State Consumer Disputes Redressal Commission
Balwinder Kaur vs Life Insurance Corporation Of India & ... on 14 August, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH
3rd Bench
FIRST APPEAL NO. 1077 OF 2007
Date of Institution: 6.8.2007
Date of Decision: 14.8.2012
Balwinder Kaur w/o late Sh. Surjit Singh r/o V.P.O. Dulley, Tehsil &
District Ludhiana.
.....Appellant
VERSUS
1. Life Insurance Corporation of India, Career Agents Branch, Jawahar
Market, Post Box No. 237, Clock Tower, Ludhiana through its
Branch Manager.
2. Punjab State Electricity Board, The Mall Patiala, through its
Chairman.
3. Punjab State Electricity Board, Lalton Kalan, Ludhiana through its
XEN/SDO.
..... Respondents
First Appeal under Section 15 of the
Consumer Protection Act, 1986
against the order dated 8.6.2007
passed by the District Consumer
Redressal Forum, Ludhiana.
Before:
Sh. Jagroop Singh Mahal, Presiding Judicial Member
Sh. B.S. Sekhon, Member Present:
For the appellant : None
For respondent No.1 : Ms. Jaimini Tiwari, Advocate for
Sh. Rajneesh Malhotra, Advocate
For respondent No.2&3 : Sh. Vivek Sethi, Advocate
First Appeal No. 1077 of 2007 Page 2 of 7
BALDEV SINGH SEKHON, MEMBER
This is an appeal against the order dated 8.6.2007 passed by the District Consumer Disputes Redressal Forum, Ludhiana (hereinafter called as "District Forum") vide which the complaint of the appellant was dismissed.
2. Briefly stated, the facts of the case are that Sh. Surjit Singh, husband of the appellant, son of Sh. Gurdev Singh was working with the Punjab State Electricity Board at Lalton Kalan, District Ludhiana and was getting salary of Rs. 8,000/- per month.
3. It was pleaded that Sh. Surjit Singh, during his life time, had obtained an insurance policy under salary saving scheme vide policy No. 161109657 with the instructions that the amount of premium shall be deducted from the salary of Sh. Surjit Singh by the respondent No. 3 and shall be remitted to the respondent No. 1. The appellant was the nominee in this policy. It was pleaded that these instructions were duly conveyed to the respondent No. 3. In compliance to these instructions, the respondent No. 3 was deducting the premium from the salary of Sh. Surjit Singh and was remitting the same to the respondent No. 1. As such, the respondent No. 2 and 3 were acting as an agent of respondent No. 1.
4. It was further pleaded that in addition to salary amount there were sufficient funds of Sh. Surjit Singh lying with the respondent No. 2 and 3 from which the premium could have been easily paid to the respondent No.
1. Neither the respondent No. 3 had informed Sh. Surjit Singh, during his life time, that they had stopped deducting the premium as per his instructions and were not remitting the same to the respondent No. 1 nor respondent No. 1 had informed Sh. Surjit Singh that they had not been First Appeal No. 1077 of 2007 Page 3 of 7 receiving the amount of premium from the respondent No. 3 so that he could deposit the amount directly to respondent No. 1.
5. It was further alleged that after the death of Sh. Surjit Singh, the appellant lodged the claim under the policy with the respondent No. 1 and furnished all documents required for processing the death claim of Sh. Surjit Singh. However, the appellant was surprised to receive a letter dated 21.7.2004 from the respondent No. 1 informing her that the death claim of Sh. Surjit Singh was not payable as the policy was lying lapsed from 5/2003 with eight gaps i.e. from July, 2002 to February, 2003. Thereafter, when the enquiries were made, it was noticed that the respondent No. 3 had not remitted the premium to the respondent No. 1 for the reasons best known to them. Sh. Surjit Singh was never informed to that effect. The respondent No. 2 and 3 were legally bound to deduct the premium from the salary and to remit the amount of premium to the respondent No. 1 as per instructions. They should have written to Sh. Surjit Singh so that he could have deposited the amount himself. It was further pleaded that Sh. Surjit Singh had sufficient funds lying with the respondent No. 3 but the respondent No. 3 failed to perform the legal duty and, therefore, was liable for negligent act being agent of the respondent No. 1. This amounted to deficiency in service on their part.
6. It was further pleaded that after the death of Sh. Surjit Singh, the respondent No. 2 and 3 paid service benefits to the appellant amounting to Rs. 64,000/-. Since there was sufficient funds in addition to the salary of the employee, the respondent No. 2 and 3 could have easily paid the premium for 8 installments which amounted to Rs. 1,137/- per premium totaling Rs. 9,096/-. Hence the complaint before the District Forum. First Appeal No. 1077 of 2007 Page 4 of 7
7. Upon notice, the respondent filed the written statement in which it was pleaded that no claim had been lodged by the appellant till date and only a legal notice dated 6.10.2004 was received which was duly replied by the respondent No. 1 on 21.10.2004. It was further stated that the policy had been lying lapsed since 28.5.2003 due to non-receipt of premium. Thus nothing was payable to the appellant as per the LIC Rules. It was denied if any document fulfilling the requirement of the policy were submitted by the appellant. It was also denied if the respondent No. 2 and 3 were the agents of respondent No. 1. In fact it was the duty of the life insured to make payment of the premium as per policy rules and regulations.
