Chief Electoral Officer vs Chinta Devi @ China Devi And Ors

Anil Kumar Upadhyay, J

The instant Letters Patent appeal has been filed by the Chief Electoral Officer, Bihar, Patna against the judgment and order dated 17.5.2011 passed in

CWJC No. 1781 of 2011 filed by one Chinta Devi @ China devi for quashing the letter contained in File No. E.L.S. 14/2008-11739 dated 20.11.2009

(Annexure-13 of the writ application) whereby the Assistant Chief Electoral Officer, Bihar-cum- Under Secretary, Government of Bihar held out that

the compensation amount to the husband of the writ petitioner is not payable in view of the provisions of the agreement entered into with the National

Insurance company. The writ petitioner, accordingly, prayed for follow up direction to the respondents to pay compensation amount of Rs. 10,00,000/-

as per the Insurance Policy to the writ petitioner as her husband died while performing election duty on 26.5.2000 at booth No., 67, Primary School,

Mathura Sultanpur, P.S. Bidupur in the district of Vaishali.

The writ court after hearing the parties and relying upon the judgment in the case of Smt. Lilwanti Devi Vs. The state of Bihar & Ors.: 1998 (2) PLJR

692 held that the widow is entitled to payment of compensation but in view of the supplementary counter affidavit filed by respondent No. 9, the Chief

Electoral Officer whereby he has admitted the liability the Writ Court directed the respondent No. 8, the District Magistrate and Respondent No.9,

Chief Electoral Officer, Bihar together to ensure that the insurance amount as contained in the supplementary policy is paid to the writ petitioner for

the death of her husband on election duty. In fact, the writ petitioner was paid the insurance amount of Rs. 10 lacs during the pendency of the present

Letters Patent Appeal.

The appellant, who was respondent no. 9, has filed the present Letters Patent Appeal against the judgment of the writ court dated 17.5.2011 on the

ground that the liability to pay insurance amount lies with the Insurance Company as the death of the husband of the writ petitioner occurred during

the currency of the insurance policy and during the course of election duty on 26.5.2000. The appellant has not disputed the entitlement of the writ

petitioner for payment of insurance amount of Rs. 10 lacs on account of death of her husband during the election duty but the only issue raised in the

present Letters Patent Appeal under Clause 10 of the Letters Patent of the Patna High Court Rules is that the writ court has committed error in

directing the respondent Nos. 8 and 9 of the writ petition, namely, the District Magistrate, Vaishali and the Chief Electoral Officer, Bihar together to

ensure payment of entire amount instead of directing the Insurance Company and erroneously relied upon the judgment in the case of Kamlawati Devi

Vs. State of Bihar & Ors.: 2002 (3) PLJR 450.

We have heard counsel appearing on behalf of the Election Commission as well as the counsel appearing on behalf of the State and Shri Ashok

Priyadarshi, learned counsel appearing for the Insurance Company.

Mr. Priyadarshi placing reliance in the case of Lilwanti Devi (supra) submitted that the Insurance Company is not liable to pay the insurance amount

as the Insurance claim was not made instantly. However, he has not disputed the fact that the insurance policy was taken by the State Government

during the election in 2000 from 9.2.2000 to 8.3.2000 which was subsequently extended from 24.5.2000 to 23.6.2000. He has also not disputed the fact

that the death of the husband of the writ petitioner occurred during the course of election duty on 26.5.2000, i.e. during the currency of the insurance

coverage. The only point he has raised for shifting the liability to pay the insurance amount on the State Election Officer on the ground that the

insurance claim was not made instantly and as such, though the husband of the writ petitioner was covered under the insurance policy and the

insurance policy was effective upto 23.6.2000 but the liability to pay the insurance amount by the Insurance Company ceased and submitted that the

writ court has committed no illegality in relying upon the judgment in the case of Lilwanti Devi (supra) and fixing accountability on the State Election

Commission and the District Magistrate, Vaishali for payment of the insurance amount. In the case relied upon by the learned Single Judge and the

Insurance Company i.e., Lilwanti Devi (supra) the foundational fact was quite different.

In Lilwanti Devi’s case (supra) the writ court held out that the policy covering the date of personnel accident has expired and as such, no direction

can be given for payment after expiry of the time, whereas the fact of the instant case is entirely different. In the instant case it is undisputed rather

admitted fact that the insurance policy was in existence on the date when the husband of the writ petitioner died during the course of election duty.

