Madhya Pradesh

StateCommission

FA/11/1205

LIC - Complainant(s)

Versus

SMT. RAMWATI - Opp.Party(s)

MS.PREETIMA SHRIVASTVA

10 Jan 2023

ORDER

M. P. STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,                         

                             PLOT NO.76, ARERA HILLS, BHOPAL

 

                                      FIRST APPEAL NO. 1205 OF 2011

(Arising out of order dated 18.04.2011 passed in C.C.No.21/2010 by District Commission, Anooppur)

 

LIFE INSURANCE CORPORATION

OF INDIA, THROUGH REGIONAL MANAGER,

CENRAL REGIONAL OFFICE,

JEEWAN SHIKHA, 60-B, HOSHANGABAD ROAD,

BHOPAL (M.P.).                                                                                            … APPELLANT.

 

Versus

 

SMT. RAMWATI,

W/O SHRI RAGHUNANDAN YADAV,

R/O SINGAL STORY QUARTER NO.138,

BIJURI, POST OFFICE-BIJURI KALARY                                                    …. RESPONDENT.   

                     

BEFORE :

 

            HON’BLE SHRI A. K. TIWARI                : PRESIDING MEMBER

            HON’BLE DR. SRIKANT PANDEY        :          MEMBER

                     

COUNSEL FOR PARTIES :

 

                Ms. Preetima Shrivastava, learned counsel for the appellant.

           Shri R. K. Sengar, learned counsel for the respondent.

 

 O R D E R

(Passed On 10.01.2023)

                                The following order of the Commission was delivered by A. K. Tiwari, Presiding Member: 

           

                   This is an appeal by the opposite party/appellant against the order dated 18.04.2011 passed by the District Consumer Disputes Redressal Commission, Anooppur (for short ‘District Commission) in C.C.No.21/2010 whereby the complaint filed the complainant/respondent has been allowed.

 

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2.                Brief facts of the case as stated by the complainant/respondent in her complaint are that her late husband Raghunandan Yadav during his life time on 28.03.2004 had obtained Bandobasti Bima Policy No.378404706 for sum assured of Rs.51,000/-, on 24.11.2005 he had obtained New Jan Raksha Policy No. 4378744341 for sum assured of Rs.30,000/-, on 19.01.2007 he had obtained Jeewan Saral Policy No.378755521 for sum assured of Rs.62,500/- and on 24.01.2007 he had obtained New Jan Raksha Policy No.37855615 for sum assured of Rs.40,000/-. It is further submitted that deceased husband of the complainant was employed as labourer in Bijuri Kalary and the premiums of the aforesaid policies were deducted from his salary. On 26.03.2007 he died during duty time. The complainant filed claim with requisite documents to the opposite party-LIC but on 24.09.2009, the opposite party LIC deducted Rs.2512/- from policy no.37855615, Rs.1236/- from policy no.4378744341, Rs.1852.83 from policy no.378404706 and Rs.32,500/- from policy no. 378755521 totaling Rs.38,100.83 illegally.  The complainant therefore alleging deficiency in service on part of opposite party-LIC approached the District Commission seeking payment of Rs.38,100.83 with interest @ 12% p.a. and compensation & costs of Rs.50,000/-.

3.                The opposite parties-LIC filed reply to the complaint admitting that deceased-husband of the complainant took four policies and after his

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death on claim being filed by the complainant, same was paid. Rs.2512/- from policy no.37855615, Rs.1236/- from policy no.4378744341, Rs.1852.83 from policy no.378404706 and Rs.2128/- from policy no. 378755521 were deducted as unpaid premium as policy terms and conditions and after deducting the said amount rest amount was paid to the complainant and the complainant executed satisfaction letter in that regard. The opposite parties have not committed any deficiency in service. It is therefore prayed that the complaint be dismissed with costs.

4.                The District Commission after hearing parties and considering the evidentiary material available on record allowed the complaint and directed the opposite parties to pay deducted amount of Rs.7728/- along with interest @ 9% p.a. from 24.09.2009 till payment. Compensation of Rs.2,500/- is also directed to be paid by the opposite parties-LIC to the complainant.

5.                Heard learned counsel for the parties. Perused the record.

6.                Learned counsel for the opposite party/LIC argued that the impugned order passed by the District Commission is erroneous, perverse and against the facts on record. The District Commission erred in not appreciating the fact that after deducting the amount of unpaid premium from the amount payable, rest amount was paid to the complainant on claim being made. The District Commission has committed error in awarding the

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amount deducted and compensation with interest. She therefore argued that the impugned order deserves to be set-aside.

7.                Learned counsel for the complainant/supported the impugned order and placing reliance on the decision of the Honb’le Supreme Court in Chairman, Life Insurance Corporation and others Vs Rajiv Kumar Bhaskar AIR 2005 SC 2087 argued that since the premiums of the policy in question were deducted by the employer for remitting the same to the LIC, therefore, on failure on part of the employer for payment of premium, the LIC is liable to pay assured amount.  The District Commission rightly allowed the complaint directing the LIC to pay the amount deducted towards unpaid premium.

8.                Having heard learned counsel for the parties and having gone through the record, we find that it is an admitted fact that the deceased-insured during his life time had taken four abovementioned policies from the LIC for which premiums were deducted from his salary. Unfortunately, he died on 26.03.2007 during the course of his employment. On claim being made by his wife, the complainant, opposite party-LIC after deducting certain amount towards unpaid premium paid the amount payable. The case of the complainant is that the LIC illegally deducted the said amount and the complainant is entitled to get the amount deducted with interest.

