This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Smt. Mallamma against the Respondents- (1) Branch Manager Life Insurance Corporation of India Branch Office Sindhanoor and (2) General Manager Hutti Gold Mines Company Ltd., Tq. Lingasugur Dist: Raichur. The brief facts of the complaint are as under:<br /> <br /> The complainant is the legally wedded wife of Sharanabasava who was an employee working as Labour in underground bearing token No. 2191 under employee of Respondent No-2 Hutti Gold Mines Company Ltd., Hutti. The said Sharanabasava died on 09-12-04 leaving behind the complainant as the legal heir and nominee. The said Sharanabasava during his service had taken (7) Insurance Policies Respondent NO-1 under Salary Saving Scheme as detailed as under: (1) 661414369 dt. 25-03-03 for sum of Rs. 25,000/- for a period of (20) years, (2) 661414350 dt. 26-03-03 for a sum of Rs. 50,000/- for a period of (25) years, (3) 661414961 dt. 10-05-03 for a sum of Rs. 50,000/- for a period of (15) years, (4) 661414962 dt. 10-05-03 for a sum of Rs. 50,000/- for a period of (15) years, (5) 661415003 dt. 28-05-03 detailed not shown, (6) 661415219 dt. 15-07-03 for a sum of Rs. 30,000/- for a period of (25) years, & (7) 661416617 dt. 23-04-04 for a sum of Rs. 30,000/- for a period of (20) years. <br /> Since the said policies were under Salary Saving Scheme the Respondent No-2 had undertaken for making the payment of premium amount of the above said policies to the Respondent No-1 out of the salary amount of said Sharanabasava.<br /> <br /> After the death of Sharanabasava, the complainant submitted claim application along with original LIC Bonds to the Respondent No-1 vide letter dt. 03-02-05. In-spite of furnishing the document as required by Respondent NO-1 neither her claim was settled nor they replied to her claim application. So the complainant issued legal notice on 25-06-07 through her counsel to the Respondent NO- 1 & 2 through RPAD. In-spite of the service of notice Respondents have not at all taken any steps to settle her claim which amounts to deficiency of the service. Due to non-settlement of her claim the complainant has been put to mental torture and agony. As such the Respondents are liable to pay compensation of Rs. 20,000/-. Hence for all these reasons the complainant has sought for direction to the Respondent No- 1 & 2 to make payment of policy amount under (7) policies along with bonus and other benefits and also to pay compensation of Rs. 20,000/- towards damages and cost.<br /> <br /> 2. In-response to service of notice Respondent NO-1 & 2 through appeared their respective counsel Respondent No-1 has filed written version contending that the deceased life assured had taken (7) policies as detailed in Annexure-1 to the written version. The said policies are under Salary Saving Scheme thereby premium are to be recovered from the salary of the employee by the employer and remitted to the Insurance Corporation. This Respondent came to know the death of life assured that he has died on 09-12-04 and the nominee the complainant. After the receipt of death intimation from the complainant-nominee, the Respondent No-1 has informed that the policies are in lapsed condition and so nothing is payable. The Respondent No-1 informed with full details of premium received. The Respondent No-1 has received legal notice and suitable reply was given to the complainant on 15-09-05. Hence there is no deficiency in service on the part of the Respondent Corporation. The details of the policies premium received and gaps of premium are shown in the <br /> <br /> Annexure-1. <br /> <br /> As per Authorization Letter life assured Sharanabasava shows that he will be entirely responsible for keeping the policy in-force within the stipulated time and in the event of the non-payment of premium to the corporation by the Respondent No-2 for whatever reason it will be its responsibility to make payment of the premiums directly to the Corporation together with any additional charges as applicable if any. The Insurance is a contract between the insurer and insured. If the insured pays premium on the stipulated due date the risk on life assured will be covered till next premium falls due. It is the duty & responsibility of insured to pay premium whenever it falls due. Nowhere it is mentioned in the contract that the premiums should only be paid on demand. Paying premiums to have insurance coverage on his own life is left to the insured. As a courtesy this Respondent sends premium intimation to the policyholders non-sending of premium intimation will not amount to deficiency in service. Anything mentioned in the contract and failing to fulfill it will only amounts to deficiency in service. Every month the Respondent No-2 furnishing details of the salary paid and amount recovered to his different heads are given to life assured i.e, the employee. So it is evident that the employee policyholder was aware of the fact that premiums are not recovered and it is the bounden duty to make arrangements of the same as per Authorization given by the life assured to the Respondent. Hence as an Insurer this Respondent is not at fault. The premiums were not recovered through salary for the months mentioned in Annexure and also not paid directly to the corporation by the life assured the policies are in lapsed condition nothing is payable. As such the question of payment does not arise. Hence for all these reasons the Respondent NO-1 has sought for dismissal of the complaint with cost.