COL RAJEEV BHATNAGAR vs MORADABAD DEVELOPMENT AUTHORITY

-THIS is an appeal by the Deputy Director (PLI), office of Chief Post Master General, Punjab Circle against the order of the District Forum dated 24. 8. 2006 by which the complaint of the complainant was allowed in the following terms: "10. We have gone through the evidence and hearing the Counsel for the parties. According to affidavit Ex. CP-1 filed by O. P. in which it is admitted that deceased had deposited payment of premium through pay recovery. This proves that there is a deficiency of sub-office and head-office of the respondent party. The O. P. had been intimated about the deduction of pay through office, then was responsibility of the respondent to make the deductions and send the same to the insurance office.

Therefore, due to deficiency in service and not providing of proper service on the part of the respondent the insured/deceased has suffered the benefit of the policy and for this serious lapse in the present complaint. There, is a deficiency of service on the part of the opposite party. As such, the present complaint is allowed. Complainant is entitled for full amount of the insurance i. e. , Rs. 30,000 in all. Parties are left to bear their own costs. Compliance of the order be made within one month from the copy of receipt of this order. Copies of the order be sent to the parties, free of costs, under rules. File be consigned to the record room. "

BRIEF facts are that Charna Ram complainant''s husband was working as a postman in the Department of Post and posted at Village Shankar Post Office, Tehsil Nakodar, Distt. Jalandhar. He had taken a Postal Life Insurance Policy bearing No. 30584/p dated 19. 8. 1996 in the sum of Rs. 30,000. Complainant''s husband died on 10. 1. 2004. Complainant filed a complaint before the Department dealing with the Postal Life Insurance to get the amount as envisaged by the policy. The claim was not entertained by the Deparment inasmuch as according to the Department, the policy stood lapsed as after the 1st premium, no further premium was paid by the insured through the employer towards the monthly premium which was Rs. 197 per month. Thereafter the complaint was filed, which has been allowed as aforesaid. Hence, the present appeal.

The whole controversy revolves around one fact i. e. , whether it was the duty of the Department to send the premium after deducting the same from the pay of the employee to the Department dealing with the Postal Life Insurane or it was the duty of the insured to pay the premium.

LEARNED Counsel for the appellant has referred to Rule 28 of the Post Office Insurance Fund which envisages that ultimate responsibility is of the insured to pay the premium. Rule 28 of the Post Office Insurance Fund is in the following terms: "28. The first premium paid on any date shall represent the premium for that calendar month. This first premium must always be paid in cash by the insured person and the date and amount of such payment should be reported by him to the Postmaster General. Subsequent premia payable monthly, will be recovered as far as possible by deduction from the pay of the insured person. If the recovery is to be made by deduction from pay, the insured person is responsible that the amount of the premium, which is due on the first day of each month, shall be deducted from his pay for the preceding month e. g. the premium due for June will be deducted from the insured Person''s Pay for May, which is drawn on the last working day of May. If the premium is to be paid in cash the insured person must pay the amount at the post office selected by him on or before the 31st of the month for which premium is due and obtain the Postmaster''s receipt for it in his premium receipt-book. Payment of premia by insured persons who have quitted the service of the Government is governed by Rule 36. "

The appellant''s Counsel also referred to a letter dated 19. 8. 1996, which was addressed to the complainant''s husband (insured) when the proposal to get the policy was accepted. In that letter, it was mentioned as under: "3. As you have desired to pay the further premium through pay bill, we have requested your PAO/ddo to commence deduction of premium from your pay of 9/96 payable on or after 30. 9. 1996. In the event of delay on the part of your PAO/ddo in commencing deduction from your pay please deposit your monthly premium at the Post Office on the authority of this letter. Your monthly premium rate is Rs. 197. "

LEARNED Counsel further referred to a condition in the policy, issued to the insured, which reads as under: "now it is hereby declared that if the insured shall pay to the Director-General of posts or the officer for the time being performing his functions or any other officer duly authorised by the President of India in this behalf, the subsequent monthly premia as stipulated for in the said schedule or until his death, whichever shall first occur, the President of India shall be subject and liable to pay the sum mentioned in the said schedule together with bonus, if any, declared by the President of India to the insured or his assigns as early as possible after the insured has attained the age specified in the said Schedule or if he shall die without receiving payment, unto his Executors, Administrators or Assigns as early as possible after proof of death of the insured and title of the claimant, to the satisfaction of the Director-General of Posts or the officer for the time being performing his functions or any other officer duly authorised by the President of India in this behalf as aforesaid. "