 

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9.                To resolve the issue regarding deduction of unpaid premium, we would like to reproduce the condition no.2 of the policy terms and conditions which is as follows:

2. Payment of Premium: A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premium.  If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the Sum Assured paid after deduction of the said premium as also the unpaid premiums falling due before the next anniversary of the policy.  If the premium is not paid before the expiry of the days of grace, the policy lapses.

 

On bare perusal of the aforesaid condition, it is clear that if death occurs within grace period and before payment of premium due, the policy will be still valid and the Sum Assured paid after deduction of the said premium as also the unpaid premiums falling due before the next anniversary of the policy.

10.              On going through the policies taken by the deceased-insured during his life time, which are available in the record of the District Commission, we are dealing them separately as follows:

                    1. On 28.03.2004 he had obtained Bandobasti Bima Policy No.378404706 for sum assured of Rs.51,000/- (having monthly premium of Rs.323/-) out of which the LIC has deducted a sum of Rs.1852.83 towards unpaid premium.

                   Since this policy was taken on 28.03.2004 and the insured died on 26.03.2007, thus there is no question of deduction of unpaid premium

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falling due before the next anniversary of the policy. Thus we find that in this particular policy the LIC has wrongly deducted a sum of Rs.1,852.83/- from the amount payable.

                     2. On 24.11.2005 he had obtained New Jan Raksha Policy No. 4378744341 for sum assured of Rs.30,000/- (having monthly premium of Rs.206/-) out of which the LIC has deducted a sum of Rs.1236/- towards unpaid premium i.e. for the period May-2007 to October-2007 for six months, (6x206=1236).

                   Since this policy was taken on 24.11.2015 and insured died on 26.03.2007 therefore the LIC has rightly deducted monthly premium amount of Rs.206/- for a period of six months from May-2007 to October-2007, Rs.1236/- i.e. unpaid premium falling due before the next anniversary of the policy.

                   3. On 19.01.2007 he had obtained Jeewan Saral Policy No.378755521 for sum assured of Rs.62,500/- (having monthly premium of Rs.266/-) out of which the LIC has deducted a sum of Rs.2128/- towards unpaid premium i.e. for the period May-2007 to December-2007 for eight months, (8x266=2128).

                   Since this policy was taken on 19.01.2007 and insured died on 26.03.2007 therefore the LIC has rightly deducted monthly premium amount of Rs.266/- for a period of eight months from May-2007 to December-2007,

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Rs.2128/- i.e. unpaid premium falling due before the next anniversary of the policy.

                   4. On 24.01.2007 he had obtained New Jan Raksha Policy No.37855615 for sum assured of Rs.40,000/- (having monthly premium of Rs.314/-) out of which the LIC has deducted a sum of Rs.2512/- towards unpaid premium i.e. for the period May-2007 to December-2007 for eight months, (8x314=2512).

          Since this policy was taken on 24.01.2007 and insured died on 26.03.2007 therefore the LIC has rightly deducted monthly premium amount of Rs.314/- for a period of eight months from May-2007 to December-2007, Rs.2128/- i.e. unpaid premium falling due before the next anniversary of the policy.

11.              In view of the aforesaid, we find that the opposite party has rightly deducted an amount of Rs.1236/- towards unpaid premium of policy no.4378744341, Rs.2128/- towards unpaid premium of policy no.378755521 and Rs.2512/- towards unpaid premium of policy no.37855615 as per condition no.2 of the terms and conditions of the policy. However, we find that the LIC has wrongly deducted a sum of Rs.1852.83/- towards unpaid premium of policy no.378404706 more particularly when this policy commenced on 28.03.2004 and its anniversary will come on

 

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27.03.2007 whereas the insured died on 26.03.2007 itself, thus there is no question of coming anniversary.

12.              By filing some documents in appeal that is too without any application, the opposite party/appellant LIC tried to convince that this amount was deducted towards bonus as the bonus was to be paid for three years only. However, the LIC has no such pleading in reply and affidavit before the District Commission nor in appeal memo. In reply, affidavit and appeal memo, the LIC has mentioned it as deduction towards unpaid premium. Thus we find that the LIC has wrongly deducted this much amount of Rs.1852.83/- from the payable amount to the complainant and therefore, the complainant is entitled to get the same.

13.              So far as the reliance made by learned counsel for the appellant on a decision of Apex Court in Rajiv Kumar Bhaskar (supra) is concerned that case is regarding Salary Saving Scheme for which it was the duty of the employer to deduct premium and to send the same to the insurance company, whereas in the present case, the deceased-insured had obtained individual policies and permitted the employer to deduct the premium from his salary for sending it to the LIC. But the LIC in the case in hand, has deducted premiums after his death and falling due before the coming anniversary of the policy as per condition no.2 of the policy. Even otherwise after the death of the deceased-insured, how an employer can deduct

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premiums from his salary when he is no more. Thus the decision relied upon by learned counsel for the appellant is of no help.

14.              Thus, we find that the District Commission has committed gross error in directing the LIC to pay the full deducted amount from the amount payable. In our considered view, the complainant/respondent is entitled to get a sum of Rs.1852.83/- which has wrongly been deducted by the LIC. Thus we find that the impugned order deserves to be modified to that extent.

15.              Accordingly, the impugned order is modified to the extent that the opposite party LIC shall pay a sum of Rs.1852.83 to the complainant/respondent with interest @ 6% p.a. from the date of payment of claim i.e. 24.09.2009 till payment. LIC shall also pay costs of Rs.2,500/- as awarded by the District Commission. However, no interest is payable on the amount of costs.

16.              With the aforesaid observations and modifications, this appeal filed by the LIC stands partly allowed. No order as to costs.

           

                  (A. K. Tiwari)                          (Dr. Srikant Pandey)

            Presiding Member                             Member