Employer had committed default in payment of premium
Branch Manager LIC of India vs Smt.Gousabi

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 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 Deviís 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 .Salary Savings Scheme was floated by the LIC for the benefit of an average employee. The duty was caste on employer to deduct the premium and pay the same to the LIC and it was the employer who was keeping all the accounts. It was duty of the employer to remit the premium after deducting it from the salary of an employee and the employee was, at no stage, involved in the remittance of the premium to the employer. A purposive interpretation was given by the Supreme Court of India to the Scheme.

Held : That the point involved in the present case is concluded in the Basanti Deviís case (supra) and the LIC is liable to pay the sum assured under the four policies to the respondent wife being the nominee/legal heir. In the judgement the Revision Petition was dismissed.