Mr. Priyadarshi has not disputed either the factum of death during the course of election or the factum of coverage of insurance up to 23.6.2000. in

view of the admitted factual position of existence or continuance of the Insurance policy upto 24.5.2000 to 23.6.2000 and the death during the said

period of policy makes the case of Lilwanti Devi (supra) inapplicable in the present fact scenario. The reliance placed by Mr. Priyadarshi is totally

inapplicable in the instant case.

Counsel appearing on behalf of the appellant, Mr. Siddharth Prasad and Mr. Shashi Shekhar Prasad placed reliance on the judgment in the case of

Sushila Devi Vs. The State of Bihar & Ors.: 2005(1) BLJR 67 7wherein the judgment reported in 1998 (2) PLJR 692 (Lilwanti Devi Vs. The State of

Bihar & Ors.) was distinguished on fact and considering the factual and legal position it has been held out that the Insurance Company is liable to pay

the entire amount and cannot deny the same on account of delay. Paras 12 to 21 of the judgment are relevant for deciding the instant case which are

quoted below:

On behalf of the petitioner the alternative claim made against the police authorities was not given up in the slightest degree but the counsel for the

petitioner contended that notwithstanding the delay by the police authorities in giving information it was still the liability of the Insurance Company to

make payment of the insured amount. In support of the contention, learned counsel relied upon a Supreme Court decision in Delhi Electric Supply

Undertaking v. Basanti Devi and Anr., : (1999) 8 SCC 229. Mr. Ajay Behari, SC X appearing for the police authorities also took the same stand,

based upon the decision in the case of Basanti Devi. The counsel for the petitioner further pointed out that the Supreme Court's decision in Basanti

Devi was followed by this court first by a learned single judge and then in appeal by a Division Bench for holding the insurer and not the employer as

responsible for payment of the insured amount in Rajiv Kumar Bhaskar v. The Chairman, Life Insurance Corporation of India and Ors. : 2001 (4)

PLJR 180 and (then in appeal) in the Chairman, Life Insurance Corporation of India and Ors. v. Rajeev Kumar Bhaskar : 2001 (4) PLJR 581.

In the light of the decisions relied upon by the parties, it is to be examined whether the insurer is still to be held liable to make payment of the

insured amount, notwithstanding the delay in giving information with regard to the death of the insured or whether the insurer can legitimately

repudiate the claim and in that event liability to make payment of an amount equal to the insured amount may fastened upon the authorities responsible

for the delay in giving information to the insurer.

Mr. Priyadarshi submitted that the case of Smt. Lilawanti Devi arose in similar circumstances and the order of the learned single judge in that case

was conclusive of the issue. The order passed in Smt. Lilawanti Devi is very brief and I find that it does not address all the issues arising in the case.

Moreover, it appears that the case of Smt. Lilawanti Devi was fundamentally different from the facts of this case. From the order passed in the case

it appears that the husband of Lilawanti Devi died on 25.3.1993, as a result of sustaining injuries in an encounter with criminals. It is seen above that

the insurance policy was initially for the period 1.3.1992 to 28.2.1993 and then it was renewed from 22.4.1993 to 21.4.1994. There was, thus, a gap

from 1.3.1993 to 21.4.1993 when there was no insurance cover and the death of the husband of Lilawanti Devi had taken place during that gap. It

was under that circumstances that the order observed as follows:

This Court is of view that it cannot direct the Insurance Company to make payment after expiry of the policy.

In that view of the matter, this court directs the appropriate respondents authority of the State Government to examine the claim of the petitioner in

respect of insurance amount. The petitioner is directed to make a representation along with the relevant records to the respondent No. 6. If

respondent No. 6 finds that the petitioner has been deprived of from the insurance claim as a result of laches on the part of the officers of the State

Government, he will make order for payment of insurance amount to the petitioner. .....

In this case, the death of Hare Ram San indisputably took place when the insurance policy was alive and subsisting and, therefore, there is no

question of his claim arising after the expiry of the policy. The order passed in Smt. Lilawanti Devi, therefore, has no application to the facts of this

case.