<br /> <br /> 3. Respondent No-2 has filed a written version/objection contending that Respondent No-2 have regularly remitted the premiums of late Sharanabasava to the Insurance Corporation whatever his wages are sufficient. Thereafter due to non-availability of the sufficient wages. The premiums could not be remitted and this fact was being regularly informed to the life assured and he had knowledge of non-payment of premiums, whenever he took his monthly wage slip. But even then he did not take any steps to remit the premiums.<br /> <br /> The Hutti Gold Mines Company Ltd., Hutti could not deduct the insurance premium regularly from the salary of the said employee as his earnings were not enough to recover the premium which stands at clause 1 of sub-clause 2 of section 7 of the Payment of Wages Act because the deductions are to be made on the basis of priority as per the provision of law. Therefore the non-payment of premiums of said employee by deducting salary did not fall in the Order of priority. So the Respondent No-2 neither negligent nor violated any alleged undertaking given to the Respondent No-1 LIC as such Respondent No-2 is not liable for damages or compensation. Hence for all these reasons Respondent has sought for dismissal of the complaint with cost.<br /> <br /> 4. During the course of enquiry the complainant-Mallamma has filed her sworn-affidavit by way of examination-in-chief reiterating the averments of her complaint and has got marked (11) documents at Ex.P-1 to Ex.P-11. In-rebuttal the Respondent No-1 Corporation has filed sworn-affidavit of Accounts Officer (Legal heir & HPF) of Division of the Respondent Corporation by way of examination-in-chief reiterating contents of Written Version and has got marked (6) documents at Ex.R-1 to Ex.R-6. Respondent No-2 has filed sworn-affidavit of its Executive Officer by way of examination-in-chief reproducing his written version and closed its side.<br /> <br /> 5. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination:<br /> <br /> 1.Whether the complainant proves deficiency in service by the Respondents in not settling her claim, as alleged.?<br /> <br /> 2.Whether the complainant is entitled for the reliefs sought <br /> for?<br /> <br /> 6. Our finding on the above points are as under:-<br /> 1) In the affirmative. 2) As per final order for the following<br /> <br /> REASONS<br /> <br /> POINT NO.1 :-<br /> <br /> 7. There is no dispute that Sharanabasava life assured had taken (7) LIC Policies from Respondent No-1 during his life-time and that the complainant being the wife is the nominee of all the policies. It is also not in dispute that the insurance policies were under Salary Saving Scheme and thereby the premiums were to be deducted from the salary of the life assured by his employer-Respondent No-2. It is also not in dispute that the said life assured Sharanabasava died in-service on 09-12-04. The complainant has produced Xerox copies of (6) Insurance Polilcy Bonds at Ex.P-1 to Ex.P-6 except the policy No. 661415003. The Respondent Corporation has filed Xerox copy of the Bond of this policy No. 661415003 at Ex.R-6. So to say we have got Insurance Bonds of all the (7) policies.<br /> <br /> 8. The Respondent No-1 Corporation has contended that policies were in lapsed condition due to non-remittance/payment of the monthly premium as detailed in Annexure to the written version so the Respondent Corporation is not liable to pay the policy amount and the same has been intimated to the complainant. It is also their case that as per Authorization Letter given by the deceased life assured to the Respondent No-1 that the life assured shall be entirely responsible for keeping the policy in-force and in the event of non-remittance of premium by the employer/Respondent No-2 for whatever reason then it shall be his responsibility to make payment of premium directly to the corporation together with additional charges as applicable. So the life assured is solely responsible for non-payment of monthly premiums and for lapsed condition of the policy. The Respondent NO-2 in their written version have contended that they have remitted the premium of the policy of late Sharanabasava to the Insurance Corporation whenever his wages were sufficient and thereafter due to non-availability of sufficient wages of the policyholder the premium could not be remitted because his earnings were not enough to recover the premiums which sands at clause 1 sub-clause 2 of section 7 of Payment of Wages Act. Therefore the non-deduction of the premium of the said employee from his salary did not fall in the Order of priority. The said fact was being regularly informed to life assured by the Respondent No-2 who had also knowledge of non-payment of premiums. So the Respondent No-2 is neither negligent nor violated the alleged undertaking given to Respondent No-1.