Life Insurance Corporation of India vs SHIV KUMARI RAGHAV

LIFE Insurance Corporation of India (hereinafter referred to as Corporation) has come up in appeal against the order of the District Consumer Forum, Gurgaon dated 9.12.1998 vide which on a complaint filed by Smt. Shiv Kumari, Distt. Forum had issued directions to respondent Nos. 1 and 2 to pay Rs. 1,00,000/- to the complainant with bonus etc. available under the policy with interest @ 15% p.a. from the date of death till the date of payment.

NOTICE of the appeal was issued and in pursuance of which the respondent have put in appearance through their Counsel. The Counsel for the appellant has argued that the deceased Puran Singh Raghav was an employee of the Indian Hotels Company Ltd., who had taken an insurance policy for a sum of Rs. 1,00,000/- on 7.7.1994. The policy was under the salary saving scheme. The insured was to pay a sum of Rs. 172/- per month as premium, which was to be deducted by his employer-Hotel Management and the same was to be remitted to the L.I.C. The premium for the month of January, 1996 onwards was not paid and the policy had lapsed on that account and as such a sum of Rs. 1,376/- deposited towards the premium for the month of January, 1996 i.e. after the death of the policy holder was returned vide letter dated 4.3.1998. Since the premium was not paid in time, the policy had lapsed and the District Forum ought not to have issued directions to the appellant to pay the insured amount.

The Commission has considered the submissions of both sides and has also perused the impugned order. Having considered the same, the Commission is of the considered view that there was a delay on the part of the Hotel Management in remitting the amount of premium to the LIC, though the Management had deducted the amount from the salary of the deceased. The Life Insurance Corporation had accepted the premium for the defaulting period and when they noticed the death of the insured, the said amount was returned on 4.3.1998. It is pertinent to note here that the insured had taken the policy on 7.7.1994 and the premium was paid upto December, 1995. Thereafter, the policy holder was transferred to Taj Hotel, Delhi and he had informed the Hotel Management about the mode of payment and made a request to the LIC to transfer his policy to Delhi, but no reply was received by him. In the meantime the insured died on 28.8.1996. In view of the matter, the Commission is of the considered view that there was no fault on the part of the insured because the policy was under the salary saving scheme and the amount was duly deducted from his salary by the Hotel Management for remitting the same to the LIC in time. More so, the LIC had also not transferred the policy from Bombay to Delhi from where the payment was to be collected and as such there was deficiency in service on the part of the Hotel Management as well as on the L.I.C. and the complainant, who is nominee of the deceased, cannot be made liable to suffer for the lapse on the part of the employer of the deceased. In view of the aforesaid discussions, we are of the considered view that the District Forum ought not to have fastened liability on the L.I.C. itself. Accordingly, we modify the impugned order to the extent that the LIC and the Hotel Management are liable to pay the compensation amount alongwith interest @ 12% and bonus etc. to the complainant in equal share i.e. fifty-fifty. The appeal stands disposed of accordingly. Appeal disposed of.