@JUDGMENTTAG-ORDER
Radha Mohan Prasad, J.@mdashIn this writ petition, prayer of the Petitioner is to direct the Respondents to pay him the death claim of his father, who died on 9.7.1996 while working as Lecturer, Geography Department, Ram Lakhan Singh Yadav College, Aurangabad with interest and cost.
2. The case of the Petitioner, in brief, is that his father late Upendra Sharma was posted as Lecturer, Geography Department, Ram Lakhan Singh Yadav College, Aurangabad and in the year 1992 he insured his life under the Salary Saving Scheme for Rs. one lac for which required monthly premium was deducted from the salary of the Petitioner''s father every month by the said Ram Lakhan Singh Yadav College, Aurangabad and that was deposited with the Aurangabad Branch of the Life Insurance Corporation. Father of the Petitioner died of massive heart attack on 9.7.1996, thereafter the Petitioner put forth the death claim of his father and submitted the required papers in Aurangabad Branch office of the Corporation on 10.9.1996. Although the premium were to be deducted from the salary of the deceased the Petitioner on 5.11.1996 deposited the so called arrear premium amounting to Rs. 6040/- through the College for the period December, 1995 to July, 1996 for which a receipt (Annexure-7/1) v/as granted by the Patna Division of the Corporation. Petitioner also sent legal notice on 26.4.1998 to the Respondents followed by letter dated 24.1.2000. Thereafter the Additional Executive Director (Marketing) of the Corporation (Respondent No. 2) vide his letter dated 2nd February, 2000 (Annexure-11) assured the Petitioner that the matter has been taken up with Aurangabad Divisional office. However, the death claim of his father has not been settled as yet and, therefore, the Petitioner has filed the present writ application.
3. A counter affidavit has been filed on behalf of the Respondents 1 to 4, in which it is stated that it is the responsibility of the employer of the life assured to deduct the premium amount every month from the salary of the life assured and to remit the same to the Corporation and it was also the duty of the life assured to ensure payment of premium under the policy. It is stated in the counter affidavit that the premium under the policy was paid up to November, 1995 and the premium for the period December, 1995 to July, 1996 were deposited on 6.11.1996 by the Petitioner when his father died on 9.7.1996 itself. Thus, the policy in question was lying in lapsed condition on the date of death of the life assured, and acquired a paid up value of Rs. 31,800/- which they have decided to pay with interest @ 9% per annum and refund the deposit of Rs. 6040/- made after the death of the life assured on execution of discharge voucher issued on 19.7.2001.
4. It is submitted on behalf of the Petitioner that in absence of any dispute that the deceased father of the Petitioner was covered by the salary savings scheme floated by the L.I.C. and that it was the responsibility of the employer of the life assured, namely, the College to deduct the premium amount every month from the salary of the life assured and to remit the same to the Corporation, denial of payment of the death claim under the policy of the deceased is wholly arbitrary and contrary to the principle decided by the Apex Court in the case of Delhi Electric Supply Undertaking v. Basanti Devi and Anr. reported in 2000 SAR (Civil) 29 (SC). It is submitted that it is not the case of the Respondents that the premium was not deducted from the salary of the life assured or that he was not entitled for the salary during the said period, as such, even if the amount of premium was not deposited by the employer of the life assured, namely, the College and the insured employee died during the said period, the L.I.C. cannot get away with the liability to meet the claim of the heirs of the deceased employee under the L.I.C. policy of the deceased employee, moreso, when L.I.C. accepted the deposit of arrear premium through the College for the period in question i.e. December, 1995 to July, 1996 and for which receipt (Annexure-7/1) was issued by them.
5. According to learned Counsel for the L.I.C. the insurance scheme of the nature in question where the installments are paid once every month the Corporation has adopted a liberal policy and gives a grace period of 15 days for payment of installment every month. But in the instant case the employer having not at all deposited the premium for the period December, 1995 to July, 1996 till the life assured died on 9.7.1996 the policy lapsed before the death of the life assured and, thus, the Petitioner is not entitled for the claim except that he can get the paid up value for which L.I.C. is ready to pay with interest and refund of the deposit made after the death of the life assured on execution of discharge vouchers issued on 19.7.2001. In support of his contention, Mr. Singh, learned Counsel appearing for the L.I.C. has relied upon the order dated 27.1.2000 passed in the case of Chameli Khatoon v. State of Bihar and Ors. (C.W.J.C. No. 9906 of 1998) (Annexure-A to the counter affidavit) in which, according to him under more or less similar circumstances learned Single Judge of this Court held that L.I.C. is justified in refusing to make payment of the insured amount, and that the judgment of the Supreme Court in the case of Delhi Electric Supply Undertaking v. Basanti Devi and Anr. (supra) does not apply. However, in the said case, this Court directed the employer to make payment of the insured sum to the Petitioner with interest @ 12% from the date of death of the employee and awarded cost of Rs. 10,000/- to be paid by the employer. On behalf of the L.I.C. it is, thus, submitted that the liability in the instant case, if any, is of the employer i.e. the College and not of the L.I.C. to pay the sum insured.
