JUDGMENT
Sachchidanand Jha, J.
1. This Letters Patent Appeal arises from the judgment and order of a learned single Judge of this Court allowing the writ petition of the sole respondent with a direction to Life Insurance Corporation of India (L.I.C.), appellant herein, to pay the sum assured under the insurance policy with interest at the rate of 12 per cent per annum from the date of death and costs of Rs. 5,000.
2. The case of the writ petitioner (hereinafter referred to as ‘the respondent’), briefly stated, is that his father late Upendra Sharma was a Lecturer in Ram Lakhan Singh Yadav College, Aurangabad. In the year 1992 he got his life insured under the ‘Salary Savings Scheme’ for Rs. 1,00,000. As per terms of the scheme the amount of premium was to be deducted from his salary by the college and deposited with the Aurangabad Branch, of L.I.C. Upendra Sharma died of heart attack on 9.7.1996. On 10.9.1996 the respondent lodged claim for payment of the amount and, on being asked, submitted the required papers in the branch office. As the college authorities had failed to deposit the premiums for the months December, 1995 to July, 1996, respondent deposited the amount due, being Rs. 6,040, with the college on 5.11.1996 which was remitted to L.I.C. on the same day. As no action was taken on the claim, on 20.12.1999 the respondent served legal notice. On 24.1.2000 he served another notice. By letter dated 2.2.2000 he was informed by the Additional Executive Director (Marketing) of the Corporation that the matter had been taken up with the Aurangabad Divisional office and the claim will be decided shortly. When no decision was communicated the respondent approached the District Forum constituted under the Consumer Protection Act with a complaint which was registered as Case No. 33 of 2000 but the said complaint too was not taken up for want of quorum as the President of the Forum had not been appointed. Finding no way out the respondent moved this Court in the connected writ petition, i.e., C.W.J.C. No. 8452 of 2001 seeking direction upon L.I.C. to settle the death claim and pay the amount of insurance with interest.
3. L.I.C. in its counter-affidavit did not deny that Upendra Sharma had taken life insurance policy for an assured amount of Rs. 1,00,000 commencing from 20.3.1992 under the Salary Savings Scheme. According to it though the employer was responsible for deducting the premium amount every month from the salary and remitting the same to it, it was the duty of the assured to ensure payment of premium under the policy. The amounts of premium due for the period December, 1995 to July, 1996 (when respondent’s father died) were deposited only on 6.11.1996 which proves that no premium was paid for those months and it was only after the death of the assured that the payment was made by the respondent from his own source. The policy having lapsed, the respondent was not entitled to the sum assured, except the paid up value of the deposits, i.e., Rs. 31,800 which L.I.C. is ready to pay with interest at the rate of 9 per cent per annum, besides refund of the amount deposited on 6.11.96 i.e., Rs. 6,040. The appellant relied on the decision of this Court in the case of Chameli Khatoon v. State of Bihar CWJC No. 9906 of 1998, in which, according to it, in similar circumstances this Court directed the employer to pay the money.
4. The learned single Judge relying on a decision of the Supreme Court in Delhi Electric Supply Undertaking v. Basanti Devi 1999 CCJ 1465 (SC), negatived the contention of the appellant and allowed the writ petition with direction, as mentioned at the outset.
5. Mr. Umesh Prasad Singh, learned Counsel for the appellants, submitted that the learned single Judge committed error in relying on the decision in Delhi Electric Supply Undertaking v. Basanti Devi 1999 CCJ 1465 (SC) (briefly, Basanti Devi), as the facts of that case were different. In that case the Delhi Electric Supply Undertaking (D.E.S.U.) had made deductions from salary of the employee but failed to deposit premium whereas in the present case the salary itself was not paid to the respondent’s father; therefore, there was no question of any deduction from the salary and deposit thereof with L.I.C. Whereas in Basanti Devi’s case by reason of the payment of salary to the employee, there was no occasion for him to suspect that the premium was not being deposited, in the present case as the salary itself was not paid to Upendra Sharma, he should have known that no deduction was being made and, consequently, premiums were not being deposited because deductions could be made only if salary was paid and when salary was not paid there was no occasion to make any deduction and deposit. Mr. Singh stated that in a large number of undertakings and organisations including the Universities in the State of Bihar salary is not being paid regularly to the employees and in such a situation the application of the principle laid down in Basanti Devi’s case would be contrary to the aims and objects of the Salary Savings Scheme. As a matter of fact, L.I.C. was seriously considering to withdraw the scheme from the concerned undertakings or organisations, etc. Secondly, Mr. Singh submitted that as the respondent had filed complaint before the District Forum under the Consumer Protection Act, which was pending, the writ petition was not maintainable. In Basanti Devi’s case too, the complaint was earlier filed under the Consumer Protection Act in course of which the parties had produced materials on the basis of which the Supreme Court decided the case. In the present case no such material has been produced and this Court is being asked to proceed on assumptions as to the terms of the Salary Savings Scheme. Copy of the Scheme has not been brought on record and it is thus not known as to what the terms of the Salary Savings Scheme were under which the respondent’s father obtained the insurance policy. Lastly, it was submitted that there being contrary decision of another single Judge in the case of Chameli Khatoon, CWJC No. 9906 of 1998, if the learned single Judge wanted to differ, he should have referred the case to a larger Bench.
