NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
(From the order dated 9.11.2005 in Appeal No.892/2002 of the
1. Chairman/Managing Director,
United India Insurance Company Ltd.
2. Asstt. General Manager,
United India Insurance Company Ltd.
3. Regional Manager,
United India Insurance Company Ltd.
4. Divisional Manager,
United India Insurance Company Ltd.
Division No.VI, Space No.106,
Lenine Estate, Gunfoundry,
1. Koramutta Pullana, S/o Naganna
2. Patapujala Venkataswamy, S/o Venkataswamy
3. Bommisetty Munaiah, S/o Venkataiah
4. Gali Nagaiah, S/o Nagaiah
5. Prabhuleti Chinna Papaiah, S/o Veeraiah
6. Nalamaru Eswaraiah, S/o Nagaiah,
7. Nalamaru Naaraju, S/o Balaiah,
8. Nalamaru Nadipi Nagaiah, S/o Nagaiah,
9. Nalamaru Siva Bhaskar, S/o Balaiah
10. Prabhuleti Chinna Chandrayudu,
11. Prabhuleti Eswaraiah, S/o Veeranna,
12. Koneti Chinna Obaiah, S/o Singaraiah,
13. Koneti Obulesu, S/o Chinna Obaiah,
14. Nalamaru Nagendra S/o Nagaiah,
15. Dondla Subbarayudu, S/o Subaiah,
16. Rebba Chandrayudu, S/o Chandrayudu
17. Nalamaru Nagulu, S/o Pedda Nagaiah,
18. Nalamaru Balanna, S/o Nagaiah @ Roddaiah
All are members of Rangapuram Handloom Weavers Co-op.
Production and Sale Society Ltd.
Khajipeta Manda, Cuddapah District, A.P.
19. Development Commissioner for Handlooms,
20. Director of Handlooms & Textiles,
21. Assistant Director of Handlooms &
Textiles, Cuddapah. Respondents
MRS. RAJYALAKSHMI RAO, PRESIDING MEMBER
For the Petitioner : Mr. A.K. De, Advocates
The present Revision Petition is filed against the order dated 9.11.2005 passed by the State Commission, Andhra Pradesh in F.A. No.892/2002 against the order of the District Forum Cuddapah passed in Complaint No.90/2001 whereby the Respondents appeal was allowed.
Considering the fact that poor weavers who have lost their residential premises due to fire, I have heard the matter exhaustively at the admission stage. In my view, this is not a fit case for interference in revision application for the reasons stated below :
Brief facts of the case are :
The 18 Respondents are members of Rangapuram Handloom Weavers Co-op. Society from Cuddapah District, A.P. Under a scheme proposed by Central Govt., through Ministry of Finance, a new group insurance scheme to cover the members of Handloom Weavers Society has been promulgated to safeguard the interests of these poor weavers. In this scheme 50% of the premium, i.e. weavers’ share and the state Government’s share and the balance 50% of the premium would be paid by the Central Government to United India Insurance Co. As per that scheme 18 members of the society, on 1.4.1998 paid premium of Rs.60/- which is 50% of the total of Rs.120/-. Accordingly, State Government share was also received by the Insurance Company by the same date. The balance 50% of the premium amount by the Central Government was admittedly received only on 13.8.1998.
On 24.5.1998 the residential houses of the Respondents caught fire due to electrical short circuit and their houses were completely gutted down. Police investigated and registered Crime No.49/98 on the basis of complaint given by Mandal Revenue Officer, Khajipet. The Commissioner of Handloom and other concerned officials recommended the payment of compensation. But the Petitioner repudiated the claim on the ground that the fire accident occurred prior to the full payment of premium under the scheme and since the premium from the Central Government was received only on 13.8.1998, the policy did not come into existence as the risk, as per the policy given, would commence from 24.8.1998.
District Forum dismissed the complaint, appreciating the grounds taken by the Petitioners that the Respondents have not filed the complaint within two years from the date of damage and that the correspondence between the parties and the legal notice given thereafter would not extend the limitation and rejected the complaint as barred by limitation. The State Commission allowed the appeal of Respondents on the ground that it is a continuing cause of action and that the complaint is not barred by limitation. Further the State Commission directed the Petitioners to settle the insurance claims expeditiously within a period of eight weeks from the date of receipt of the order with interest at 9% p.a. alongwith costs of Rs.5,000/-.
