Dheeraj Kumar Verma and Others vs State of Bihar and Others

Mridula Mishra, J.—Petitioners are the legal heirs of late Hare Krishna Lal, who was accountant in Saharsa Municipality and died in harness on 1.3.1999. This application has been filed by the petitioners for a direction to respondent Nos. 2 and 3 to make payment of retiral dues of their late father relating to earned leave, gratuity, provident fund, arrears of bonus and increment. Further prayer is for a direction to Life Insurance Corporation of India, respondent No. 4, to make payment of group insurance with interest.

Petitioner No. 2, son of Hare Krishna Lal had been appointed on compassionate ground in Saharsa Municipality after the death of his father. He made the grievances for the payment of death-cum-retiral dues of his father. No action was taken by the Special Officer, Saharsa Municipality. As such, he approached the District Magistrate, Saharsa, respondent No. 2, for the payment of retrial dues and in turn the District Magistrate, Saharsa, by his letter dated 24.8.2000 directed the Special Officer to take necessary steps for the redressal of his grievances. Even then no payment was made by respondent No. 3. Since money was urgently needed for the marriage of petitioner No. 3, the present application has been filed by petitioners. Life Insurance Corporation of India by letter dated 15.2.2000 has communicated that only premium amount of Rs. 8,000 is payable for which a cheque has already been issued to Saharsa Municipality. Life Insurance Corporation of India has taken the plea that policy lapsed in the year 1997 itself on account of non-payment of premium in due time. Petitioner''s stand is Life Insurance Corporation as well as Municipality have adopted an arbitrary approach by withholding legal dues of their father payable to them.

Respondent No. 3 has taken a stand that the G.P.F. with interest and gratuity were offered to the petitioner No. 2 who refused to accept it taking the plea of pendency of this writ application. The cheque sent by Life Insurance Corporation of India amounting to Rs. 8,000 was also offered but it was refused by petitioner No. 2. It has also been stated by respondent No. 3 that petitioners'' father had taken loan from his provident fund account as per audit report and after deducting that amount, the remaining amount was offered to petitioner No. 2 but the same was refused. Respondent No. 3 is ready to offer that amount to the petitioner.

The petitioners'' Counsel vehemently objected to the statement of respondent No. 3 that Rs. 78,700 was outstanding dues against the father of the petitioners. It has been submitted that no notice was issued to the petitioners but in reaction to the show-cause issued by this Court in the writ application, respondent No. 3 has taken this stand that Rs. 78,700 is the outstanding dues against the father of the petitioner. It has also been submitted that no details of the amount taken by their father have been furnished to them.

Without going into dispute since the respondent is ready to make payment of the admitted dues to the petitioners after deducting the amount which, according to the audit report, is liable to be deducted, the petitioners are directed to receive the cheque offered by the respondent No. 3. Petitioners, if they desire may represent before respondent No. 3 for payment of remaining dues after they get the statement of account furnished by respondent No. 3 regarding the amount taken by their father as loan from G.P.F.

So far entitlement of the petitioners group insurance is concerned, respondent No. 4 has filed counter-affidavit and supplementary, counter-affidavit stating that the petitioners are not entitled to receive any group insurance amount. A cheque equivalent to premium amount has already been issued in favour of the petitioner. The stand of the respondent No. 4 is that Corporation is not liable to pay the group insurance amount as master policy under Group Savings Linked Insurance Scheme (hereinafter referred to as ''GSLI Scheme'') lapsed in January 1997. Saharsa Municipality was asked to make up-to-date payment with interest, with a declaration of good health of its employees, as well as year-wise fresh list showing change in category of the employment. This was not complied and as per terms and conditions governing the payment of ''GSLI Scheme'', no amount is payable to employees under the Scheme. In case of a lapsed policy, Corporation has neither contractual nor statutory liability in making payment of insurance amount to the assured. As such, the assured is only entitled to the surrender value for which already a cheque has been issued by Life Insurance Corporation.

