JUSTICE SUDIP AHLUWALIA, MEMBER

2. The factual background, in brief, is that the Complainant is the wife and nominee of Late Ramagiri Shankar, who was an employee at Singareni Collieries Co. Ltd., and also a Policy Holder with the Petitioner. Late Ramagiri Shankar acquired several Policies from the Petitioner during his lifetime through salary deductions, including Policy No. 683286369 with a sum assured amount of Rs. 5,00,000/-. On 30.12.2010, at approximately 5 pm, Ramagiri Shankar and his wife, i.e. the Complainant, were returning home. Upon reaching Harijan Colony, they were intercepted by Purella Thirupathi and his associates, who proceeded to assault Ramagiri Shankar, using abusive language until he lost consciousness. Feeling humiliated, Ramagiri Shankar consumed pesticide around 2 pm on 01.01.2011. He was promptly taken to Godavarikhani Hospital, and while being transferred to Karimnagar Hospital, he passed away en route. A First Information Report (FIR) was filed against the accused under various sections of the Indian Penal Code (IPC) and the SC/ST Prevention of Atrocities Act. Following the incident, the Complainant notified the Petitioner and submitted the Claim Form along with all necessary documents. Despite these efforts, the Petitioner did not process the Claim for an extended period. Consequently, the Complainant issued a Legal Notice dated 03.09.2012, which went unanswered. Dissatisfied with the Petitioner's failure to pay the claim amount under the Insurance Policy, she filed a complaint before the Ld. District Forum, Karimnagar.

 3. The District Forum vide its Order dated 11.11.2013 allowed the complaint and directed the Opposite Party to pay to the Complainant the sum assured amount of Rs. 5,00,000/- after deducting the unpaid monthly premiums and pay the balance amount with interest @9% p.a. from the date of filing of complaint till the date of realization along with Rs. 1,000/- towards litigation costs. The Petitioner filed Appeal against the Order in the State Commission which dismissed it and affirmed the Order of the District Forum. The relevant extracts of the impugned Order are set out as below -

“9) The points that arise for consideration are,

(i) Whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner?

(ii) To what relief ?

 

10). Point No. 1:

There is no dispute that the husband of the complainant obtained Ex.A-1 insurance policy for an amount of Rs.5,00,000/- under salary savings Scheme during his life time while he was employee in Singareni Collieries Company Limited to pay the monthly instalments from deducting his salary through his employer and he died due to committing suicide and the complainant is the nominee under the policy. There is no dispute that the claim submitted by the respondent/complainant was repudiated on the ground that the policy holder paid only two monthly premiums and the policy was lapsed on the date of the death of the deceased policy holder on 01.01.2011.

 

11) Perusal of Ex.A2 FIR, Ex.A3 inquest report and PME report under Ex.A4 reveals that on 30.12.2010 at about 5.00 PM the deceased and the complainant were returning to their house from Mangalampally village and when they reached near Harijan colony one P. Thirupathi and his wife stopped them and forcibly took him in an Auto to the area of M. Mahendar where he was beaten by them and some persons due to which he lost consciousness and again he was beaten by pouring water. On coming to know about the incident R. Rajesham and Laxmaiah took the policy holder to his house where he was bedridden for one day. On the next day, the policy holder consumed pesticide due to humiliation and while he was shifted to Karimnagar for treatment he died on way. Godavarikhani II town PS registered Cr. No. 2/2011 against P. Thirupathi and others. Perusal of Ex. Bl/AlO Status report reveals that the policy was commenced on 28.03.2002 and the monthly premium was paid upto May, 2002 and thereafter the policy was lapsed due to non-receipt of premiums from his salary. The policy holder died on 01.01.2011. Ex.A2 to AS Criminal case records reveal that the policy holder committed suicide due to humiliation and beatings given by P. Thirupathi and others.

 

12). Counsel for the Appellant Insurance company argued that the policy was lapsed due to non receipt of premiums since May, 2002 and as per the conditions of the policy no amounts are payable under the policy and that the salary saving scheme was not commenced operation, therefore, the provisions of the salary saving scheme are not applicable to the facts of the case. Further, there is no material to show that any such authorization letter is given to the employer by the deceased policy holder to deduct the premiums from his salary.

 

13) The District Forum, relying upon the decisions of the Hon'ble National Commission, came to the conclusion that it is the duty of the opposite party to inform about non-receipt Of premiums and without such communication they cannot repudiate the claim on the ground of lapse of the policy and that the appellant/opposite party is liable to pay the sum assured after deducting the unpaid premiums. We do not have any contradictory view against the opinion expressed by the District Forum.

