Before the District consumers  Forum: Kurnool

Present: Sri K.V.H. Prasad, B.A., LL.B., President

And

Smt C.Preethi, M.A., LL.B., Member

Sri R.Ramachandra reddy, B.Com., LL.B., Member

Monday the 21^st day of June, 2004

C.D.No.33/2002

Between:-

M. Linganna,

H/o. Late Tippamma,

H.No. 38/118-A,

Erraburaj, Kurnool.                                              . . . Complainant represented by his

                                                                                    Counsel Sri S.Iqbal Ahmed

-Vs-

1.   The Commissioner,

Kurnool Municipal Corporation,

Kurnool.                                                    . . . Opposite party No.1 represented

by his counsel Sri D.Yella Reddy.

2.  The Divisional Manager,                               

L.I.C. of India, Cuddapah Division,

Cuddapah.                                              . . . Opposite party No.2 represented by

                                                                           his Counsel Sri M.L.Srinivasa Reddy.

CD. No. 33/2002

(As per Smt C.Preethi Member )

1.         This CD complaint of the complainant is filed under section 12,13 & 14 of CP Act, 1986, seeking a direction on the opposite parties to pay RS.10, 000/- insured amount under G.S.L.I scheme of 1986 with 12% interest per annum from the date of death of the deceased RS. 5,000/- as compensation and any other relief or reliefs which the complainant is entitled in the circumstances of the case.

2.         The brief facts of the unverified complaint of the complainant is that the complainant’s mother P Hussainamma was an employee of opposite party No.1, working as a public Health worker died on 13.5.1993 in service, she contributed RS. 10/- per month from her salary and the opposite party No.1 remitted towards Group Saving Linked Insurance Scheme of 1986, of the opposite party No.2.  After the death of the complainant’s mother, the complainant submitted  necessary particulars to the opposite party No.1 but the opposite party No.1 did not furnish the said particulars to the opposite party No.2 for granting of insurance i.e amount to the complainant.  But inspite of submitting necessary certificates to the opposite party No.1, the opposite party No.1 did not forwarded the claim of the complainant to the opposite party No.2.  Hence, the act opposite parties in not  settling the claim of complainant is amounting to deficiency of service to the complainant.

3.       In substantiating its case the complainant filed the following documents Viz (1) legal heir certificate dt 4.6.1996 issued by M.R.O, Kurnool, beside to the above document, the complainant filed his sworn-affidavit in reiteration of his complaint averments as evidence and the above document is marked as Ex A.1 for its appreciation in this case.

4.       In pursuance to the notice of this Forum of this case of the complainant, the opposite parties appeared through its standing counsels and filed separate written version’ s denying the complaint as not maintainable either in Law or on facts.

5.       The opposite party No.1 in its written version submits that complaint is not maintainable as the complainant has not issued any statutory notice as contemplated under section 685 of Hyderabad Municipal Corporation Act, before filling this complaint and admits that the deceased Thipamma was its employee and working as a Public Health Worker and died on 1.5.1996 in service, and RS.10/- was deducted from her salary and paid to opposite party No.2 under Group Savings Linked Insurance Scheme of the opposite party No.2.

6.       It further submits that the opposite party No.1 paid premiums after deducting the premium amount from its employees to the opposite party No.2 as and when requested by the opposite party No.2.  Hence it is the opposite party No.2 who has to pay the insured amount to the complainant as the opposite party No.1 paid premium with the interest and the master policy  was fairly reinstated with retrospective effect and it is obligatory on the opposite party No.2 to admit the claim.  The opposite party No.2 never cancelled the policy nor the policy was in lapsed condition.  The opposite party No.1 forwarded the claim of the complainant to the opposite party No.2 for settlement hence it is for the opposite party No.2 to pay the said  insured amount to the complainant therefore there is no deficiency of service on part of the opposite party No.1 and the complainant has to take appropriate steps against opposite party No.2 only and seeks for the dismissal of complaint against the opposite party No.1 with costs.

