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2021 DIGILAW 459 (RAJ)

Ghisa Lal v. Life Insurance Corporation of India

2021-02-23

I.MAHANTY

body2021
JUDGMENT : I. Mahanty, J. 1. The instant first appeal has been preferred by the plaintiff-appellant against the judgment and decree dated 22.07.1998 passed by the learned Additional District Judge No.1, Ajmer in Civil Suit No.95/1996 dismissing the suit of the appellant plaintiff, claiming a sum of Rs. 68,950/- as claim on account of death of his wife Smt. Kamla Devi, in terms of joint Insurance Policy No. 180536249 issued by the Life Insurance Corporation of India (hereinafter referred to as "the Corporation"). 2. The facts, in brief, giving rise to this appeal are that the plaintiff-appellant filed a suit claiming Rs. 68,950/- in the Court of District Judge, Ajmer, which was later on, transferred to the Court of Additional District Judge No. 1, Ajmer contending, inter alia, that the plaintiff-appellant, while working as labourer in M/s. Aditya Mill, Kishangarh, took a life insurance policy bearing No. 180536249 for a sum of Rs. 50,000/- from the Corporation jointly in his name and in the name of his wife late Smt. Kamla Devi. The said policy was issued by the Corporation under the "Salary Saving Scheme" launched by it and the monthly premium was Rs. 291/-. It was further contended by the plaintiff-appellant that as per the said scheme, there was an agreement between the Corporation and the employer M/s. Aditya Mill that the employer will deduct the premium amount from the salary of the plaintiff-appellant and then remit it to the Corporation. According to the plaintiff-appellant, it was the duty of the employer to deduct and send the premium to the Corporation and, at the same time, it was the duty of the Corporation to inform the employer in case of non-receipt of the premium amount and despite information if the employer did not pay the due premium, the Corporation was under an obligation to inform about the non-receipt of premium from employer, to the plaintiff-appellant. It was further stated by the plaintiff-appellant that his wife Smt. Kamla Devi died on 31.08.1994 and information about the sad demise of his wife was given by him to the Corporation on 12.09.1994 with application claiming the insured amount under the insurance policy. 3. It was further contended by the plaintiff-appellant that in 1st week of November, 1994, he came to know that his employer was not deducting and sending the premium amount to the Corporation under the policy. 3. It was further contended by the plaintiff-appellant that in 1st week of November, 1994, he came to know that his employer was not deducting and sending the premium amount to the Corporation under the policy. This fact that the employer was not sending the premium amount to the Corporation was not made known to the plaintiff-appellant as he did not receive any information whatsoever from the Corporation in this regard. On 9th November 1994, the plaintiff-appellant wrote a detailed letter to the Branch Manager of the Corporation intimating therein that since after taking policy, the employer did not deduct the premium and send it to the Corporation for five months, he was sending five months' premium to the tune of Rs. 1,500/- through Field Agent namely, Shri Suresh Kumar Vaishnav and requested him to deposit the same. The Field Agent gave receipt showing deposit of the premium amount for two months, while returning the remaining amount with the saying that the Corporation accepted only two months' premium and rest premium amount of three months would be received by the Corporation through the employer, after deducting from the salary of the plaintiff-appellant. It was further mentioned in the letter that from December, 1992 to March, 1993 double deductions were made and sent to the Corporation. It was further stated that the Mill of the employer was locked from 08.05.1993 to 22.09.1993 and as a result of which, the salary of April 1993 could not be paid in time, therefore, the deduction of premium from April 1993 to September 1993 could not be made and remitted. It was further stated by the plaintiff-appellant that for the period from October 1993 to August 1994, except for the month of December 1993, premium was paid. On receipt of letter dated 14.09.1994, the plaintiff-appellant again wrote a letter to the Corporation on 03.12.1994 stating that he did not receive the letter dated 06.04.1994 as mentioned in the letter dated 14.09.1994, nor employer has informed him about the same. It was further contended by the plaintiff-appellant that after submission of claim application, the Corporation sought various information which were given by the plaintiff-appellant. He has also furnished the receipts showing deposit of two months premium by Suresh Kumar Vaishnav. It was further contended by the plaintiff-appellant that after submission of claim application, the Corporation sought various information which were given