Orissa

Rayagada

CC/121/2016

Smt. Mamata Mishra - Complainant(s)

Versus

The Branch Manger, LIC of india - Opp.Party(s)

Self

16 May 2018

ORDER

DISTRICT   CONSUMER  DISPUTES REDRESSAL    FORUM, RAYAGADA,

STATE:  ODISHA.

C.C. Case  No. 121 / 2016.                                           Date.     16    .     5  . 2018

P R E S E N T .

Dr. Aswini  Kumar Mohapatra,                       President.

Sri  GadadharaSahu,                                             Member.

Smt. Padmalaya  Mishra,                                     Member.

 

Smt. Mamata Mishra, W/o: Late Purna Chandra  Rath, C/O: Smt. Gayatri  Mishra, Indira Nagar, 5th. lane, Po/    Dist:Rayagada  (Odisha)                   …. Complainant.

Versus.

1.The  Branch Manager, LIC of India,  Rayagada  Branch, Rayagada

2. The Principal, Draupadi  Junior College,  AT/Po: Gumuda, Via: Hukkamba, Dist: Rayagada.

                                                                                                            .…..Opp.Parties

Counsel for the parties:                         

For the complainant: - Sri Sitaram  Panda, Advocate, Rayagada.

For the O.P No.1   :- Sri  K.Ch.G.S.Kumandan, Rayagada.

For the O.P. No.2:- In person.

.

JUDGMENT

                The  curx of the case is that  the above named complainant alleging deficiency in service  against  afore mentioned O.Ps for  non payment  of  LIC death claim insured amounts  under  Salary Saving Scheme bearing policy Nos.  (1) 573721393  (2) 573730723 for which  the complainant  sought for redressal of the grievances raised by the complainant.

On being noticed the O.P  No.1 (LIC) appeared through their learned counsel and filed written version refuting allegation made against them.  The O.P No.1  taking one and another pleas in the written version   sought to dismiss the complaint as it is not maintainable  under the C.P. Act, 1986. The facts which are not specifically admitted may be treated  as denial of the O.P No.1 . Hence the O.P No.1   prays the forum to dismiss the case against  them  to meet the ends of justice.

On being noticed the O.P  No.2 (College)  appeared and filed written version refuting allegation made against them.  The O.P No.2  taking one and another pleas in the written version   sought to dismiss the complaint as it is not maintainable  under the C.P. Act, 1986. The facts which are not specifically admitted may be treated  as denial of the O.P No. 2 . Hence the O.P No.2   prays the forum to dismiss the case against  them  to meet the ends of justice.

Heard arguments from the learned counsel for the    O.Ps and from the complainant.    Perused the record, documents, written version  filed by the parties. 

This forum  examined the entire material on record  and given  a thoughtful consideration  to the  arguments  advanced  before us by  the  parties touching the points both on the facts  as well as on  law.

                                               

 

                                                         FINDINGS.

On perusal of the record it is revealed that there is no dispute that the death  life  assured was having  2  (two)  Nos.  of    LIC  policies.  Again there is no dispute  the  D.L.A. was  working as Lecturer in English   at  O.P. No.2  College  and was expired  on Dt. 29.10.2013 due  to  heart  attack.

The  O.P. No.1 (L.I.C) in their written version  para-6 contended that the    death claim amount  could   not paid  as the policies were in lapsed condition as detailed  below.  

Policy No.	Date  of commencement .	Premium  @ per month.	First unpaid premium	Date of death.	Sum assured	Status.
1.	2.	3.	4.	5.	6.	7
573721393	28.5.2013	Rs.3,023.00	28.7.2013	29.10.2013	5  lakhs.	Lapsed.
573720723	15.03.2013	Rs.3,023.00	15.5.2013	29.10.2013	5  Lakhs.	Lapsed.