It is the case of the appellant that initial 1st premium was paid but no further premium was paid. On the other hand learned Counsel for the complainant/respondent submitted that Rule 28 (supra) as well as the condition in the policy as also the communication to the complainant dated 19. 8. 1996 should be read in a manner that it was the sole duty of the employer to deduct the premium from the salary of the insured and credit/forward it to the accounts of the Postal Life Insurance. He also cited two judgments of the Apex Court i. e. , Chairman, Life Insurance Corpn. and Ors. v. Rajiv Kumar Bhasker, V (2005) SLT 567=iii (2005) CLT 144 (SC)=air 2005 SC 3087 and also Delhi Electric Supply Undertaking v. Basanti Devi and Anr. , III (1999) CPJ 15 (SC)=viii (1999) SLT 279=1999 (4) SCT 417, to contend that the employer in such cases is the agent of the insurer and if there is any default on the part of the agent, the insurer cannot take advantage of that; rather he is responsible for the default on the part of the agent. Learned Counsel for the respondent also referred to a letter dated 10. 5. 2005 from the Department in which it is mentioned that no recovery had been made by the official from the pay of the employee i. e. , complainant''s husband from January 1998 to December 2000, April 2001 to September 2001, January 2002 to July 2002 and January 2003 to January 2004. From this learned Counsel argued that for the rest of the period the deductions were made. One thing is very clear that for quite some period the deductions were not made which have been mentioned in this letter and even if we assume that some deductions were made for the rest of the period, there is nothing on the record whether the complainant''s husband took any steps to see that for the period deductions were made from the salary the same was forwarded or remitted to the Postal Life Insurance party. For quite a long period no deductions were made.

WE have carefully considered the arguments of both sides. The terms of the Rule 28 as also the communication dated 19. 8. 2006 make it very clear that in the event of non-deduction of the premium from the salary of the employee or non-forwarding the same to the Postal Life Insurance Department, it is the duty of the insured to oversee it and then make the payment of the premium in time. The rule and the communication takes care of the default which may arise in deduction of the salary from the employee''s pay by the employer or sending the same to the concerned department towards the premium. The care taken is that in such an eventuality, it is the duty of the insured who has to see that the payment of the premium is duly made within the stipulated period. Similar is the position in the terms of the policy which have already been reproduced above. In Basanti Devi''s case (supra) as well as Rajiv Kumar Bhasker''s case (supra), there was no such rule as has been noticed in this case nor the terms in the policy as well as in the acceptance letter were there in those cases. That was peculiar type of policy where the Life Insurance Coporation was approaching ''d. E. S. U. '' to get its employees insured with the Insurance Company on an understanding that the premium should be paid by ''d. E. S. U. '' on behalf of the employees by deducting the same from their salary. It was in these circumstances that "d. E. S. U. " was held to be the agent of the Life Insurance Corporation and it was its duty to deduct the premium from the employees, pay and forward the same to the Life Insurance Corporation and if it failed to do so it was held that the insured cannot be made to suffer.

THOUGH we have all the sympathy for the complainant as she has lost her husband and on the other hand the amount is also not being paid by the department, we are helpless in the matter as we are governed by the terms of the policy as well as rules and regulations of the Department regarding the policy, which have already been noticed above. In this view of the matter we are of the opinion that the District Forum was not right in its approach. Consequently, this appeal is allowed and the judgment and order dated 24. 8. 2006 of the District Forum is set aside and the complaint stands dismissed. We make no order as to costs.

However, the appellant Department will check up on the basis of the letter dated 1. 1. 2004 as to whether any deductions from the salary of the complainant''s husband was made by the employer, though may not have been forwarded to the Postal Life Insurance and if these deductions have been made then atleast that much amount, if not paid to the next of the kin, should be paid.

THE amount deposited by the appellant while filing the appeal may be refunded to it (appellant) by way of crossed cheque/demand draft after 45 days. Appeal allowed.