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2010 DIGILAW 845 (GAU)

Prabhabati Deka v. State of Assam

2010-11-11

BROJENDRA PRASAD KATAKEY

body2010
JUDGMENT B.P. Katakey, J. 1. The petitioner, who is the widow of Jogesh Chandra Deka, an employee of Assam Khadi and Village Industries Board ('the Board'), by the present petition, is praying for a direction to the respondents, including the Life Insurance Corporation of India (in short, the Corporation), to satisfy the claim lodged by her on account of the death of her husband, against the group insurance cover scheme policy No.GSLI MP No.26223. 2. The petitioner's husband, who was the Registrar of the Board, died in harness on 4th March, 2001. While her husband was in service, a group insurance policy bearing No.GSLI MP No.26223 was taken by the Board, with its Chief Executive Officer as the master policyholder, from the respondent-Corporation insuring the lives of its employees, including the petitioner's husband. Under the scheme of such policy, the master policyholder is required to deposit lump sum premium after deducting proportionate amount from the members of the group. One of such premiums was payable in the month of February 2001. The master policyholder, however, initially had issued a cheque dated 5 March 2001 in favour of the respondent-Corporation towards the premium payable in the month of February 2001, but the same, on presentation, was dishonoured due to insufficient fund in the A/c of the Board and as such, the Board was accordingly informed by the Corporation. The Board, subsequently on 31st May, 2001, made payment of the premium amount payable, which was accepted by the Corporation by realizing the fine/interest. The entire policy thereafter stood revived on acceptance of such premium-payable in the month of February 2001. Before making such payment, unfortunately, on 31st May, 2001, petitioner's husband, who was a member of the group, died on 4th March, 2001. A claim application was thereafter filed on 10th April, 2001 in the respondent-Corporation claiming an amount of Rs.1,20,000 (Rupees one lakh and twenty thousand) only, which, according to the petitioner, was payable under the policy for the death of her husband. Since the claim application was not processed, an application was thereafter filed by the petitioner under the Right to Information Act, the reply of which was given by the Corporation on 27th October, 2009 intimating her that the policy was in lapsed condition at the time of the death of her husband as the premium was paid only on 31st May, 2001. It was also informed that the claim, however, has not been repudiated. It is also not in dispute that the amount deductible from the salary of the petitioner's husband was deducted by the employer namely the master policyholder and the payment of lump sum premium was made to the respondent-Corporation, maybe with the delay of about 3 months. 3. Since the claim of the petitioner has not been settled by the respondent-Corporation, she has filed the present petition seeking the relief as aforesaid. 4. I have heard Mr. A. Chamuah, learned counsel for the petitioner; Mr. B.J. Ghosh, learned State counsel, appearing for the respondent No.1; Mr. A. Thakur, learned counsel for the respondent Nos.2 and 3; and Mr. K.K. Nandi, learned counsel for the respondent Nos.4, 5 and 6. 5. Learned counsel for the petitioner submits that since under the scheme the employer is required to deduct the contribution payable by the members of the group towards the share of the premium amount and there is no provision under the scheme requiring the Corporation to inform the members of the group, individually about the non-payment of such premium and the Corporation having never at any point of time informed any of its members about the non-deposit of the premium payable by the employer, i.e., the master policyholder, the Corporation cannot decline to settle the claim on the ground that the premium was paid after 3 months from the day it fell due, that is, in the month of May 2001, towards the premium payable in the month of February 2001. Learned counsel submits that all the members were under the impression that proportionate premium deducted from their salary was duly deposited by the master policyholder and as such, no members of the group can be made to suffer for the inaction/lapse, if any, on the part of the master policyholder in not depositing the premium in time with the Corporation, more so when for the purpose of the policy there is a relationship of master and agent between the Corporation and the Board. Learned counsel, in support of his contention, has placed reliance on a decision of the Apex Court in Chairman, Life Insurance Corporation and Ors v. Rajiv Kumar Bhasker (2005) 6 SCC 188 . 6. Learned counsel, in support of his contention, has placed reliance on a decision of the Apex Court in Chairman, Life Insurance Corporation and Ors v. Rajiv Kumar Bhasker (2005) 6 SCC 188 . 