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Judgment
THERE is a delay of 85 days in preferring this revision petition beyond the prescribed period of limitation. For the reasons sated in the application for condonation of delay, the delay is condoned.
THE petitioner -insurance company was opposite party No. 2 and respondents No. 1 and 2 herein were opposite party No. 1 and the complainant, respectively, before the District Forum. The State Government of U.P. introduced a "Group Student Safety Insurance and Group Janta Personal Accident Policy" for all regular students of all the government aided/recognized educational institutions for higher education under the control of U.P. Government. Accordingly, the Memorandum of Understanding (MOU) was entered into between the Director, Higher Education, U.P. and the petitioner -National Insurance Co. Limited through its divisional office at Kanpur. As per the MOU, the insurance company was to provide insurance coverage to all regular students and private examinees of all the government aided/recognized educational institutions for higher education under the direct control of U.P. Government. In terms of the MOU, each such institution was to make necessary arrangement wherein each student in the concerned institution was required to deposit an annual premium of Rs. 22 towards Student Accident and Safety Insurance simultaneously with the payment of admission fee in the concerned/ respective collage at the time of his/her admission. The concerned University/College was required to deposit the entire payment so collected during the month, directly with the National Insurance Company Limited by each 15th day of next month.
ADMITTED facts are that one Sharif Ahmed son of the complainant had taken admission in class M.A. Ist Year (Economics) with respondent No. 1 -College in the year 1999 and had deposited his admission fee along with insurance premium of Rs. 22/ -. As ill luck would have it, Sharif Ahmed died on 8.12.1999 in a road accident. Claim of the father of the insured for award of insured sum, was, however, repudiated by the petitioner -company on the ground that as the respondent No. 1 had not deposited the premium with the petitioner -company before the death of the student, the deceased -insured did not stand insured at the time of his death. This made the father of the deceased to file a consumer complaint before the District Forum, which, on appraisal of issues, though did not find deficiency in service with the petitioner -company, made respondent No. 1/College liable to pay the insured sum to the complainant on the ground that the employees of the respondent No. 1/College was at fault in not remitting the amount of premium collected from the deceased -insured to the petitioner -company before the death of the life covered. In appeal that was preferred by the respondent No. 1/College against the order of the District Forum, Uttarakhand State Consumer Disputes Redressal Commission, Dehradun ( in short, ''the State Commission'') held that in this case the premium was received by the respondent No. 1 -College in advance from the deceased -insured at the time of his taking admission on 24.08.1999 and as per the provisions of MOU, the liability of the student was over as soon as he had deposited the premium with the College which gave the insurance cover to such student. The State Commission while putting reliance on the decision of the Apex court in the case of Delhi Electric Supply Undertaking Vs. Basanti Devi and another reported in III, (1999) CPJ 15 (SC), consequently held vide its impugned order dated 22.12.2008 that since the Principal of the respondent No. 1/College was agent of the petitioner -insurance company, the payment made to the Principal of the respondent/college was impliedly made to insurance company and accordingly, directed the insurance company to pay the insured sum at Rs. 1,10,000/ -to the complainant/claimant along with interest @8% per annum.
AGGRIEVED by the aforesaid order of the State Commission, the petitioner -insurance company has approached this Commission by filing the present revision petition challenging the impugned order of the State Commission. We have heard at length the arguments of Mr. Yogesh Malhotra, learned counsel for the petitioner -company and Mr. Jagdeep Kishore, learned counsel for respondent No. 1 and Mr. Anwar Masood, learned counsel appearing for respondent No. 2. Although in its written reply as well as in all submissions made earlier, it was claimed by respondent No. 1/College that the insurance premium of the deceased -insured student, namely, Sharif Ahmed, had been remitted by the respondent -College to the petitioner -insurance company along with premium of other students on 8.10.1999 i.e. before the death of the student on 8.12.1999, during the course of hearing, learned counsel for the respondent No. 1/College specifically admitted before us that there was no proof to support this contention of the respondent No. 1 -College as such under instructions he has given up this plea on behalf of the respondent No. 1 -College.
IN view of the aforesaid clarification given by learned counsel for the respondent No. 1/College, learned counsel for the petitioner -company submitted that since it is no longer under dispute that the respondent No. 1 -College did not remit the fee of the student concerned before his death, in terms of para 6 of the MOU, the petitioner -company was not liable to make the payment of any benefit to the complainant in respect of accidental death of the student. He argued that the words used in para 6 of the MOU are categorical and do not leave any doubt in this regard. Referring to the provisions of this para, he submitted that unless the premium in respect of the concerned student is paid by the educational institution to the insurer within the stipulated time on any ground or for any reason whatsoever, the insurer will not be on risk during such specific period of non -payment of premium in advance. Another contention raised by learned counsel for the petitioner -company was that the decision of the Apex Court in Basanti Devi (supra) will not be applicable to the facts and circumstances of the present case. In any case, he submitted that in Basanti Devi''s case, DESU has not been given a clear chit by the Apex Court but it was made to pay cost of Rs. 25,000/ -for its default in not remitting the premium to the LIC. Learned counsel for the petitioner -company placed reliance on the judgments of the Apex court in the cases of National Insurance Co. Ltd. vs. Seema Malhotra and others : (2001) 3 SCC 151 and Deokar Exports Pvt. Ltd. vs. New India Assurance Company Ltd., 1 (2009) CPJ 6 (SC) and the order of the National Commission in the case of United India Insurance Co. Ltd. Vs. Satrughan Sharma & Ors. I, (1999) CPJ 1 (NC) and submitted that as held by the Apex Court and as provided under Section 64VB of the Insurance Act 1938, no risk is to be assumed unless premium is received in advance. He, therefore, submitted that the State Commission committed grave error in ignoring the specific provisions of law and the ratio laid down in the cases relied on by him and hence the impugned order cannot be sustained in the eye of law and is liable to be set aside.