The other decision relied upon by Mr. Priyadarshi in National Insurance Co. Ltd. has also no application to the facts of this case. That decision

examined the effect of the stipulation in the insurance policy that unless an action was instituted within the specified period after the repudiation of the

claim by the insurer, all benefits under the policy would cease and would be deemed to have been abandoned. That relates to para 4 of condition No. 8

of the present policy while the present case relates to the alleged violation of condition No. 1.

Coming now to the decision in Basanti Devi, relied upon by the petitioner and the State; in that decision an employee of the Delhi Electric Supply

Undertaking (DESU) took an insurance policy from LIC under its Salary Savings Scheme. He paid premium for two months. The scheme provided

that the premium for the following months would be paid, not by him directly, but by DESU by making deductions from his monthly salary. The

premium for the 3rd month was paid as per the scheme by DESU by making deduction from his salary. For the next two months, though deductions

were made from his salary, the DESU did not remit the premium amounts to the Insurance Company. At that stage, the employee died. The claim for

the insured amount made by his widow was rejected by the Insurance Company on the ground that the policy had lapsed for non-payment of

premium. The claimant took the matter to the State Commission, constituted under the Consumer Protection Act. The Commission upheld and

accepted the plea of LIC but held DESU responsible for making payment to the widow of the deceased employee on the ground that it was

responsible of the lapse of the policy. In appeal, the National Commission affirmed the order passed by the State Commission. The Supreme Court,

however, took the view that in the scheme of things DESU was in the position of an agent of LIC and hence, the liability to make payment of the

insured amount still lay with the insurer.

In that decision, the Supreme Court examined in detail the nature of the policy as appearing from the brouchure on the scheme. The court also

noticed specimen of the letter addressed by the insurer to the employer and the specimen of the letter that the employer was to write in reply to the

insurer. It is significant to note that in the letter meant to be written by the employer in reply to the letter from the LIC it was specifically stated as

follows:

In all transactions made by us pertaining to this Scheme and any policies issued by you thereunder, we shall act as the agent of our employees and

not as your agent for any purpose.

Notwithstanding the above declaration, the Supreme Court held that the employer was an agent of the LIC as defined under Section 182 of the

Contract Act though not within the meaning of the Regulations framed under the Insurance Corporation Act, 1956. The finding that the employer was

an agent of the insurer is based primarily on the consideration that once the policy was taken by the employee, the employer assumed the responsibility

of deducting the premium amount from his monthly salary and remitting it to the Corporation. The employer, this, got the implied authority to collect the

premium amount on behalf of the Corporation. The relevant passage from paras 11 & 12 of the decision is as follows:-

......... .DESU is certainly not an insurance agent within the meaning of the aforesaid Insurance Act and the regulations but DESU is certainly an

agent as defined in Section 182 of the Contract Act. The mode of collection of premium has been indicated in the Scheme itself and the employer has

been assigned the role of collecting premium and remitting the same to LIC. As far as the employee as such is concerned, the employer will be an

agent of LIC. It is a matter of common knowledge that insurance companies employ agents. When there is no insurance agent as defined in the

regulations and the Insurance Act, the general principles of the law of agency as contained in the Contract Act are to be applied.

Agent in Section 182 means a person employed to do any act for another, or to represent another in dealings with third persons and the person for

whom such act is done, or who is so represented, is called the principal. Under Section 185 no consideration is necessary to create an agency. As far

as Bhim Singh is concerned, there was no obligation cast on him to pay premium direct to LIC. Under the agreement between LIC and DESU,

premium was payable to DESU who was to deduct every month from the salary of Bhim Singh and to transmit the same to LIC. DESU had,

therefore, implied authority to collect premium from Bhim Singh on behalf of LIC. There was, thus, valid payment of premium by Bhim Singh. The

authority of DESU to collect premium on behalf of LIC is implied. In any case, DESU had ostensible authority to collect premium from Bhim Singh on

behalf of LIC. So far as Bhim Singh is concerned DESU was an agent of LIC to collect premium on its behalf.

