IMPORTANT POINT
Appellants/Insurance Company cannot be held liable for actions of Agent with whom they do not have principal to agent relationship.

Vineeta Rai, Member—Being aggrieved by the order of the West Bengal State Consumer Disputes Redressal Commission, both the parties have filed separate appeals.

FA/126/2009 has been filed by LIC of India (herein referred to as appellant) , which had partly allowed the complaint of Shri Radhey Shayam Kedia & Ors. Respondents herein and original complainants before the State Commission.

FA/190/2009 has been filed by Shri Radhey Shayam Kedia & Ors./original complainants seeking interest on the awarded amount.

2. Since the parties, as also the facts are common and arise out of the same complaint, it is proposed to dispose of these appeals through a single order by taking the facts from FA No. 126/2009.

3. In their complaint before the State Commission, Shri Radhey Shayam Kedia & Ors./Original Complainants had contended that they are policy holders in respect of a number of policies that they had taken from the LIC of India (appellants no. 1-5 herein), which had been obtained through the licensed agent of appellant insurance company namely OP-6 (Sri Smarjit Nandy). It was contended that the value of the policies was for a total assured sum of Rs.12 lakhs and the respondents regularly paid the premium in respect of these policies through OP-6(Agent). However, OP-6 in collusion with OP-1 did not deposit the premium amounting to Rs.3,44,000/-. Besides this, three demand drafts sent by the respondents/complainants in favor of OP-1/Insurance Company for Rs.14,958/-, Rs.9,653 and Rs.9,547/- towards premium in respect of three policies through registered post, were also not encashed for reasons best known to the Appellant/insurance company. They instead handed over these over to OP-6 (i.e. the Agent), which were returned to the respondents/complainant asking for cash payments. According to the Respondents, such transactions between them and the insurance company through an insurance agent of appellant/Insurance Company was the usual practice prevailing in the field of insurance business, and therefore, the respondents were shocked when they came to know that the premium were never deposited by OP-6 (Agent). Respondents also came to know at that time, that most of the life policies taken by them were lying in a lapsed condition because of non-deposit of premium and the appellant/insurance company was not ready to acknowledge their complaint against their Agent and revive the policies. Alleging deficiency in service on the part of the appellant/insurance company, who was responsible for the illegal actions of their authorized agent with whom they had a relationship of Principal and Agent, respondents filed the complaint before the State Commission on grounds of deficiency in service and requested that the appellant/insurance company be directed to refund all premiums with prevailing interests, which are still deposited with appellant/insurance company amounting to Rs.1,40,674/- and also refund Rs.2,94,014/- which appellant/insurance company’s agent used for his personal use without paying premium to the appellant insurance company with 18% interest p.a. and Rs.5,000/- as costs.

4. Appellants/Insurance Company on being served filed a written rejoinder. It was specifically stated therein that an LIC agent is not authorized to collect premium on behalf of the insurance company and when he collects premium from the policy holder to deposit the same with the insurance company, he acts as an agent of the policy holder - in this case the respondents and not the LIC/ Insurance Company. This has been clearly stated in Section 8 Sub-Section 4 of the Agents Regulations, 1972. It was further contended that so far as the three demand drafts were concerned, these contained only one yearly premium payment for each of the policy, whereas for all the three policies, two yearly premiums were due. It was the respondents, in fact, who vide their letter dated 10-04-1997, had requested appellant/insurance Company to return their respective demand drafts to