<br /> <br /> 9. The Respondent NO-2 in the Annexure-1 to the written version the Respondent NO-1 Corporation has stated in detail about the non-remittance/payment of each policy which material for our purpose reads as under:-<br /> <br /> ANNEXURE-I<br /> <br /> The details of the policies of life assured Sharanabasava S/o. Nagappa Nominee: Mallamma (Wife)<br /> Date of death of life assured Sharanabasava on 09-12-2004.<br /> <br /> Sl.No. Policy No. Date of the Sum Assured Table & First unpaid Gaps <br /> Commencement Term Premium<br /> 1) 661414368 08-03-2003 Rs. 25,000=00 88-20 08/2004 1 11/2003<br /> 2) 661414350 26-03-2003 Rs. 50,000=00 93-25 08/2004 1 11/2003<br /> 3) 661414961 01-05-2003 Rs. 50,000=00 90-15 06/2004 3 08/03, 09/03 & <br /> 11/03<br /> 4) 661414962 10-05-2003 Rs. 50,000=00 90-15 07/2004 3 08/03, 09/03 &<br /> 11/03<br /> 5) 661415003 28-05-2003 Rs. 40,000=00 75-20 08/2004 1 07/03<br /> 6) 661415219 15-07-2003 Rs. 30,000=00 14-25 06/2004 2 01/2004 & 02/2004<br /> <br /> 7) 661416617 23-04-2004 Rs. 30,000=00 91-20 06/2004 06/2004<br /> Premium not received<br /> -------------------------------------------------------------------------------------------------------------------------<br /> <br /> From the column gaps’ shown in the Annexure-1 it discloses non-remittance/payment of monthly premium for the month of November-2003 in-respect of the first & second policy, non-payment of monthly premium for August, September and November in-respect of the third & fourth policy, non-payment of monthly premium for July 2003 in-respect of fifth policy, non-payment of monthly premium for January & February 2004 in-respect of sixth policy, and non payment of premium for the month of June 2004 in-respect of last policy. This in-turn goes to show that the Respondent Corporation has received the monthly premium for the subsequent months immediate after the non-payment of the monthly premiums as shown above and so the question of lapsing of the policy to the extent of the non-payment of premium shown in the column gaps of the Annexure does not arise. This Annexure also shows the non payment of monthly premium from August-2004 in-respect of policy No. 1st, 2nd, & 5th policy. From June-2004 in-respect of 3rd ,6th & 7th policy and for July 2004 in-respect of 4th policy. If, this column is read along with “column gaps” in this Annexure, it shows that non-payment of monthly dues as shown are from June, July Aug 2004 onwards in-respect of respective policies. So from this Column in the Annexure table it can be inferred that the monthly premium for the respective policies are not remitted/paid from June, July & August 2004 for the respective policies. The Respondent No-2 in the written statement as seen above has stated that they have deducted the monthly premium of the policy whenever there is sufficient wages of the policyholder and they have not deducted the premium due to non availability of sufficient wages as per clause 1 sub-clause 2 section 7 of Payment of Wages Act since the deductions are to be made on the priority basis as per provision of law. The Respondent NO-2 Hutti Gold Mines Company Ltd., has not specifically stated as to for which month in a particular year they have deducted and remitted the premium to the Respondent No-1 Corporation and for which months they have not deducted due to shortage of sufficient wages of the policyholder. Even they have not filed any statement in this regard. It is worthwhile to note here that during course of the arguments on this point, the L.C. for the complainant sought adjournment for issuing notice to the Respondent No-2 for clarifying the deduction and non-deduction of monthly premium of the policyholder. Accordingly on 29-01-08 the counsel filed a memo along with copy of legal notice issued to Respondent No-2 together with postal acknowledgement for having served legal notice to Respondent No-2 and submitted that the Respondent No-2 has not replied to the said notice till then. As rightly argued by the L.C. for the complainant, the written statement of Respondent No-2 in Para-6 is not specific but they have simply stated that they have deducted the monthly premium whenever the wages of the policyholder of employee were sufficient and due to non-availability of sufficient wages of the policyholder they have not deducted monthly premium. Even the Respondent No-2 have not specifically stated the month-wise and year wise of the deduction and non-deduction of policy. Further they have not replied to the legal notice issued by the complainant as submitted by counsel for complainant. So it shows that the non-deduction of monthly premium of the policyholder-employee was due to shortage of sufficient wages of the policyholder. Hence the next question that would arise for our consideration is whether the Respondent No-2 has informed the non-deduction of monthly premium to the Respondent NO-1 Corporation. Of course the Respondent NO-2 