State Consumer Disputes Redressal Commission
Erumalla Alias Laxmi vs 1.Life Insurance Corporation Of India on 31 March, 2022
STATE CONSUMER DISPUTES
BEFORE THE TELANGANA
REDRESSAL COMMISSION: HYDERABAD.
FA.NO.551 OF 2017
DISTRICT CONSUMER
AGAINST ORDERSs IN CC.No.183/2015,
COMMISSION, KARIMNAGAR
Between:
Erumalla ErmallaiLaxmi,
W/o.Late Chandraiah,
Aged about 47 years,
Occ: Housewife, R/0:2-89,
Naringpur (Village), Jaipur Mandal,
Adilabad District.
Appellant/Complainant
And
1. Life Insurance Corporation of India,.
Manchirial Branch,
Rep. by its Manager,
Post Mancherial, Adilabad District.
2. The Divisional Manager,
Divisional Office,
The Life Insurance Corporation of
India, 2-7-105, Jeevan Prakash,
Dr.B.R.Ambedkar Stadium Road,
Karimnagar District.
Respondents/0pposite Parties
Counsel for the Appellant/Complainant: Sri V.Gourisankara Rao
Counsel for the Respondent/Opp.Party: Sri SrinivasS.Rajan
QUORAM: SRI JUsTICE M.S.K.JAISWAL, HON'BLE PRESIDENT,
HON'BLE SMT.MEENA RAMANATHAN..LADY. MEMBER.
THURSDAY,{THE, THIRTY FIRST DAY OF MARCH TWO THOUSAND TWENTY TWO ******* Order:
1. This is an appeal filed U/s. 15. of Consumer Protection Act, 1986 against, the 'order dated 25.10.2017 of the District Consumer Commission-l, Hyderabad, made in Cc.No.183/2015..
The Appellant is the Complainant.and the Respondents are the Opposite Parties in Cc.No. 183/2015.
For the sake of convenience, the parties are described as
2. arrayed in the complaint.
3. Briely stated, the facts are:
The Complainant's husband obtained several Life Insurance Policies during his life time from the Opposite Parties under the Salary Saving Scheme. One policy,bearing No.684595928 was not settled by the Opposite Parties despite several representations they repudiated the requests. Though they received the legal notice, they have neither paid the amount covered under. the policy nor have they repudiated the claim. Hence, the present complaint is filed seeking redressal.
4. The Opposite Parties filed their written version admitting to the fact that the policy bearing No. 684595928 was issued on 07.09.2010 for sum assured of Rs.5 lakhs. The Life Assured dieéd a on 13.10.2011 and the premiums under the said policy were not paid from April,2011. It is further submitted that the Life Assured had also signed on the Salary Saving Scheme authorization letter before issuing the pplicies and agreeing to make arrangements for remittance of premiums directly to the Corporation in the event of non-payment of premiums by the employer. Since the proposal form, medical certificate and authorization letter are the basis for entering into the contract and the policy holder failed to discharge his liability, this Opposite Party is not liable to pay the claim amount.
5. Before the, Di_trict Forum, the Complainant filed. evidence affidavit and Ex.A1 to A5 marked on his behalf. Evidence affidavit of Opposite Parties filed. No documents marked on their behalf.
6. The District Fprum after hearing both sides and considering the material on record dismissed the complaint with no order as to costs.
7. Aggrieved by the said order of the District Forum, the Complainant filed this appcal contending that the Commission below had failed to consider the following:
The Forum erred in dismissing the complaint on the ground that it is barred by limitation.
The Forum below failed sce that the judgment of the Hon'ble Chattisgarh State Commission is not binding on the District Forum in the presence of various judgments rendered by the A.P.State Commission and Telangana State Commission. While the Opposite Parties have settled other claims to the Complainant, they are needlessly denying this claim.
8. The Appellant/Complainant is the wife and nominee of the deceased who obtained several Life Insurance Policies under the Salary Saving Scheme. The policy holder died on 13.10.2011 and the policy bearing No.684595928 for a sum assured of Rs.5 lakhs is being denied by the Respondents/Opposite Parties stating that the policy is under lapsed condition.