7.       The opposite party No.2 admits in its written version that the deceased Tippamma was an employee of opposite party No1, working as Public Health Worker and she was a member of GSLI scheme of opposite party No.2, subscribing monthly premium of RS.10/- from her salary to the said scheme through the drawing office i.e opposite party No.1.  It also admits the opposite party No.2 received claim form B along with xerox copy of certificate of death, legal heir certificate and a list without month wise member wise remittance particulars of GSLI premia  from opposite party No.1 vide its letter dt 13.1.2000.

8.          It further submits that the master policy of the opposite party No.1 was in lapsed condition due to non-payment of premium from 6/93 onwards and the opposite party No.2 addressed a letter dt 5.10.1994 to the opposite party No.1 stating that the master policy is in lapsed condition and they will not entertain  any death claim that has occurred during the discontinued period even if the master policy reinstated with retrospective effect.  The opposite party No.2 made it clear as to the consideration of death claims for the discontinued period, accepted  premiums from the opposite party No.1 with interest.

9.         The opposite party No.2 further submits that the master policy of the opposite party No.1 was in a lapsed condition from 6/93 to 1/97 and the opposite party No.2 made it clear through its communications to the opposite party No.1 that it would not entrain any death claims that has occurred during the dis continuation period, even after re-instation of the master policy.   The policy holder Tippamma died on 1.5.1996, during the period when the master policy was in lapsed condition.  Hence the opposite party No.2 has no liability towards the complainant and seeks for the dismissal of complaint with costs.

10.     In substantiation of its case the opposite party No.1 filed documents marked as Ex B.1 to B.10 for appreciation in this case besides to its sworn affidavit as devidence and the opposite party No.2 filed the documents marked as Ex B.11 to B.19 for appreciation in this case besides to its sworn-affidavit as evidence.

11.         Hence the point for consideration is to what relief the complaint is remaining entitled alleging deficiency of service on part of the opposite party:-

12.       There is no dispute about the wife of the complainant being an employee in the Kurnool Municipal Corporation and she died on 1.5.1996.  There is no 6hydisputes that she was a member in the scheme, while being a member she contributed RS.10/- P.M towards G.S.L.I.S of 1986.  The opposite party No.1 forwarded claim of the complainant for settlement to the opposite party No.2 but no action was taken.

13.        The Ex B.1 attested xerox copy dated Nil/7/1994 from the opposite party No.1 to the opposite party No.2 shows that a cheque for RS.42, 540/- bearing No. 337939 dt 26.4.1994 towards subscription of G.S.L.I.S of Public Health and non Public Health Workers for a period from 6/93 to 2/94 was sent for acknowledging the receipt of the cheque and stamped receipts.  The opposite party No.2 returned the said cheque dt 26.4.1994 on the ground that the cheque was valid only up to 26.7.1994 as the period of validity of the cheque was only for 3 months.  Therefore the opposite party No.1 was called up on to send D.D immediately as the scheme already in lapsed condition.   The opposite party No.1 vide Ex B.2 enclosed a revaluated cheque bearing No. 337937 dt 17.9.1994 for RS.42, 640/- towards subscription under G.S.L.I.S.

14.         The Ex B 13 letter addressed by opposite party No.2 to opposite party No.1 dt 6.9.1995, it was informed by the manager of the opposite party No.2 that in respect of master policy No. 40267, DD 831676 for RS.8, 790/- and another DD.No.410160 dt 10.5.1995 for RS. 1,06,770/-, it was informed about having acknowledged the arrears of premia received, but it is stated that the Competent Authority has not agreed to waive interest on the arrears of premia received.   So opposite party No.1 was called upon to pay the interest @ 12% per annum compounding half yearly, besides called upon to note that they will not consider any death claims occurred during the discontinuation period.  It was already been communicated to opposite party No.1 vide Ex B.11.

