Date of filing: 29.11.2021 Date of disposal: 05.10.2023
Complainant: Smt. Soma Devi, W/O- Lt. Pankaj Sharma, St. No.37, Qrts No.44/A, P.O. & P.S.- Chittaranjan, Dist. Paschim Bardhaman, Pin-713331, W.B.
-V E R S U S -
Opposite Party: 1. Branch Manager, C/O- LIC Chittaranjan Br. P.O.- Rupnarayanpur Bazar, Near to Rupnarayanjpur Gram Panchayat, Pin-713386, W.B.
2. F A & C A O, C/o- C L W,
Chittaranjan, Chittaranjan Adminstrative Building, Dist. Paschim Bardhaman, Pin-713331,W.B.
Present:
Smt. Subrata Saha (Hazra) Hon’ble President
Ms. Lipika Ghosh Hon’ble Member
Mr. Atanu Kumar Dutta Hon’ble Member
Appeared for the Complainant: Biswajit Bandyopadhyay -Ld. Advocate.
Appeared for the Opposite Party No.1: Sourab Dey -Ld. Advocate.
Appeared for the Opposite Party No.2: Kailash Dutta -Ld. Advocate.
F i n a l O r d e r
Contention as depicted under the complaint is, complainant being the wife of the deceased who expired on 04.09.2018 approached before the O.Ps on 07.08.2019 for the maturity amount of Rs.5,00,000/- owing to the cause as her husband since deceased, executed a LIC policy bearing No.449449924 on 10.02.2016 and duly paid premium on monthly basis at his lifetime deducted from his salary which lied with the O.P.-employer No.2 i.e., Chittaranjan Locomotive Works (CLW) who was in connection with LIC department of Chittaranjan. But unfortunately she was refused by a letter dated 10.10.2019 by the LIC Branch Manager of Chittaranjan on the plea of lapsing policy of her husband. But to say either husband or she were never informed about such lapse either by the LIC Office or by the employer where the husband used to work i.e., Chittaranjan Locomotive Works (CLW). The premium was of Rs.1420/- per month which was deducted duly as per issuance of policy slip or her husband which remain to her custody i.e., from October, 2016 to August, 2018. Needless to mention two premiums were directly deposited by her husband after making the policy i.e., for the month of February and March of 2016 but from April 2016 to September, 2016 may not be deducted or deposited by the employer to the office of LIC may be caused for non information to the employers by her husband with regard to his policy. She issued two layer’s letters to them on 25.08.2021 and 27.10.2021 to the Branch Manager but all in vein. For the cause of pandemic she was unable to approach before the Court in due time. Now she wants to have a direction to the LIC or O.Ps to pay the amount of matured policy bearing No.449449924 dated 10.02.2016 as death claimed of her husband with interest since the death of her husband.
On the other corner, O.P.No.1 i.e., LIC Branch of Chittaranjan on responding to the summons by the Commission duly approached before the Commission with a version that, there about two years one month twenty three days delay in filing the case since 10.10.2019 when the policy was refused. This husband of the complainant was a member of salary saving scheme and enrolled his name in the said scheme through employer CLW and proposed three policies out of which the present policy No. No.449449924 dated 10.02.2016 is one of Rs.5, 00,000/- monthly premium was 1462/- which has been lapsed. Before entering into agreement the deceased was fully known about terms and conditions of policy /scheme that if policy maker does not pay premium from salary saving scheme, policy will lapse when premium to be paid within 20th of due month. This premium was on due from 09/2018 of the year. This scheme is a three party’s agreement among employer, employee and insurance company. The nominee cannot claim more than coverage of policy. As the policy holder died nominee cannot claim death benefit because it was lapsed condition due to the death of policy holder. This premium-paying-gap intimation was duly given by the LIC to the employer by ordinary post. It was the responsibility of the employer to deduct premium of the employee from his salary and pay or remit it to the LIC regularly as per authorization letter given by the employee. Accordingly as per policy contract, duty of the policy holder to ensure the payment of policy premium to the LIC regularly with a view to avoid lapsation of policy in lieu of which LIC is liable to bear risks and to pay claims. There were other two policies of this holder which were duly paid by the O.P. No.1 because they were in force at the time of death but this policy in question was lapsed. It is not admissible as per IRDAI. So there is no deficiency of service or unfair trade practice for the O.P.No.1 in which he is liable to pay compensation rather O.P. is entitled to get Rs.10,000/- as compensation.