 

                The  O.P. No.1 (LIC)  in their written version  para-7 contended that the    death claim under policies Nos. 573721393 & 573720723  have not been settled since they are  in lapsed condition. That, at the time of death of the life assured, these two policies  were  in lapsed condition as initial two  installments  premium were deposited along with the proposal while opening the insurance policies.  The O.P. No.2 should have deducted the subsequent premiums  w.e.f  05/2013 in case of  policy No. 573720723  &  w,e,f,  07/2013  in case of policy No. 573721393 from the salary of the life assured and remitted to LIC but it was no done..  The  life assured has also  given authorization letter for deduction of premium from his salary.  That the O.P. No.1 (LIC) had sent the Authorization letter    to the O.P.No.2 (College)   on  Dt.  27.6.2013  for deduction and remittance of premium and a reminder was also sent on Dt. 5.9.2013.   A notice was also sent to the life assured  on Dt. 27.9.2013 regarding non receipt of premium  from the O.P. No.2  and requested to pay  the arrear  premium to keep policy  in force but no response   was received from him.    As per the  authorization  letter, the L.A.  is entirely reponsible  for remittance  of premium to prevent the policy from  lapsing. After  the death of husband of the complainant  the complainant  approached the O.P. No.1 on Dt. 2.12.2013 and submitted the necessary documents on 14.2.2014.

          The  O.P. No.1 (LIC) in their written version  para-8 contended that  as per the  item No.2 of terms and conditions of the  insurance policy,  the policy  will result into lapsed  when   the premium under the policy is not duly paid  within the days of grace  i.e. a period of 1 month in case of regular mode and 15  days   in case of SSS mode.

          Further  the  O.P. No.1 (LIC) in their written version  para-8  contended that  in case any policy 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  the employer, to deduct the premium from his salary every month and to remit the same in LIC of India and in case he is left with no salary by any reason, he undertake to pay the  premium directly to LIC. In the present case also, the authorization letter i.e. Form No. A(SSS) has been signed  and submitted by the  DLA(policy holder) at the time of taking the policy, wherein it is clearly mentioned that:

          I agree that your liability will be confined to making arrangement for deduction of premium  from my salary whenever this can be made  and for remitting the amount of deduction to the LIC in time up  to the month and  year of last  installment   stated   below or till I  gave you and LIC a specific  of withdrawal of this authorization after a minimum period of 3 years.

          I   shall be entirely responsible  for any  consequences on account of non payment of premium on my policy for reasons beyond  your control  such  as in the event  of proceeding  on leave  without pay, or my drawing  advance salary without deduction of premium per chance or my withdrawing this  authorization by a due notice to you and the corporation after the initial period of 3 years  as stated above or any cancelling this authorization for deduction in case of my  leaving service.  In any such case,  it will be my responsibility to  make arrangements for remittance of premium  directly  to the corporation to prevent my policy  from lapsing”.

          But the life assured miserably failed to keep up the undertaking he has made at the time of taking of policy, that in case he did not get any  salary by any reason, he shall remit the  premium directly to LIC.  He has allowed the policy to lapse and so could not get valuable life insurance coverage.

          In the context of the above  the O.P. No.1 (LIC)  relied  citation  it is held in Revision petition No.1926  of 2008 Pushpa Devi Vrs. LIC of India  vide  their order Dt. 30^th. November, 2017 the hon’ble  National   Commission  where  in observed “Once  the policy holder obtained  the policy from the LIC   under the Salary Saving Scheme, it was his duty to ensure that proper authorization was filed with the employer for  deduction of the premium  and the premium  was deducted from his salary from time to time and remitted   to the LIC.  In the absence of proper  authorization given  to the Employer, they were not bound to    deduct the premium  from the salary of the deceased. Obviously  the said policy lapsed due to non payment of   premium and hence LIC is not liable to make the payment of the claim under the  policy”. 

          The O.P. No.2 (College) in their written version admitted  in para-2  that  Sri   Purna Chandra  Rath  was working as Lecturer in English  and was  expired on Dt. 29.10.2013 due to heart attack.. The O.P. No.2 (College) in their written version  para-2  contended that  the O.P. No.1  (LIC)  never intimated to the  O.P. No.2 (College) about the deduction of the premium amount from the salary of Sri  Purno Chandra Rath.

          The O.P. No.2 (College) in their written version  para-4  contended that  the  O.P.No.2  college by his letter Dt. 343 Dt. 26.8.2013 had intimated to the staffs of the college  to intimate about the deduction of the premium  under L.I.C. as the staffs covered under Direct payment and the salary  will be disbursed through e-disbursement process.  The complainant’s  husband  had never  filled any intimation regarding the LIC policies as mentioned in the  complaint petition.  As  such no premium was deducted from the salary of  Sri  Purno Chandra Rath  by the O.P. No.2.  The above letter is  in the file which  is marked as Annexure-I.

