- (1.) LIFE Insurance Corporation of India (LIC) (hereinafter referred to as the petitioner for short) has filed the present Revision Petition against the Order dated 21. 11. 2004 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as the State Commission for short) in Appeal No. 490 of 2002 whereby the State Commission has reversed the Order passed by the Uttar Kannada District Consumer Disputes Redressal Forum, Karwar (hereinafter referred to as the District Forum for short ). By the impugned Order, the State Commission has directed the petitioner to pay the assured amount under the different policies, which were the subject matter of the Appeal with all consequential benefits within four weeks.
(2.) SHRI Imamsab Husensab Handur-deceased, husband of the respondent-complainant was employed with the West Coast Paper Mills Ltd. , Dandeli as Truck Boy and he took four life insurance policies under the Salary Savings Scheme of the petitioner as per the following details: - SAURAS0_37_NCDRC_2009.HTM In terms of the Salary Savings Scheme authorization letter signed by the deceased, the premium was to be deducted every month from the policyholders salary. In the policy, the deceased had undertaken and declared that he shall be entirely responsible for any consequences on account of non-payment of premium on his policy, in the event of his proceeding on leave without pay, etc. The deceased- Shri Imamsab Husensab Handur died on 25. 06. 2000. The respondent being a nominee under the policies claimed the amount. Employer had committed default in payment of premium. In view of the default committed by the employer, the petitioner Insurance Company repudiated the claim of the complainant. Respondent, thereafter, filed the complaint before the District Forum, Karwar. The District Forum, distinguishing the law laid down in Delhi Electricity Supply Undertaking v. Basanti Devi and Anr. reported in 1999 VIII AD (S. C.) 454, dismissed the complaint. It was held that since the deceased- Shri Imamsab Husensab Handur was on leave without pay, the premium could not be deducted by the employer from the salary of the deceased and remitted to the Life Insurance Corporation. Repudiation of the claim by the LIC was upheld. Aggrieved against the Order of the District Forum, the respondent filed the appeal before the State Commission. The State Commission by the impugned Order, reversed the Order passed by the District Forum and held that the Basanti Devis case (supra) was fully applicable to the facts of the present case and the District Forum had erred in dismissing the complaint. Hence, this Revision Petition.
(3.) POINT in issue in the present case is as to whether the ratio of law laid down by the Supreme Court of India in Basanti Devis case (supra) would be applicable even though the husband of the respondent had proceeded on leave without pay. And, whether the employer, who could not deduct the premium from the salary of the employee as he was on leave without pay and remit the same to the LIC being an agent of the LIC, would bind the LIC to pay the assured amount? in Basanti Devis case (supra), after referring to the Salary Savings Scheme, Supreme Court of India held that the employer was an agent of LIC as defined under Section 182 of the Contract Act, 1961 and the deduction from the salary of the employee was deemed as valid deduction and payment of the premium. It is the LIC, which is liable to pay the insurance amount even though the employer had failed to remit the premium of the employee to the LIC.;