BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri.K.V.H. Prasad, B.A., LL.B President
And
Smt. C.Preethi, M.A.LL.B., Lady Member
Wednesday the 13th day of May, 2009
C.C.No. 196/08
Between:
S.Lakshmi Devi, W/o Late Sandhu Virupakshaiah,
R/o H.No.9-69/2, K.V.S.Colony, Dhone-518 222, Kurnool District.
… Complainant
Versus
1. The Depot Manager, APSRTC New Bustand,
D.No.8-109-3-1,Kothapeta, Dhone-518 222.
2. The Branch Manager, Branch Office LIC of India,
D.No.8-85-4-1,Near Bustand Road, Kothapeta, Dhone-518222.
3.The Divisional Manager, Divisional Office LIC of India,
The Divisional Manager, Divisional Office LIC of India
… Opposite parties
This complaint is coming on this day for orders in the presence of Sri. M.Sivaji Rao, Advocate, for the complainant, and opposite party No.1exparte and Sri. L.Hari Hara Natha Reddy, Advocate, for the opposite parties 2&3, upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Smt. C.Preethi, Lady Member
C.C.No.196/08
This Consumer Complaint of the complainant is filed U/s 11 & 12
Of Consumer Protection Act, 1986, seeking a direction on opposite
Parties to pay the assured amount under two policies with 24%
Interest p.a., Rs.20,000/- as compensation for mental agony, cost of
The complaint & any other relief or relief’s which the complainant is
Entitled in the circumstances of the case.
2.The brief facts of the complainants case is that the complainant
Is the wife & nominee of the deceased policy holder Sandu
Virupakshaiah, who has taken two policies bearing No’s.651097235 &
653285371 for Rs.35,000/- & 50,000/-. The payment mode of the two
Policies in monthly premium & opposite party No.3 regularly deducted
The premium from the salary of the deceased. On 25-8-2005 the
Policy holder died & the complaint being nominee submitted her claim,
But the opposite parties even after receipt of the claim form did not
Settle the claim & on 4-11-2008 the complaint got issued legal notice,
To this notice also there was no reply. Hence, the complainant
Resorted to the forum for reliefs.
In support of her case the complainant relied on the following
Document viz (1) of legal notice dt.2-11-2008 along with postal
Receipts & acknowledgements and (2) Xerox copy of death certificate
Besides to the sworn affidavit of the complainant reiteration of her
Complaint avernments & the above documents are marked as Ex.A1 &
Ex.A2 for its appreciation in this case, & replies to the interrogatories
Exchanged.
In pursuance notice of this forum as to their case of the
Complainant, the opposite parties 2&3 appeared before the forum and
Contested the case by filling Written Version. The Opposite party NO.1
Did not contest the case and remained absent through out the case
Proceedings.
The Written Version of Opposite parties 2 & 3 submits that the
Complaint is not maintainable either in law or on facts, but admits the
Deceased Policy holder Sandu Virupakshiah, has taken two polices for
Rs.35,000/- and Rs.50,000/-. The policy holder was working as
Mechanic in Opposite party NO.1’s depot & died on 25-8-2005 due to
Diabetic nephropathy & chronic kidney disease & know diabetic for past
1 ½ year and suffered renal failure & ischemic heart decease. Due to
Said illness the policy holder did not attend his duties & was on loss of
Pay from March, 2005 till death & as no premium was received under
The two policies and the policies were in lapsed condition. The
Opposite party No.3 did not receive any premium from the paying
Officer or from the policy holder and it is the responsibility of the policy
3.holder to pay the premiums regularly, when ever the premiums are
Not recovered from the salary. Hence, the corporation is not liable to
Pay any amount to the complainant as the two policies are in lapsed
Condition & there is no deficiency of service on part of opposite parties
And seeks for the dismissal of the complaint with costs.
In support of their case the opposite parties relied on the
Following document viz (1) proposal form dated 12-10-2002. (2)
Policy bond issued in pursuance of Ex.B1 (3) proposal form dated 6-
11-2003. (4) Policy bond issued in pursuance to Ex.B3. (5) Letter
Dated 26-12-2008 issued by the opposite party No.1. (6) Annexure I
(A) dated 12-10-2002 to Ex.B1. (7) Annexure II (A) & (8) Reply
Dt.17-12-2008 of Opposite parties to Ex.A1 besides to the Sworn
Affidavit of the opposite party No.3 in reiteration of its written version
Averments and the above documents are marked as Ex.B1 to Ex.B8 for
Its appreciation in this case & replies to the interrogatories exchanged.