6. I would deal with the last contention first. As the learned Counsel for the respondent submitted, the case of Chameli Khatoon, CWJC No. 9906 of 1998, stood on a different footing. That was a case of Group Insurance Scheme whereunder it was the obligation of the employees to pay the premium, the employer was merely to co-ordinate the payment. In the case of Salary Savings Scheme, on the other hand, the employer acts as the agent of not only the employee but also the employer, as held by the Apex Court in Basanti Devi’s case, 1999 CCJ 1465 (SC) and, therefore, the decision in Chameli Khatoon could not be a precedent to decide the case of the respondent. I find substance in the contention.
7. I also find substance in the submission of the counsel for the respondent that the Salary Savings Scheme being the same throughout India, the fact that the copy of the scheme was not brought on record could not be a ground to non-suit the respondent, particularly when the relevant terms and clauses of the scheme can be found from the judgment of the Supreme Court in Basanti Devi’s case, 1999 CCJ 1465 (SC). Though it goes without saying that a party is required to substantiate its case by bringing the relevant materials, in the nature of evidence, on record in a proceeding under Article 226 of the Constitution and, therefore, the respondent ought to have enclosed and thereby brought on record the brochure, etc., relating to the Salary Savings Scheme, but in the absence of any plea that a different scheme was in vogue in the State of Bihar under which Upendra Sharma had taken the said policy, and the relevant terms and clauses of the scheme being available in the judgment in Basanti Devi’s case, the objection of the learned Counsel for the appellants has merely an academic value. It is to be noted that even in Basanti Devi’s case, from the judgment it does not appear that copy of the scheme was on the record of the case from before, even though the case had arisen from a concluded proceeding under the Consumer Protection Act. From para 3 of the judgment rather it appears that the brochure was produced only in course of hearing. In the instant case also, in fairness to the appellants, it must be stated that after the hearing concluded, portion of the brochure was provided to us by the appellants’ counsel, perusal of which corroborates the submission of the respondent’s counsel that scheme is the same as the one referred to in Basanti Devi’s case.
8. There being a decision of the Apex Court on the point, following which the learned single Judge has allowed the claim of the respondent, the point which arises for consideration is whether in the facts and circumstances, the learned Judge committed error in applying the principle laid down in that case.
9. Though the relevant parts of the Salary Savings Scheme have been extensively quoted in the judgment in Basanti Devi’s case, 1999 CCJ 1465 (SC), reference to which should be sufficient. I consider it proper to refer to some of the clauses of the scheme. The scheme has been explained in these words:
It is a simple, economical plan whereby your employees may obtain a life insurance protection for their families and retirement income for themselves under advantageous conditions which might not be available to them otherwise. This it accomplishes by savings automatically deducted from their pay and remitted to us once a month. This is not a group insurance. Each employee owns his policy individually, is entitled to all its benefits and can continue the policy in the event of any change in employment.
Under this plan, you as an employer give facilities to the representatives of L.I.C. to contact your employee to offer life insurance cover to them. Premium .amounts, if an employee agrees to insure under this plan, are to be deducted every month from the employee’s salary, in the same manner as the employees provident fund. All the amounts so collected are paid to the Corporation by one cheque by the employer. This ensures for the employee regular payment, monthly, of his premiums at concessional rates. Deduction of premium from the salary or wages of an employee and its remittance to L.I.C. is so beneficial that the recently amended Payment of Wages Act and the Minimum Wages Act make it legally permissible for an employer to do so. On your part, all that the plan involves is a little extra accounting which you will surely consider worthwhile because of the….
10. The employer is informed about the advantages of the Scheme from the employer’s as well as the employees’ point of view, by letter, specimen whereof has been set out in the brochure itself, by the Branch Manager of L.I.C. The brochure also contains the specimen of the letter to be sent by the employer in response. Thereafter, letter of acceptance is issued by the Branch Manager along with an enclosure. Some of clauses thereof may usefully be noticed as follows:
(a) The employer will receive list of premiums to be deducted called as demand invoice in duplicate each month on the specified date.
(b) One copy of the invoice is to be returned along with the remittance. The second copy is to be retained by the employer for his record.
