SRI G.K. RATH, PRESIDENT.…….. The factual matrix of complaint is that, the W/o the complainant namely Ramani Dongari had insured her life with two insurance policies under the OP.1 vide policy no.573368857 & 573358151 appointing nominee to the present complainant. Out of the first policy bearing no.573368857 is a salary saving scheme namely “Jeevan Anand” for which monthly premium was Rs.703/- which were to be deducted from the salary of policy holder. The SSS policy was commenced on 28.06.15 with a sum assured Rs.1,10,000/-. On 14.10.16 the insured policy holder Ramani Dangari died, suffering from unknown fever at DHH, Nabarangpur under treatment. So the complainant being nominee of the policies lodged claim for the benefits to which the OP settled claim for policy no.573358151 but repudiated the SSS policy vide no.573368857 without informing any reasons. So the complainant approached the OP.1 through a letter on dt.11.9.17 to settle the SSS policy but the OP.1 in reply wanted to get clarified about the gaps of 3/16, 4/16, 5/16, 6/16 & 8/16 to 10/16 and sent some forms. The complainant contends that he had earlier submitted the claimant statement and burial certificate etc before the OP.1. He further stated that in SSS policy, the insured has authorized the OP.1 & 2 for recovery of monthly premiums from her employer. He further contends that as per the apex court “employer of the insurer acts as an agent of the LIC under salary saving scheme” reported in AIR-2005 page-3087. As the claim of complainant not settled by the OP.1 & 2, the complainant financially harassed, so he prayed to direct the OP.1 & 2 to pay for the insured sum of Rs.1,10,000/- and Rs.20,000/- as compensation.
2. The counsel for OP.1 & 2 Mr S.Ch.Palo appeared and filed 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. In the instant policy, premium were not deducted and was not deposited by the insured as per her undertaking, the policy lapsed with FUP (first unpaid premium) 08/16 with gap of 4 dues from 3/16 to 6/16 & 8/16 to 9/16 and the policy holder died on 14.10.16 during the period when the policy was in lapsed condition. So in the instant case the OP have done no wrong as alleged. Hence there is no deficiency in service on the part of OP.1 & 2, so prayed to dismiss the case.
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 and affidavit. We have heard from both sides and perused the submissions. 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. It reveals from record that, the life insured supra late Ramani Dongari being an employee under the OP.no.3 had insured her life under the OP.1 with two number of policies and the dispute arose out of one policy bearing policy no. 573368857 which is a Salary Saving Scheme named 'Jeevan Anand' policy, to which premium of Rs.703/- p.m. were to be deducted from the salary of LA, commenced on 28.06.2015 for sum assured of Rs.1,10,000/- and the present complainant is the nominee. Unfortunately the life insured has died on 14.10.2016 suffering from fever, hence later on the complainant being the nominee applied for the insurance benefits, though the OP.s has settled 01 policy out of two but repudiated the present alleged policy, as there was gap month of 03/16 to 6/16 & 8/16 to 9/16 due to premium not recovered", hence this complaint.
5. It is further reveals that, the OP.no.3 is the employer of deceased who has regularly deduct the premium and remit the same to OP.1 & 2. At the time of commencement of policy the employer has been authorized to deduct monthly premium from the salary of insured and duty bound to pay it to the OP.1. But the OP.s failed to file any prove as evidence for the causes on non remittance of the premiums.
6. From the entire transaction it is admitted by the OP.s that the policy was in force as the OP.1 has regularly deducted the premiums from the salary of DLA except the months of 3/16, 4/16, 5/16, 6/16, 8/16 & 9/16. It is quite insusceptible here that the OP.s repudiated the present claim on ground of default of premium for the above said months and the question aroused after demise of the DLA. Though the OP.s denied to settle the claim but failed to prove that they have intimated about the unpaid premiums to the employer or the DLA in any point of time from the period of default to till her death.
7. It is out of context that the IRDA has allowed in their guidelines for 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 employer of DLA or complainant nor allowed to regularize the policy by imposing prescribed late fine, which seems that the OP.s never approached the DLA in her life time for the unpaid premium to regularize the policy.
8. We have also observed catena of judgment from Hon'ble Apex Court & Hon’ble National Commission, wherein held that, "employer of the insurer acts as an agent of the LIC under Salary Saving Scheme". In this context the OP.1 & 2 being the principal, it may be treated that the employer OP.3 is their agent.
9. Apart from the above transactions, the OP.s failed to substantiate their contentions, 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 in the instant case they failed to do so. Hence we feel that the OP.1 & 2 acted upon intentional deliberate negligence illegally which amounts to deficiency in service and for their negligence the complainant being the legitimate nominee of policy holder harassed without any fault on his part. So we found guilty on the part of OP.1 & 2 and the complainant being the nominee of the policy is entitled for assured sum along with declared bonus and other benefits.
10. As thus we allowed the complaint against the OP.no.1 & 2 with costs. As there is no such claim leveled against the OP.no.3, we are not inclined to pass any order against OP.3.
ORDER
i. The opposite parties 1 & 2 supra are jointly, severally & collaterally hereby directed to pay the sum assured as agreed in policy no.573368857 of Rs.1,10,000/- (Rupees One lakh & ten thousand only) along with acquired bonus as prescribed in the policy from the date of repudiation to till the date of realization deducting the unpaid premiums for the gap periods if any, inter alia, to pay Rs.10,000/-(Ten thousand) as compensation and Rs.3000/- (Three Thousand) as cost of litigation to the complainant.
ii. The OP.1 & 2 has liberty to collect the above compensation & cost from the erring officials.
iii. 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 26th day of June' 2018.
MEMBER PRESIDENT,DCDRF,
Memo No_______________DF Dt………………………
Copy to the parties concerned.
PRESIDENT, DCDRF,
NABARANGPUR