 

14). After considering the foregoing facts and circumstances and also having regard to the contentions raised on both sides, this Commission is of the view that there are no merits in the appeal and hence it is liable to be dismissed.

 

15). Point No. 2 :

In the result, the appeal is dismissed confirming the impugned order dated 11.11.2013 in CC 193 of 2012 passed by tlie District Forum, Karimnagar. There shall be no order as to costs. Time for compliance four weeks.”

 

4. Ld. Counsel for Petitioner has argued that the Life Assured had ceased making premium payments, resulting in the Policies lapsing; That no evidence was presented to confirm whether the Life Assured was receiving a salary from their employer, as the employer was not included in the complaint. The lack of documentation regarding premium deductions from the Life Assured's salary complicates the matter; That there is uncertainty surrounding the Life Assured's employment status with M/s. Singareni Collieries Company, as no salary slips were provided as evidence. It is the responsibility of the employer to validate the payment of salaries and the continuous employment of the Life Assured; That in the event of suicide, no benefits are payable.

5. This Commission has heard both the Ld. Counsel for Petitioner and perused the material available on record.

6. At the outset, it may be mentioned that this is a case of the deceased Policy Holder having committed suicide on account of which according to the Petitioner/Corporation the Policy was void in view of Clause 6 of the same.  But this submission is not tenable firstly because in the reply filed on behalf of the Corporation/Opposite Party before the Ld. District Forum (Annexure-P4), it was not at all its case that for this reason the Policy was void.  Even otherwise, according to Clause 6 the Policy would have been rendered void if the life assured committed suicide within one year from the date of its commencement only.  But in this case, he died on1.1.2011 which was almost 09 years after the Policy had started to commence w.e.f. 28.3.2002.

7. On the other hand, the specific defence of the Petitioner Corporation was that the sum assured under the Policy conditions was not payable as the Policy had already lapsed on the date of death of life assured due to non-payment of premiums w.e.f. May, 2002.  This defence however found no favour either with the District Forum or the Ld. State Commission, as both these Fora were of the view that it was the duty of the Opposite Party/ Petitioner Corporation to inform the Insured about non-receipt of the premiums, and without having issued such communication, it could not have repudiated the claim on the ground of lapse of Policy, and consequently, the Corporation was liable to pay the sum assured after deducting the unpaid premiums.

8. It has nevertheless been argued on behalf of the Petitioner that it was incumbent upon the employer of the Insured to make such payments.  This contention however would not appear to be tenable in view of the decision of the Hon’ble Supreme Court in “LIC of India VS. Rajiv Kumar Bhasker reported in AIR 2005 SC 3087”, wherein it had been observed inter alia –

“In terms of the Scheme, significantly the employee for all transactions was required to contact his employer only.  In view of our findings, the Corporation, thus, cannot be permitted to take a different stand so as to make the employee suffer the consequences emanating from the default on the part of the employer.  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 as its agent having the implied authority there-for, 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 obligated 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 corporation.”

 

9. In the present case, the employer was not made a party, and the Petitioner-Insurance Company in its Counter/Reply filed before the District Forum (Annexure-P4) never raised any objection for the same, ostensibly under an impression that the employer was its own Agent in view of the aforesaid decision of the Hon’ble Supreme Court.  No information was also sought by the Petitioner from the employer about non-remittance of the Insurance Premiums for the period following May, 2002.  The employee is not to suffer for such fault of the employer. Furthermore, the Petitioner- Insurance Company neither informed the deceased Life Assured that his Policy stood lapsed, nor even responded to the Legal Notice issued on behalf of the Complainant.

10. From his side, Ld. Counsel for the Petitioner has been unable to cite any case law to counter the aforesaid decision of the Hon’ble Supreme Court in “LIC of India VS. Rajiv Kumar Bhasker” (supra), and instead submitted that holding the Corporation responsible for any laches on the part of the employer “would be going too far”. But it is the view of the Hon’ble Supreme Court that when in such a situation the employer is to be regarded as an Agent of the Insurer/ Corporation, clearly the interest of the Life Assured would need to be protected.

11. For the aforesaid reasons, this Commission finds no grounds to interfere with the well-reasoned orders of the Ld. State Commission.  

12. The Revision Petition is, therefore, dismissed.  No orders as to costs.

13. Pending application(s), if any, also stand disposed off as having been rendered infructuous.