SANT GAJANAN MAHARAJ vs Pratibha

-THESE three Revision Petitions arise from a common order passed by the State Commission.

SMT. Pratibha, widow of Ramchandra B. Belokar, was the complaint before the District Forum, where she had filed a complaint alleging deficiency in service on the part of the employer of her husband, namely, Shri Sant Gajanan Maharaj College of Engineering, Shegaon as also the insurer, i. e. the Life Insurance Corporation of India. Undisputed facts of the case are that the husband (since deceased) of the complainant Smt. Pratibha was working as a Lecturer of Physics in the college run by Shri Sant Gajanan Maharaj College of Engineering. It is not in dispute that he was a beneficiary under the ''salary savings scheme'' for which there was a tripartite agreement. It is also not in dispute that it was incumbent upon the employer to remit the insurance premium after deducting it from the employee concern. In the present instance, the deceased Ramchandra was deputed for research work in Nagpur University in the subject of Physics for the period from 1. 7. 95 to 30. 4. 1996. During the period of study programme, the deceased was getting Rs. 2,500 as financial assistance from college and Rs. 2,500 from Nagpur University as a fellowship. The college after adjusting for quarter rent Rs. 350, instalment of SBI loan Rs. 500, paying the deceased only Rs. 1,500. Unfortunately, the insured Sh. Ramchandra died due to accidental death by drowning and in these circumstances, when the complainant Mrs. Pratibha and her minor daughter Km. Abha, preferred the claim with the LIC, which was repudiated on the ground that no premium has been paid to them in the month of July, August and September, 1995. It is in these circumstances, complaint was filed by the claimants before the District Forum, against the College as also the LIC where the matter was contested by both the opposite parties. After hearing the parties, the District Forum allowed the complaint in following terms: "1. The non-applicant Nos. 1 and 2, jointly and severally pay to the applicants, all the beneficiary amount due on Policy No. 821289737 dated 15. 12. 1995 and Policy No. 821113399 dated 23. 2. 1994. This amount should be paid to them with the interest at the rate of 18% per cent per annum from the date of rejection of their claim, i. e. from 5. 11. 1996. As stated in the application, all this amount of Rs. 2,50,000 (Rupees two lacs fifty thousand only) or whatever it may be due should be paid by the non-applicants to the applicants with effect from the date and at the rate of interest as stated above. 2. This amount should be paid to the applicants within the period of 45 days from the date of receipt of this judgement. 3. The amount of Rs. 500 should be paid to the applicants within the said stipulated period. 4. We do not grant to the applicant any amount towards damages and compensation on account of deficiencies in rendering the service. "

Aggrieved/not satisfied with this relief, two separate appeals were filed before the State Commission, namely, by Shri Sant Gajanan Maharaj College of Engineering as also by Km. Abha Belorkar, rep. by her guardian. The State Commission, after hearing the parties and perusal of material on record, passed the following order: "appeal Nos. 2628/99 and 2641/98 are dismissed. The Appeal No. A 352/99 is partly allowed. The impugned order of the Forum is modified. The Sant Gajanan Maharaj Engineering College, Shegaon and LIC Branch at Khamgaon are hereby directed to pay jointly and severally an amount of Rs. 3,00,000 as double accident benefit claim amount under the Insurance Policies of Ramchandra along with interest @ 7. 5% p. a. thereon, from 30. 9. 1998 till realization. Parties to bear their own cost of this Appeal. Copies be furnished to the parties. "

AGGRIEVED/dissatisfied with this order, these three revision petitions have been filed before us. We heard the learned Counsel for the College, LIC as also the Authorised Rep. , namely, the father of the complainant in person. Revision Petition No. 1630 of 2007