6. This Court is unable to accept the said submission of the learned Counsel appearing for the L.I.C. It is not in dispute that the deceased father of the Petitioner was covered by the salary savings scheme of the L.I.C. and had a life insurance policy for a sum assured for Rs. one lac. In the case before the Apex Court of Delhi Electric Supply Undertaking v. Basanti Devi and Anr. (supra) premium for two months of the life assured was paid to the L.I.C. Premium for 3rd month was payable by March 29, 1992. The amount of the premium was deducted by the undertaking Appellant from the salary of the life assured and remitted by it to the L.I.C. However, premium for the subsequent months though was deducted by the undertaking from the salary of the life assured but was not remitted to the L.I.C. and in the mean time the life assured died on August 17, 1992. The widow-Respondent informed L.I.C. of the death of her husband and requested for payment of the amount due under the policy of L.I.C. L.I.C. disclaimed any liability for payment under the policy as the installment of premium after June, 1992 were not received by it and L.I.C, therefore, repudiated the claim of the Respondent-widow on the ground that the policy had lapsed. The Apex Court after considering the brochure on the scheme and the provisions of the Contract Act in detail held that under the agreement between L.I.C. and D.E.S.U. premium was payable to D.E.S.U. who was to deduct the premium every month from the salary of the life assured and to transmit the same to the L.I.C. DESU had, therefore, implied authority to collect premium from the life assured on behalf of L.I.C. under such circumstances, the Apex Court held that there was, thus, valid payment of premium by the life assured. The authority of DESU to collect premium on behalf of L.I.C. is implied. In any case, DESU had ostensible authority to collect premium from the life assured on behalf of L.I.C. It was, thus, held that DESU was agent of L.I.C. to collect premium on its behalf. The Apex Court after noticing that there was, nothing on the record to show that the life assured was ever made aware of the fact that DESU was not acting as an agent of L.I.C, observed that in the nature of the scheme employee was made to believe that it is the duty of the employer though gratuitously cast on him by the L.I.C. to collect premium by deducting from the salary of each employee covered under the scheme every month and to remit the same to L.I.C. by means of one consolidated cheque. The Court also said that as to what is the arrangement between the L.I.C. and DESU the employee is not concerned, and thus, held that DESU is not liable under the Act. However, in the said case, the widow had not challenged the order of the State Commission discharging L.I.C. of its liability but the Apex Court in exercise of its jurisdiction under Article 142 of the Constitution of India for doing complete justice in any cause or matter pending before it and also deriving strength from the provisions of Rule 33 Order 41 of the CPC dealing with power of Court of Appeal directed the L.I.C. to pay to the widow Basanti Devi insurance amount of Rs. 50,000/- with interest at the rate of 15% per annum from the date of death of the life assured and the Apex Court also awarded cost of Rs. 25,000/-.
7. The present case is also covered by the same salary savings scheme and the liability was of the employer to deduct the premium from the salary of the employee and to deposit the same with the L.I.C. It is nobody''s case that the deceased employee was ever made aware that his employer, namely, the College was not acting as an agent. Under similar circumstances, the Apex Court held that in the nature of the scheme the employee was made to believe that it is the duty of the employer though gratuitously cast on him by the L.I.C. to collect premium by deducting from the salary of each employee covered under the scheme every month and to remit the same to the L.I.C. by means of one consolidated cheque. In view of the principle laid down by the Apex Court in the case of Delhi Electric Supply Undertaking the employer in the present case was also acting as an Agent of L.I.C. and, thus, in my opinion, in case of any default on the part of the agent the employee cannot be made to suffer.
8. In view of the decision of the Apex Court in the case of Delhi Electric Supply Undertaking the order of the learned Single Judge passed in the case of Chameli Khatoon v. State of Bihar and Ors. (Annexure-A) is of no avail to the Respondent L.I.C. It goes with out saying that the decision of the Apex Court binds us and is to be followed.
9. In the result, writ application is allowed. The Respondent L.I.C. is directed to pay the sum assured under the policy in question with interest @ 12% per annum from the date of death of the life assured within two weeks from the receipt/production of a copy of this order. In the facts and circumstances of this case, this Court finds it to be a fit case of awarding cost which is quantified as Rs. 5,000/- to be paid by the L.I.C.
