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2010(1) CPR 123 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI
Hon’ble Mr. Justic Ashok Bhan,
President
Hon’ble Mr. B.K. Taimni, Member
Life Insurance Corporation of India, City Branch - II, P.O. Box No. 28, Sunder Archade, B.N. Road, Mysore Through: Regional Manager (L&HPF) Northern Zonal Office, LIC Jeevan Bharti Building, Connaught circus, New Delhi — Pettinoer
versus
1. Smt 1. Mangai, W/o Late Vishwanath, Door No. 1374, ‘Ravi Nilaya’, B.B. Laya Street, K.R. Mohalla, Mysore - 24.
2. The Commissioner, Employee’s Provident Fund Corporation, P.O. No. 12, IInd Floor, Regency Theatre Complex, Lok Ranjan Mahal Road, Mysore — Respondents
Revision Petition No. 2514 of 2005
(From the order dated 14.06.05 in Appeal No. 273/2004 of Karnataka State Consumer Disputes Redressal Commission)
Decided on : 27-11-2009
Counsel for the Parties:
For The Petitioner:Mr. Ashok Kashyap, Advocate
For The Respondent:Mr. Rajesh Manchanda, Advocate
IMPORTANT POINT
Insured cannot be made to suffer if policy lapses due to fault of assignee.
Headnote:Consumer Protection Act , 1986—Sections 2(1)(g), 14(1)(d) ,15 ,17 and 21— Insurance Act, 1938—Section 38—Insurance—Life Policy —Policy was ‘assigned’ in favour of Employees Provident Fund (EPF) Scheme, by virtue of which, EPFC was to pay premium on behalf of employees—Death claim repudiated by petitioner -Insurance Company on the ground that Policy was in lapsed condition as on date of death of insured—District Forum allowed complaint and directed petitioner to pay a sum of Rs.1 lakh with vested bonus due to complainant along with interest @9% p.a. and cost of Rs1000/-— State Commission, by a cryptic order dismissed appeal— When liability was on EPFC to pay premium in respect of policy which they had undertaken, being an assignee of insured, and if they failed to do so, it is they, who would be liable to compensate insured for deficiency on their part—This is a clear case of deficiency in service on part of EPFC, to not have remitted premium resulting in lapsing of policy for no fault of the insured deceased— Impugned order passed by District Forum and as affirmed by State Commission, modified to the extent that EPFC would be liable to pay amount awarded by District Forum—Revision petition allowed. (Paras 2 to 4)
AIR 2000 S.C. 43; R.P. No. 871 of 2009 —Distinguished.
Mr. B.K. Taimni, Member —
Petitioner was one of the opposite parties before the District Forum, where the respondent no. 1/ complainant had filed a complaint alleging deficiency in service on the part of the petitioner and the second respondent, i.e., Employees Provident Fund Commissioner, Mysore, (EPFC).
Undisputed facts of the case are that the late husband of the complainant Smt. S. Mangai, had obtained a life Policy from the petitioner LIC. It is also not in dispute that the insured was working with M/s. Manmul Products having its Dairy at Mandya District. The said policy was ‘assigned’ in favour of Employees Provident Fund (EPF) Scheme, by virtue of which, the EPFC was to pay the premiums on behalf of the employees, such as the deceased, when they became due. Admittedly, from the office of EPFC, the premium was not paid to the Insurance Company, which was not within the knowledge of the deceased / complainant. When upon the unfortunate death of the insured the nominee, i. e., wife of the deceased / complainant, preferred a claim, it was repudiated by the petitioner ‘Insurance Company’ on the ground that the Policy was in lapsed condition as on the date of death of Vishwanath. It is in these circumstances, a complaint was filed before the District Forum, where the matter was contested by both the opposite parties, i.e., Petitioner and the second respondent. The District Forum after hearing the parties, allowed the complaint and directed the petitioner to pay a sum of Rs.1 lakh with vested bonus, if any, found due to the complainant alongwith interest @9% p.a. from 1.08.01 till the date of payment along with cost of Rs1,000/-. Complaint against the second respondent was dismissed.
Aggrieved by this order, the petitioner filed an appeal before the State Commission, who by a cryptic and non- speaking order dismissed the appeal, hence this revision petition before us.
We heard the Ld. Counsel for the petitioner as well as to the counsel for EPFC at considerable length and perused the material on record. After hearing the parties and perusal of material on record, we find that undisputedly the onus of paying the premium was with the EPFC, which admittedly, on account of some fault in their computer system, was not paid during the life of the deceased insured and it is only paid after his death, thus, making clear that at the time of death the policy was in lapsed condition.
Ld. Counsel for the EPFC wishes to rely upon the judgement of the Hon’ble Supreme Court in the case of “D.E.S.U. Versus Basanti Devi & Anr. [AIR 2000 S.C. 43]” as also the judgment of this Commission in the case of “Smt. M. Anjali Vs. President Atomic Energy Employees Consumer Cooperative Store Limited and others [RP No. 871 of 2009 decided on 23.04.2009].”
3. When we go through the cited judgments, we find that in the cited cases, the employer was held to be acting as ‘Agent’ of LIC and it was a case of ‘Group Insurance’ Policy, in the instant case, it was not a Group Insurance Policy, as is clear from the Policy in question appearing at page 31 of the paper-book. It was in the name of Shri R. Vishwanath, the insured, since deceased. It is also not in doubt that this policy was ‘assigned’ in favour of EPFC in Form 15 of the Employees Provident Fund Scheme, 1952, which is also endorsed by LIC, meaning thereby, that the EPFC was the assignee. The question before us whether ‘assignee’ would fall in the same category as an ‘Agent’ as reflected in the Judgments (supra).
Section 38 of the Insurance Act, 1938, deals with the effect of assignment and transfer of Insurance Policy, which reads as follows:-
“Assignment and transfer of insurance policies.
(1) A transfer or assignment of a policy of life insurance, whether with or without consideration may be made only by an endorsement upon the policy itself or by a separate instrument, signed in either case by the transferor or by the assignor, his duly authorised agent and attested by at least one witness, speci
