S. Sadasivan vs Bharat Sanchar Nigam Ltd. & Ors.

Per: Justice Sunil Thomas, Judicial Member –

Both the applicants retired as the Assistant General Manager of the respondent, BSNL. While they were in service, BSNL by Annexure A2 notification dated 05.12.2018 proposed to implement a Voluntary Group Term Insurance Scheme exclusively for BSNL executives, in partnership with Life Insurance Corporation of India. By Annexure A2 dated 05.12.2018, the executives were informed that a POP UP Window was made available in the ESS-ERP Portal, which was the online portal used by each employee to perform his official duty in the day to day transaction, by using unique username and password known to each of such executive. They were informed that the above insurance scheme was completely voluntary and all executives were directed to indicate whether they agree or disagree to be in the Scheme by clicking “I agree” or “I disagree”, in the POP UP Window. The details of premium and other terms were mentioned in the enclosed POP UP Window. They were informed that the Window will be open till 20.12.2018. The applicants logged into the BSNL ESS portal, and clicked the option “I agree”.

Claiming that it was clicked by them by mistake and that he did not intend to join the Scheme, the applicant in O.A No. 593/2020 issued a letter in writing on the next day to the BSNL. The applicant in O.A 12/2021 communicated in writing to the BSNL about six days thereafter.

It emerges that the applications of both the applicants along with other similar applications were forwarded to the Accounts Officer for further disposal by the BSNL. According to the applicants, it was mandatory in terms of the Insurance Regulatory and Development Authority of India (IRDAI), to submit system generated application for signing the insurance proposal after completing online option. They contended that they did not submit any written document nor had they signed any document exercising their option to join the Group Term Insurance Scheme. It was contended that in spite of their disagreement, BSNL proceeded to process their application and entered into the Insurance Scheme by subscribing to the policy without their consent. Though the representation was submitted, claiming that it was not responded favourably, the O.As have been filed. The reliefs sought in the Original Application are :-

Respondents have filed a detailed reply statement to which the applicants filed rejoinder traversing the various contentions raised in the reply statement.

The original applicant in O.A No. 593/2020 appeared in person. He being a Lawyer, had filed vakalath on behalf of applicant in O.A No. 12/2021. Before commencement of hearing, we confirmed from the counsel whether there will be any conflict of interest in so far as he was appearing in person in one O.A, and was holding brief of identically placed applicant in O.A No. 12/2021 as a Counsel. He submitted that he propose to pursue the applications in both the capacities and there was no conflict of interest. Accordingly, both sides were heard.

It is an admitted fact that pursuant to Annexure A2, both the applicants had clicked ‘I agree’ thereby consenting to join the Insurance Scheme. According to the applicants, they subsequently withdrew the consent by submitting representation in writing. The precise contention of the applicant is that notwithstanding the withdrawal of consent, before it was accepted by the BSNL, BSNL proceeded to process their application and illegally deducted a sum of Rs. 45,430/- as subscription from their salary for the period March, 2019. Annexure A9 is the policy document which was entered into between the BSNL and the LIC. Each of the applicant was the beneficiary, under Annexure A9. Annexure A9 shows that it was a biparty agreement between BSNL and LIC, and the applicants who were beneficiaries were not parties to Annexure A9 policy document. Annexure A9 document also shows that on receipt of the first premium from BSNL, Annexure A9 was entered into. The policy document further shows that the period of coverage was from 01.03.2019 to 31.02.2020. The assured amount was 50 lakhs. It also emerges that the premium has to be paid every year, to keep the beneficiary enrolled in the Scheme. Since the applicants retired on 31.01.2020, admittedly, they did not continue in the Scheme, after 31.2.2020.

The sole question that arises is whether the applicants had successfully withdrawn from the proposal after clicking ‘I agree’ in response to Annexure A2. It is an admitted fact that both of them had given communications in writing expressing their intention not to pursue the proposal.

In the reply statement, it was contended that the applicants had not withdrawn from the proposal and had in fact joined the Scheme by voluntarily clicking on ‘I agree’ in the online portal. Even thereafter, they did not withdraw from the scheme, in spite of opportunity granted to them. Thus, they remained to be a beneficiary under the Scheme. A valid contract was accordingly entered into, evidenced by Annexure A9, it was contended.

According to the respondents, before the option button, the line specifically read “certified that I have read the above information to the best of my knowledge, and therefore, I hereby opt the GTI as decided by the BSNL and authorise them to deduct the premium of Term Insurance Scheme from my salary on annual basis”. There was no space for affixing any signature for manual submission and was only format in the POP UP option form. However, the facility to print POP UP Window was given. Hence, the claim of the applicants that, since they have not submitted signed application forms, they have not joined the scheme, is only to be rejected. According to the respondents, submission of the applicants that they could not log into the system due to the POP UP Window was false. The POP UP will appear only after executive has logged into ESS-ERP Portal using his/her password and was not an impediment to access the normal activities. The POP UP for exercising option was available for 15 days.

