State Consumer Disputes Redressal Commission
Jangili Madavi Alias Madhavi vs Life Insurance Corporation Of India on 31 March, 2022
BEFORE THE TËLANGANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION: HYDERABAD.
FA.NO.553 OF 2017
AGATNST ORDERSIN CC.NO.345/2015, DISTRICT CONSUMER
COMMISSION, KARIMNAGAR
Between:
Jangili Madavi @ Madhavi,
W/o.Late Rajaiah, aged about 57 years,
Occ: Housewife, R/o.Vittal Nagar,
Near Post Office Godavarikhani,
Ramagundam Mandal,
Karimnagar District.
Appellant/Complainant
And
Life Insurance Corporation of India,
Ramagundam Branch,
Beside Rajeev Rahadari,
Post Godavarikhani,
Karimnagar District505 209,
Rep. by its Manager
Respondent/Opposite Party
Counsel for the App llant/Complainant: Sri V.Gourisankara Rao
Counsel for the
Respondent/Opp.Party: Sri Srinivas $.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.345/2015. The Appellant is thie Complainant and the Respondent is the Opposite Party in CC.No.345/2015.
2. For the sake 'of convenience, the partics arc described as arrayed in the complaint.
3. Brielly 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.683820413 was not settled by the Opposite Parties despite sevoral representations they repudiated the requests. Though they received the lcgal 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 Party filed their written version admitting to the fact that the policy bearing No. 683820413 was issued on 28.06.2004 for sum assured a Rs.50,000/-..The Life Assured of died on 18.01.2007 The Opposite Party has submitted that they have paid claims relating to other policies as reproduced below:
SI.No. Policy No Nature of Claim
682699357 (Joint Death Claim on 06.11.07 for Rs.28,881
lifepolicy) and Maturity claim to the present
complainant on 18.07.2014 for Rs.47,806 682715064 Death Claim on 5.11.2007 3 683821710 Death Claim of Rs.89,738 on 24.3.2015 6848688296 Death Claim of Rs.96,520 on 24.3.2015 They have denjed this policy as it is barred by limitation.
5. It is further submitted that the Life Assured had also signed on the Salary Saving Scheme authorization letter before issuing the policies 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.
36. Before the District Forum,.the Complainant filed evidence affidavit and Ex.A1 to A4' marked on his behalf. Evidence affidavit of Opposite Parties filed. No documents marked on their behalf.
7. The District Forum after hearing both sides and considering the material on record dismissed the complaint with no order as to costs
8. Aggrievedby ithe said order of the District Forum, the Complainant filed this appeal 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 see that the judgment of the Hon'ble Chattisgarh State Commission is not binding on the District Forum in the presence of various judgments fendered 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.
9. The Appellant/Complainant is the wife and nominee of the deceased who obtained several Life Insurance Policies under the Salary Saving Scherme. The policy holder died on 18.01.2007 and the policy bearing No.683820413for a sum assured of Rs.50;000/- is being denied by the Respondent/Opposite Party stating that the policy is under lapsed condition.
10. The fact that the policy bearing No. 6838204 13 was issued on 28.06.2004 by the Respondent/Opposite Party is not in dispute. Since the premiums were not paid regularly-date is not specified by the Opposite Parties and the policy was under lapse condition, they havq stated that nothing is payable. The policy is issued under the ^alary Saving Scheme and they refer to the 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 Schcme requires due emphasis and this point also requires further elaboration.
11 The Respondent/Opposite Party never repudiated the policy when the premiums were not paid regularly but only when a claim was made, they have raised the ground of limitation and lapsed status of policy.
12. At this juncture, it would' be appropriate to understand Salary Saving Scheme of LIC. It is a simple economical plan whereby employees obtained a 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 Respondent/Opposite Party cannot escape their liability to pay the sum assured on thç ground of 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 SCthe Hon'ble
Supreme Court while considering the relationship of employee and the Insurance Company in the matter of Insurance Policy issued under Salary Saving, Scheme, 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 Insurance Company was made basis to fasten the liability on the Insurance Company.
13. The Hon'ble Supreme Court had considered the relationship of employer and th 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 uFder 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 to deduct premium from the salary of the insured and transmit the'same to the LIC of India, LIC was bound to pay the sum assured even if the employer failed to deduct the monthly premium from the salary of the insured.
14. In DESU case (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 to deduct and remit the premium Irom the salary of the employee was held to be the agent of the LIC of India.
15. We do not find much substance in either of the submissions made by the learned counsel for the Respondent/0pposite Party. The period of limitation would start running from the date of the last letter sent to the Appellant/Complainant i.e., 17.08.2015 vide Ex.A1. The cause of,action subsisted till the repudiation or status report was filed.
16. The Salary Saving Scheme of LIC is very simple and they need the cooperation of the Pay Roll Department. The deductions are made on the employee's authorization and remittance is done regularly to LIC with a reconciliation statement. The Respondent/Opposite Party haye failed to submit any reconciliation statements and neither have they demonstrated their interest in the welfare of the.employees. The Respondent/Opposite Party/Corporation would have a. duty to individual employee/employee's concerned about the conclusions of non- receipt of premiums from the employer. The Respondent/Opposite Party/Corporation filed or neglected in their primary duty: Even their brochure is discussed in "DESU. Vs. Basanthi Devi"
reported in Il (1999) CPJ 15 SC: The scheme has been explained is reproduced below XXX All the amounts ,so collected paid to the are Corporation that means Resppndent/Opposite Party by one cheque by the employer. This ensures for the employee regular payment, monthly, of his premiums at concessional rates."
XXX the plan involves is a little extra "On your part, all that surely consider worthwhile accounting which you will because of the scheme."
order hesitation in holding that the impugned
17.
17. We have no is not entitled to grossly erred in concluding that the Complainant the any relief on the sole ground of limitation when discussing of nature of the Salary Saving Scheme and the responsibility Respondents/Opposite Party/LIC.
allow the appeal and hold the
18. In the result, we
to
Respondent/Opposite Party a s being deficient and direct them the sum assured of Rs.50,000/- to the pay Appellant/Complainant. Time for compliance is six weeks, failing which, the said amgunt shall carry interest @ 6% p.a. from that date till payment. The Appellant/Complainant is also entitled to costs of Rs.10,000/-