SRI G.K. RATH, PRESIDENT.……..        The brief facts of complaint is that, Late Neelambar Naik, deceased husband of the complainant being the employee under OP.no.3 had subscribed four number of Life Policies vide policy no.571358094, 572073469, 573356111 and 573366840. Out of the above policies, policy no.573366840 has been made under Salary Saving Scheme in the name of Jeevan Anand, with premium payable Rs.2032/- p.m. deductible from salary, the date of commencement was 20.06.2014 and sum assured payable was Rs.3,15,000/-. The L.A died on 24.09.2016 for fever, and the complainant being nominee of all the policies submitted claim form all duly filled along with all relevant documents required by OP.1. Though the OP.s settled 03 policies but repudiated one policy bearing no.573366840 i.e salary saving scheme with a note that “nothing is payable for policy bearing no.573366840, as the policy has lapsed for non recovery of premium for August 2014”. She further contends that all the original documents were lying with the office of OP.1 & 2 while lodging the claim as asked by OP.s. She further stated that, the said policy was under salary saving scheme and as the insured has authorized the OP.1 & 2 for recovery of monthly premiums from his employer, if any amount towards has not been recovered by the OP.1 & 2 then, neither the insured nor the complainant is at fault. She further contends that the OP.1 & 2 have never intimated the insured or the employer of the deceased regarding the non recovery of the premium of Rs.2032/- for the month of Aug’2014 hence there is deficiency in service on the part of OP.1 & 2. She submitted that if a premium has not been deducted from the salary, then the OP.1 & 2 should not have denied the benefits available under the policy to the complainant because “employer of the insurer acts as an agent of the LIC under salary saving scheme” as observed by Hon’ble Supreme Court reported in AIR 2005 page-3087. So the complainant praying for direction to OP.s to disburse the sum assured with accrued bonus and interest along with compensation of Rs.50,000/-.

2.         The OP.s.1 & 2 through their counsel Mr S.Ch.Palo appeared and file the written version contending that, the insured had not authorized the OP.1 & 2 to collect the premium rather the insured had authorized his employer OP.3 to deduct the premium for the said policy. As per insurance norms the policy will result into lapse condition when premium under the policy is not duly paid within the grace of i.e. as period of 1 month in case of regular mode and 15 days in case of salary saving scheme mode. In case of any policy issued under SSS mode the life assured has to give his authorization cum undertaking to the employer, to deduct the premium from his salary every month and to remit the same to LIC of India and incase he has left with no salary by any reason, he undertook to pay the premium directly to LIC. In the present case, the authorization letter Form no.A (SSS) has been signed and submitted by the DLA at the time of taking the policy. Inter alia he has specified some clauses of Form No.A (SSS) as mentioned details in the counter. He further contends that the death claim was intimated on 25.10.16 and on verification the OP found that the First Unpaid Premium of the policy was of 09/2016 with one initial gap of 08/2014, hence the policy was lapsed and the OP.s had intimated the fact on 15.11.16 to the DDA of LA under intimation to the nominee of the policy. The DDA intimated to the OP.s through letter on dt.12.5.17 that they have received the authorization letter for the month August 2014 late i.e. after preparation of salary bill, hence, premium for Aug'2014 was not deducted and thereafter premium was regularly deducted from Sept'2014 and onwards. The counsel for OP.s further contends that on 15.11.2016 the policy was in lapsed condition with initial gap 08/2014. But on 29.11.2016 they have received the premium for the month of 09/2016 and on verification they found that the policy is in force. So on the above grounds the OP.s prayed that the complaint is devoid of any merit, hence is liable for dismiss.

3.         The counsel for complainant has filed copy of certain relevant documents along with affidavit in support of his claim. The Counsel for OP.1 & 2 filed nothing except counter along with affidavit. We have heard from both sides. The OP.3 did not participate in the entire adjudication since there is no such claim against him, so we decided to proceed the case on the basis of evidences available in record on merit.

4.         What we find from record is that, the so called life insured late Neelambar Naik being an employee under the OP.no.3 had insured his life under the OP.1  with four number of policies and the dispute arose out of one policy bearing policy no.573366840 which is a Salary Saving Scheme named 'Jeevan Anand' policy, to which premium of Rs.2032/- p.m. were to be deducted from the salary of LA, commenced on 20.06.2014 for sum assured of Rs.3,15,000/- and the present complainant is the nominee. Unfortunately the life insured has died on 24.09.2016 suffering from fever, hence later on the complainant being the nominee applied for the insurance benefits, though the OP.s has settled 03 policies but repudiated the present policy with a ground of "lapsed as there is one initial gap for 08/2014 due to premium not recovered", hence this complaint.

