IMPORTANT POINT
Insured cannot suffer for lapses of his employer in payment of premium.

Suresh Chandra, Member—This revision petition is directed against the order dated 21.12.2006 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (‘State Commission’ for short) by which the State Commission allowed the appeal of the complainant Smt. Krishna Devi who is Respondent No.1 herein and reversed the order dated 4.8.2003 of the District Forum, Nawanshahar by which the complaint was dismissed without prejudice to the rights of the complainant to take recourse to appropriate civil proceedings by way of filing a regular suit for establishing her claims under the disputed insurance policy.

2. The facts of this case are like this. Sh. Som Nath deceased husband of Respondent No.1/complainant had obtained an endowment insurance policy bearing No. 130100532 dated 28.3.2001 for Rs.1 lac along with other consequential benefits from the LIC of India through their Branch Office Garhshankar. At the time of taking the policy in question, her husband was working in the office of OP-3, i.e., the Executive Engineer, Punjab State Electricity Board, Distribution Division, Garhshankar. As a matter of arrangement between the petitioner Corporation who were OPs -1 & 2 before the District Forum and OP-3, the office of OP-3 used to deduct the necessary premium for the policy from the salary of husband of the complainant and then remit the same to the concerned office of the petitioners. Thus the office of Respondent Nos. 2 & 3 herein used to act as a collecting agent for and on behalf of the petitioners. After the death of insured in December, 2001, the complainant being the widow and nominee of her deceased husband lodged necessary claim with the petitioners for payment of the sum assured along with other consequential benefits but the petitioners repudiated the claim on the ground that the above-mentioned insurance policy was lying in a state of lapse and the complainant was not entitled to any claim under the policy. Alleging this repudiation to be illegal, the complainant/Respondent No.1 filed a complaint before the District Forum seeking relief. The Insurance Co. in its reply admitted the policy but pleaded that no premium was received in respect of this policy after May, 2001 from the employers of Som Nath, i.e., OP-3 and hence the policy stood lapsed for non-payment of premium from June, 2001 onwards. According to the petitioners, this fact was in the knowledge of insured in his lifetime as also known to the employer of the deceased insured. It was stated that at the time of obtaining the policy, the deceased was posted at Garhshankar in the office of OP-3 but was subsequently transferred to the office of the Executive Engineer, PSEB, Distribution Division, Nawanshahar, Respondent No.3 herein and as per clause No.11 containing the terms and conditions of the policy, it was the responsibility of the employee to inform the LIC regarding his transfer as well as when premium was not deducted from this salary but the deceased insured never informed the LIC about his transfer. It appears that the employers of the deceased in their letter dated 7.5.2002 admitted their lapse in the matter in not deducting the premium from the salary of the deceased and depositing the same with the LIC but requested for reconsideration of the matter by the petitioners on compassionate grounds. The stand of the petitioners was that the policy already stood lapsed and hence the claim was rightly repudiated by them. OP-3 in their reply before the District Forum admitted deducting the premium from the salary till May 2001 but thereafter chose to remain absent from the proceedings in the case. OP-4, i.e., the Executive Engineer, Nawanshahar did not appear in the case despite notice and hence was proceeded against ex parte.

3. As stated above, the District Forum dismissed the complaint which led the complainant to file an appeal before the State Commission which accepted the same in favour of the complainant vide its impugned order. Even