IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF OCTOBER, 2017 BEFORE THE HON’BLE MR. JUSTICE A S BOPANNA W.P.Nos.26378/2017 & 30022-30023/2017(GM-RES) BETWEEN:
SMT.NAGAMMA, AGED ABOUT 44 YEARS, WIFE OF GURUSWAMY, NO.15, CID PREMISES, CARLTON HOUSE, PALACE ROAD, BENGALURU – 560 001.
(BY SRI.M.S.RAJENDRA, ADV. FOR SRI.VIVEK HOLLA, ADV.) AND:
1. LIFE INSURANCE CORPORATION OF INDIA, NO.10/A, CHANDRAKIRANA BUILDING, KASTURBA ROAD, BANGALORE – 560 001. REPRESENTED BY MANAGER.
2. LIFE INSURANCE CORPORATION OF INDIA, CUSTOMER RELATION MANAGEMENT, SOUTH CENTRAL ZONAL OFFICE, “JEEVAN BHAGYA”, SAIFABAD, HYDERABAD – 500 063. REP. BY REGIONAL MANAGER 3. CITY CIVIL COURT, POSTAL OFFICE ROAD, ... PETITIONER BANGALORE – 560 001. REP. BY ITS REGISTRAR.
(BY SRI.H.N.KASAL, ADV. FOR R1 & R2 R3 IS SERVED) …RESPONDENTS THESE PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH THE LETTER/ENDORSEMENT DATED 13.03.2017 ISSUED BY RESPONDENT NO.1 AT ANNEXURE –H AND THE LETTER/ENDORSEMENT DATED 22.03.2017 ISSUED BY RESPONDENT NO.2 AT ANNEXURE –K AND ETC.
THESE PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Learned Government Advocate to accept notice for respondent No.3 and file memo of appearance in four weeks.
2. The petitioner is before this Court assailing the endorsement/communication dated 13.03.2007 as also the letter/endorsement dated 22.03.2017 impugned at Annexures-H and K to the petitions. In that light, the petitioner is seeking issue of mandamus to direct respondents No. 1 and 2 to honour the claim lodged by the petitioner under the Policies referred to in Prayer (b) to the petitions.
3. The petitioner is the mother of one late Vijay Kumar, the policy holder and is the nominee under three Life Insurance Policies referred to in the petitions. Subsequent to the death of the policy holder viz., the son of the petitioner, the petitioner had lodged the claim for payment of the amount due under the said policies. Respondents No.1 and 2 having taken note of the same have declined the request of the petitioner by informing the petitioner that policies have lapsed due to non- payment of the premium during the month of May 2014. It is in that light, the petitioner claiming to be aggrieved by such communication is before this Court assailing the same and seeking payment under the policies.
4. Respondents No. 1 and 2 have filed their objection statement seeking to sustain their action. The details relating to the policies issued in favour of the policy holder late G. Vijay Kumar though not disputed, it is contended that the amount payable therein would not arise for consideration at this juncture as they seek to justify the impugned communication issued to the petitioner. In addition, it is also contended that the claim is not processed as the required documents are not produced and in that circumstance, a consideration in the instant petition would not arise. It is also contended that the respondent-Corporation has a Multiple Level of Grievance Redressal System and the petitioner without exhausting the said remedy cannot approach this Court.
5. In the light of the rival contentions, though at this juncture this Court is not required to consider the other aspects of the matter relating to the payment of the amount under the policy since according to the learned counsel for the respondents, a communication dated 31.08.2017 is addressed calling for certain documents relating to the claim which is made after the death of the policy holder and to support such claim. However, the position at present to be considered in this petition is as to whether respondents No. 1 and 2 would be justified in declining the claim of the petitioner on the ground that the policies have lapsed as the policy holder according to respondents No. 1 and 2 has not paid the premium due for the month of May 2014.
6. In that regard, the factual position which cannot be in dispute is that the policy holder viz., the son of the petitioner was working as a Process Server in the City Civil Court, Bengaluru. In that view, since the premium was to be paid after deducting the same from the salary, appropriate authorization had been submitted by the policy holder which is dated 30.03.2014 as at Annexures-B, B1 and B2. In view of the same, the premium payable was being deducted from the salary by the employer of the petitioner and was being credited directly which was being received by respondents No.1 and 2.
7. Though at this point, respondents No. 1 and 2 contend that the premium for the month May 2014 had not been paid, no document is relied upon to indicate the fact that the premium not having been received for the said month has been either communicated to the policy holder or to the employer of the policy holder. If this aspect of the matter is kept in view, the question that would also require consideration is as to whether the petitioner who is the nominee of the policy holder could be denied the benefit of the fruits of the policy on the ground that the employer of the policy holder had not paid the premium and whether the employer can be construed as the agent of the Insurance Corporation.
8. To the said extent, the position of law in that regard is no more res integra in view of the decision of the Hon'ble Supreme Court in the case of Delhi Electric Supply Undertaking –vs- Basanti Devi and Another (1999) 8 SCC 229 relied on by the learned counsel for the petitioner. In the said case, the Hon'ble Supreme Court while considering a similar situation whereunder the employer was to deduct the premium from the salary of the policy holder having failed to pay the amount at a particular point in time, the consideration made therein was as to whether the employer could be considered as an ‘agent’ of the Insurance Corporation and in that circumstance, the manner in which the consideration is required to be made. In that regard, the Hon'ble Supreme Court has held that though the employer is ‘not an agent’ as provided in the LIC of India (Agents) Regulations, he would be an ‘agent’ of Life Insurance Corporation where the employee is a policy holder, under Section 182 of the Contract Act. In that view, it was held that if the premium for any particular month is not deducted from the salary and paid to the Corporation, in such event, it cannot be held that there is default committed by the policy holder.
9. If that be the position, in the instant facts, since the policy holder had issued a valid authorization to the employer to deduct the premium from the salary and pay the same to the Insurance Corporation and when the premium has thus been deducted from the salary and been paid for all the months, prior to and after May 2014 during the life time of the policy holder and in that circumstance, if the employer has not paid the premium for the month of May 2014, neither the policy holder nor the petitioner who is claiming subsequent to the death of the policy holder could be held liable for such act to deny the benefit of the policy by contending that such policy is lapsed, if the employer as an agent has defaulted.
10. Therefore to the said extent, the communication as issued by the respondents to hold that the policy has lapsed, through the letters dated 13.03.2017 and 22.03.2017 at Annexures-H and K would not be sustainable. The said communications impugned herein are accordingly quashed. Respondents No. 1 and 2 are directed to consider the claim lodged by the petitioner under the three policies bearing policy Nos. 613268953, 613268954, 613268955. However, further consideration shall be made subject to other necessary documents which are to be produced for completion of the process is submitted by the petitioner to respondents No. 1 and 2. All further action to complete the process shall be taken by respondents No. 1 and 2 within two months from the date on which the necessary documents are submitted.
The petitions stand disposed of accordingly.
Sd/- JUDGE hrp/bms