by the plaintiff-appellant. He has also furnished the receipts showing deposit of two months premium by Suresh Kumar Vaishnav. However, the Corporation, vide letter dated 26.04.1996, informed the plaintiff-appellant that since there are nine defaults in making payment of premium, no claim could be granted under the policy in question. According to the plaintiff-appellant, if there was any default in payment of premium, he was not responsible for the same as it was incumbent on the part of the employer to deduct the premium from the salary of the plaintiff-appellant and remit it to the Corporation. If there was any default in sending the premium by the employer, no liability can be fastened on the plaintiff-appellant as he was not informed by the Corporation about the nonpayment of premium by the employer. 4. The suit was contested by the defendant-Corporation by filing a written statement contending, inter alia, that there was no agreement between the defendant-Corporation and the employer, as urged by the plaintiff-appellant. The Corporation has also denied the so-called liability of the employer. It was further averred that it was not the responsibility of the Corporation to either inform the employer or the plaintiff regarding non-payment of the premium. It is further contended that the policy lapses in case of default in payment of six premium. It was further contented that clauses of the manual are only suggestive in nature and not binding as agreement. The plaintiff-appellant was well aware of all the facts right from the very beginning and thus, it was his bounden duty to see that premiums are being regularly paid to the Corporation. Hence, it was prayed that the suit be dismissed. 5. On the basis of pleadings of the parties, the learned trial Court framed the following three issues: 1. Whether the defendant-Corporation has illegally rejected the insurance claim of the deceased-wife of the plaintiff as mentioned in para 12 of the plaint? 2. Whether the plaintiff is entitled to receive a claim of Rs. 68,950/- from the defendant Corporation under the insurance policy? 3. Relief? 6. No witness was examined either by the plaintiff-appellant or the defendant-respondent in support of their respective case. 7. 2. Whether the plaintiff is entitled to receive a claim of Rs. 68,950/- from the defendant Corporation under the insurance policy? 3. Relief? 6. No witness was examined either by the plaintiff-appellant or the defendant-respondent in support of their respective case. 7. The learned Additional District Judge, after hearing the parties and considering the materials available on record, dismissed the suit of the plaintiff-appellant vide impugned judgment holding, inter alia, that the plaintiff-appellant has failed to deposit nine installments of premium with the Corporation prior to the death of his wife. The burden to prove the issues No. 1 and 2 was on the plaintiff which he failed to discharge. Furthermore, there was no agreement between the employer and Corporation with regard to deduction of premium. In fact, as per document (Exhibit-A/1), in case of default in payment of premium, the entire liability was of plaintiff-employee. 8. Heard learned counsel for the parties. 9. Learned counsel for the appellant, referring to the terms and conditions of the Salary Saving Scheme launched by the Corporation, urged that it was the duty of the employer to deduct the premium from the salary of the plaintiff-appellant and remit it to the Corporation. In case the employer failed to deduct and send the premium to the Corporation, the Corporation was required to first inform the employer to remit the due premium and despite that if the employer did not remit the premium, in that eventuality it was the duty of the Corporation to inform the plaintiff-appellant to pay the due premium. The appellant was not informed by the employer or the Corporation about the non-deposit of premium. When there was default of nine installments of premium, as claimed by the Corporation, the Corporation under the terms of the Scheme was required to inform about the same to the appellant enabling him to pay the same. Since the appellant was not informed, he cannot be held liable for non-payment of the premium of nine installments. 10. Apart from this, it was submitted that the consequences of the non-payment of the premium were also not made known to the plaintiff-appellant by the Corporation. Since the appellant was not informed, he cannot be held liable for non-payment of the premium of nine installments. 