According to the respondents, few applications were received from other executives regarding the exercise of the scheme. Some executives wanted the 'agree' option while others wanted the 'disagree' option. The requests of all such executives were compiled for further processing. Thereafter, by Annexure R3 instruction dated 18.12.2018, executives who had earlier opted for ‘I disagree’ were given one more opportunity to accept the GTI. However, the last date for option change was kept at 20.12.2018. It was specifically stated that the applicants were trying to misguide the Tribunal by not referring to Annexures R4 and R5. According to them, Annexures R4 and R5 were instructions dated 07.02.2019 and 18.02.2019 issued by the first respondent. In Annexure R4, it was specifically stated that the competent authority had decided to re-open ESS window for providing one more last chance to executives to exercise/change option for GTI Scheme. Subsequently final list of executives would be provided to LIC for implementation of Voluntary Term Insurance Scheme. They were directed to exercise the option by 11.02.2019. Since there was some technical defects, Annexure R5 was issued to re-open ESS window for providing one more opportunity as last chance to the executives to exercise a change of option for the Scheme, which was available from 18.02.2019 to 20.02.2019. Those who had already given ‘agree’ option were informed that, if they did not want to change the option, they need not opt it. However, the applicants did not avail to it.

Annexures R4 and R5 clearly shows that one more opportunity was given to all executives to change their options. Strangely, applicants did not avail it. However, in the rejoinder, the applicants have taken a strange stand that Annexures R4 and R5 letters issued by the respondents were never brought to the knowledge of the affected parties, including the applicants. It is absolutely uncharitable and unbecoming of Senior Officers in the Grade of Additional General Manager to contend that the common public notice issued by the BSNL, should have been individually informed to the applicants. We are convinced that it is only a desperate attempt of applicants to wriggle out of an inconvenient situation created by reference to Annexures R4 and R5, by feigning ignorance about Annexures R4 and R5.

The applicants contended that by virtue of Section 5 of the Indian Contract Act the applicants were legitimately and legally entitled to withdraw the offer made, before it was accepted. To substantiate it, they relied on the judgment of the Hon’ble Supreme Court in M/s. Padia Timber Company (P) Ltd. v. The Board of Trustees of Visakhapatanam Port Trust through its Secretary [Civil Appeal No. 7469/2008], Raghunandhan Reddy v. The State of Hyderabad through the Secretary to Government Revenue Department, (AIR 1963 AP 110), Branch Manager, Bajaj Allianz Life Insurance Company Ltd. & Ors. v. Dalbir Kaur [Civil Appeal No. 3397/2020] and the judgment of the Hon'ble High Court of Kerala in M.M.Varghese v. Kerala Water Authority & Ors. [WP(C) No. 12421/2012]. There cannot be any doubt regarding the legal position that before an offer is accepted, the offeror is entitled to withdraw the offer. However, none of the decisions apply to the facts of these cases specifically for the simple reason that a specific option was given to the applicants to withdraw the option but they did not avail. After having not adopted the process of withdrawal in accordance with prescribed procedure, they cannot take an unauthorized method of withdrawing the offer. Further, as far as Annexure A9 is concerned, there is no privity of contract between the LIC and the applicants. Applicants are not parties to Annexure A9.

The contention of the applicants that Annexures R4 and R5 were not brought to their notice and that hence not binding on them cannot be accepted for yet another reason also. Annexure A2 which resulted in the applicants joining the scheme was announced through the website without individual notices to any person. The applicants responded to it. There were further notifications pursuant to which the applicants responded. In this context the contention that Annexures R4 and R5 notices were not specifically brought to their notice cannot be accepted and for the reasons mentioned hereinafter, we have strong reasons to doubt the malicious intention behind taking such a contention.

It is pertinent to note that the applicants allegedly clicked “I agree” key sometime in January 2020. After dispatching notices few days thereafter claiming that they involuntarily clicked it, the applicants remained silent. Both of them retired on 31.1.2020. During the said period the applicants were under the cover of Annexure A9 policy. The coverage continued till 31.2.2020. After having enjoyed benefit of being under the protection of an insurance policy and thereby exposing the insurance company of the eventuality of possible honouring of the claim for insurance in the event of any unfortunate or any untoward incident happening as detailed in the policy document, after the expiry of the policy period applicants have come up with a claim for refund of Rs. 45,430/-. In other words, the very fact that the applicants issued notices in writing but did not respond to Annexures R4 and R5 and feigning ignorance about it, clearly shows the malicious intention of claiming the benefit of coverage on the technical ground that they have not withdrawn the policy in accordance with the law. On the other hand, in the eventuality of expiry of the period they could claim the refund of the amount on the strength of the notices issued to them in writing, though not legally sustainable. They approached this Tribunal, only after the expiry of coverage period, and much thereafter in November, 2020, when OA No. 180/593/2020 was filed. OA No. 180/12/2021 was filed thereafter. Clearly the applicants were protected by the insurance policy and after enjoying its benefit indirectly, only thereafter, they have come up with the malicious claim of refund of insurance premium. We feel that this is a clear case of abuse of process of law and cost is liable to be imposed on them.

