Zonal Manager, Life Insurance Corporation of India vs MAUREEN CATHERINE LOBO

ADVOCATE for the respondent undertakes to file his appearance on behalf of the respondent.

WE are proceeding to dispose of this appeal at the stage of admission itself on perusal of the material made available in the appeal paper book and on hearing the submissions of the learned Advocates for the parties. Appellants herein are the original O.P. in the aforesaid complaint and they have taken exception to the order dated 7.5.2002 passed by South Mumbai District Forum holding them deficient in the matter of settlement of the claim of the complainant/respondent herein of the amount payable under the insurance policy and repudiation thereof (hereinafter for brevity''s sake appellants are referred to as "L.I.C." and respondent as "complainant"). Few relevant facts :

One Mr. Walter Joseph Lobo (since deceased) had obtained insurance coverage on his life for sum of Rs. 1 lakh together with accident benefit.

THE proposal was submitted on 26.1.1997 and it was accepted by the L.I.C. and policy was issued to him on 8.2.1997. On 23.3.1997, the said insured Lobo died accidentally by drowning. Thereafter the respondent herein who is a sister of the deceased insured and also nominee, made a claim to the LIC. It is noticed that the LIC soon after the death of the insured, was informed about the death and it investigated the matter and they found that insurance premium which was payable monthly was paid by its Agent by his cheque. Therefore, the LIC felt that the payment made by the Agent for and on behalf of the insured was not valid as per their rules and, therefore, they proceeded to repudiate the same and hence the complaint.

BEFORE the District Forum, LIC asserted their case and justification in the manner as mentioned hereinabove. However, the District Forum did not find the same convincing or acceptable and allowed the said claim. Across, the learned Counsel Mr. Kaushik submitted that although the insurance policy in question was in force at the time of death of the insured, the same cannot be accepted, since under their Regulations, their Agent is not supposed to pay the premium on behalf of the insured to the LIC. Mr. Kaushik also stated that the LIC has its Rules and Regulations in the appointment of Agents detailing guidelines. It is to be stated that this was also highlighted before the District Forum, which has also reproduced so-called rule in paragraph 6 of the impugned order which we have carefully and closely perused.

THE District Forum, we notice, considered the said rule as also judgment of the Apex Court in the case of Mr. Harshad J. Shah v. LIC of India, III (1997) CPJ 9 (SC)=AIR 1997 SC 2459.

WE have carefully gone through the Rules and we are of the view that the said rule is more in the nature of administrative guidelines to the Agent. Further the proviso thereof also provides that collection by the Agent should not be at the risk of the LIC. The material on record shows which the complainant has stated, and not effectively dealt with, that deceased insured had made payment in cash to the Agent towards the premium for being paid to the LIC for his convenience, which the agent in fact paid to LIC and which amount was received by LIC towards premium payable. Nothing has been shown that there was any oblique motive or dishonest intention in so doing. Case of the complainant that the amount was paid in cash by the deceased has not been denied or disputed.

It is further important to note that it is not the case of the LIC that there was any foul play in the death of the insured. On the other hand, there is evidence made available by the complainant not doubted or disputed by LIC to show that the death of the insured was accidental. The policy was in force at the time of death of the insured.

THE matter would require consideration from yet another angle. THEre are judicial pronouncements on the point the latest being of the Supreme Court in the case of 2000 SC 43, which surveys the legal position of the law of agency, in the light of various decisions on the point. In all such cases, the factual position was, either there was failure of remittance of the amounts of premium after deduction by the employer of the insured employee from the salary, to the Insurance Company or failure of the employer to deduct the premium from monthly salary despite specific authority of the employee to the employer to do so, or non-deduction due to the employee being disentitled to the salary or non-payment either because of proceeding on leave or termination, and consequently non-remittance resulting into policy getting lapsed. However, in the matter herein, this is not the case. Furthermore, there is nothing on the record to show that the deceased insured was ever made aware of the so-called Regulations of LIC in question. Really speaking whatever done in making payment, in any event, cannot be said to be amounting to contravention of the Regulation of LIC since, the Agent in fact-situation has done only the job of messenger and cannot be attributed as being part of his duties as Agents as such.

THE District Forum, in its elaborate judgment, dealt with and considered all these aspects and has assigned the good reasonings for its findings to which we are in agreement with. It is more so, when claim is sought to be repudiated on the so-called rule which, as noticed, does not lend assistance to the LIC. For the reasons as above, we hold the appeal herein being devoid of merits. ORDER "1. Appeal stands dismissed. 2. No order as to costs. 3. Office shall furnish copies of the order herein to the parties."

Appeal dismissed.