DIVISIONAL MANAGER LIC OF INDIA Vs. HARIBANDHU SETHA

JUDGEMENT

(1.) THIS appeal has arisen from the judgment dated 7th of August, 1992 of the State Commission, Orissa and raises the question of interpretation of the contract of insurance of the Life Insurance Corporation of India under the 'Salary Saving Scheme' of the State of Orissa.

(2.) THE State Commission has taken great pains to spell out the terms and conditions of Insurance Policy of LIC under Orissa Government "Salary Saving Scheme" and may be seen from there. The Salary Saving Scheme of the LIC had been introduced by the State Government of Orissa for the benefit of their employees since 1964. The scheme in the nutshell provides service at the door steps of the salaried employees of the Government. The scheme benefits the policy holders as the risk is covered and an effortless saving is made through small and easy monthly instalments. It benefits him again because of the decreased chances of the Insurance Policy getting lapsed due to the scheme of deduction of the premium from the salary at source. The responsibility of deduction and remitting the premium in time periodically during the term of the policy is taken over by the employer. Under Clause 5 of the Administrative Procedure, the employee polity holder is to give an authorisation letter in the specified Form-A. It authorises the employer to arrange to deduct and pay to the LIC the premium amounts stated therein from the salary of the employee for the given month and also to continue to deduct and pay such amounts every month till further orders,

(3.) THE insured expired on 17th July, 1990. The Complainant who is the father of the deceased and nominee under the said policy, sent intimation of death to the LIC who found that the policy had lapsed due to non-receipt of monthly premium from January, 1990. LIC called upon the complainant to furnish, inter alia, a certificate in respect of premiums from January, 1990 to June, 1990 on the prescribed proforma under die seal and signatures of the Disbursing Officer, if the premium had been recovered and remitted. The Complainant approached the Executive Engineer and his Senior Officers but no information was forthcoming, Ultimately the complaint was filed.