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2008 DIGILAW 43 (UTT)

SENIOR BRANCH MANAGER v. KALAWATI DEVI

2008-01-31

C.C.PANT, IRSHAD HUSSAIN

body2008
ORDER (Per : Justice Irshad Hussain, President) This is insurer’s appeal against the order dated 03.10.2006 passed by the District Forum, Nainital, allowing the consumer complaint No. 154 of 2005 and directing the insurer to pay to the complainant within one month sum of Rs. 25,000/- as insurance policy amount together with interest @ 9% per annum and also to pay Rs. 1,500/- towards litigation expenses. The insurance policy amount under the Group Salary Linked Insurance Scheme was payable to workman Chatur Singh’s widow, the complainant and the workman’s employer-opposite party No. 2 of the complaint was absolved of its liability for the policy amount. 2. We have heard the learned counsel for the insurer – appellant and the complainant – respondent No. 1. None appeared for the employer – respondent No. 2. On the submission made at the bar, the only question, which arise for consideration in this appeal, is as to whether or not under the Group Salary Linked Insurance Scheme, there would be continued insurability even if the employer, respondent No. 2 in this appeal, did not make payment of the premium of the policy by the stipulated date, in the event of the death of a workman/employee, the insurer will still be liable to pay the insurance policy amount. 3. In this case, it is not disputed that workman Chatur Singh died on 09.08.2001, whereas on account of non-payment of the premium by the employer, the policy under the Group Salary Linked Insurance Scheme stood lapsed. Employer’s letter of the month of December, 2005 (Paper No. 56) as well as cheque dated 09.12.2005 (Paper No. 57) reveal that the premium for the period August, 2000 to July, 2001 had been sent in the year 2005, whereas the above-named workman had died long ago in the year 2001. Schedule Part II of the policy in question (Paper No. 32) provide that if the premium is not paid for a particular month within the days of grace, the grantees shall be deemed to have discontinued payment of premium in respect of the policy as a whole. It also provides under what circumstances and how with the consent of the insurer, the grantees could be permitted to resume payment. It also provides under what circumstances and how with the consent of the insurer, the grantees could be permitted to resume payment. At no stage, the grantees, namely, the employer in this case, had sought to resume payment of the premium with the consent of the insurer on settled terms and conditions and, as such, as submitted by the learned counsel for the insurer, it ceases to be a case of continued insurability. 4. A case with similar facts came to be considered and decided by the Hon’ble National Commission. It pertain to the dispute between the Central Coalfields Limited Vs. Bandana Mishra and another; 2007 (I) CPC 580, pressed into service by the learned counsel for the insurer, in support of the submission that in the event of default to pay the premium by the employer under the Group Salary Linked Insurance Scheme, the insurer would not be fastened with the liability to pay insurance policy amount to the workman/employee’s widow and that the employer alone shall be liable to pay the insured sum with interest. In the reported case, the decision of the Hon’ble Apex Court in the matter of Delhi Electric Supply Undertaking Vs. Basanti Devi and another; III (1999) CPJ 15 (SC) = AIR 2000 Supreme Court 43, relied upon by the District Forum in deciding the case against the insurer, was distinguished and it was observed that the decision in the case of Basanti Devi (supra) was rendered with reference to Salary Saving Scheme and not to a case pertaining to Group Insurance. The ratio of the case of Basanti Devi (supra) was , thus, not applicable to the facts of the instant case and in the face of the facts of the case, the District Forum fell in error in fastening the liability to pay the insurance policy amount on the insurer. Since the employer – respondent No. 2 had taken the policy under the Group Salary Linked Insurance Scheme and has defaulted in payment of the premium installment as stated above, there was no continued insurability and insurer was not liable to pay the insurance policy amount to the complainant. Under these circumstances, employer – respondent No. 2 has to be fastened with the liability to pay the insurance policy amount with interest etc. The question under consideration is answered accordingly. 5. Under these circumstances, employer – respondent No. 2 has to be fastened with the liability to pay the insurance policy amount with interest etc. The question under consideration is answered accordingly. 5. In view of aforesaid finding, this appeal succeed and the insurer has to be absolved of its liability to pay any amount under Group Salary Linked Insurance Scheme. The liability shall be that of the employer – respondent No. 2. 6. Appeal is allowed. Order dated 03.10.2006 of the District Forum is set aside. The consumer complaint is dismissed against the appellant – insurer. The respondent No. 2 is hereby directed to pay Rs. 25,000/- as insurance policy amount to the complainant together with interest @9%per annum from the date of filing of the complaint till the date of actual payment and also to pay Rs. 1,500/- towards litigation expenses awarded by the District Forum. Cost of the appeal made easy.