(c) It is necessary to inform L.I.C. when an employee leaves the service or is transferred from one department to another.
(d) Reconciliation statement in a specified form to be supplied by L.I.C. will accompany the statement.
(e) The Corporation will make changes in the invoice based on the information received from the employer regarding transfer in, transfer out and exits.
(f) Deductions made in each month will have to be remitted to us within a week from the date of making deductions along with a copy of invoice and a reconciliation statement. Make your cheque payable to Life Insurance Corporation of India and send it along with the copy of invoice with reconciliation statement drawn in the form suggested in (d) above to the appropriate Branch Office. While checking out statement if you find that an item cannot be paid, rule through the item on the original statement and note the reason for nonpayment against the item in the remark column. If you find that an addition is to be made make the addition at the end of the statement giving policy number, name, amount and the reason for addition. If the employee is transferred from one department to another, the names of the departments concerned and code number must be stated.
(g) In order to bring the invoices up to date, it is desirable that the employer informs us of all the changes in the staff immediately as soon as they occur. The employer need not wait to incorporate those in the invoice. The changes communicated to us through invoice are received date (Sic.) and the names of employers continue to appear in the wrong invoice in the meanwhile.
The brochure also contains the form of the letter in which the employees are informed about the scheme, which also may be quoted as under:
Realising that an adequate savings and protection scheme will mean so much to you and your family we have arranged for the benefits of the Salary Savings Scheme of the Life Insurance Corporation of India for all employees who desire its privilege. The premium will be automatically deducted from your salary once a month and remitted to the Life Insurance Corporation.
11. Having noticed the aforequoted clauses of the Salary Savings Scheme the Supreme Court observed:
It is, thus, the sole responsibility of D.E.S.U. (read college) to collect premium from all the employees and remit the same by means of one cheque. Reconciliation statement is also to be sent in the form prescribed by L.I.C. No individual premium notice is to be sent by L.I.C. to any employee and no receipt is to be given to it for the premium received. It is D.E.S.U. (read college) which is to inform L.I.C. of all the changes in the staff as soon as they occur, so also the fact when any employee leaves the service of D.E.S.U. An employee is kept ignorant of the happenings between L.I.C. and D.E.S.U. except he is made aware of deduction of premium from his salary every month.” (The words within brackets inserted by me for the sake of convenience).
12. What is more significant is that the employer [in Basanti Devi’s case, 1999 CCJ 1465 (SC), D.E.S.U.; in the present case, the college] was held to be the agent of L.I.C. notwithstanding a clause to the contrary in the Scheme. The relevant part of the judgment may be noticed in extenso as under:
In the present case, we are not concerned with the insurance agent. It is not the case of L.I.C. that D.E.S.U. could be permitted as an insurance agent within the meaning of the Insurance Act and the regulations. D.E.S.U. is not procuring or soliciting any business for L.I.C. D.E.S.U. is certainly not an insurance agent within the meaning of the aforesaid Insurance Act and the regulations but D.E.S.U. is certainly an agent as defined in Section 182 of the Contract Act. The mode of collection of premium has been indicated in the Scheme itself and the employer has been assigned the role of collecting premium and remitting the same to L.I.C. As far as the employee as such is concerned, the employer will be an agent of L.I.C. It is a matter of common knowledge that insurance companies employ agents. When there is no insurance agent as defined in the regulations and the Insurance Act, the general principles of the law of agency as contained in the Contract Act are to be applied.
Agent in Section 182 means a person employed to do any act for another, or to represent another in dealings with third persons and the person for whom such act is done, or who is so represented, is called the principal. Under Section 185 no consideration is necessary to create an agency. As far as Bhim Singh is concerned, there was no obligation cast on him to pay the premium direct to L.I.C. Under the agreement between L.I.C. and D.E.S.U., the premium was payable to D.E.S.U. who was to deduct every month from the salary of Bhim Singh and to transmit the same to L.I.C. D.E.S.U. had, therefore, implied authority to collect premium from Bhim Singh on behalf of L.I.C. There was, thus, valid payment of premium by Bhim Singh. The authority of D.E.S.U. to collect the premium on behalf of L.I.C. is implied. In any case, D.E.S.U. had ostensible authority to collect premium from Bhim Singh on behalf of L.I.C. So far as Bhim Singh is concerned D.E.S.U. was an agent of L.I.C. to collect premium on its behalf.
