Block Development Officer vs RAJALAXMI SATAPATHY

THIS is an appeal against the judgment and order dated 17.10.1995 passed by Distt. Consumer Forum, Paralakhamundi, Distt. Gajapati in Complaint Case No. 78/1995.

THE facts of the case stated in brief are that the complainant is the legally married wife and the nominee of the policy holder of late Dilip Kumar Khadanga a primary school teacher working at Chhatrapur who had a Life Insurance bearing Policy No. S-5312006 78 under L.I.C. in a Salary Saving Scheme and had paid his 1st premium of Rs. 99/- on 28.10.1990 for an assured amount of Rs. 21,500/-. THE said policy holder thereafter transferred to Kunburd D.P. School under the Mohana Block and had given the letter of authorisation to the Drawing and Disbursing Officer for deducting the next premiums Rs. 99/- from his salary. THE said policy holder died on 24.6.2001 at Buguda vide the death certificate vide Regd. No. 012/91 dated 26.4.1991 of the N.A.C. Buguda. THE complainant intimated telegraphically to the L.I.C., regarding the death claim of her late husband and the L.I.C. replied to look into the matter soon. THE complainant also filed the legal heir certificates and affidavit in support of her claim. But no reply was given to the complainant or to her Advocate. Hence, a claim was lodged with L.I.C. alleging deficiency in service on their part in not settling their claim. Hence this case filed before the District Forum alleging mental agony and financial loss and praying for appropriate relief. 4. In the written version, the L.I.C. have admitted that the insurance policy under the Salary Saving Scheme commenced from 28.10.1990. Mr. Barik asserts that outstanding premium instalments must be paid upto date for clearing the assured amount. As such the nominee is not entitled to get the assured amount and there is no deficiency in service on their part.

THE LIC Forum after considering the case of the parties, came to the conclusion that there was deficiency in service on the part of the concerned B.D.O. (Govt. of Orissa) and allowed the complaint directing the authority to pay the assured amount of Rs. 21,500/-, 12% interest from 24.9.1991 from the date or receipt of the legal notice till the realisation of amount and cost of litigation worth of Rs. 250/- respectively and direct to comply within thirty days from the receipt of the order.

Aggrieved against the order of the learned District Forum the appellant (B.D.O.) has come in appeal and has challenged the correctness of the order passed by the District Forum.

Heard Mr. Barik the learned Counsel for the L.I.C. of India and A.S.C. the learned Counsel on behalf of the authority and both of them advanced extensive arguments touching the points both on facts as well as on law. After hearing both of them and going through the various decisions cited before us, we dispose off the matter in the following manner.

It is admitted by both of them that the policy No. 9812006 was for an assured amount of Rs. 21,500/- and this was under a Monthly Salary Savings Scheme and the policy commenced from 28.10.1990 and 1st premium for Rs. 99/- was paid on the date indicated above.

In respect of this policy, the learned Counsel on behalf of the O.P. (L.I.C.) admitted to have received the initial premium for Rs. 99/- dated 28.10.1990 but since according to the L.I.C. there was no payment of premium thereafter, the policy stood lapsed and, therefore, nothing was payable under the said policy. THE learned Counsel of L.I.C. cast blame on the employer for not remitting the premium in time. In this regard, we are of the view that the L.I.C. should be liable for their inaction because it was their duty and responsibility to send all the relevant documents with special reference to the authorisation letter of the complainant of the employer with all particulars of the policy but there is no explanation as to what steps they took after receiving the initial premium of Rs. 99/- directly from the party. We, therefore, do not find an fault either with the policy holder or the employer. THE L.I.C.I. should have chosen as to which method of payment of premium will suit it. If it agrees that the employer should pay the premium then it cannot ask the insured to pay the premium. So the Insurance Company cannot escape from the consequence of their inaction which it is liable to bear under the terms of the policy agreement and the agency which has been created by it.

THE employer is an agent of the L.I.C. as has been held by this Commission as well as by the Hon''ble Supreme Court in the case of Delhi Electric Supply Undertaking v. Basanti Devi & Anr., III (1999) CPJ 15 (SC)=VIII (1999) SLT 279=AIR 2000 SC page 43. THE Hon''ble Supreme Court after considering the Salary Saving Scheme of the L.I.C.I. held that so far as an employee is concerned an employer act as agent of the L.I.C.I. to collect the premium on behalf of the employee and then remit it to L.I.C. It was further held by the Hon''ble Supreme Court, the L.I.C.I. while accepts the proposal on receipt of an authorisation from the employee assumed the role of an agent for and on behalf of the L.I.C.I. that the employer is to deduct the premium in relation to the employee, there the employee acts as an agent of the L.I.C.I. THE Hon''ble Supreme Court after interpretation of the law came to the conclusion that as the employer was an agent of the Insurance Company, the payment of premium will be deemed to have been made to the L.I.C.I. even if the employee fails to remit the same in time. THE Hon''ble Supreme Court, therefore, directed the L.I.C.I. to pay the benefits of the insurance policy. Thus, in view of what has been laid down by the Hon''ble Supreme Court the employer is an agent of the L.I.C.I. and if an agent has made any delay due to even and unavoidable circumstances in sending the premium in time even then the liability of the L.I.C.I. will not cease and it will be held responsible for the amount under the policy. Thus, the deficiency in rendering service by the L.I.C.I. is proved both on facts as well as on law.

THErefore, we are of the view that the entire procedure adopted by the learned District Forum in disposing the instant case is contrary to the law laid down in the case of Basanti Devi. Hence the final order passed against the appellants and others cannot be sustained. Hence we allow the appeal and set aside the order of the District Forum.

In the result, we direct the Life Insurance Corporation of India to pay the assured amount of Rs. 21,500/- with 100% interest from 24.9.1991 till the realisation of amount. No cost. With this modification, appeal is disposed of.

Appeal allowed.