10. Apart from this, it was submitted that the consequences of the non-payment of the premium were also not made known to the plaintiff-appellant by the Corporation. It was the right of the plaintiff-appellant, who is labourer, to know the repercussions of lapse of policy on account of non-payment of premium and by not informing about the same, the Corporation has acted in an arbitrary and casual manner ignoring the object and purpose of the Salary Saving Scheme, under which the policy in question was issued. In such circumstances, the appellant cannot be held liable for the alleged default and the Corporation was not justified in rejecting the claim of the plaintiff-appellant. The findings of the trial Court rejecting the claim of the appellant run contrary to the facts and materials available on record. Hence, the judgment & decree of the learned trial Court cannot be sustained and the appellant is entitled to receive the claim amount under the policy in question on account of death of his wife. 11. Learned counsel for the respondent-Corporation submitted that there was no agreement whatsoever between the employer and Corporation, as contended by the appellant. It was asserted that the Corporation was not liable to inform about the non-payment or non-receipt of premium under the Salary Saving Scheme. As a matter of fact, the plaintiff-appellant was fully aware about the non-payment of premium to the Corporation. It was further submitted that as per terms and conditions of the said scheme, the policy lapses where there is default in making payment of premium for six months. Since there was nonpayment of nine months' premium, the policy in question lapsed, and thus, no illegality was committed by the Corporation in rejecting the claim of the plaintiff-appellant. 12. In support of his submissions, learned counsel for the respondent has placed reliance on the judgment of Hon'ble Supreme Court in Delhi Electric Supply Undertaking Vs. Basanti Devi & Anr., AIR 2000 SC 43 . 13. I have considered the rival submissions of the parties and perused the materials available on record. 14. 12. In support of his submissions, learned counsel for the respondent has placed reliance on the judgment of Hon'ble Supreme Court in Delhi Electric Supply Undertaking Vs. Basanti Devi & Anr., AIR 2000 SC 43 . 13. I have considered the rival submissions of the parties and perused the materials available on record. 14. Admittedly, the plaintiff-appellant took a life insurance policy jointly in his name and in the name of his wife Smt. Kamla Devi and monthly premiums thereof were being deducted from the salary of the plaintiff-appellant under the Salary Saving Scheme. However, there were as many as nine defaults in making payment of premium i.e. from 5/92 to 7/92, 4/93, 5/93, 8/93 to 10/93 and 12/93. 15. Clause 16 and 24, of the Manual, which would be relevant to deal with the present controversy, reads as under:- "16. DEFAULT AND FINAL LAPSE NOTICE. While posting the Group Ledger any default in payment of premium should be communicated to the employer on a special form No. 5227. If the premiums remain unpaid for 6 months, a lapse intimation on the prescribed form No. 5228 should be sent to the employee. A lapse Register is also to be maintained for preparing statistics in respect of lapses." "24. PREMIUM DEFAULT INTIMATION (GAP INTIMATION) Under SSS are not sending individual premium receipts to the policyholders, as such it becomes our duty to inform the policyholder of any default in receiving the premium. Premium default intimation to policyholder for stray defaults should be sent immediately when the premiums are adjusted and defaults posted in Group/Individual ledgers. Prompt intimation would serve to remind the policyholder for payment the overdue premium or result in prompt action to trace the amount if already paid through the employer. ................" In these circumstances, it was the duty of the respondent-Corporation to immediately inform the plaintiff-appellant regarding default in payment of monthly premium. In this regard, the learned trial Court came to the conclusion that the provisions of the above Manual were directory and not mandatory in nature, but no reasons have been given by the learned trial Court for reaching on the above conclusion. In the opinion of this Court, the provisions of the Manual were mandatory in nature and the respondent-Corporation was duty bound to immediately inform the policyholder of any default in receiving the premium. 16. In the opinion of this Court, the provisions of the Manual were mandatory in nature and the respondent-Corporation was duty bound to immediately inform the policyholder of any default in receiving the premium. 16. In view of the above, the learned trial Court while passing the impugned judgment & decree, has committed material illegality in appreciating the factual and legal aspects of the matter and, therefore, the impugned judgment & decree deserve to quashed and set aside. 17. Consequently, the appeal succeeds and is hereby allowed. Impugned judgment & decree dated 22.07.1998 passed by the learned Additional District Judge No. 1, Ajmer dismissing the suit of the plaintiff-appellant is quashed and set aside. Accordingly, the suit of the plaintiff-appellant is decreed for a sum of Rs. 68,950/- along with interest @ 6% per annum on the principal amount from the date of filing of the suit till its realisation.