ON the other hand, learned counsel for the respondent No. 1 -College contended that the MOU in question on which so much reliance has been placed by the counsel for the petitioner -company was entered into between the U.P. State Government and the petitioner -company. The respondent No. 1 -College as an institution under the State Government has necessarily to follow the guidelines and the instructions contained in the MOU even though it was not a party to the MOU. In any case, he submitted that the provisions of para 6 referred to by the learned counsel for the petitioner -company cannot be read in isolation and when the provisions of this para are considered along with other provisions of the MOU, it would be clear that in para 4 of the MOU, the insurer is equally responsible to collect the premium from the office of all the Finance Officers of the Universities/Colleges within 15th day of the next month. In the circumstances, holding the respondent No. 1 -College responsible and saddling the liability on it, would not only be against the provisions of MOU but uncalled for and unfair since the respondent No. 1 -College is rendering services regarding collection and remittance of the premium along with admission fee from each student in terms of the MOU free of charge. He also pointed out that the collection of the premium from each student along with the admission fee and its onward remission to the insurance company, is a matter of routine since no option has either been given to the students not to pay the premium or the concerned College to withhold the amount of premium so collected. Another contention raised on behalf of the respondent No. 1 -College was that Section 64VB of the Insurance Act, 1938 will not apply to the present case because the relationship between the respondent No. 1 -College and the petitioner -company is not of a normal insurance agent. He pointed out that explanation below Section 64VB clearly indicates that relationship between the respondent No. 1 -College and the petitioner -company is of a different nature and is governed by the provisions of MOU rather than Section 64VB which applies to the normal insurance agent, who solicits business of insurance cover by approaching different members of public. He pleaded that the ratio laid down by the Apex Court in the case of Basanti Devi(supra) squarely covers the present case wherein the Apex Court has held that DESU is not liable as agent of its principal i.e. LIC rendering service free of cost to the employees. We have given our thoughtful consideration to the contentions raised by counsel for the parties and have perused the record before us. One thing is clear that as far as the student, Sharif Ahmed is concerned, his liability was over as soon as the premium of Rs. 22/ -was deposited by him with the respondent -College and as such the insurance cover cannot be denied to him since it had already become effective from 24.8.1999 when he got the admission in the College and deposited the insurance premium. In order to decide as to between the respondent -College and the petitioner -Company, which one would be liable to pay the amount of claim to the complainant, we have to consider and decide about their relationship under law and the MOU. So far as the applicability of Section 64VB is concerned, we need to first consider the role of the respondent -College under the MOU to decide whether the College acted as a normal insurance agent in this case. In the case of an insurance agent, he approaches various people and parties and solicits business for the insurer by selling the idea of taking insurance cover and wherever he does so successfully, he collects premium on a policy and insurance on behalf of the insurer. In such cases, as per provisions of this Section, he has to necessarily deposit the premium so collected within 24 hours of the collection excluding bank and postal holidays and as envisaged under this Section no insurer shall assume any risk unless the premium is received in advance by it. In the present case, the respondent -College was not required to approach any student to take the insurance cover or otherwise since under the instructions contained in the MOU, every student has to necessarily deposit the insurance premium along with admission fee with the College and as such the role of the College was simply collection of the premium along with usual college fee from each student and thereafter remitting it to the insurance company as per the provisions of MOU. The respondent -College, therefore, cannot by any stretch of imagination, be recorded as an insurance agent as per the general definition of the term so as to attract the provisions of this Section. We, therefore, agree with the view taken by the State Commission in this regard. Coming to the role of the respondent -College and the petitioner -company under the MOU, we agree with the counsel for the respondent -College that provisions of para 6 of the MOU cannot be considered in isolation and the same will have to be read and considered along with other concerned provisions of the MOU. For better appreciation, we consider it expedient to reproduce some of the relevant paras contained in the MOU which would clarify the position: 2.... Only those students will be covered under this Scheme, who will seek regular admission in such colleges and also private examinees who will appear in the Examinations of the University in one particular session of the examination. These students will form one single group. Thus, each individual student will avail the advantage of group discount in his annual premium as agreed upon by the Insurer.
