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Madhya Pradesh High Court · body

2016 DIGILAW 1087 (MP)

Neeta VIJ v. LIC

2016-11-29

SUJOY PAUL

body2016
ORDER : Sujoy Paul, J. 1. In this petition filed under Article 226 of the Constitution, the petitioner has prayed for issuance of a writ of mandamus directing the respondents to make full payment of two different policies with interest from the date of death of petitioner's husband. 2. Draped in brevity, the facts as narrated by the petitioner are that the petitioner is the widow of Late Devendra Kumar Vij, who was serving in Gun Carriage Factory (hereinafter referred to as the GCF) till the time of his death. The deceased employee bought two insurance policies for Rs. 1 lac and 2 lacs respectively. The first policy was bought on 28.08.1994 bearing No. 371249571 and second policy was bought on 07.03.2011 bearing No. 374020052. Both the aforesaid policies were under "Salary Saving Scheme." An arrangement was made that all the instalments fixed by respondent No. 2 (LIC) shall be payable at the rate shown in the schedule of the policy so long as life assured continues to be an employee of GCF. The premium was required to be deducted from the salary of Shri Vij. The employer was required to deduct the amount of premium from salary and remit it to the LIC without any charges. 3. Shri Devendra Kumar Vij died on 13.09.2013 leaving behind the petitioner and her son. They approached the LIC for payment of amount of policies. They were informed that the premium was not paid by the deceased-employee and, therefore, the benefit of insurance cannot be extended in favour of the petitioner. Lastly, a payment of Rs. 2 lacs was made to the petitioner but without any additional benefit and interest. This amount was made out of second policy whereas against the first policy, the petitioner received only Rs. 25,000/-. 4. Shri A.K. Jain, learned counsel for the petitioner submits that the employer/GCF has to be treated as an agent and was required to deposit the amount of premium after deducting it from the salary of the deceased employee. If the employer has failed to deduct the said amount, the petitioner cannot be deprived from the legitimate claim of insurance. On merits also, it is contended that the document (Annexure P/8) which are pay slips (cumulatively) showed that the deduction of premium was actually made from the monthly salary of the deceased-employee, hence the contention of LIC is factually incorrect. 5. On merits also, it is contended that the document (Annexure P/8) which are pay slips (cumulatively) showed that the deduction of premium was actually made from the monthly salary of the deceased-employee, hence the contention of LIC is factually incorrect. 5. Learned counsel for the petitioner submits that the petitioner's right flowing from Article 14 and 21 of the Constitution are taken away. The petitioner is entitled to get the benefit of insurance. In support of his contention, he relied on Delhi Electric Supply Undertaking vs. Basanti Devi and Another, (1999) 8 SCC 229 , Commissioner of Income Tax and Others vs. Chhabil Dass Agrawal, (2014) 1 SCC 603 and Real Estate Agencies vs. State of Goa and Others, (2012) 12 SCC 170 . 6. Nobody appeared for the LIC even in the pass over round. However, LIC has filed its reply which is pregnant with preliminary objection on maintainability. It is averred that in view of LIC of India and Others vs. Smt. Kiran Sinha, AIR 1985 SC 1265 and LIC of India and Others vs. Asha Goel and Another, (2001) 2 SCC 160 this writ petition is not maintainable. The proper remedy for the petitioner is to approach the Consumer Forum established under the Consumer Protection Act. It is submitted that a number of complex findings of facts are required to be given, which is possible only before the Civil Court or before the Consumer Forum. In the return, it is admitted that the policy in question was a "Salary Saving Scheme" and insurance premium was deducted by the employer/GCF from the monthly pay of deceased-employee. The employer used to remit the said payment to the office of respondent No. 2. It is averred that the employer was not acting as an agent of LIC and thus no liability in the matter arises with regard to non remittance of premium to the answering respondent as answering opposite party was under no obligation as no liability can be saddled on the Insurance Corporation under the policy for which no premium has been received by the Corporation. As per Section 64-BB of Indian Insurance Act, the Insurance Corporation must be absolved from paying any claim under the policy. 7. As per Section 64-BB of Indian Insurance Act, the Insurance Corporation must be absolved from paying any claim under the policy. 