The central legal point established in the judgment is the liability of the employer to collect and remit premiums to the insurance company, and the employer cannot make the employee suffer the consequences of its default in paying premiums.

ORDER

D. Appa Rao, President - This is an appeal preferred by the complainant against the order of the Dist. Forum declining to extend benefits under the policy while allowing basic amount.

2. The case of the complainant in brief is that her husband Racharla Tirupathi had taken Jeevan Mitra (with triple cover endowment plan with accident benefit and profits) policy keeping her as nominee for a sum of Rs. 2,05,000 commencing from 28.5.2006 wherein R2 the Divisional Engineer, Northern Power Distribution Company agreed to deduct premiums from out of his salary he being employed as junior lineman. He died on 12.11.2006 during the subsistence of the policy. When the said fact was intimated to the Insurance Company it did not settle the claim, and on that after issuing legal notice she filed the complaint claiming Rs. 6,15,000 with interest @ 12% p.a., from the date of death till the date of realization together with compensation of Rs. 10,000 for mental agony, and costs.

3. The Insurance Company R1 resisted the case. While admitting issuance of policy it alleged that under the policy only two months premium viz., 5/2006 and 6/2006 were received. Further premiums from 7/2006 were not received. The policy did not acquire paid up value. As on the date of death of the assured the policy was in a lapsed condition, and therefore nothing could be paid under the terms of the policy. There was neither delay nor deficiency in service on its part.

4. The employer R2 did not choose to contest and was set ex parte.

5. The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A11 marked while the Insurance Company filed the affidavit evidence of its Administrative Officer and got Exs. B1 to B4 marked.

6. The Dist. Forum after considering the evidence placed on record opined that non-payment of premiums by the employer R2 was wrong and at any rate, the complainant cannot be suffered for the lapse of employer and therefore directed the Insurance Company to pay basic sum of Rs. 2,05,000 with interest @ 6% p.a., from the date of death of assured viz., 12.11.2006 till the date of realization and costs of Rs. 1,000.

7. Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the employer had agreed to deduct premiums from out of salaries of the employees and pay to the Insurance Company. For the fault of the employer she should not be penalized. Therefore she prayed that the benefits accrued under the policy be directed to be paid to her.

8. The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law

9. It is an undisputed fact that the complainant's husband being an employee of R2 Northern Power Distribution Company Ltd., has taken Jeevan Mitra (with triple cover endowment plan with accident benefit and profits) wherein the employer had agreed to deduct premiums from out of salary of the complainant's husband vide Ex. B1. A premium of Rs. 986 was to be paid every month. It is not in dispute that the policy was issued under Salary Saving Scheme (SSS) admitted by the very Insurance Company in the affidavit filed by its Administrative Officer. He categorically stated that under the above said policy two premiums for the months of May and June, 2006 were received and further premiums from 7/2006 were not received. He also filed Ex. B4 letters addressed to R2 employer to send the premiums. Despite notices the employer did not send the premiums nor gave any reply as to why it did not honour SSS scheme floated by the LIC in favour of the employee. The employer obviously having no say or defence did not choose to contest even.

10. The Hon'ble Supreme Court in Chairman, LIC of India v. Rajiv Kumar Bhasker, reported in AIR 2005 SC 3087, considered the liability of the employer wherein it accepted the responsibility to collect premiums from its e