3...
Payment of Insurance Premium on annual adjustment basis.
Insurance Premium. Resolved that the Institution agrees to make necessary arrangement, wherein each student will deposit his/her annual premium Rs. 22.00 as premium towards ''Student''s Accident & Safety Insurance'' simultaneously with admission fee in the respective college at the time of taking admission. Similarly, private -examinee will also deposit his/her annual premium Rs. 22.00 as premium towards ''Student Accident and Safety Insurance'' simultaneously with forwarding charges of the examination in his/her respective college. Later on, each Finance Officer of the University/College will deposit the entire premium so collected, during the month directly with National Insurance Company Ltd. Chaman Lal Market, Gumuti No. 5, Kanpur -208 012 latest by each 15th day of the next month. These educational institutes will also submit a written declaration mentioning the total number of students who took admission in the particular month and number of students who were on previous scroll, under advice to the Directorate Higher Education and the U.P. Government. The Insurer will be equally responsible to collect such remittances from the office of all the Finance Officers of the Universities/Colleges within 15th day of the month. The insurer will include each student as per scroll register of the educational institute after inception of these policies in every month during currency of the policy period as and when respective insurance premium is paid by the Institution to the Insurer who will lastly adjust the entire amount of premium in 12th month of the policy period of a particular session -year as per number of students on scroll in the State of Uttar Pradesh under control of the U.P. Government.
5... The insurance covers given in the Schedule of Benefits for these students will commence from the day when the Insurer will receive respective premium of those students in advance during the academic session -year i.e. 1996 -97 till expiry of the current academic session year. Fresh entrant students will remain automatically held covered form the start of next academic session -year i.e. 1997 -98 till policy period being the insurance covers will be granted on unnamed basis in academic session year 1996 -97. Later on, such fresh entrant students will be held covered under renewal of previous policy till expiry of his/her academic session year, for which, he/she will deposit the respective premium at the time of his/her admission in the respective college/University.
Resolved that the Insurer will grant covers, as per the Schedule of Benefits, to each Insured -Student for a period towards which the advance premium of each Insured -Student respectively has been paid to the Insurer. The Insurer will not be liable to make the payment of any benefit under these policies to any Student for whom the premium amounts are not paid by the educational Institutes to the Insurer within the stipulated time on any ground or for any reason whatsoever, as the Insurer will not be on risk during such specific period of non -payment of premium in advance....
7...
Resolved that it is a pre -condition of Group Student Safety Insurance & Group Janta Personal Accident Policy at any pre -existing disease/injury/disablement is specifically excluded from the scope of cover. The Insurer has also agreed to send their representatives to each district to guide and assist all concerned authorities of the Higher Education for smooth implementation of the captioned Scheme.
(Emphasis provided by us).
IT would be seen from the above that the MOU contains several guidelines/instructions which govern the payment of premium in advance by each student at the time of his admission with the College, remission of the premium collected from the student by the College to the insurance company and the respective duties/responsibilities of the Colleges and the insurance company in relation to the remission of such premium to the insurer. While considering the contention of learned counsel for the petitioner -company to the effect that the insurer will not be liable to make the payment of any benefit under the policy to any student for whom premium is not paid by the educational institutions to the insurer within the stipulated time, we have to take into consideration the instructions contained in para 4(supra) as well. Para 4 specifically makes the insurer equally responsible to collect such remittances from the office of all the Finance Officers of the Universities/College within 15th day of the month. Both the provisions have to be read together. Once we do so, we have no doubt in our mind that in the present case, not only there was a lapse on the part of the respondent -College to have failed to remit the amount of premium in respect of student, Sharif Ahmed to the petitioner -company within the stipulated time, the petitioner -company was equally responsible for its failure to collect the premium within 15th day of the next month following the month in which the premium was paid by the student, Sharif Ahmed. This being the position, the petitioner -company cannot escape its responsibility and deny the claim to the father of the deceased student since the petitioner -company was equally responsible for collecting the premium within the stipulated time. We have, therefore, to keep in view the totality of the Scheme under the MOU and hence, we cannot accept the contention of the counsel for the petitioner with reference to the contents of para 6 of the MOU. Coming to the relationship between the College and the insurance company, we find that the ratio laid down by their Lordships of the Apex court in the case of Basanti Devi (supra) is squarely applicable to the facts and circumstances of the case of this case and though the respondent -College is not insurance agent in the ordinary sense of the term, it is an agent of the petitioner -company to collect premium on its behalf from each student simultaneously along with his/her admission fee at the time of his/her admission in the College and as held by the Apex court, the respondent -College is not liable as agent of its Principal i.e. petitioner -company rendering service free of cost to the students. Applying the ratio of Basanti Devi, the State Commission has rightly modified and set aside the order of the District Forum and held the petitioner -company liable to pay the insurance claim to the complainant. In the circumstances, we do not find any ground for our interference with the impugned order and hence, we dismiss the revision petition with the parties bearing their own costs.