13. The submission of the learned Counsel for the appellants, as noticed above, however, is that whereas in the case of Basanti Devi, 1999 CCJ 1465 (SC), the employer had failed to deposit the premium without knowledge to the employee. In the present case as salary itself had not been paid to Upendra Sharma from December, 1995, it must be presumed that he knew about the non-deposit of the premium, for the premium could be deposited only after deducting the amount from the salary and where salary itself is not paid there is no question of deduction and, as such, the question of deposit does not arise. This, in fact, if I may say so, is the only difference in the fact-situation between Basanti Devi’s case (supra) and the present case. The question is whether in such a situation L.I.C. can be permitted to deny its liability. In my opinion, this does not materially change in the legal character of the employer, college in the present case, as an agent of L.I.C. merely because the salary is not paid on time to the employer. I am not able to reconcile as to how the legal character of the employer would be different in a case where he pays the salary but does not deposit the premium (whether the amount is deducted from the salary or not) and a case where salary is not paid to the employee at all. In both the cases that would be a default of the employer. The scheme does not contemplate that in such a situation the employee could rush to the concerned Branch and pay the premium to escape the consequence of the nonpayment. From the circular titled ‘Salary Savings Scheme endorsement’, it appears that where the Scheme ceases to be effective by reason of its being withdrawn or the employee leaving the employment or otherwise, the employee is required to pay some additional amount for continuing the insurance cover.
14. In fairness to the appellants, I must observe that in the said ‘Salary Savings Scheme endorsement’ there is a clause to the effect that where the premium ceases to be collected and/or remitted to the Corporation, the concerned employee is required to intimate the fact to L.I.C. The question arises as to whether in view of the said clause the respondent’s father committed any default by not intimating to L.I.C. that the premium was not being collected and/ or remitted to the Corporation. Before answering the question it would be relevant to quote the relevant part of the aforesaid Salary Savings Scheme endorsement as under:
In the event of the life assured leaving the employment of the said employer or the premium ceasing to be so collected and/or remitted to the Corporation, the life assured must intimate the fact to the Corporation and in the event of the Salary Savings Scheme being withdrawn from the said employer, the Corporation shall intimate the fact to the life assured and all premiums falling due on and after the date of his leaving employment of the said employer, or cessation of collection of the premiums arid remittance thereof in the manner aforesaid, or withdrawal of the Salary Savings Scheme as the case may be, shall stand increased by the imposition of the additional charges…
15. In my opinion, as the failure of the college to pay the premium occasioned by the failure to pay the salary was general and applicable to all the employees who had subscribed to the scheme, the respondent’s father alone was not supposed to inform L.I.C. that the salary was not being paid arid, therefore, resultantly, he believed that the deductions were not being made and the premiums were not being deposited. It is not the case of L.I.C. that by reason of this default of the college, the insurance policies of other subscribers of the Scheme had lapsed. As a matter of fact, if I may say so, it has become a usual phenomenon in the State of Bihar that the salary is not being paid regularly to the employees in various organisations including public undertakings and Universities, but on that ground the scheme has not been withdrawn by L.I.C. so far.
16. Normally, as per the terms of the scheme, like any ordinary insurance policy, premiums are supposed to be paid on time where it is payable monthly, every month, where it is payable quarterly, every third month, and so on. But it is apparent that in the case of college and all such organisations, which have subscribed to the Salary Savings Scheme, L.I.C. has been accepting belated payment for several months at a time. This, in my opinion, amounts to waiver. In the instant case, the problem arose because of the death of the respondent’s father. Had he not died, this situation would not have arisen, like other employees of the same very college who have subscribed to the scheme. Can the consequences be different only because meanwhile one of the employees dies giving rise to the claim? The answer, in the opinion of this Court has to be given in the negative. In my opinion, until the scheme is withdrawn or the employee leaves the employment and ceases to be in employment of the employer, the employer shall remain responsible for making deductions from the salary as and when the salary is paid to the employee(s) and for the defaults committed by him or it, L.I.C. cannot escape the liability under the Scheme. I accordingly hold that the case is fully covered by the ratio of the decision in Basanti Devi’s case, 1999 CCJ 1465 (SC) and L.I.C. is liable to pay the sum assured under the insurance policy and the direction of the learned single Judge does not require any interference.
17. The submission that during the pendency of the complaint before the District Forum under the Consumer Protection Act the writ petition should not have been entertained, has been noticed only to be rejected. It is well settled that the objection to the jurisdiction must be taken at the earliest opportunity, at any rate not in appeal, unless it is a case of inherent lack of jurisdiction. It is merely a self-imposed limitation on the exercise of jurisdiction under Article 226 of the Constitution not to entertain the writ petition where alternative remedy is available to the person concerned. In the instant case, as a matter of fact, for want of quorum the District Forum before which the respondent had filed complaint was practically non-functional for more than a year, leaving little option to him but to approach this Court in its writ jurisdiction. I, therefore, do not find any substance in this contention of the appellants either.
18. In the result, I do not find any merit in this appeal, which is accordingly dismissed but without any order as to costs.
Chandramauli Kumar Prasad, J.
19. I agree.