WE heard the learned Counsel for the petitioner and perused the material on record. It is his case that basic facts are not in dispute except that in view of the letter dated 27. 5. 1995 they were under no obligation to deduct the premium from the amount, as this did not form part of the advice on deductions as per instructions of the deceased himself. They also rely upon the judgment of the Hon''ble Supreme Court in the case of Chairman, Life Insurance Corp. and Ors. v. Rajiv Kumar Bhaskar, V (2005) SLT 567= (2005) 6 SCC 188, about the liability of the agent as according to them they were only the agents of LIC. The letter dated 27. 5. 95 is reproduced below: "to the Chairman, shri Gajanan Shikshan Sansthan, shegaon-444203. Through: The Principal, SSGM College of Engineering, Shegaon. Subject: Request for the financial assistance during study leave (July 1995 to April 1996 ). Reference: My earlier letter, dated 27. 4. 1995. Respected Sir, with reference to my earlier letter, I am going to join as a Research Fellow at Nagpur University Department of Physics in next month. I have been selected for the JRF in the AERB research scheme for one year. During the tenure of scheme I will be getting the Fellowship Rs. 2,500 only. Moreover, it will be very difficult for me to do my research work and run my family on such a meagre amount. I, therefore, request you to kindly sanction me Rs. 2,500 p. m. during this period so that I will be able to complete my work leading to Ph. D. degree. However, the quarter rent Rs. 350 and SBI loan instalment Rs. 200 may be deducted from this financial assistance. Other deductions may be withheld for the said period. Thanking You, your faithfully, (R. B. Belerkar)"

It is not in dispute that the petitioner college while agreeing to pay a sum of Rs. 2,500 p. m. to the deceased during the time that he was attached with Nagpur University, was paying only Rs. 1500. It is also not in dispute that the instructions/advice of the petitioner reproduced earlier mentions only deductions with regard to Rs. 350 as quarter rent and Rs. 200 for SBI loan instalments. This makes a total sum of Rs. 2,050 only. No explanation whatsoever is forthcoming as to why the balance amount was retained by them. On a specific query being put to them, the reply was they are ready to give the balance amount. In our view, this does not help the case of the petitioner. We like the learned Counsel for the petitioner, also rely upon the judgment of the Hon''ble Supreme Court (supra) giving paras 18-19, 21, 22, 26, 33, which read as under: "18. The salary savings scheme, as noticed hereinbefore, provides for a tripartite arrangement.

The Corporation itself had approached the employers and they agree to such proposal; upon acceptance whereof by the Corporation, the employer addressed a letter to the employees concerned giving details about the scheme. In the letter of the Corporation, it was projected that it was the scheme of the employer itself. The employers were, thus, allured to ask their employees to agree to the proposal, on the premise that the same would amount to a practical demonstration of their interest in the welfare of those who help to make the companies successful and, furthermore, which would also be in tune with the ''present social trent''.

Para 3 of the employer''s letter to the Corporation indicates that no form of individual premium, due notice or receipt would be issued by the Corporation which clearly shows that the entire responsibility was thrust upon the employer by the Corporation.

An agency can be created expressly or by necessary implication. It may be true that the employers in response to the proposal made by the Corporation stated that they would act as agents of their employees and not that of the Corporation. But, the expression ''agent'' in such circumstances may not mean to be one within the meaning of the Life Insurance Corporation of India (Agents) Regulations, 1972 made in terms of Section 49 of the Act; but would mean an agent in the ordinary sense of the term. An employer would not be an agent in terms of the said Regulations on the premises that it was not appointed by the Corporation to solicit or procure Life insurance business. The employers had no duty to discharge to the Corporation either under the Act or the Rules and Regulations framed thereunder but keeping in view the fact that the Corporation did not make any offer to the employees nor would directly make any communication with them regarding payment or non-payment of the premium or any other matter in relation thereto or connected therewith including the lapse of the policy, if any, it cannot be said that the employer had no role to play on behalf of the Corporation.

The definition of ''agent'' and ''principal'' is clear. An agent would be a person employed to do any act of another, or to represent another in dealings with third parties and the person for whom such act is done or who is so represented is called the principal. It may not be obligatory on the part of the Corporation to engage an agent in terms of the provisions of the Act and the Rules and Regulations framed there-under, but indisputably an agent can be appointed for other purposes. Once an agent is appointed, this authority may be expressed or implied in terms of Section 186 of the Contract Act.

. . . . . . . . . . If for some reasons the employer is unable to pay the salary to the employees, as for example, its financial constraints, the employee may be held to have a legitimate expectation to the effect that his employer would at least comply with its solemn obligations. Such obligations having been undertaken to be performed by the employer at the behest of the corporation cannot be permitted to take advantage of its own wrong as also the wrong of its agent. In any event, the employer was obliged to inform the employee that for some reason, he is not in a position to perform his obligation whereupon the latter could have paid the premium directly to the appellants. "

(Emphasis supplied)