This court followed the decision in Basanti Devi in the case of Rajiv Kumar Bhaskar v. The Chairman, Life Insurance Corporation of India and

Ors., and held LIC liable to make payment even though according to the Corporation the policy of the deceased employee had lapsed due to non-

payment of the premium amount for several months. In the case of Rajiv Kumar Bhaskar, the deceased was a teacher in one of the colleges of

Magadh University. The payment of monthly salary to him was in default for several months. A distinction was, therefore, sought to be made out that

in the case of Basanti Devi before the Supreme Court, though deductions were made from the salary of the employee, the employer defaulted in

remitting the deducted amounts of premium to the Corporation and, therefore, the concerned employee had no means to know that his monthly

premium was not deposited in time but in the case of Rajiv Kumar Bhaskar, no salary was paid to him at all for several months and hence, it was well

known to him that the monthly premium of his policy was not being sent to the Corporation and in that situation the liability for payment of a lapsed

policy would not lie with the Corporation. This Court rejected the submission holding that as long as the employer was in the position of an agent of the

insurer, the liability to make payment would continue with the insurer, the principal.

The reasons for which the employer was held to be in the position of an agent are fully present in the case in hand. I am not unconscious that the

case of Basanti Devi arose from a life Insurance Policy under the Salary Savings Scheme floated by the Life Insurance Corporation of India and the

present case arises from Group Personal Accident Policy of the Oriental Insurance Co. Ltd. But the basic reason and the ground on which the finding

in Basanti Devi is based remain the same. In Basanti Devi, under the Salary Savings Scheme the employer assumed the responsibility of deducting the

premium amount from the monthly salary of the employee and remitting it to the Insurance Company. In the present case, the amount of net premium

was raised by making deductions from the salaries of police personnel and was paid to the Insurance Company directly by the head-quarter. In

Basanti Devi, the employee had taken out the policy and he had paid the premium for the initial two months. In the present case, the individual at no

stage came into any contact with the insurer. Even the policy on behalf of the individual police personnel was taken under the signature of the Director

General and Inspector General of Police or his nominee. An individual employee had no option in the matter and it was not open to him to opt out of

the policy. Under the rules, he was prohibited from making any correspondence directly with the Insurance Company and the claim and all matter

appertaining thereto were to be routed through the police head-quarter. The payment of the insured amount was also received not by the individual

claimant directly but by the police head-quarter and it was disbursed to the individual through the head-quarter. It is, thus, evident that the reasons for

holding the police head-quarter as the agent of the Insurance Company are available in the present case with greater force than in the case of Basanti

Devi.â€​

Mr. Ashok Priyadarshi as second limb of argument has submitted that in view of the letter dated 10.2.2000 of the Chief Election Officer, Bihar the

Insurance Company is not liable to make payment of the entire amount as information with regard to the death of the husband of the writ petitioner

was not furnished within time.

We have gone through the contents of letter dated 10.2.2000 which was placed by the Insurance Company as Annexure-B to the counter affidavit,

for ready reference the letter dated 10.2.2000 is reproduced hereinbelow:

GOVERNMENT OF BIHAR

( )

Cabinet (Election) Department

7, , 800015

7, Mangles Road, Patna â€" 800015

@Date â€" 10.02.2000

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â€" 2000

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9 , 2000 8

2.50

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- 220979, 223103 0 - 220973

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From perusal of Annexure-B, the letter dated 10.2.2000 no reasonable man can read any specific time limit for raising the insurance claim and the

claim of the Insurance Company that its liability to pay insured amount stands ceased in the event of non-raising of claim within the time limit as the

letter does not specify any time limit for raising the claim.

We have given our anxious consideration to the judgment of the writ court and also letter as contained in annexure-B on which heavy reliance is

placed by counsel for the Insurance Company, we are of the considered view that Insurance Company was obliged to make payment of the entire

amount after death of any person employed in connection with election duty if death occurred during the currency or course of election and the

insurance policy covers the period of election.

At the cost of repetition we state that the death of the husband of the writ petitioner occurred during the course of election and the insurance policy

was in existence at the time when the husband of the writ petitioner died and as such, it is pure and exclusive liability of the Insurance Company to

pay the entire amount and the said liability of paying the insured amount cannot be disowned by the Insurance Company on the pretext of not raising

the said claim at once. It is to be borne in mind that the Insurance Company as insurer is under obligation to honour the promise of paying the insured

amount if the accident took place during the currency of the insurance policy and such liability of the Insurance Company cannot be disowned on the

ground of delay in raising the claim.

Accordingly, we allow this appeal and direct the Insurance Company to pay and reimburse the entire amount already paid to the writ petitioner by the

appellant in compliance of the direction of the writ court within a period of one month.

The appeal is allowed to the extent indicated above.