MR. PRABODHA KUMAR DASH, PRESIDENT:-             

                     This C.C.Case No. 21/2021 taken up today for order. The Insurance claim of the Complainant/nominee on death of her insured husband repudiated by the Ops(LIC) on remark that the policy under which the claimant claims lapsed due to non-payment of installments/premium therefore rejected.

Brief Fact:-

                     Complainant’s husband insured under the insurer (LIC) under a money back plan-20 years (with profits) from the insurer, sum assured Rs. 2,25,000/- date of policy Rs. 28.03.2018, commencement of risk from 31.03.2018. The date of maturity on 28.03.2038, quarterly premium Rs. 4713.50 on every 28^th of quarter. The Op No.3 agent collected Rs. 60.00 per day from 29.01.2018 to 12.12.2019 from insured as per exhibited collection ledger of OpNo.3 for 537 days x 60= Rs. 32.220 which was more than 6 installments value but Op No.3 paid 4 quarterly only i.e, Rs.4.781x4=19.124 to LIC on 28.09.2019. The Op No.3 collected total Rs. 32.220 made payment to LIC Rs. 19,124.00 rest Rs. 13.096 without payment to LIC misappropriated by Op No.3 with malafide intention to grapes the balance amount due to such misappropriation of OPNo.3 the policy installment for 5^th installment could not deposited. When complainant filed claim application before OpNo.1 & 2 they issued a repudiation letter to complainant on 05.12.2020. Being aggrieved by the arbitrary, illegal action of OPNo.1 & 2 the C.C. Case was filed for various reliefs as prayed for.

                  We found following issues would arise for better analysis of case in hand.

1. Whether the Complainant is a consumer ?
2. Whether the C.C.Case filed within a limitation period? ?
3. Whether the Ops are liable for deficiency in services unfair trade practice ?
4. Whether the Op No.1 & 2 are liable for illegal act of Op No.3 ?
5. Whether the Policy in lapsed condition or revivable subsequently ?
6. Whether the Complainant entitle to various reliefs as shought for ?

Issue No.1

                     The Complainant being the wife of insured & also mentioned on bond as nominee of the insured on demise of her husband is entitled to the benefit under the policy. Present complainant in a consumer under U/S 2(5)(vi) on death of the wife also nominee.

Issue No.2 

                     Claimed repudiation letter issued by OpNo.1 & 2 to Complainant on 09.12.2020 and such arbitrary action redressable by DCDRC within 2 years. The C.C.Case was filed on dt. 08.04.2021 within the prescribed limitation period.

Issue No.3 

                     Delay & non-settlement of claim coming  under the provision of Sec-2(ii) deficiency of service. In a remarkable decision of Honbl’e NC in United India Insurance Co. Ltd. Vs R.Piyare Lall imports Export Ltd. 2010(NC) 300. It was held that non-payment of insurance claim deficiency on part of insurer & the same is deficiency in service. The service has been well defined includes Insurance U/S-2(42) of C.P.Act.

Issue No.4 

                     On perusal of the entry made by OpNo.3 in the daily collection sheets she received Rs. 60/- per day from 29.10.2018 to 12.12.2019. OpNo.3 deposited 4 premiums before LIC but not deposited the 5^th premium on the required date so also within grace period. OpNo.3 deposited as per her wishes & suitability as found each time there was an excess of interest in all occasions.

                    Non-payment of 5th installment also within its grace period was the negligence, laches, illegal act of Op No.3 for which the policy lapsed not within the knowledge of insured or the nominee therein. The Op No. 1 & 2 stated in their written version that the Opno.3 not authorized person then question arose during subsistence of agency the principal liable for its agent which cause irreparable loss to the insured & after demise to his nominee. It is a common practice the OpNo.1 & 2 engaged agent with reward for collection of more policies in every month/quarter/half yearly/ yearly. It is a common practice no insured approaching LIC, it is the agent who collect the installment & deposit the same.

                    Under the law governing contracts of insurance the premium maybe paid by the assured to the insurers or to an insurance agent acting on behalf of the insurers & if the agent has authority to receive  if the payment binds the insurers. The authority need not been express authority, it may be implied  authority it may be implied from the circumstances (Halsbury’s law England, vol25, P-254, Para460).

                    Sec-187 of India contract-Act, 1872 lays down that the authority of an agent may be express or implied. An authority is said to be express when it is given by words spoken or written and an authority is said to be implied when it is to be inferred from the circumstances of the case & things spoken/written, or the ordinary course of dealing may be accounted circumstances of the case.

                   Sec-237 contract Act provided that when an agent has, without authority done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligation if he has by his words or conduct induced such third persons to believe that such acts & obligation were within the scope of agents authority.

