State Consumer Disputes Redressal Commission
Smt. Anita Sharma vs Lic Of India & Ors on 31 January, 2011
BEFORE
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CIRCUIT BENCH,
RAJASTHAN, JAIPUR
Appeal No. 632/2007
Smt.
Anita Sharma W/o Late Shri Dinesh Sharma, R/o Behind Bijli Ghar, Budh
Gate, Deeg, Distt. Bharatpur.
..Appellant-Complainant
VS
LIC
of India, Mumbai through Chairman.
Branch
Manager, LIC of India, Bharatpur.
Raj.State
Road Transport Corporation, Lohagarh Depot, Bharatpur through Chief
Manager.
..Respondents-OPs
Before:
Mr.
G.S. Hora, Presiding Member
Present:
Mr. Puneet Sharma, counsel for the Appellant Mr. Mr. Puneet Gupta, counsel for the Respondents No.1&2 Mr. V.B. Mathur, counsel for the Respondent No.3 ORDER Dated: 31.01.2011 PER Mr. G.S. HORA, PRESIDING MEMBER This appeal arises out of order dated 1.3.2007 passed by the District Consumer Forum (DCF), Bharatpur whereby the complaint of the Complainant was dismissed.
Admittedly, the Husband of the Complainant had obtained a life policy for a sum of Rs. 1,00,000/- under Salary Savings Scheme (SSS). The insured admitted in All-India Institute of Medical Sciences (AIIMS), New Delhi in December, 2002 and when he was under treatment, died on 27.7.2003. The claim was filed with the Insurance Corporation but the same was repudiated on the ground that the policy was lying in lapsed condition since 28.12.2002 and therefore no claim was payable.
The learned DCF relying upon the judgement of the State Commission passed in Appeal No. 1448/96 Shanti Devi vs LIC of India & Anr held that if the salary was not prepared, it was not possible for the Department to have sent the premium to the Insurance Corporation and therefore the Complainant 2 should have ensured the payment himself. Thus finding no deficiency in service on the part of Insurance Corporation, the complaint was dismissed.
I have gone through the judgement of the learned DCF. I am of the view that the judgement is not sustainable in view of the ruling of the Hon'ble Supreme Court in LIC vs Rajeev Kumar Bhaskar (2005) SCW 3636. The observations of the Hon'ble Supreme Court are reproduced as under:
"The Scheme clearly provides that in the event of cessation of employment the concerned employee if continues his employment under a new employer, the former employer has to inform the Corporation thereabout. Further more, upon retirement or in situations other than taking up of any job with any other employer, the employee would be entitled to continue with the policy but therefor, he will have to pay a higher premium. Even at this stage, the Corporation would have a duty to inform the employee concerned towards his right. Even in case of non payment of premium for any reason whatsoever, in view of the object the Scheme seeks to achieve, it was the duty of the insurer to informthe employee about the consequences of non-receipt of such premium from the employer."
It has also been held by the Hon'ble Supreme Court in DESU vs Basanti Devi 1999 AIR SCW 4161 that the employer is the agent of the Corporation and being a agent he is to deduct the premium from the salary and then to remit the same to the Corporation every month. From the judgement passed in Rajeev Kumar Bhaskar (Supra), it is clear that it was the duty of the insurer to inform the employee and the employer about the non-receipt of the premium. At this juncture, I would like to quote some of the instructions issued by the Corporation under the SSS which as reproduced below:
"Clause 13.4 Default in payment of premium should be intimated to the party and arrears of premium should be called for. If the number of premiums unpaid are six, lapse action should be taken.
"Clause
16. While posting the group ledger any default in payment of premium should be communicated to the employer on a special Form No. 5227. If the premium remained unpaid for six months, a lapse intimation to the prescribed form No. 3 5228 should be sent to the employee.A lapse register is also to be maintained for preparing statistics in respect of lapses."
"Clause
17. In case of stray default for any reason, the defaulted premium can be allowed to remain, pending for collection later on. Further, premiums as and when received should be credited towards the months for which deductions has been made instead of towards an earlier default or instead of holding all collection in deposit till the full arrears are received."
The entire scheme goes to show that due to any reason if the default of the premium is made then intimation should be given to the party calling for payment of arrears. The Scheme further goes to show that the number of premium if remain unpaid for six months then lapse action has to be taken. This means that policy does not get lapsed automatically in case of default but lapse action is required to be taken by the Corporation. In this perticular case, due to illness of the employee, the premium could not be sent. In that case, it was required of the Corporation to have sent the notice to the employee as well as to the employer. In absence of such an intimation, the policy could not have been treated in a lapsed condition.
For the foregoing reasons, the appeal is accepted. The impugned order is set aside and the Insurance Corporation is directed to pay to the Complainant a sum of Rs. 1,00,000/- along with interest @ 9% per annum from 19.9.2003 when the claim was filed till the payment is made.
The Complainant shall also be entitled to get Rs. 5,000/- as cost of litigation.
Presiding Member Hira Lal