15.     The Ex B.10 is the letter addressed by opposite party No.1 to opposite party No.2, in the said letter it is mentioned that the manager, LIC has claimed interest on belated payment of premia for continuation of master policy.  There by enclosing a DD for RS.4, 560/- bearing No. 380171 dt 28.12.1996 towards the premium for the month of January, 1996 and another DD for RS.23,180/- bearing No. 448867 dt 31.12.1996 towards the premium for the months of Feb, 96 to June 96 was sent to opposite party No.2 and requested opposite party No.2 to intimate interest payable in the regard, but it was returned by opposite party No.2 through its letter dt 18.7.1996 vide Ex B.16 with a request for complying its requirements mentioned in its letter dt 10.4.1996 and allowed the policy under disputed conditions.

16.     The opposite party No.1 says that the delay in payment of premia is due to paucity of funds and the office of opposite party No.1 had paid the late fee on belated payment on demand by the opposite party No.2.  So the opposite party No.1 requested the opposite party No.2 for condone the delay in payment of premia and accept the premia sent and reinstate and regularize the master policy of opposite party No.1

17.  The point for consideration is whether the opposite party No.2 is justified in denying its liability for payment of the insurance amount of RS.10, 000/- on the ground that late Tippamma died on 1.5.1996, where as the master policy holder ‘[send by DD on 31.12.1996 for RS.23,180/- for the period from Feb, 1996 to June 1996, the delay on the part of the master policy holder cannot be a ground to exonerate opposite party No.2 from paying the insurance amount of RS.10,000/- to the legal heirs of the deceased.  As per the decision of Supreme Court between Delhi Electricity Supply Under taking Vs Shanti Devi and another reported in AIR, 2000, SC Pg 43, wherein an identical question was considered by their lord ship who answered it, in favour of the claimant, who is the widow of deceased employee of D.E.S.U who took out an LIC policy for RS. 50,000/- which was to commence from, January 1992 under salary saving scheme of LIC.  He paid premium of RS.639/- for two months to the LIC, premium for third month was payable by March, 25, 1992, premium for subsequent months was deducted by DESU from the salary of the deceased but not remitted to LIC.  In the meantime the husband of the complainant died in August 1992.

18. In the said case it was categorically held that in case of default of an employer in remitting the premium of an employee concerned to the LIC under the scheme, the LIC is liable to pay the policy amount.

19. The learned counsel for opposite party No.2 tried to distinguish the ratio of the above decision on the ground that in that case it related to salary saving scheme where as in the case on hand it was Group Saving Linked Insurance scheme.  It is to be noted that the deceased was working as public health worker in the place of opposite party No.1 died on 1.5.1996 and she was contributing RS.10/- per month to cover the insurance of RS.10.000/- payable in the event of death and thereon to retirement of employees.  Except the difference in the nomenclature of the scheme, scope of the scheme, manner of the deduction of premium from the salary every month, there is no difference.  There being so, the submissions made by the learned counsel for opposite party No.2 cannot be accepted on.  If the stand of the opposite party No.2 is accepted the public will loose confidence in their employer i.e master policy holders as well as the Insurance Company’s because insurance coverage is intended for the benefit of the deceased in case of death or retirement.  Hence the stand of opposite party No.2 is denied.

20. Hence in the circumstances discussed above and in the light of the above decision of Supreme Court, even though the employer defaulted in payment of premiums of its employees after deducting the premium from their salaries and the LIC accepting the premiums belated with interest, then the master policy is reinstated with retrospective effect, therefore the opposite party No.2 is liable to pay the insured amount and the case is dismissed against opposite party No.1.

21.        In the result, the complaint is allowed, directing the opposite party No.2 to pay the insured amount of RS.10,000/- to the complainant with 9% per annum from the date of death of the deceased till realization along with RS.1,000/- as cost of this complaint, within one month from the date of receipt of this order for compliance.

Dictated to the Stenographer, Typed to the dictation corrected by us, pronounced in the Open Court this the 21^st day of June, 2004.

                                                                         Sd/-

                Sd/-                                            PRESIDENT                       Sd/-

          MEMBER                                                                                MEMBER