in the written version have contended that the fact of non-deduction of monthly premium being regularly informed to the late policyholder and he had also knowledge of the same when he took his monthly wage-slip. The Respondent NO-2 have not produced copy of monthly wages slip said to have been issued to the policyholder and whether it was specifically informed to the policyholder regarding non-deduction of monthly premium. But there is no whisper in the written version that they have intimated this fact to the Respondent No-1 Corporation. The Respondent No-2 has simply contended that as per law laid-down by the Supreme Court of India, the non- payment of premium by the employer collecting from the employee’s salary does not absolve LIC to pay the policy amount. According to the Respondent NO-1, the policyholder had given an undertaking in-writing that in case of non-recovery/remittance of premium by his employer for whatever reason then it is his responsibility to make the payment of premium directly to the Corporation together with additional charges and they have produced some of these undertaking in Ex.R-1 to Ex.R-5. A perusal of Ex.R-1 to Ex.R-5 it shows that they are printed forms to be filled by the proposer in duplicate and to be sent along with proposal-papers. On the back side of this proforma there is one more proforma showing the Policyholder’s Particulars to be filled by the LIC. The undertaking shows that they are in printed proforma issued by the LIC of India Raichur Division to be filled by the proposer in duplicate and sent along with the proposal papers this Undertaking is to be sent along with proposal papers. Admittedly the policyholder Sharanabasava was working as an under ground Labourer in Hutti Gold Mines Company Ltd., of Respondent NO-2. So we do not know as to whether the printed matters have been made known to understand to the policyholder, even though it bears the signature of the policyholder. If the non-deduction/remittance of monthly premium by the employer/Respondent NO-2 had been intimated to the Respondent No-1 corporation and the Insurance corporation if had made correspondence with the Respondent NO-2 employer of policyholder for non-remittance of monthly premium of policy then the lapsing of policy would have been avoided by informing the policyholder for payment of premium for avoiding lapsing of the policy. Un-fortunately such a curtsey act having not been done by the employer Respondent No-2 or Respondent No-1 Insurance Corporation and they kept mum by leaving to the fate of policyholder under the garb of so- called provision of priority of deductions under the wages Act by Respondent No-2 and under the so-called undertaking given by the policyholder enclosed to proposal form by Respondent No-1. Over and above there was regularity in remittance of his premium by Respondent NO-2 employee barring stray incidents of non-remittance as seen from column ‘gaps’ in Annexure-1, then the Respondent Corporation must have bestowed its belvolent and gracious attention on the case of the policyholder for non-remittance of premium continuously for few months earlier to his death in the year 2004, by cautioning the policyholder of lapsing of policy for non-payment of premium. This gracious attitude on the part of the Respondent Corporation would have avoided lapsing of policy. So all these factors leads to deficiency of service by the Respondents as rightly argued by the L.C. for the complainant. Hence we hold that the complainant has proved deficiency of service by the Respondent and so Point NO-1 is answered in the affirmative.<br /> <br /> POINT NO.2:- <br /> <br /> 10. The complainant has sought for payment of policy amount with its bonus and other benefits along with compensation of Rs. 2,00,000/- towards damages and cost. So-far as the first relief relief is concerned, the complainant is entitled to receive the policy amount along with bonus and other benefits so far as the claim of Rs. 20,000/- towards damages is concerned, having regard to the facts and circumstances of the case as discussed above we feel it just and proper to award a global compensation of Rs. 1,000/- (One Thousand) including cost. In this view of the matter we pass the following order:<br /> <br /> ORDER<br /> The complaint of the complainant is allowed in part.<br /> <br /> The Respondent No-1 Insurance Corporation shall pay the policy amount under (7) policies to the complainant-nominee along with its accrued bonus and other benefits and also to pay a global compensation of Rs. 1,000/- (One Thousand) including cost.<br /> <br /> The Respondent No-1 Bank Insurance Corporation shall comply this order within (6) weeks from the date of receipt of copy of this order.<br /> <br /> Office to furnish certified copy of this order to both the parties forth with free of cost.<br /> <br /> (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum On 29-02-08.)<br /> <br /> Sd/- Sd/- Sd/-<br /> Smt.Pratibha Rani Hiremath, Sri. Gururaj Sri. N.H. Savalagi,<br /> Member. Member. President, <br /> Dist.Forum-Raichur. Dist-Forum-Raichur Dist-Forum-Raichur.