O.P.No.2 the employer-CLW responded at the summons and stated that the deceased was an employee of their company. As employer O.P.No.2 deducted the premium of the employee since October, 2016 to August, 2018 which sent to the LIC Office Chittaranjan against said policy. There was no business in between LIC and employer before October, 2016 relating to said policy. Before filing this case neither LIC nor employee’s wife raised any dispute or claim behind the dues of premium of the deceased as outstanding behind this policy. The deduction of premium in respect of any employee was deducted only after his giving information about creation of policy from the wage bill and remitted to the LIC office. In the instant case or about policy instruction of deduction was received only from 05.10.2016 and pursuant to that from the month of October, 2016 it was deducted and forwarded to the LIC up to August, 2018 and not after because policy holder died on September, 2018 (04.09.2018). So there no negligence on the part of O.P. No.2 in respect of lapse deposit of premium. LIC –O.P. NO.1 also did not give them any intimation of deduction of premium before October, 2016. So there is no negligence on their part and suit should be dismissed against them.
Decision with Reasons
In order to substantiate the claim and in opposition to discard of the claim, parties to the litigation, examined themselves as evidence in writing with affidavit respectively.
This Commission perused entire materials which are on record i.e., policy paper, deduction status of the employee, lawyer’s letter on behalf of nominees dt.24.8. 21/, termination letter dt.10.10.2019 as filed by the complainant & on the other, original policy bond with terms and conditions, copy of status report on the policy-in-question, copies of LIC Circular dt.16.12.19 &20.5.16 On behalf of the O.P. No.1 which were filed.
On perusal of those, we the commission find the delay which was alleged by the O.P.No.1 at their W/V was already condoned by this Commission in initial stage for the cause of Covid situation and the matter was admitted by the litigants.
Now, the crux of this dispute is about lapse of policy-in-question. O.P.No.1 by their termination letter inform that the policy-in-question was at lapse condition at the time of death of policy holder by a letter dated 10.10.2019.
From the policy agreement what deposited by the O.P.No.1, we find within Point No.2- ‘Payment of Premiums speaks : A grace period of one month but not less than 30 days shall be allowed for payment of yearly or half yearly or quarterly premiums and 15 days for monthly premiums. If the premium is not paid before the expiry of the days of grace, the Policy lapses. If the death of the Life Assured occurs within the grace period but before the payment of the premium then due the policy will still be valid and the benefits shall be paid after deductions of the said unpaid premium as also the unpaid premiums falling due before the next anniversary of the policy.’
So from the above noted agreements behind the policy paper as submitted by the LIC company, grace period of one month but not less than 30 days / and 15 days behind monthly premium shall be allowed in paying premium. It is further noted from this clause that if death of the life assured occurs within the grace period but before the payment of premium then due, the policy will still be valid and the benefits shall be paid after deductions of said unpaid premiums.
So this very specific clause of this scheme or agreement says about the ‘validity’ of the policy-in-question not ‘invalidity’ of it, owing to any non payment for the cause of death of policy holder.
In this instant case it is admitted position that this policy holder died just 4th day of that month and year (04.09.2018) when policy was declared lapsed for nonpayment, But here we the Commission hold/observe, if for argument sake no premium was sent to the L.I.C department after August, 2018 still then due to the death of this policy holder policy-in-question itself was valid ,in spite of premium was not paid by the employer at that month or any succeeding months even along the year also. Because in respect of wage-labour, monthly salary is to be paid after the end of month, then, if a person not alive to work at September, 2018 how he would be entitled to get salary of that month except four days? Irrespective of any deduction about premium? The policy holder died on 04.09.2018 and at that month he /or his family only got or would get four days salary and naturally for that reason employer was not able to deduct about his premium behind this policy.
Eventually this demand of LIC Company to declare this policy-in-question as lapsed since September, 2018 and to terminate the claim of it is most unethical, unjustified method at their business policy when they took the risk factor of the life of a policy holder. It is held by this Commission that non receipt of the premium the insurance company was duty bound to give a notice to the employer as well as to the employees’ family regarding default of premium but it’s failure to do so could not deprive the insured from the benefit under the policy. Though LIC Company at their W/V stated that they sent a letter in ordinary post but what prevent them to file that copy of letter before the Commission? Hence this statement of giving intimation about premium through ordinary post in W/V is nothing but a myth.
