Life Insurance Corporation of India vs B.S.P.JYOTHI

WE heard the learned Counsel for the appellant and carefully perused the order of the District Forum. WE do not find any ground for interfering with the order of the Nellore District Forum in CD No. 278/1998 dated 20.8.1999 questioned by the opposite party in that C.D. The complainant is the respondent in this appeal.

IT is not in dispute that the deceased husband of the complainant, one Sri Jonnalagadda James, had taken a double accident benefit policy bearing No. 650299021 from the appellant for Rs. 1,00,000/- under the Salary Saving Scheme. At the time of the proposal itself the premium for the first two months was collected from him and a letter of authorisation was also taken from him (marked as Ex. B-2). Sri Jonnalagadda James died in an accident on 20.7.1997 and that was not disputed by the appellant. The complainant was the nominee under the policy and after the death of her husband she claimed the policy amount from the appellant. The appellant repudiated the claim on the basis that the employer i.e. Mandal Development Officer (MDO), Jaladanki in Nellore District, did not pay the premium payable on 20.4.1997, 20.5.1997 and 20.6.1997 and therefore the policy was in a lapsed condition when the insured died. According to the appellant they sent on 7.4.1997 by registered post a letter of authorisation with a request to deduct the premium amounts from the monthly salaries payable to the insured and to remit the same to the LIC, but the M.D.O. did not send the premium amounts. Considering all aspects of the matter, the District Forum allowed the complaint following the decisions of the National Commission in The General Manager, Hotel Kanishka v. Smt. Saroj Attal & Anr., III (1997) CPJ 72 (NC)=1997 (2) CPR 138, and the decision of this State Commission in A. Subba Rao v. Branch Manager, LIC, Nampally Hyderabad & Anr., 1998 ALD (CONSUMER) 299, and holding as follows : "In our case the learned Counsel for the respondent argued that on 7.4.1997 the respondent addressed a letter to the employer intimating the authorisation letter given by the life assured but the employer failed to deduct the premium from the salary of the insured. Ex. B3 is a letter, dated 5.6.1998 written by the respondent to the Mandal Development Officer to the effect that they had sent by registered post on 7.4.1997 the authorisation letter of the policy holder with covering letter, dated 7.4.1997 but the premia premium was not remitted as per the authorisation letter. But the opposite party has (not) filed the letter, dated 7.4.1997 or proof to show that the respondent sent such a letter to the employer and that the employer received the notice and acknowledged it. Therefore there is no proof placed by the opposite party to show that it had intimated to the employer about the authorisation given by the policy holder and requesting to send the premium deducting from the salary of the policy holder. Hence there is deficiency of service on the part of the opposite party."

In that view of the matter the District Forum directed the appellant to pay Rs. 2,00,000/- together with interest @ 12% from 25.6.1998 the date of repudiation, till the date of payment and also costs of Rs. 1,000/- within three months from the date of receipt of the copy of the order.

The learned Counsel for the appellant tried to pursuade us that the facts of the present case are not covered by the decision of this Commission in A. Subba Rao v. Branch Manager, LIC Nampally, Hyd. & Anr., 1998 ALD (CONSUMER) 299, and the decision of the National Commission in Union of India, Through Deputy Chief Engineer v. Smt. Rajeshwari, because, according to him, in the present case the appellant sent the letter of authorisation alongwith a covering letter by registered post on 7.4.1997 to the M.D.O. inspite of which the M.D.O. did not take steps to pay the monthly premium amounts from April, 1997. But, as rightly observed by the District Forum, the appellant did not state that they received acknowledgement from the M.D.O. or anything to establish that the M.D.O. received the authorisation letter. We may also further point out that, when the authorisation letter was received in February, 1997 itself, there was no explanation as to why there was delay in sending it to the M.D.O. till 7.4.1997. Even if it was sent on 7.4.1997 by registered post, it could have been easily envisaged that the M.D.O. would have received the same only after about a fortnight and thereafter it would not have been possible for him to deduct the monthly premium from the salary payable to the insured on 1.4.1997 in order to remit the premium due on 20.4.1997, and that in the result the policy would have lapsed for the non-payment of the premium for April, 1997 because the grace period available was only 15 days i.e. upto 5.5.1997 and it would have continued in a lapsed condition because renewal of a lapsed policy would take some time. Under the circumstances, by the time Sri Jonnalagadda James died on 20.7.1997, the policy would have been in a lapsed condition any-way because of the delay till 7.4.1997 in sending the letter of authorisation by registered post, even assuming that the M.D.O. received the same. Because of this lapse, deficiency in service on the part of the appellant is clearly made out and established and therefore the principle laid down by the National Commission in Union of India, Through Deputy Chief Engineer v. Smt. Rajeshwari, applies on all fours to the facts of the present case. We, therefore, do not find any ground for interfering with the order of the District Forum except observing that the L.I.C. would be entitled to deduct the premia for the three months April, May and June, 1997 without collecting any interest thereon. We are making this observation because it does not appear that the premia amounts were deducted from the salaries of Sri Jonnalagadda James for the months of April, 1997 to June, 1997. Subject to the above this appeal is dismissed. Appeal dismissed.