                   In a decided case by Honbl’e National Commission in Rainder Singh Malik vs Sr. Branch Manager, & another on a revision petition it was held that Insurance Company is liable for all acts and omissions of its agent. In LIC of India Vs Chitanya Das on a decided revision No. 2792/2010, 2013(1)CPR199(NC) , it was held LIC is responsible for act of its agent.

                     According to Insurance laws (amendment) act 2015 section 45 no claim can be repudiated after 3 years of the policy being in force even if the fraud is detected. Large number of policy holder are residing at places where there is no branch office of the LIC and the failing for depositing the premium with the LIC is not available within a reasonable distance it has been the prevailing practice in the LIC for the agent to collect the premium from the policy holders & to deposit the same at the LIC office later & since the agents receive commission on the amount of premium which they collect on the policies the receipt of the premium by the agents must be treated as an act within the scope of their authority as agents of the LIC & the limitation imposed on the authority of the agents to receive the premium in the Regulation/Ruler or in the letter of appointment cannot be binding as against third parties. The payment of premium by insured in the present case by nominee to the Op No.3 in his capacity as the agent of the LIC. The authority of an agent is apparent to the insured as 3^rd party.

               All the above cited cases by various Apex Courts & Commission directed the Ops to pay the claimed amount entrusted to 3rd party (OPNo.3) & the same not deposited in time. The insured(deceased) the nominee both ignorant about the actual payment to the OpNo.2 such illegal activities are not within the knowledge of insured so also nominee.

Issue No.5 

                     Insurance Act, 1938:- An insurer shall (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid) give notice to the policy holder informing him of the option available to him. LIC Policy not lapse in entirety. The revival of lapsed policy arises when insured unable to make payment premiums on time or within the grace period also. There is a provision for revival for lapsed policy within 3 years with admissible interest. The insurer may charge fines or penalties for revival of the policy which depends upon the sum assured and the period after the policy has lapsed. Present LIC lunches various campain with discounts and exemption of interest & penalties for revival of lapses policies within 5 years also the present complainant being a widow & suffering minor child must be compensated by a benevolent legislation enacted for redressal of their grievances. It was held by Honbl’e Apex Court in Delhi Electricity supply Co. vs Basanti Devi & another 1999(8) insured person can’t suffer because of negligence of 3^rd party non-payment of premium entrusted to such 3^rd party by implied or express ways. The Apex Court directed LIC to pay the insured amount with other reliefs also. The case of complainant squarely applicable to above cited case where OpNo.3 being the 3^rd party entrusted before date of payment of premium not deposited the same within the time & such not within the knowledge of either the insured or by its nominee. Ld. Counsel for OpNo.1 & 2 filed written version & submitted the policy in dispute in a lapse condition & LIC has no liability to pay claim amount due to lapse policy, such contention of OPNo.1 & 2 are not sustainable in eye of law, same liable to interfere & in our considered view regarding payment & lapse point have no merit decided the same in favour of complainant.

Issue No.6 

                     Prayer was made before this Commission for insured amount Rs. 2,25,000/- & mental agony suffered due to long delay which is illegal on part of OpNo.1 & 2 and being widow wife of deceased expenses incurred in the litigation. In our consideration the Complainant entitled to sum assured Rs. 2,25,000/- from death of date of his husband(insured) i.e, 27.12.2019 with @12% interest till its realization with mental agony suffered Rs. 40,000/- being just & proper for a widow lady unable to maintain her family on demise of insured husband at his youthfull age, also litigation cost insured Rs. 2000/-.

                                                           O R D E R

                     It is directed the Op No.1 & 2 shall pay the insured amount under the policy Rs. 2,25,000/- at the rate of interest @12% P.A. from the date of death dt. 27.12.2019 till its realization with mental agony suffered equitably Rs. 40,000/- being just & proper in our views and additional Rs. 2000/- for litigation cost within one month from receive of this order failing which thee shall be @18% interest payable to complainant till its realization. The Op No. 1 & 2 are at liberty to realize the same from OpNo.3 & 4 by legal remedies available under the law. Complaint petition is allowed in favour of Complainant. No order to the parties for compliance.

                      Issue extract of the order to the parties for compliance.           

                     Pronounced in the open Court, this the 18th day of October,2022.             

                              I, agree.

                               Sd/-                                       Sd/-     

                           MEMBER                             PRESIDENT

Documents Exhibited :-

1. Policy Bond.
2. Leadger LIC-Daily collection account of insured maintained by p No. 3 & 4(Annexed)60/- daily by Complainant.
3. Death certificate of husband.
4. LIC money receipt.
5. Claim-Acknowledgement.