          Again it is  held and  reported in SCC  2005 (6)  page No. 188 in the case of Chairman, LIC and others  Vrs. Rajeev  Kumar Bhaskar  the  Hon’ble  Supreme Court where  in observed “That the Salary Savings Scheme provides for a tripartite  arrangement, under which  it is the duty of the employer to deduct  premium  from the  salaries   of the employees and remit the  same to the LIC. “

          However, the facts in the present  case seem to be different, because the employer  of the insured  has taken the stand they were never informed  about the deduction of the premium  and no such authorization was given by the husband of the complainant   to the employer for such prupose.  The complainant  has drawn attention    to a copy of authorization  deed addressed   to the employer that has  been placed  on record. However, there is no evidence that such document  was ever  received   by the employer and whether they  initiated any action in pursuance of the said agreement. The  O.P. No.2  (College) not even  a single premium was deducted from the salary of the deceased by the employer meaning thereby that  the payment of two instalments of the premium  was done by the employee, 

The complainant  have taken the stand that after the  issuance of policy by the LIC, it was their  duty to ask the employer to deduct the premium and send it to them.  Nevertheless, the fact  remains that the deceased employee continued to draw his  full salary from his employer all this time. Once  he had obtained   the policy from the LIC the Salary Savings Scheme, it was his duty to ensure that  proper  authorization was  filed  with the employer for deduction of the  premium and the premium was  deducted   from his salary  from time to time and remitted to the LIC. 

Further  the Insurance Ombudsmen, Bhubaneswar   also  fixed the entire  responsibility on the policy  holder on account of non payment premium (copies of the order also in the file marked as  Annexure-2.

The complainant in her petition cited  citation   which are mentioned  here. 

(1 ) Delhi  Electricity  supply  Undertaking    Vrs.  Smt. Basanti Devi  reported in 1999(8)  SCC page No. 229.

(2)The Chairman, LIC & Anr. Vrs. Rajib Kumar Bhaskar reported in  2005(6) SCC 188.

(3)Smt. Basant Manjari Das Vrs.  LIC of India  2001 (1)  OLR 115.

(4) L.I.C  Vrs. Jayamilika  order  pronounced by the  National C.D.R.Commission  in R.P. No. 495 of 2005  date of order. 13^th. Feb. 2006.

(5) LIC of India  & Ors. Vrs. Smt. Ram Sakhi & Anr order  pronounced by the  National C.D.R.Commission  in R.P. No. 4150 of 2007  date of order. 7^th. January. 2015.

The above Citations citated by the complainant in her complaint  petition    which are not squarly  applicable to  the  present case. The  facts of the case   is  not identical to this present case in hand.

 

 

          Based on the discussion above, This forum do not found any infirmity  or illegality  in the  absence of proper authorization given to the  employer, they were not bound to deduct the premium from the salary of the deceased.  Obviously, the policy in question lapsed due to non-payment  of premium and hence the  O.P. No. 1 (L..I.C)  is not   liable to make payment of claim under  the  above   policy.   Therefore   the   complainant   would  not be  entitled  to benefit under  the  said  policy.

Thus,  it    becomes clear that even on merits, complainant is  not entitled to  any claim.

At  this stage this forum observed   the interest of justice  would met if  the O.P. No.1 refund the  deposited premium amount    in the above 2 Nos. of policy an  amount a sum of  Rs.12,092/- by the deceased life assured  with  interest  @ Rs.9% per annum from the date of receipt till realization  to the complainant.

Hence  to  meet the  ends of justice, the following order is passed.                                                                                                      

                                                ORDER.

            In  resultant    the complaint petition is allowed  in  part  on  contest against  the O.P No.1 and dismissed  against  the  O.P No..  2  on contest.. 

The O.P. No. 1  (L.I.C.)  is ordered to refund  deposited  premiums in the above 2 Nos. of policy an  amount a sum of  Rs.12,092/- inter alia interest @ Rs. 9%  per annum from the date  of respective deposit till realization  in addition to Rs.1,000/- (One thousand)only  to the complainant.  Parties are left to bear their own cost.

The OPs     ordered to make compliance the aforesaid Order within  45 days from the  date of  receipt  of this order.      .

   Serve the copies of above order to the parties free of cost.

 

Dictated and corrected by me

Pronounced on this          16 ^th.   Day of     May,   2018.

 

Member.                                                             Member.                                                             President