PBEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 29th day of October 2011
Filed on : 10/05/2011
Present :
Shri. A Rajesh, President.
Shri. Paul Gomez, Member. Member.
Smt. C.K. Lekhamma, Member.
C.C. No. 235/2011
Between
Beena Sajiv, : Complainant
S/o. A.R. Sajiv, (By Adv. Tom Joseph, Court
Areekunnel house, Road, Muvattupuzha)
Ayavana P.O., Enanelloor,
Muvattupuzha.
And
The District Insurance Officer, : Opposite party
Near C.B.I Court, Ravipuram, (By Adv. Viji V.P. Govt.
Ernakulam, Kochi-16. Pleader, Ernakulam-682 011)
O R D E R
Paul Gomez, Member.
Case of the complainant is as follows:
Complainant is the wife of late Mr. Sajiv, who was Lower Division clerk in Sales Tax Department, Government of Kerala.The said Government employee was a subscriber to life Insurance policy as well as Group Insurance Scheme. On the death of the insured a claim application was preferred to the opposite party. Unfortunately it was not allowed in toto. On the other hand Rs. 5,950/- was allowed in the place of Rs. 10,300/- plus bonus in respect of Life Insurance Policy Scheme. In respect of Group Insurance scheme in stead of paying the assured amount of Rs. 1,00,000/- (Rupees one lakh only ) plus bonus, what was actually offered was Rs. 9,500/-. The reason for denying the benefits as per the schemes is stated to be breakage of the schemes for having not remitted the premia. Regarding break with regard to Group Insurance Sheme it was regularized by Government on 17-08-2010. As to the Life Insurance policy, the opposite party continued to accept the premia even after the break. This complaint has been filed with the object of recovering full benefits under both the two schemes and cost of proceedings.
2. On the other hand, opposite party refutes the contentions in his version. Even though complainant joined the Group Insurance Scheme with effect from 25-08-1997, he remitted the premium only from 01-01-1999 without clearing the arrears. Hence the remitted premium is refunded. His membership was broken and hence as per rules the subscription for the defaulted period ought to have been remitted in 3 instalments which was not done. In the case of Life Insurance also defaulted member can approach the Government for revival. The claims preferred by the complainant run counter to Ext.5 and 6.
3. No oral evidence for complainant. Ext. A1 to A3 marked on her behalf. Opposite party was examined as DW1. Exts. B1 to B6 marked for him. Learned counsel were heard.
4. Points for determination
i. Whether de-jure revival has occurred in this case?
ii. Who is responsible for recovery of arrears?
iii. What are the reliefs, if any
5. Point No. i. Ext. A1 Life Insurance policy incorporates an assurance given by the Director of Insurance, government of Kerala stating that the insured will be paid Rs. 10,300/- along with bonus on completion of fifty five years or in the event of his death earlier. The name of the complainant is stated as the nominee. Against this assured sum, the complainant contends that she has been offered only Rs. 5,950/- . Ext. A2 is the proceedings of the Director of Insurance sanctioning the payment of Rs. 9,500/- being the accumulated amount under group Insurance scheme. According to the complainant she is entitled to receive Rs. 1,00,000/- (Rs. 1 lakh) together with bonus as per rules. The complainant has not produced any evidence to support her claim of 1 lakh rupees and bonus. Even though there is no mention regarding the sum assured under the Group Insurance Scheme. Ext. B4 Notification rule 5(2) will lead us to the conclusion that the sum insured in the instant case was Rs. 1 lakh plus bonus because he had been paying Rs. 100/- being the monthly amount of subscription, entitling him to own 10 units. It has to be borne in mind that the insurance coverage for each unit of Rs. 10/- is Rs. 10,000/-. He is also entitled for bonus.
It is contended by the opposite party that they were constrained to deny him any benefit under the insurance scheme because the insured could begin to remit the premium only on 0-10-1997 whereas the policy had been issued with commencement on 25-8-1997. The insured did not care to remit the arrears. Even though clause 1 (de) of Ext. B1 conditions offer opportunity for payment of arrear premium, that was not made use of by the complainant. That is the reason why he was denied the benefits under the scheme and the nominee was offered only Rs. 5,950/-. The learned counsel appearing for the opposite party tends to take shelter under point No. 1 (a) of Ext. B1 schedule, where it is stated that,
“The insured person is responsible to see that the premium which is due on the first day of each month is deducted from his/her pay for the preceding month”.