7. In Para 13 of the reply, the Corporation contended that the premium for five months (w.e.f. 5/12 to 9/12) under the Policy No. 374020052 were not received but as a good will measure and considering the plight of the petitioner/widow, the claim under policy was considered sympathetically. The claim was paid on the basis of ex-gratia. The petitioner has already accepted the said ex-gratia amount paid to her on 18-03-2014. It is common ground taken by Corporation and GCF that the deceased policy holder was under suspension between 20.04.2012 to 04.10.2012 and during this period no premium was collected and paid to the Corporation. Similarly, in Policy No. 371249571 there were eleven gaps during which premium was not paid. Hence, under the policy the premium collected was refunded to the petitioner as notional paid up value. In nutshell, the stand of LIC is that in absence of payments of all instalments of premium, the petitioner is not entitled to get the benefit of insurance. 8. Shri A.P. Khare, learned counsel for the respondent No. 3 placed reliance on his reply and contended that the premium amount used to be deducted from the salary of deceased-employee and remitted to the Corporation. However, the employee remained under suspension between 20.04.2012 to 04.10.2012 and during this period, the premium was not deducted from subsistence allowance. He placed reliance on Instruction No. 5 published below FR 53 (Annexure R-3/1). On the strength of this, it is urged that the recovery from subsistence allowance can be made only to the extent it is made permissible as per Ministry of Finance Memorandum No. F.15(5)-E. IV/57 dated 18.09.1959 and 20.11.1961. 9. No other point is pressed by the parties. 10. I have heard the parties at length and perused the record. 11. The aforesaid factual backdrop makes it crystal clear that there is no factual dispute between the parties regarding existence of insurance policy, employment of petitioner's husband, practise and liability under the policy for the employer to deduct the premium from the salary and pay it to the Corporation. I have heard the parties at length and perused the record. 11. The aforesaid factual backdrop makes it crystal clear that there is no factual dispute between the parties regarding existence of insurance policy, employment of petitioner's husband, practise and liability under the policy for the employer to deduct the premium from the salary and pay it to the Corporation. The only question is whether the employer was justified in not deducting the amount of premium from subsistence allowance during the period of suspension and whether such non payment (which was of course happened without intimation to the deceased-employee) can become a reason for non payment of necessary benefits arising out of two policies. The ancillary legal question raised by the respondents is whether the respondent No. 3 can be treated to be an 'agent' for the Corporation. These points need serious consideration. 12. As per Section 182 of Contract Act, 'Agent' means a person employee to do any act for another, or to represent another in dealing with third person and the person for whom such act is done, or who is so represented, is called the "Principal". As per Section 185 of the said Act, no consideration is necessary to create an agency. In the present case, it is not in dispute that the premium was payable to LIC, which was to be deducted every month by GCF from the salary of Shri Vij. The GCF had, therefore, implied authority to collect premium from Shri vij on behalf of LIC. There was, thus a valid payment of premium by Shri Vij except the period during which he was under suspension. In my view, the authority of GCF to collect premium on behalf of LIC is implied. The GCF had ostensible authority to collect the premium from Shri Vij on behalf of LIC. So far as the deceased employee is concerned, GCF was an agent of LIC to collect the premium on his behalf. I find support in this regard from the judgment of Supreme Court in Basanti Sinha (supra). The judgment of Basanti Sinha (supra) was again followed in LIC and Others vs. Rajiv Kumar Bhasker, (2005) 6 SCC 188 . 13. So far as the deceased employee is concerned, GCF was an agent of LIC to collect the premium on his behalf. I find support in this regard from the judgment of Supreme Court in Basanti Sinha (supra). The judgment of Basanti Sinha (supra) was again followed in LIC and Others vs. Rajiv Kumar Bhasker, (2005) 6 SCC 188 . 