8. The respondent No. 2 and 3 filed separate written statement in which it was pleaded that the appellant knew very well that Sh. Surjit Singh remained absent from his duty from 28.6.2002 to 3.3.2003 for 209 days, from 23.4.2003 to 23.10.2003 for 184 days and from 17.4.2004 to 9.5.2004 till his death for 23 days. As such, his salary was not to be withdrawn for disbursement. When no salary for the above said period was payable, then the payment of any premium on behalf of Sh. Surjit Singh could not have been made to the LIC. In fact, above referred period of absence of the employee was regularized after his death and most of this period was sanctioned without pay. It was stated that Sh. Surjit Singh himself was at fault for which the respondent Board cannot be held responsible. It was denied if the respondent Board was bound to inform Sh. Surjit Singh regarding non-deduction of premium. Dismissal of the complaint was prayed.
9. The parties led their evidence by way of affidavits and documents. First Appeal No. 1077 of 2007 Page 5 of 7
10. The learned District Forum, after going through the pleadings of the parties and evidence on record, dismissed the complaint of the appellant.
11. Hence the appeal.
12. We have gone through the pleadings of the parties and thoroughly perused the evidence on record and considered the submissions of the contending parties.
13. The admitted facts of the case are that Sh. Surjit Singh, husband of the appellant, was insured with the respondent No. 1 vide policy No. 161109657 and respondent No. 3 was depositing the monthly premium from the salary of Sh. Surjit Singh. It has been contended by the respondent No. 1 that the said policy was lying lapsed since 5/2003 with eight gaps i.e. from July, 2002 to February, 2003. Therefore, nothing was payable to the appellant as per regulations. The appellant has contended that the respondent No. 2 and 3 were legally bound to remit the monthly premium to the respondent No. 1 which they have failed. The respondent No. 2 and 3 have also failed to inform the appellant about non-deduction of premium from his salary so that late Sh. Surjit Singh could deposit the premium of his own.
14. The respondent No. 2 and 3 have proved on record the authorization letter (Ex. R-1) written by late Sh. Surjit Singh vide which the respondent No. 3 was authorized to deduct the monthly premium from the salary of the deceased life assured and remit the same to the respondent No. 1. Perusal of this authorization letter reveals that the life assured was entirely responsible for any consequences on account of non-payment of premium of the policy in the event of his proceedings on leave without pay and it was the responsibility of the life assured to make arrangements for First Appeal No. 1077 of 2007 Page 6 of 7 remittance of premium directly to the Corporation. The relevant portion of authorization letter is reproduced as under:-
"I agree that your liability will be continued to arrangement for deduction of premium from my salary where ever this can be made and remitting the amount to the Corporation in time. I shall be entirely responsible for any consequences on account of non- payment of premium on my policy for reason your beyond control, such as an in the event of my proceeding on leave without pay or my drawing advance salary without deduction of premium or canceling this authorization for deduction of premium or my leaving your employment. In any such case, or in case of withdrawal of the Salary Saving Scheme with you by the Life Insurance Corporation of India for any reasons whatsoever, it will be my responsibility to make arrangements for remittance of premium directly to the corporation at the increased rate specified in the policy from going into lapsed condition."
15. Thus the life assured had only authorized the respondent No. 3 to deduct the premium from his salary in case the same was drawn by the respondent No. 3. The respondent No. 2 and 3 have also placed on record the documents Ex. R-2 to R-6 intimating the life assured that he was absent from duty for a long period and no pay was being drawn during the said period. The respondent No. 3 proved on record the office order dated 18.5.2004 (Ex. R-7) vide which the absence period of the deceased life assured was regularized after his death. Hence the respondent No. 2 and 3 were not, at all, in a position to deduct the premium from the salary. The appellant has further contended that Rs. 64,000/- was paid to her as "service First Appeal No. 1077 of 2007 Page 7 of 7 benefits" after the death of the life assured and, therefore, the sufficient funds were available with the respondent No. 3. This contention is totally baseless because the service benefits of an employee only become due and are paid after his death and these are not payable during his life time. Since the respondent No. 2 and 3 merely following the instructions of the life assured, they were not agents of the respondent No. 1. When the life assured was aware of the fact that due to his absence from duty no salary was being paid to him, he should have made arrangements to pay the premium at his own level.
16. Thus the life assured himself, and not the respondent No. 2 and 3, was responsible for the lapse of the policy and, therefore, the claim of the appellant was rightly repudiated by the respondent No. 1 vide letter dated 21.10.2004 (Ex. C-9) as per policy conditions.
17. In view of the above discussion and findings, we find no merit in the appeal of the appellant and the same is dismissed. The impugned order of the learned District Forum is upheld.
18. The arguments were heard on 9.8.2012 and the order was reserved. Now, the order be communicated to the parties.
19. The appeal could not be decided within statutory period because of the heavy pendency of court cases.
(Jagroop Singh Mahal) Presiding Judicial Member (Baldev Singh Sekhon) Member August 14, 2012 VINAY