THE Hon''ble Supreme Court in the cited judgment clearly has bought about the role of the agent and principal in this regard para 33 of the order is adequate to hold the petitioner deficient in rendering service when they held that "in any event, the employer was obliged to inform the employee that for some reason, he is not in a position to perform his obligation whereupon the latter could have paid the premium directly to the appellants herein. " Either before us or any fora below, no evidence has been led by the petitioner that at any time, they informed the employee that the premium is not being paid. Learned Counsel for the petitioner wishes to take umbrage under letter dated 27. 5. 1995. We are afraid that, that does not help the petitioner. It was incumbent upon the petitioner, either to continue to discharge his dues by deducting the premium at source or alternatively to inform the employee (since deceased) that, in view of this letter dated 27. 5. 1995, it was incumbent upon the employee to send the premium directly. The petitioner did neither. As held by the Hon''ble Supreme Court in the judgment (supra) the spirit of tripartite agreement was that it was the intent of the employer to show their concern as an employer for the benefit and well-being of the employee. In the aforementioned circumstances, the petitioner has completely failed to discharge his duties as expected from the employer as well as from the agent, in view of the judgment of the Hon''ble Supreme Court (supra) and specially, what has been held in para 33 of the judgment (supra ). This is a clear case of failure on the part of the petitioner for non-performing the duties cast on them as employer and as agent, from which they cannot get away. Revision Peititon No. 1847 of 2007

IT is the case of the petitioner LIC that since the premium was not being paid to them, they cannot be held liable. Under the tripartite agreement, the employer was unquestionably an agent, but LIC also cannot be absolved that the petitioner LIC also failed to inform any of the parties about non-payment of premium relating to the deceased Ramchandra. In para 33 of the judgment (supra) of the Hon''ble Supreme Court, the Hon''ble Supreme Court has clearly held: "if for some reasons the employer is unable to pay the salary to the employees, as for example, its financial constraints, the employee may be held to have a legitimate expectation to the effect that his employer would at least comply with its solemn obligations. Such obligations having been undertaken to be performed by the employer at the behest of the corporation cannot be permitted to take advantage of its own wrong as also the wrong of its agent. " It is not the case of the petitioner LIC that they informed the deceased at any time about the non-payment of premium. Not having done so is a clear case of deficiency in service on the part of the LIC. Revision Peititon No. 3292 of 2007

This Revision Petition has been filed by Smt. Pratibha, widow of Ramchandra. There is a delay of 220 days in filing this revision petition and there is no application for condonation of delay, in view of which keeping in view the provisions under Section 14 (1) (i) of Regulations 2005, wherein the revision petition had to be filed within 90 days from the date of passing of order or receipt of order and since there is no application for condonation of delay, we are unable to accept this revision petition as it is clearly time-barred.

EVEN on merits, we see that the prayer is that the complainant is entitled to Rs. 1,50,000 under Jeevan Mitra Policy and Rs. 2,00,000 under Bima Kiran Policy, thus, making a total of Rs. 3,50,000, whereas the State Commission has granted only Rs. 3,00,000. The case of the complainant''s representative is that as per copy of the Brochure brought on record, under Jeevan Mitra Scheme, the petitioner is entitled to Rs. 50,000 being the assured amount and double of that amount i. e. , Rs. 1 lakh as accident benefit thus making total amount of Rs. 1. 5 lakh. Our attention has also drawn to Condition 10 (b) of the Policy, which reads as under: "death of the life assured-to pay an additional sum equal to the death benefit under the Policy of the life assured. "

In view of these provisions, we are unable to satisfy ourselves that the petitioner is entitled to anything more than the amount granted by the State Commission. The date of brochure is also not on record to help the petitioner.

IT was also the case of the complainant''s representative that the interest granted by the State Commission is lowered @ 7. 5% p. a. while the District Forum has granted interest @ 18%, hence this should be enhanced. After hearing we are satisfied that interest granted does not call for our interference. In the aforementioned circumstances, this revision petition is dismissed as barred by limitation as also having no merits. In the result, we uphold the order passed by the State Commission, and hold Shri Sant Gajanan Maharaj College of Engineering, and Life Insurance Corporation of India, jointly and severally liable for deficiency in service and are directed to pay jointly and severally Rs. 3,00,00 to the complainant, Smt. Pratibha, widow of Ramchandra, under the Insurance Policies of late Ramchandra along with interest @ 7. 5% from 30. 9. 1998 till realization. These payments shall be made within 6 weeks from the date of receipt of this order, failing which the complainant shall be at liberty to proceed against the opposite parties, under Sections 25/27 of the CPA, 1986.

ALL the three revision petitions stand disposed of in above terms. Revision Petitions dismissed.