13. Another ancillary question is whether employer was justified in not deducting the premium from the subsistence allowance of Shri Vij during the period he remained under suspension and whether this action should left the widow high and dry when she is in the need of money to keep her body and soul together. At this stage, it is noteworthy that contention of Shri Jain that premium amount was actually deducted from the salary of Shri Vij during the period between April to May 2012 is not supported by payslips (Annexure P/10). Petitioner has not filed payslips for the months between April to September 2012. 14. The employer has placed reliance on O.Ms. dated 18.09.1959 and 20.11.1961. As per those O.Ms., deductions are permissible from the subsistence allowance for payment of income tax, HRA, electricity, water, furniture, repayment of loan, contributions under Central Health Scheme and also contributions towards Employees Group Insurance Scheme, 1980. Thus, these O.Ms. are wide enough to permit deductions for payment of premium of insurance policies. When these O.Ms. were issued in 1959 and 1961, perhaps the 'Salary Saving Scheme' was not in existence. It is not necessary that every such scheme should be named in such O.Ms. It is a matter of common knowledge that LIC used to introduce different policies periodically. However, a reading of these O.Ms. make it clear that deductions for subscription/premium to group insurance scheme was permissible. Thus, the deduction for payment of premium to LIC, a Government Corporation was also permissible. Apart from this, if it was not permissible and employer did not deduct the said amount, in all fairness, the employer should have intimated this fact to the deceased employee to enable him to make payment in this regard. Apart from this, no bar for deducting the premium from subsistence allowance could be pointed out by the respondents. 15. Apart from this, if it was not permissible and employer did not deduct the said amount, in all fairness, the employer should have intimated this fact to the deceased employee to enable him to make payment in this regard. Apart from this, no bar for deducting the premium from subsistence allowance could be pointed out by the respondents. 15. So far as the objection of maintainability is concerned, in Smt. Kiran Sinha (supra) the Apex Court "in the circumstances of that case" opined that only remedy available to the respondents "in that case" was a suit before the Civil Court. There is no thumb rule as per this judgment that when there are no factual dispute, the claimant should be relegated to avail the remedy of alternate forum. In Asha Goel (supra), the Apex Court held that in cases of disputed questions of fact, the proper remedy is consumer forum or any other appropriate forum. It was made clear that it cannot be laid down as a general preposition that a claim under the insurance policy can never be enforced under Article 226 of the Constitution. At the cost of repetition, in the present case, there are no such disputed questions of fact which necessitates this Court to relegate the petitioner to avail the alternate remedy. This petition is pending for more than two years. In this backdrop, I am not inclined to relegate the petitioner to avail any other alternate remedy. 16. The last question is as to what relief can be given to the petitioner? 17. The respondents have already paid certain amount arising out of said policies as ex-gratia amount notional payment. If the premium for the relevant period was not deducted and paid by the employer to the Corporation, the petitioner cannot be deprived from the fruits of insurance policy. 18. Accordingly, I deem it proper to direct the respondents to calculate the benefit of insurance arising out of both the insurance policies as if all the premiums have been paid to the Corporation. The amount so reached on such calculation shall be paid to the petitioner after deducting the notional/ex-gratia payments actually paid to the petitioner. This order passed in the peculiar facts and circumstances of this case will not have any serious impact on the financial health of the Corporation. The amount so reached on such calculation shall be paid to the petitioner after deducting the notional/ex-gratia payments actually paid to the petitioner. This order passed in the peculiar facts and circumstances of this case will not have any serious impact on the financial health of the Corporation. In addition, the petitioner shall get 12% interest for delayed payment from due date because the delay was solely attributable to the respondents. [See Union of India vs. Justice S.S. Sandhawalia (Retd.) and Others, (1994) 2 SCC 240 ]. This exercise shall be completed within 30 days from the date of production of copy of this order. 19. The petition is allowed. No cost.