DELHI ELECTRIC SUPPLY UNDERTAKING versus BASANTI DEVI AND ANR.

DELHI ELECTRIC SUPPLY UNDERTAKING versus BASANTI DEVI AND ANR.

DESU, although not an insurance agent under the Insurance Act, was the agent of LIC for premium collection under Section 182 of the Contract Act, with implied authority. Employee remitted premium via salary deduction; non-remittance by DESU cannot defeat insurance claim. LIC was wrongly discharged of its liability; Article 142 and Order 41 Rule 33 empower the court to substitute LIC for DESU and direct payment to the widow to ensure substantive justice.

Parties
Appellant: Delhi Electric Supply Undertaking; Respondent: Basanti Devi; Intervenor/respondent: Life Insurance Corporation of India
Jurisdiction
India
Judgment Date
28 September 1999
Procedural Posture
Civil Appeal / Appeal From National Consumer Disputes Redressal Commission
Outcome
appeal disposed of; orders modified
Legal Topics
Agency, Insurance Policy Lapse, Salary Savings Schemes, Complete Justice Under Article 142, Code of Civil Procedure Order 41 Rule 33, Premium Deduction and Remittance
Consumer Protection Insurance Law Contract Law Agency Insurance Policy Lapse Salary Savings Schemes Complete Justice Under Article 142 Code of Civil Procedure Order 41 Rule 33 +1 more

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Parties

Delhi Electric Supply Undertaking

Appellant

Basanti Devi

Respondent

Life Insurance Corporation of India

Intervenor/respondent

Procedural Posture

Civil Appeal / Appeal From National Consumer Disputes Redressal Commission

Legal Issues

  1. 1 Whether DESU acted as agent of LIC under Section 182 of Contract Act, 1872 regarding premium collection
  2. 2 Whether LIC was wrongly absolved of liability under the Salary Savings Scheme policy due to non-remittance by DESU
  3. 3 Whether employee's widow can be denied claim when premium deducted but not remitted

Ratio Decidendi

DESU, although not an insurance agent under the Insurance Act, was the agent of LIC for premium collection under Section 182 of the Contract Act, with implied authority. Employee remitted premium via salary deduction; non-remittance by DESU cannot defeat insurance claim. LIC was wrongly discharged of its liability; Article 142 and Order 41 Rule 33 empower the court to substitute LIC for DESU and direct payment to the widow to ensure substantive justice.

Court Disposition

appeal disposed of; orders modified

Orders

  • LIC shall pay Basanti Devi Rs. 50,000 with interest at the rate of 15% per annum from December 17, 1992 till payment.
  • DESU shall pay Rs. 25,000 as costs to Basanti Devi for suffering due to its default.