6. Learned counsel for the respondent-Corporation, on the other hand, has submitted that under the scheme the master policyholder is required to deposit the premium payable in the first week of every month, after deducting the proportionate amount of premium from the salary of the individual members of the Board, and in the instant case, since the premium payable in the month of February 2001 was deposited only on 31st May, 2001, i.e., much after the death of the petitioner's husband, the policy in respect of the member who is death, stood lapsed though the said policy stood revived in respect of the surviving members. 7. Learned counsel for the Board, on the other hand, has submitted that the Corporation, on 31st May, 2001, has accepted the entire premium including the share of premium payable by the petitioner's husband, and by such action the earlier policy stood revived. It has also been submitted that the Corporation was aware about the death of the petitioner's husband on 10th April, 2001 and despite that, had accepted the entire premium amount on 31st May, 2001, and by such act the Corporation has revived the entire policy. 8. Learned State counsel has submitted that the State has nothing to do with the matter, since it is a dispute between the Board and Corporation vis-a-vis the petitioner. 9. The facts narrated above are not in dispute. Under the scheme of the group insurance policy, the respondent-Corporation undertook to cover the risk of the members of the group, subject to the payment of lump sum premium by the master policyholder, that is, by the Chief Executive Officer of the Board. Under the scheme, the master policyholder is required to deduct the proportionate amount towards the premium from the salary of each of the members and then to deposit the same with the respondent-Corporation. There is absolutely no provision in the scheme of the policy for making payment by the individual members of the group directly. The premium on lump sum basis is to be paid by the master policyholder, that is, the Chief Executive Officer of the Board. There is absolutely no provision in the scheme of the policy for making payment by the individual members of the group directly. The premium on lump sum basis is to be paid by the master policyholder, that is, the Chief Executive Officer of the Board. The petitioner's husband, as noticed above, had died on 4th March, 2001, whereafter on 10th April, 2001, the claim application was filed before the respondent-Corporation. It also appears from the facts narrated above that the premium due in the month of February 2001 was paid, and realized by the Corporation on 31st May, 2010, with penalty/interest. 10. Since under the scheme of the group insurance policy a responsibility was cast upon the master policyholder, that is, the Chief Executive Officer of the Board, the master policyholder partakes the character of an agent, insofar as the group insurance scheme is concerned. There being no provision and the Corporation having not informed the members of the group insurance scheme about the failure of the master policyholder to deposit the premium amount in time, the members of such group cannot be made to suffer for non-payment of premium by the master policyholder to the Corporation, despite deduction from the salary of the members. The Corporation, in fact, on a subsequent date, i.e., on 31st May, 2001, had accepted the entire premium and thereafter never at any point of time had informed the Board that they have deposited more amount than required, after the death of one of its members, about which they had the knowledge at least on 10th April. 2001. 11. The Apex Court, in LICI (supra), has held that the LICI cannot be absolved from its liability of satisfying the claim, when under any scheme the employer is required to make the deposit of insurance premium after deducting the same from the salary of the employee. 2001. 11. The Apex Court, in LICI (supra), has held that the LICI cannot be absolved from its liability of satisfying the claim, when under any scheme the employer is required to make the deposit of insurance premium after deducting the same from the salary of the employee. It has also been observed that if for some reasons, the employer is unable to pay the salary to the employees, as for example, its financial constraints, the employee may be held to have legitimate expectation to the effect that his employer would at least comply with its solemn obligations and such obligations having been undertaken to be performed by the employer at the behest of the Corporation, as its agent having the implied authority therefor, the Corporation cannot be permitted to take advantage of its own wrong as also the wrong of its agent. 12. In view of the aforesaid discussion, I am of the view that the Corporation cannot be absolved from the liability of satisfying the claim lodged by the petitioner against the group insurance policy, and, hence, the Corporation is directed to pay the amount to which the petitioner is entitled to under the policy, within a period of two months from the date of receipt of the certified copy of this order to be produced before the respondent Nos.3 and 4 by the petitioner. 13. The writ petition is accordingly allowed. No costs. Petition allowed.