The upshot of the above discussion is that the contention now set up by the applicants based on their communication sent after responding to Annexure A2 is not legally sustainable. The offer made by them was not validly revoked by responding to Annexures R4 and R5 notices and in the manner contemplated by the said annexures. There was a binding contract with BSNL which resulted in Annexure A9. The premium due from them has been collected by the Company and handed over to the Life Insurance Corporation. In the light of the above concluded contract the applicants cannot take up a contention that they are entitled to refund of Rs. 45,430/- as claimed by them. Accordingly, the Original Applications are liable to be dismissed.

In the light of our specific finding that it is abuse of process of law, both the OAs are dismissed with costs, quantified at Rs. 20,000/- each which shall be paid to the respondents BSNL within two months from the date of order. In case of default, the same may be recovered by the BSNL by due process of law, from the applicants personally or from their assets.

Annexure A1 – File No. 1-05/2019-PAT (BSNL) dated 30.12.2019 issued by respondent No. 1.

Annexure A2 – Letter No. 8-1/2017-Restg(Pt) dated 5.12.2018 issued by respondent No. 1 notifying voluntary group term insurance scheme.

Annexure A3 – Representation dted 6.12.2018 submitted by the applicant for cancellation of the online option for voluntary group term insurance scheme.

Annexure A4 – Letter No. ST-1837/ERP/2018/10 dated 26.12.2018 issued by respondent No. 3 forwarding the representation of the applicant to the concerned Accounts Officer (Pay) for cancellation of the online option.

Annexure A5 – Printed format of application form for opting the Insurance Scheme.

Annexure A6– File No. 1-8/2018-Restg dated 18.12.2018 issued by respondent No. 1 for change of option from Disagree to Agree voluntary group term insurance scheme.

Annexure A7 – Pay slip of the March, 2019 salary of the applicant.

Annexure A8 – Representation dated 29.3.2019 submitted to the respondent No. 3 for refund of the amount deducted from salary as annual premium.

Annexure A9 – Master policy No. dated 19.9.2019 issued by LIC of India.

Annexure A10 – Notification of Regulations dated 22.6.2017 issued by the Insurance Regulatory and Development Authority of India for the protection of the policy holders.

Annexure R1 - True copy of the order F. No. 1-05/2019-PAT (BSNL) dated 30.12.2019 issued by the 1^st respondent.

Annexure R2 - True copy of the order No. 8-1/2017-Restg(Pt.) dt. 5.12.2018 issued by the 1^st respondent.

Annexure R3 - True copy of the instructions vide 1-8/2018-Restg. Dated 18.12.2018 issued by the 1^st respondent.

Annexure R4 - True copy of the order No. 8-1/2017-Restg(Pt) dated 7.2.2019 issued by the 1^st respondent.

Annexure R5 - True copy of the order No. 8-1/2017-Restg(pt) dated 18.2.2019 issued by the 1^st respondent.

Annexure R6 - True copy of the guidelines issued by IRDAI with respect to Group Term Insurance Policy vide 015/IRDA/LIFE/Circular/GI Guidelines/2005 dated 14.7.2005.

Annexure R7 - True copy of the circular No. IRDA/LIFE/CIR/172/09/2019 dated 26.9.2019.

Annexure A1 – File No. 1-05/2019-PAT (BSNL) dated 30.12.2019 issued by respondent No. 1.

Annexure A2 – Letter No. 8-1/2017-Restg(Pt) dated 5.12.2018 issued by respondent No. 1 notifying voluntary group term insurance scheme.

Annexure A3 – Letter No. ST-1837/ERP/2018/10 dated 26.12.2018 issued by respondent No. 3 forwarding the representation of the applicant to the concerned Accounts Officer (Pay) for cancellation of the online option.

Annexure A4 – Printed format of application form for opting the Insurance Scheme.

Annexure A5– File No. 1-8/2018-Restg dated 18.12.2018 issued by respondent No. 1 for change of option from Disagree to Agree voluntary group term insurance scheme.

Annexure A6 – Pay slip of the March, 2019 salary of the applicant.

Annexure A7 – Representation dated 2.4.2019 submitted to the respondent No. 3 for refund of the amount deducted from salary as annual premium.

Annexure A8 – Representation dated 25.7.2019 submitted to respondent No. 3 for refund.

Annexure A9 – Master policy No. dated 19.9.2019 issued by LIC of India.

Annexure A10 – Notification of Regulations dated 22.6.2017 issued by the Insurance Regulatory and Development Authority of India for the protection of the policy holders.

Annexure R1 - True copy of the order No. 8-1/2017-Restg(Pt) dated 7.2.2019 issued by the 1^st respondent.

Annexure R2 - True copy of the order No. 8-1/2017-Restg(pt) dated 18.2.2019 issued by the 1^st respondent.

Annexure R3 - True copy of the guidelines issued by IRDAI with respect to Group Term Insurance Policy vide 015/IRDA/LIFE/Circular/GI Guidelines/2005 dated 14.7.2005.

Annexure R4 - True copy of the circular No. IRDA/LIFE/CIR/172/09/2019 dated 26.9.2019.