Hence, the point for consideration in to what relief the
Complainant is entitled:-
It is the case of the complainant that she nominee & wife of
Sundu Virupakshaih, who has t a k e n two polices bearing
No’s.651097235 & 653285371, vide Ex.B2 & Ex.B4 by submitted
Proposal vide EX.B1 & B3. The said two polices are salary saving
Scheme polices & opposite party No.1 has to deduct the premium
Amount from the policy holder’s salary & remit the same to opposite
Party 2&3. The policy holder died on 25-8-2005 & on the claim
Preferred by the complainant the opposite parties 2 & 3 did not settle
The claim & the complainant being vexed got issued legal notice dt. 2-
11-2008 vide Ex.A1 and the opposite parties 2 &3 replied vide Ex.A8
Dated 17-12-2008 stating that the two polices bearing No’s
651097235 & 653285371 are in lapsed condition as on date of death
Of the policy holder and nothing is payable under the above two
Polices. But the complainant submits that if the employer fails to pay
The premium, then it is for opposite parties 2 &3 to intimate the policy
Holder about the non receipt of premium. So as to enable the policy
Holder to pay the premium directly, hence it is the failure on part of
Opposite parties 2 & 3 to intimate the policy holder about the non
Receipt of premium and allowing the policy to be lapsed. In support
Of their case the complainant relied on the following decisions
(1) Assistant area Manager S.E.C.L. and other Vs Meera Garg
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And others reported in II 2006 C.P.J. page 221 (National
Commission) where in it was held that, when the policy was
Repudiated on the ground that the policy was lapsed due to non
Payment of premium and the employer never informed the policy
Holder about the non availability of amounts towards premium from
The salary of the policy holder. There fore it was held that the
Insurance company and employer has to pay the amount under the
Policy.
The other decision relied by the complainant it is that of
National Commission between Life Insurance Corporation of
India Vs Jaya Malika and others reported in II 2006 CPJ page
280, where in it was held that when the Department failed to pay the
Premium due to non collection of premium and it is for LIC to intimate
The policy holder about the not receipt of premium and if no such
Intimation i s given, LIC is liable to pay this policy amount to the
Nominee.
The other decision is also of National Commission
Between LIC of India & others Vs Basmati reported in III 2006
CPJ page 228, where in the policy was in lapsed condition as
Premiums are not paid on the date of death of policy holder and it was
Not informed to policy holder about non receipt of premium, as it is the
Duty of the insurer to intimate and the insurer cannot avade its
Liability.
From the above referred decisions it is clear that the department
In which the policy holder was working was required to pay the
Premiums of the policy to the insurance company & the said premiums
Are to be deducted from the salary of the policy holder & remit the
Same to the LIC without any charges, & in the event of salary saving
Scheme being withdrawn due to non collection of the premium the LIC
Is required to intimate the policy holder & admittedly this is not done
In present case.
Following the above mentioned decision of National Commission
Cited by the complainant & the exhibits marked on both sides the
Supreme Court in Desu Vs Basanti reported in IV 1999 SLI 351
III 1999 CLT 1, while dealing with salary saving scheme observed
That, if a condition is now placed on the employee that it is he who has
To intimate the LIC, if no remittance of the premium deducted by the
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Employer, it will be too onerous a condition to be of any validity.
Considering the scheme such a condition cannot be imposed on an
Employer. It is impractible & it was held by the Supreme Court that
Payment of premium was after deducting the premium from the salary
Of the employee and it is between employer & LIC, it will not be for the
Employee and employer to intimate the LIC about non remittance of
The premium and it is for LIC to intimate the assured as to the non
Remittance of premium.
In view of the above said settled law of Supreme Court, the nonsettlement
By the opposite parties 2&3 of the claim made by the
Complainant is totally unjustified.
The other decisions relied by the complainant are the
Decision of National Commission between P.Indira Devi Vs. LIC
Of India & another reported in I (2007) CPJ pg 205, it was held
That the opposite party has not sent any notice to employer of the
Insured informing h i m as to the non receipt of premium, in the
Absence of which the insurer was made liable. In another decision
Of supreme court between Chairman, LIC Vs. Rajiv Kumar
Bhaskar reported, in V 2005 SLT Pg 567 = (2005) 6 SCC Pg
188, it was held that the employer of the assured is the agent of the
Insurance company & no notice was sent by insurance company to the
Husband of the petitioner as to the non receipt of premium & held that
It is the duty of the insurer to inform the employee as to the non
Receipt of premium from the employer.
To sum up in view of the citations cited above & the discussions
Made supra & exhibits filed, it is clear that the complainant has get the
Assured amount of her husband, besides to costs and compensation.
As no case in made out against opposite party No.1, case against
Opposite party No.1 is dismissed.
In the result, the complaint is dismissed against opposite party
No.1, and allowed against opposite parties 2&3 jointly & severally to Pay the assured amount to the complainant under the two policies Bearing Nos 651097235 & 653285371 of Sandu Virupakshaiah with Entitled benefits & Rs.5, 000/- as compensation for mental agony and Rs.2, 000/- as costs of the case within one month from the date of Receipt of this order. In default, the opposite parties 2&3 jointly Severally liable to pay the above award with 12% interest from the Date of default till realization.
Typed to dictation, corrected and pronounced on this 13th day of May, 2009.
Sd/- Sd/-
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant: Nil For the opposite parties :Nil
List of exhibits marked for the complainant:-
Ex.A1. Office copy of legal notice dt.02-11-2008 along with two
Postal receipts and acks.
Ex.A2. Xerox copy of death certificate.
List of exhibits marked for the opposite parties:
Ex.B1. Proposal form dt.12-10-2002.
Ex.B2. Policy bond issual in pursuance of B1.
Ex.B3. Proposal form dt.06-11-2003.
Ex.B4. Policy issual in pursuance of Ex B3.
Ex.B5. Letter dt. 26-12-2008 issued by OP-1.
Ex.B6. Annexure I (A) dt.12-10-2002 to Ex B1.
Ex.B7. Annexure II (A).
Ex.B8. Reply of OP’s to Ex.A1.
Sd/- Sd/-
MEMBER PRESIDENT
// Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties
Copy was made ready on :
Copy was dispatched on :
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