S. PREMALATHA Vs. MYSORE MINERALS LTD. AND ANOTHER

JUDGEMENT

(1.) THE petitioner's husband was employed by the 1st respondent company (hereinafter referred to as 'the company'). The company had entered into an agreement with the 2nd respondent, Life Insurance Corporation of India (hereinafter referred to as 'the Corporation'). Two sets of agreements were entered into between the company and the Corporation. One in relation to the superannuation scheme and another group insurance scheme. The petitioner's husband died on 21.10.1989. The petitioner applied for payment of the benefits arising out of the two schemes. The company paid the amount due under the superannuation scheme to the petitioner, while the Corporation denied payment in regard to benefits arising under the group insurance scheme. Hence this petition.

(2.) THE Corporation has filed statement of objections stating that the company had to pay the premium as per the terms and conditions mentioned in the Group Insurance Master Policy and the premium had not been paid in due time, i.e., 1st July, 1989, as required under the policy, but paid subsequently on 27.10.1989. Therefore, premium having been received on that day, the said scheme was allowed to be made applicable with effect from 27.10.1989. It is contended that the Corporation did not accept the premium in respect of petitioner's husband but accepted only a proportionate premium from 27.10.1989 to 30.6.1990 and the excess premium paid was refunded to the company on 20.3.1990. The Corporation having accepted the premium only in respect of persons living in 27.10.1989 and no premium having been accepted in respect of an employee for the period prior to 27.10.1989, there is no risk covered so far as the petitioner's husband is concerned and the persons who were living on 27.10.1989 alone were covered under the group Insurance Master Policy and not the petitioner's husband who died on 21.10.1989 and, therefore, it is contended that the Corporation is not liable to make good the payment sought for by the petitioner. It is urged before me that no relief could be granted to the petitioner in this petition in view of the decision of the Supreme Court in Life Insurance Corporation of India v. Kiran Sinha 1985 ACJ 657 It is urged by the learned Counsel for the Corporation that the policy itself having been repudiated for a particular period, viz., 1.7.1989 to 27.10.1989 and during that period the petitioner's husband having died, there is ho policy alive at all and consequently, there is no obligation on the Corporation to make payment. In view of this dispute raised by the Corporation, it is contended, this Court cannot grant any reliefs and it would be appropriate to relegate the parties, if at all, to seek reliefs before a civil Court. It is also urged that there is no privity of contract between the petitioner and the Corporation and on that ground also, the petitioner is not entitled for any of the reliefs. The contract being only between the company and the Corporation, though for the benefit of its employees, does not entitle the petitioner to make any claim and consequently, it is submitted that no relief can be granted to the petitioner.

(3.) SO far as the other contention urged on behalf of the Corporation that there is no privity of contract between the petitioner and the Corporation but only between the company and the Corporation and, therefore, no relief can be granted to the petitioner does not appeal to me at all. Indeed when the policy itself makes it clear that the beneficiaries under policy itself makes it clear that the beneficiaries under the policy are the employees or their heirs, the policy itself is for their benefit under which the payments will have to be made by the Corporation. Although it is a Rule of English law that normally a stranger to consideration or contract cannot being a legal action, India law is quite different. Section 2(a) of the Contract Act while defining 'consideration' includes the words 'the promises or any other person' and that clearly shows that a stranger to consideration can sue. When the statute is so clear, no precedent is required to be referred to in support thereof. On the proposition that a stranger to a contract cannot sue, Indian law is also same as English law but there are recognised exceptions such as insurance contracts which are fiduciary in nature and a beneficiary under such a contract can sue for enforcement of that contract. In Khirod Behari Dutt Vs. Man Gobinda and Ors, AIR 1934 Cal 682 it was held that where a contract is made for the benefit of a third person, there may be equity for the third person to sue upon the contract.