Mr. Umesh Prasad Singh, learned Counsel appearing for Life Insurance Corporation of India, has placed reliance, on two decisions in order to show that Salary Savings Scheme and the Group Insurance Scheme are totally two different schemes floated by Life Insurance Corporation of India and any order passed in a case covered by Salary Savings Scheme will have no bearing on claim made under Group Insurance Scheme. The decisions are Delhi Electric Supply Undertaking v. BasantiDevi 3 (1999) C.P.J. 15 (S.C.) : 1999 C.C.J. 1465 (S.C.) and Chairman, L.I.C. of India and Others Vs. Rajeev Kumar Bhaskar, It has also been submitted that decision in Chameli Khatun Vs. The State of Bihar and Others, is a case under the Group Insurance but that has been challenged before the Supreme Court.

Learned Counsel for Life Insurance Corporation of India in the supplementary (sic)-affidavit has given a comparative chart of both Salary Savings Scheme and Group Savings Linked Scheme. Under the Group Savings Linked Scheme, a master policy is issued in the name of the employer termed as grantee. The policy continues until the employer continues to pay the premium and this is a special feature that although an employee may superannuate, die or new employee may join to the policy, it has no impact on the continuation of the policy. Employee has to authorise the employer to deduct the amount of premium from his salary and the premium amount is paid by the employer through a common cheque. Under this scheme, there is no grace period allowed for the payment of premium. In case of death or retirement of the employees the amount is paid to the employer by L.I.C. for payment to the employee or his nominee. The employee is known as beneficiary under the scheme. In case the beneficiary under the scheme, i.e., the employee does not receive salary in any particular month it is the duty of the employer to advance the premium of that master policy to Life Insurance Corporation of India.

Regarding Salary Savings Scheme it has been stated that under such scheme the employee either individually or with his wife may sign the proposal form for a sum as desired by him. L.I.C. enters into a contract of insurance, with the employee and the benefit, under the insurance is directly payable to the life assured, namely, the employee. The period under the policy may be as desired by the employee which may come to an end after his retirement from service or it may continue if he so desires. Under this scheme, the employee instead of paying the premium to the Corporation directly, just to facilitate the timely payment of premium, may authorise the employer to deduct the amount of premium from his salary every month and remit the amount to the Corporation which is credited to the policy obtained by the employee himself. Even in the case of non-payment of salary by the employer he can pay the premium to the Corporation. The benefit under this policy is an individual benefit to the life assured or the nominee. Under this scheme, there is a grace period of 15 days in the case of monthly and quarterly payment and 30 days in case of half-yearly and yearly payment. The policy comes to an end in case of death of the life assured. Though the argument advanced on behalf of the learned Counsel for L.I.C. is that there are some vital differences in between the two policies, i.e., the policy under Salary Savings Scheme and the policy under Group Savings Linked Insurance Scheme, but I find that under both the schemes the eligibility criteria is vital difference except that under the Salary Savings Scheme the employee can join the scheme along with his wife and also that he may continue the scheme even after his superannuation if he desires so. Except this difference, both the schemes are identical and whatever relief has been given by the Apex Court to the widow of the employee of Delhi Electricity Board can be given to the petitioner in the present writ application. In all the three reported decisions which have been cited by the parties, it has been decided that the employee cannot suffer for the laches on the part of the employer when he is liable to deduct the amount, from the salary of the employee and make payment of premium through cheque since the employer acts as an agent of L.I.C. and no notice of non-payment of premium is given to the employee, L.I.C. is liable to make payment of the insurance amount to the employee. The case of the present petitioner is fully covered by these decisions. It has wrongly been mentioned in the supplementary affidavit that no grace period is allowed under Group Savings Linked Insurance Scheme when in the counter-affidavit it is specifically been stated that Saharsa Municipality was asked to deposit premium along with interest giving full details regarding the condition of health of employees as well as changes in the category of employees under the scheme. This notice was never given to the father of petitioner who was the beneficiary. It indicates that L.I.C. was ready to give grace period to the Saharsa Municipality. On comparison it is found that whatever benefits an employee is entitled under the Salary Savings Scheme, the beneficiaries under the Group Savings Linked Insurance Scheme are also entitled for similar relief.

In the facts and circumstances, this writ application is allowed and L.I.C. is directed to make payment of group insurance amount to the petitioners with interest within a period of 3 months from today. The petitioner shall be entitled to interest at the rate of 12 per cent from the date of the death of the father of the petitioners, till the date of payment.

Writ Application allowed.