State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Smt Sumitrabai Wd/O Gangaram Chafale on 19 October, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION STATE CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE, CIRCUIT BENCH, NAGPUR 5th floor, Administrative Building, Civil Lines, Nagpur-01 Appeal No. A/08/883 (Arising out of Order dtd.04.10.2008 in Complaint No.CC/08/61 of District Forum, Nagpur) Life Insurance Corporation of India Through its Divisional Manager Nagpur Divisional Office National Insurance Building S V Patel Marg Nagpur- 440 001 Versus 1. Smt Sumitrabai Wd/o Gangaram Chafale R/o Lohari Sawanga, Tah. Narkhed, Dist. Nagpur. 2. Sub Divisional Engineer Sub-Division, Saoner MSEDCL, Tah. Saoner Dist. Nagpur. BEFORE: Honble Mr S. M. Shembole, Presiding Member Hon'ble Smt.Jayshree Yengal, Member Hon'ble Mr N. Arumugam, Member PRESENT: Adv. Mr N S Badhe ..for the Appellant Adv. Mr Naukarkar .....for Respondent No.1 None ..for Respondent No.2 JUDGEMENT
(Pronounced on 19.10.2012) Per Mr S M Shembole, Honble Presiding Member This appeal is directed against the judgement & order dtd. 04.10.2008 passed by District Consumer Forum, Nagpur in Consumer Complaint No.CC/08/61, partly allowing the complaint directing the appellant LIC - o.p. No.1 to pay to the complainant insured amount by deducting the amount of due instalments. Further the o.p.No.2 - MSEDCL is directed to pay to the complainant compensation at Rs.5,000/- and Rs.3,000/- towards cost of proceedings.
Brief facts giving rise to this appeal are that :-
1. Deceased Sanjay, who was the son of complainant Smt Sumitrabai, was in service of o.p.No.2 MSEDCL as an Electrician. During his lifetime he had taken five insurance policies under Salary Saving Scheme, which was launched by o.p.No.1 LIC. The details of the policies are as under:-
Sl.
No. Policy No. Date of Policy Policy Amount Monthly Premium Bonus Amount 1 972214357 28.08.1997 35,000/-
160/-
17,920/-
2972215176 14.03.1998 1,50,000/-
222/-
24,891/-
3972215178 14.03.1998 80,000/-
75/-
--
4972216962 28.03.1999 20,000/-
62/-
9,183/-
5972326245 15.03.2000 59,000/-
210/-
19,537/-
(For the sake of brevity the appellant hereinafter is referred as LIC, respondent No.1 as the complainant and respondent No.2 employer as MSEDCL) The monthly premium was being deducted by the employer MSEDCL from monthly salary of deceased Sanjay. However, the amount of premiums of those polices for the months of May, August, September, October, November, December of 2003 and January, February, March, September, October of 2004 and July & August of 2005 i.e. for 13 months were not paid to LIC by MSEDCL. However, premiums of subsequent policies were received by the LIC.
2. On 26.02.2006 insured Sanjay died, surviving his mother complainant Smt Sumitrabai, who is also the nominee. Thereafter, the complainant claimed the policy amount by surrendering the policies in the office of LIC. However, LIC issued the cheques totaling to Rs.90,240/- i.e. paid up value only and refused to pay bonus and other benefits.
3. It is submitted that the deceased was never informed either by LIC or MSEDCL about the non-receipt of amount of premiums. It is further submitted that when the policy was obtained under Salary Saving Scheme it was obligatory on the part of the employer i.e. MSEDCL to remit the amount of premiums regularly to LIC and in the event of non-receipt of any premium it was obligatory on the part of LIC to inform the insured. It was not fault on the part of insured and therefore, LIC cannot refuse the benefits of the policies. Therefore, complainant made Consumer Complaint, claiming total amount of Rs.4,80,639/- towards the difference of payment of policies with bonus and interest. She has also claimed Rs.10,000/- towards cost of proceedings.
