid carries premiums. The net amount payable to the Complainant interest @9% p.a. from the date of filing the complaint i.e., 15.11.2012 till realization and Rs.1,000/- towards costs of the proceedings within one month from the date of receipt of the order.
9. Aggrieved by the said order of the District Forum, the Appellant/Opposite Party filed this appeal contending that the Commission below had failed to consider the following .The Forum below failed to understand the scope of Salary Saving Scheme and the fact that premiums were not deducted by the employer and the same was not remitted to the Corporation was entirely overlooked. .The Forum below erred in allowing the complaint even though the employer was not made a party to the complaint. The Forum failed to consider that the Complainant/Respondent had not submitted the relevant 4 papers to process her claim in respect of the three policies which are in force and erred in awarding interest and costs.
10. The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner? To what relief?
11. Heard both sides and perused the material on record.
12. It is an admitted fact that the deceased obtained ten Life Insurance policy holder had Policies covered under Ex.Al to A10 corresponding to Ex.B1 to B10. The Life Assured was SCCL and the working in policies were issued under the Scheme. The fact that the Salary Saving policy holder died in a motor vehicle accident on 09.11.2008 near Peddapally is not in dispute. A perusal of the crime case records filed under Ex.A11 reveals that on 27.10.2008, the deceased policy holder B.Shanker, were grievously injured when along with one and as they were hit by a lorry a result, he was shifted to the Government Hospital, Peddapally. Subsequently, he was shifted to Yashoda further treatment and while Hospital for away on 09.11.2008.
undergoing the treatment he passed
13. fter his death, the the claim Complainant being the nominee initiated process but since there was no issued vide Ex.A14. As response, a legal was per the policies issued under the Saving Scheme, there is an Salary agreement between the employer and the Appellant/Opposite Party that monthly premiums have to be deducted from the employee/Life Assured salary. When the Appellant/Opposite Party undertakes to collect the premiums by way of salary deductions, it is their monthly the policy holder about duty to inform non-receipt of premiums. The impugned order has discussed this in great detail and concluded that no document is filed by the Appellant/Opposite Party to show that they have issued a letter about non-receipt of premium.
Scheme,
14. Having issued the policies under the Salary Saving on or liability the Opposite Party cannot evade their responsibility the ground of non-receipt of monthly premiums.
This matter has Deen considered in a catena of judgments passed by the Hon'ble to time.
the National Commission from time Supreme Court and our view of the decisions in support of We rely on the following matter.
Insurance
CPR 143 (NC) in a case Life
()
() 2009/2)
isra & Ors, wherein it
Corporation of India Vs. Smt.Ranjana is held that:
to be remitted from salary "Where premium for LIC policy was and employer and failure in remittance w a s for no fault of insured was liable for that fault, employer being agent of LIC, Corporation was liable to pay policy amount.
CPR Hon'ble National Commission reported in 2015 (1) Smt.Ram Sakhi, it was held 263 (NC) in a c a s e LIC of India Vs. that:
the the Opposite Parties to inform "it is the bounded duty of by way ofissuing a notice in same to employee and his emp!oyer, 1938 and same accordance of the Insurance Act, with Sec. 50 in the manual for policy servicing position has been enunciated Scheme issued by LIC of India on department No. 14 Salary Saving 31.12.1990".
RP.No.3482 of 2017 in
(ii) Hon'ble National Commission in decided on 13.02.2018, it a case LIC of India Vs. Seeta & Anr was held that:
"the matter has been considered in a catena of judgments Commission from time to passed by Hon 'ble Supreme Court and this time. In an order passed by this Commission on 11.03.2015 in RP.No.3016/2008, Smt. Meenakshi Popat Kambhoje & Ors Vs. LIC of India & Anr, it was held by majority judgments that the LIC was liable to pay the claim to the claimant, even in the wake of the fact that the premium was not deducted by the employer in time and paid to the LIC".
15. The criminal case records under Ex.A11 to A13 clearly establish that the policy holder died because of the injuries Sustained in the road accident. As per the policy conditions, the Appellant/Opposite Party is liable to pay the sum assured plus an additional sum equal to the basic sum assured, since the cause of death was due to injuries suffered in a road accident. The Appellant/Opposite Party has pleaded that they did not receive the intimation about the death of the policy holder. However, they were served the legal notice vide Ex.A14 and did not come forward to settle the claim of the Complainant and this visibly exhibits their negligence and deficiency. As such the cause of action would arise on the date of repudiation but in the instant case, no reply has been given by the Appellant/Opposite Party. Therefore, their contention that the complaint is barred by limitation does not hold any strength. Having appreciated all these aspects, the impugned order rightly observed that the Appellant/Opposite Party is liable to pay Rs.9,50,000/- towards basic sum and accidental benefit coverage (Rs.4,75,000/-Rs.4,75,000/-) after deducting the unpaid premiums.
16. At this juncture, it would be appropriate to understand Salary Saving Scheme of LIC. It is a simple economical plan whereby employees obtain Life Insurance protection for their families and retirement income for themselves under advantageous conditions which might not be available to them otherwise.
Having issued the policy under the Salary Saving Scheme, the Respondents/Opposite Parties cannot escape their liability to pay the sum assured the ground of on non-receipt of monthly premiums. This view is further fortified by the judgment reported in "DESU Vs. Basanthi Devl" reported in II (1999) CPJ 15 sc.
the Hon ble Supreme Court while considering the relationship of employee and the Insurance Company in the matter of lnsurance Policy issued under Salary Saving Scheine, held that: "the employer is an agent of the Insurance Company in terms of Section- 230 of the Indian Contract Act and any lapse on the part of the employer while acting as the agent of the lnsurance Company was made basis to fasten the liability on the Insurance Company."
117, The fact that premiums were not paid regularly was never intumated to the policy holder. Only the employer is responsible as the agent of the Respondents/Opposite Parties. The consequences of non-payment of premiums were never informed to the Insured.
This action on the part of the Respondents/Opposite Parties is extremely unfair, especially when their acceptance letter has the following clauses:
a) The employer will receive list of premiums to be deducted called his demand invoice in duplicate each month on the specified date.
b) One copy of the invoice is to be returned along with the remittance and second copy is to be retained by the employer for his record.
c) Reconciliation Statement in a specified form to be supplied by Respondents/Opposite Parties/LIC will accompany the statement.
18. The Respondents/Opposite Parties have not complied with their terms and conditions and clauses as specified above. Therefore, the plea taken by Respondents/Opposite Parties/LIC that due to non-receipt of premiums, the policy was considered as "lapsed" and time barred is unjustified.
19. We have no hesitation in holding that the impugned order considered the facts in proper perspective and requires no interference whatsoever. The relief on the ground of limitation when discussing the nature of the Salary Saving Scheme stands on a difference footing and the Forum has laid proper emphasis on these aspects.
20. In the result, the appeal is dismissed. No costs.