5.         On the other hand it reveals from record that, the OP.no.3 being the employer of deceased has been authorized to deduct monthly premium from the salary of insured and paid it to the OP.1. But the OP said to have in counter that, they have intimated the OP.3 for the unpaid premium but where in the OP.3 was replying that "they have received the authorization letter for the month of Aug'2014 late i.e. after preparation of salary bill, hence premium for Aug'2014 was not deducted". But the OP.s failed to file any letter of correspondence as evidence before this forum to that effect.

6.         From the entire transaction it is admitted fact by OP.s that the policy is in force as the OP.s regularly deducted the premiums from the salary of DLA except one month i.e. Aug'2014. It is quite insusceptible to mention here that the OP.s repudiated the present claim on ground of default of premium for only one month i.e. for 08/2014 and the question raised after demise of the DLA. Though the OP.s denied to settle the claim but failed to prove here that they have approached the DLA for the premium of 08/2014 in any point of time from the period of default to till his death. The OP.s also admitted in their counter that they have deducted premium regularly from Sept'2014 and onwards from the salary of DLA.

7.         It is out of context that the IRDA has allowed in their guidelines some grace period to deposit premium for every policy and after the grace period the insurance company has discretion to impose some late fine for regularize the policy, but in the said case the insurer neither intimated the DLA or complainant nor allowed to regularize the policy by imposing prescribed late fine. Though the OP.s averred in their counter that they have intimated regarding default of payment for the month of 08/2014 on dt.15.11.2016 i.e. after demise of the DLA but they have failed to prove the same by filing documentary evidences, which seems that the OP.s never approached the DLA in his life time for the unpaid premium to regularize the policy.

8.         The counsel for complainant has relied some decisions in the case between LIC of India vs St Surjit Kaur & Ors of Hon'ble Punjab State Commission, Chandigarh          reported in CPR 2010(3) P-144 AND another in the case between LIC of India vs Smt Ram Sakhi & Ors of Hon'ble National Commission reported in CPR 2015(1) Page 263 wherein held that, "Question of lapse of insurance policy arises only when premium remains unpaid for 6 months". We have also observed catena of judgment from Hon'ble Apex Court wherein held that, "employer of the insurer acts as an agent of the LIC under Salary Saving Scheme".

9.         Apart from the above transactions, the OP.s failed to substantiate their contentions by evidences that whether the policy in question had lapsed due to non receipt of premium by LIC in time, although in our concerned view, the LIC was duty bound to send notice/letter to the insured as well as the employer in accordance with section 50 of the Insurance Act'1938 in Form no.5227 & 5228 respectively, but failed to do the same. Hence we feel that the OP.s acted upon intentional deliberate negligence illegally which amounts to deficiency in service and for their negligence the complainant being the dependent widow of policy holder harassed without any fault on her part. So we found guilty on the part of OP.1 & 2 and the complainant being the nominee of the policy concerned is entitled for assured sum along with declared bonus and other benefits.

10.       So we allowed the complaint against the OP.no.1 & 2 with costs. As there is no such claim by the complainant against the OP.no.3, we are not inclined to pass any order against him.  

                                                                       ORDER

i.          The opposite parties 1 & 2 supra are jointly, severally & collaterally hereby directed to pay the sum assured as agreed in policy no.573366840 of Rs.3,15,000/- (Rupees three lakhs & fifteen thousand only) deducting the unpaid premium of Rs.2032/- for the month 08/2014, along with acquired bonus as prescribed in the policy from dt.15.11.2016 to till the date of realization, inter alia, to pay Rs.10,000/-(Ten thousand) as compensation and Rs.3000/- (Three Thousand) as cost of litigation to the complainant. 

ii.         All the above directions shall be complied with in 30 days of receipt of this order, failing which, the total declared sum will carry 12% interest per annum till its realization. Pronounced on this the 21st day of May' 2018.

          MEMBER                                                              PRESIDENT,DCDRF,

Memo No_______________DF         Dt………………………

            Copy to the parties concerned.

                                                                                         PRESIDENT, DCDRF,

                                                                                       NABARANGPUR