It is not a case of L.I.C Company i.e., O.P. No.1 that due to six months unpaid premium (since April, 2016 to September, 2016) behind the policy it was lapsed, if so? why? they took further amount of premium from the employer since October, 2016 and onwards up to August 2018? Why they did not inform at that time to the employee or the employer that the policy was failed for the months since April, 2016? It was the basic duty of the insurer under the Insurance Act that the bounded duty of the opposite parties to inform the same to the employee and his employer by way of issuing a notice. But we find as per their W/V, that default was not taken into consideration by the insurer that on the preceding month of 2016 due to nonpayment of premium, policy was lapsed. We find since October, 2016 to August, 2018 LIC got received the money from the salary of the insured and invested it at their business policy, then, at the death or end of the life of the policy holder how L.I.C company can deprive the wretched family of the policy holder on the plea of lapse premium? It was their (LIC) duty to be informed that why since September, 2018 the premium is/was not credited to their account, it is not the duty of the employee’s family to inform about his death because family members were mere illiterate and mainly maintained their/her livelihood at the income and savings of the policy holder. So, the argument by the L.I.C council or the statement under W/V by this insurer that employee or his family did not inform in time and for that reason their (LIC) computer generated system declared the policy as lapsed is an unreasonable irrational argument of the counsel or ill motive of the LIC department.
In Para No.19 Company at his W/V clearly stated that it was a tripartite agreement in between employee-employer and LIC, if so ,when on 04.09.2018 employee was off from the world, and employer was not able to deduct premium, it was the basic responsibility of the insurer to search out the reason for nonpayment of premium, since they were enjoying the money as premium from the insured so long (October, 2016 onwards), instead of that, so many time passed or after when, the wretched family or the widow of the deceased went to the company for asking about her husband’s coverage money due to his death (what money had been deposited or handed over the LIC company for their business in the form of premium ), they i.e., L.I.C. denying her on the ground that her husband did not pay the premium after September 2018 and thereby she is being dined about the coverage money.
Here, We the Commission asking to this business-man in the form of LIC Company, who will pay the money? From whose salary it would be deducted by whom, who is not exist in the world or in the company?
Certainly we the Commission hold or observe, as per terms of agreement, this O.P. No.1 is duty bound to clear out the coverage money of the deceased to the hand of his family or his wife irrespective of any prior lapse as shown by the Counsel of LIC through their filing documents from the month of April, 2016 to September 2016. It would be appreciated to understand that salary saving scheme of LIC is a simple economical plan whereby employees obtain life insurance protection for their families and retirement income for themselves under advantageous conditions which might not be available to them otherwise.
However, We the Commission being an adjudicating authority do not turn the eyes to the Circular vide Ref. No. CO/CRM/1023/23 dated 20.05.2016 and Ref No.CO/CRM/1184/23 dated 16.12.2019 to the lapse of these premiums since April, 2016 to September 2016 , accordingly, directing the LIC company to deduct those amounts of premium along with 10 % monthly interest from the coverage money of the insured. But O.P. No.1 is duty bound to handover rest coverage money to the widow of policy holder as nominee.
Calculation is to be made by the LIC Department i.e.,
5,00,000/- minus 1,462/- plus 10 % interest on monthly basis of those six months i.e., April 2016 to September, 2016.
The complaint petition is thus disposed at a summary procedure.
Hence, it is
O R D E R E D
that the Consumer Complaint being No.C.C-202 of 2021 succeeds under the following direction and as per above observations.
L.I.C. in the form of O.P. No.1 is directed to disburse the due amount of Rs.5, 00,000/-(Five Lakh) only deducting their (LIC-O.P. No.1) not receiving premium since April, 2016 to September 2016, each month having Rs.1462/- (One Thousand Four Hundred Sixty Two) only as principle amount plus 10 % monthly interest of each premium equals to Rs.9649.20/- roundly Rs.10, 000/-(Ten Thousand) only either to the hand of the widow of the deceased in cash or through A/c Payee cheque to the account of the complainant as nominee within three months from the date of passing final order.
So the complainant do get the amount of Rs. 5, 00,000/- minus Rs.10,000/- equals to Rs.4,90,000/- (Four Lakh Ninety Thousand) only within three months from the date passing order i.d., interest will be accrued on the principle amount @ 5 per cent interest per annum till realization.
Complainant is at liberty to execute the award under provision 71/72 of Consumer Protection Act, 2019 as may deem fit and proper, if order/award is not obeyed by the O.P.No.1 after statutory period of three months.
Let the documents be handed over to the parties respectively keeping one Xerox copy of each documents in record.
Case is being dismissed against O.P. No.2.
Thus the case is disposed of on contest but without any cost.
Let a copy of this order be given to the parties on free of cost.
Dictated and corrected by me.
President
D.C.D.R.C., Purba Bardhaman.
Member Member President
D.C.D.R.C., Purba Bardhaman D.C.D.R.C., Purba Bardhaman D.C.D.R.C., Purba Bardhaman
Let the record be sent to the record room through the Registrar for necessary action.