9 The fact that the policy bearing No. 684595928 was issued on 07.09.2010 by the Respondents/Opposite Parties is not in dispute. Since the premiums were not paid from April,2011 and the policy was under lapse condition, they have stated that nothing is payable. The poliçy is issued under the Salary Saving Scheme and they. refer to th clause in the Bond that states -
policy shall stand lapsed if the due premium is not received. The fact that the said policy has been issued under the Salary Saving Scheme requires due emphasis and this point also requires further elaboration.
10. The Respondents/Opposite Parties never repudiated the policy when thepremiums were not paid regularly but only when a claim was made, they have raised the ground.of limitation and lapsed status of poliçy
11. At this juncture, it would be appropriate to understand LIC. It is a simple economical plan Salary Saving Scheme of Life Insurance proection for their whereby employees obtained a and retirement income for themselves under advantageous families conditions which might not be available to them.otherwise. Having issued the policy under the Salary Saving Scheme, the Respondents/Opposite Parties cannot èscape their liability to pay the sum assured on the ground of non-receipt of monthly premiums. This view is further fortified by the judgment reported in "DESU Vs. Basanthi Devi" reported in II (1999) CPJ 15 SC the Hon'ble Supreme Court while considering the relationship of employee and the Inisurance Company in the matter of Insurance Policy issued under Salary Saving Scheme, held that the employer 1s 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 Insurance Company was made basis to fasten the liability on the Insurance Company.
12. The Hon'ble Supreme Court had considered the relationship of employer and the Insured vis-à-vis the insurance company in "Chairman LIC of India and others Vs.Rajiv Kumar Bhaskar"
reported in 2002 ACJ 204. The Supreme Court clearly laid down that in case a policy does have clause that employer shall deduct monthly premium from the salary. of the insured and remit the same to the LIC under 'salary savings scheme, responsibility of collection and remittance of premium to the LIC of India would rest on the employer as he had accepted for the same. It was held that if the employer fails tò deduct premium from the salary of the insured and transmit the same to the LIC of India, LIC was bound to pay the sum assyred even if the employer failed to.deduct the monthly premium from the salary of the insured.
13. In DESU cas (Supra) it was held that DESI was given implied authority. by LIC as its agent to collect premium from its employees and tran_mit the same to the LIC of India. In both the cases the employer who accepted deduct to and remit the premiumn 5 from the salary of the employee was held to be the agent of the LIC of India.
find much substance in either of the submissions
14. We do not made by the learned counsel for the Respondents/Opposite would start running from the date Parties. The period of limitation Appellant/Complainant i,e., the of the last letter sent to 13.04.2015 vide Ex.A1. The cause of action subsisted till the repudiation or status report was filed.
is very simple and they
15. The Salary Saving Scheme of LIC deductions Roll Department. The need the cooperation of the Pay and remittance is done are made on the employee's authorization statement. The to LIC with a reconciliation regularly Parties have failed to submit any Respondents/Opposite demonstrated their reconciliation statements and neither have they The interest in the welfare of the émployees would have a duty to Respondents/Opposite Parties/Corporation concerned about. the conclusions individual employee/employee's from the employer. The of non-receipt. of premiums failed or neglected in Respondents/Opposite Parties/Corporation "DESU Vs. their brochure is discussed in their primary duty. Even (1999) CPJ 15 SC: The scheme Basanthi Devi" reported in has been explained is reproduced below:
XXX "Al the amounts /so collected are paid to the Corporation that means Respondents/Opposite Parties by one cheque by the employer This ensures for the employee regular payment, monthly, of his premiums at concessional rates.
XXX "On your part, all that the plan involves is a little extra consider worthwhile accounting which you will surely because of the scheme."
16. We have no hesitation in holding that the impugned order grossly erred in congluding that the Complainant is not entitled to any relief on the sole ground of limitation when discussing the nature of the Salary Saving Scheme and the responsibility of Respondents/Opposite Party/LIC.
17. allow the appeal and hold the 17, In the result, we Respondents/Opposite Parties as being deficient and direct them to pay the sum assured of, Rs.5 lakhs to the Appellant/Complainant. Time for compliance is six weeks, failing which, the said amount shall carry interest@ 6% p.a. from that date till payment. The Appellant/Complainant is alsò entitled to costs of Rs. 10,000/