Ext. B2 Extract of G.O(p) No. 371/85/Fin dated 08-07-1985. Set out the Formula for calculation of arrears in case of default in the remittance of premium. Admittedly Sri. A.R. Sajeev was on leave without Allowance for the period from 11-10-2007 to 30-11-2008 on Medical grounds according to Ext. A3 order. Ext. A1 would show that the policy was issued with commencement on 25-08-1997. The break in remitting premium over the period from 09/1997 to 09/1999 will be borne out from Ext. B5. Also there is another break over the period from 07/2007 to 02/2008 and yet again there occurred another break from 03/2008 to 01/2009. It is stated as follows in rule 21 of B2 order,
“In cases, where subscriptions for a continuous period of 6 months are in default, the membership will automatically cease and such members will not be re-admitted to the scheme thereafter. In such cases, the members will also lose their entitlements under the Insurance Fund, in the event of their death. The accumulations in their savings fund with interest up to the dates of termination of their member ship will be repaid to them only at the time of retirement/death, which ever is earlier. This rule seemingly runs counter to Ext. B1 conditions and privileges especially clause 2 which categorically states that a lapsed policy can be revived by paying arrears with interest. Since rule 21 of B2 G.O. is in derogation of the terms of contract governing the Life Insurance Policy the said rule has no force of law. Admittedly there were defaults on more than one occasion. But on all those instances, as it is evident from Ext. B5 premium receipts premium have been received and credited in the account of the subscriber by the insurance department.
We take a pause and now turn to the set of facts regarding group Insurance Scheme before dealing with the legal issues involved in the facts of the complaint. It is contended by the opposite party that the complainant has been offered Rs. 10,300/- in the place of full benefits under the scheme on the ground that the subscriber had committed default in remitting the premium without break. Ext. B6 GIS details would disclose that after the payment for September 2007, he could resume payment only for the month of December 2008. Thus in the case of Group Insurance Scheme he has defaulted in payment only once i.e. for the period from 08/2007 to 11/2008 the period which corresponds with his leave without allowance on medical grounds. Ext. B4 Government Order dated 21/04/2010 deals with the rules regarding the Group Insurance Scheme. Here also we hasten to add that the recovery of the premium even after the break was made by the Drawing and Disbursing officer and the same amount has been received and credited in the account of the subscriber. Clauses in the said order have been high lighted by the learned counsel appearing for the opposite party. The relevant portions are extracted below:
(5) The drawing and Disbursing officer should recover the subscription from the members/employees irrespective of there being on duty, deputation, leave (except leave without Allowance…..)
(6) (i) in cases where subscriptions for a continuous period of 6 months are in default the membership will automatically cease and such members will be thrown out of the scheme.
(9) Wherein a subscriber is thrown out from the scheme due to any reason, subscription should not be resumed without prior Government Sanction. In cases where the employee(s) do not resume subscription; members will loose their entitlements under the insurance fund in the event of death. The accumulation in their savings fund without interest at the rates specified by Government from time to time, up to the date of termination of their membership will be paid only at the time of retirement/death which ever is earlier”.
Undoubtedly there was a break for a period of more than 6 months and by applying clause 6(i), the deceased employee referred in the complaint have been thrown out of the scheme. But everything does not end there once and for all. It can be revived with Government sanction. It may be borne in mind in the case of a lower Division clerk, it is the Drawing and Disbursing officer who has been mandated to make the recoveries in respect of subscription including that of arrears. Ext. B6 statement would show that the said officer had been making recoveries and the concerned officer at the Insurance Department has been duly crediting the amounts corresponding to those recoveries in his account without fail with their eyes wide open to the fact that the subscriber has been defaulting continuously for more than 6 months. The act of Insurance department deserves our particular attention and we must make note of the fact that the amounts have been credited in his account even without a whisper of protest from their side. The omission on the part of Drawing and Disbursing officer in not making recoveries in respect of arrears and crediting by the Insurance department those amounts without raising any protest would amount to implicit sanction of the Government to revive the scheme in spite of non-payment of arrears. It is common place that when a Government servant exercises his duly vested powers, he is not acting as a delegate of the Government, but discharges the function of the Government as such. Therefore it can be legitimately presumed that the act of reviving the scheme without clearing the arrears performed by the Insurance Department in conjunction with the Drawing and Disbursing officer tantamounts to waiver and hence the Government is estopped from raising the plea that the policy had not been validly revived. It is not fair on the part of the Government to approbate and reprobate. The same line of reasoning is applicable in the case of Life Insurance Policy issued by the Insurance Department to the deceased employee.
6. For the reasons stated above, the nominees in both the schemes are entitled for the full benefits under the schemes treating them as validly revived in spite of breaks. At the same time from the assured amounts, opposite party shall deduct the arrear premiums with interest.
1. To sum up, opposite party shall pay assured sum of Rs. 10,300/- plus bonus due to the nominee of the life insurance policy held by deceased A.R. Sajiv. However opposite party is at liberty to deduct the premium that have fell in arrears with interest as per norms.
2. Opposite party shall pay assured sum of Rs. 1,00,000/- (Rupees one lakh) plus bonus due to the persons mentioned in Ext. A2 as indicted therein in respect of Group Insurance scheme subscribed by late A.R. Sajiv. However opposite party is at liberty to deduct the premiums that have fell in arrears with interest as per norms.
The above said order shall be complied with within a period of one month from the date of receipt of a copy of this order
Pronounced in the open Forum on this the 29th day of October 2011