4. In spite of service of complaint notice o.ps failed to appear and resist the complaint before the Forum. Therefore, on hearing Ld. Counsel for the complainant and considering the evidence, produced by the complainant, the Forum passed the exparte impugned order, partly allowing the complaint as stated above.
5. Feeling aggrieved by the exparte impugned judgement & order LIC has preferred this appeal.
6. We heard Ld. Counsel for both the sides, perused the copy of impugned judgement & order and also the Written Notes of Argument submitted by the Ld. Counsel for the complainant.
7. Most of all the facts except liability of LIC to inform the insured about the non-receipt of premiums are not disputed. Therefore, the crux in this matter is as to whether it was obligatory on the part of LIC to inform the insured about non-receipt of premiums of 13 months and if yes, whether it is entitled to repudiated the claim of the complainant on the ground that the policies were lapsed and were not revived though received the amount of subsequent premiums.
8. It is submitted by Mr N S Badhe, Ld. Counsel for the appellant LIC that when undisputedly the amount of 13 months was not received and the policies were not revived. Though the amount of subsequent premiums was accepted, the complainant is not entitled to get the full benefit of the policies. It is submitted that it was the sole responsibility of the employer MSEDCL to deduct the amount of premium from the salary of insured and remit the same to LIC regularly. It is further submitted that it is not obligatory on the part of LIC to inform the insured about non-receipt of premiums. To which, it is denied by Mr Naukarkar, Ld. Counsel for the complainant and submitted that under the Salary Saving Scheme it is obligatory on the part of employer to deduct the amount of premium from the monthly salary of insured and remit it to LIC. It is also obligatory on the part of LIC to inform the insured if amount of any premium is not received in due course, etc. He has also supported his contention by relying on the decision of Honble Supreme Court in the case of Delhi Electric Supply Undertaking Vs. Basanti Devi & Anr. reported in III(1999) CPJ 15 (SC). He has also relied on the decisions of Meghalaya State Commission in the case of Dist. Manager, Food Corporation of India Vs. Maiti Mazar & Anr. reported in III(2004) CPJ 506 and National Commission in the case of LIC of India & Ors. Vs. Krishna Devi & Ors. reported in III(212) CPJ 422 (NC).
9. In the case of Basanti Devi (supra) it is held by Honble Supreme Court that under Salary Saving Scheme the employer is acted as an agent of LIC to collect the premium on its behalf and in the case of non-receipt of amount of premium, it is obligatory on the part of LIC to inform the insured, etc. The same observations are also made by Meghalaya State Commission in the case of Maiti Mazar (supra), wherein it is held that under the Salary Saving Scheme it is bounded duty of employer to remit the payment of premium regardless whether salary accrued to employee or not, in case where salary not adequate it is necessary to give intimation to employee necessary. Further in the case of Krishna Devi & Ors. (supra) National Commission held that under Salary Saving Scheme it does not make any difference that the 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.
10. In the present case, even it is not the contention of the LIC that employer - MSEDCL was not having adequate salary or no intimation was given to the insured / employee, etc.
11. On the contrary, undisputedly, till the death of insured Sanjay he was in service and he was never informed by the LIC about the non-receipt of amount of premium.
12. In view of undisputed facts and the above authorities of Apex Court, National Commission and Meghalaya State Commission, we have no hesitation to accept the arguments advanced by the Ld. Counsel for the complainant. Therefore, the submissions made by the Ld. Counsel for the appellant are being contrary to the settled position of law, cannot be sustained.
13. For the foregoing reasons, the District Consumer Forum has rightly passed the impugned judgement & order. We find no infirmity or illegality in the impugned judgement & order. Hence, no interference is warranted.
14. In the result, the appeal is being devoid of merit is liable to be dismissed with cost.
Hence, we pass the following order:-
ORDER i. Appeal is dismissed.
ii. Appellant shall pay to the respondent No.1 Rs.2,000/- towards the cost of this appeal and bear its own cost.
iii. Copy of this order be supplied to the parties.
[ S. M. SHEMBOLE ] PRESIDING MEMBER [ SMT.JAYSHREE YENGAL] MEMBER [ N. ARUMUGAM] MEMBER sj