Petitioners argued that as per the terms and conditions of the scheme of insurance for handloom workers, the risk would be covered only after compliance of Section 64 V.B. of the Insurance Act on receipt of premium in the nominated offices of the Petitioners. Admittedly, Central Government paid the 50% of the premium on their behalf only on 13.08.1998, the policy was issued covering the period from 13.08.1998 to 12.08.1999. The Petitioners prayed and argued to set aside the impugned order of the State Commission which did not appreciate the facts that the policy was not even issued at the time of occurrence of the fire accident.
Heard the Learned Counsel for the Petitioners and perused the orders of the District Forum and the State Commission. The package scheme by the Insurance Co. for the handloom weavers given to the Textile Ministry has been approved by the Finance Ministry. Admittedly, 50% of the premium of the weaver’s share and the State Government’s share was received by the Petitioner on 1.4.1998 itself. As per the balance 50% of the premium amount to be paid as part of Central Government share was received on 13.8.1998 but that cannot be considered as a ground for repudiation of the claim by Insurance Company on the ground that Section 64 V.B. was not complied with. Payment of premium by the Respondents before the fire accident is undisputed. Considering the fact that this benevolent scheme for the welfare of the Handloom Weavers was promulgated between the Petitioners, State Government and Central Government to safeguard the interests of poor weavers, a mere delay on the part of the Central Government to send its share of premium cannot go against the interests of the consumers/Respondents. Huts of all the 18 weavers were gutted down and these poor people after being assured by the Petitioners and Government bodies that their risk would be covered for which premium had been taken were suddenly told that their claim was rejected. According to the preface the Insurance for the Handloom Weavers as given in Annexure – A, that All the details as per the accident benefits/applicability, period of insurance and most of other details have been given and further to popularize the scheme they had ideas which are quoted as under :
1. Workshop/Seminars/Conference will be arranged to let the concerned officials/weavers know the benefits of this scheme (with the assistance of Deptt.)
2. Publicity material including Advertisement having the brief details of this policy shall be sent to the Regd. Societies to popularize the scheme.
Talks be Doordarshan Programme
to popularize the scheme can be arranged in consultation with Handlooms
Department. Ministry of Textiles, Govt.
If this is the view of the Central Government to announce the Insurance package as a benevolent scheme for the welfare of the Handloom Weavers and based on such assurance, weavers had paid their share by 1.4.1998, it is deemed to be understood that Government has also put in their share as promised on the very day itself which is 1.4.1998. Mere transfer of the premium amount as the share of Central Government which was received later on 13.8.1998 cannot be construed as the date of commencement of the policy. It is not anybody’s case that the Central Government was not going to continue this scheme or that there is any correspondence from the Central Government that they would not pay their share of the premium.
The public interest that is sought to be
served by the welfare scheme for the poor would be frustrated if the contention
of the Insurance Company is accepted. It is to be borne in mind that Section
64-VB specifically provides that there is no bar if the insurer assumes the
“64-VB : No risk to be assumed unless premium is received in advance: (1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner”.
In our view, once the scheme is framed by the Central Government, the Central Government is required to pay 50% of the premium as per the scheme and it is to be presumed that the Central Government would pay the said sum, as it is guaranteed by it. The said assurance is the part of the guarantee at the time of framing of the scheme. Undisputedly, in the present case, 50% of the premium which was required to be paid by the weavers and the State Government was paid on 1.4.1998, i.e. prior to the date of the accident. No doubt, the balance amount of premium which was required to be paid by the Central Government was paid on 13.8.1998. But, we have to presume that Central Government would pay the premium guaranteed by it under the scheme. Therefore, the Insurance Company is liable to reimburse the Complainants.
Further, unexplained delay on the part of the
Central Government, the Respondents (Weavers) cannot be made to suffer. The promise by the Central Government is
considered by these weavers as a guarantee to settle the claim, if risk arises
and it is this hope that prompted the weavers to pay their share. The delay of payment by the Central
Government has not been explained by the Petitioners by way of showing any
correspondence. Petitioners themselves
have not pursued the matter with the Central Government to seek instructions to
settle these insurance claims. In the
“The servants of the Government are also the servants of the people and the use of their power must always be subordinate to their duty of service. A public functionary if he acts maliciously or oppressively and the exercise of power results in harassment and agony then it is not an exercise of power but its abuse. No law provides protection against it. He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore, the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook…….One of the reasons for this appears to be development of law which, apart, from other factors succeeded in keeping a salutary check on the functioning in the government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them.”
On the basis of the above decision in Lucknow Development Authority, we direct the Central Government to hold necessary inquiry and impose penalty against defaulting officers for not acting promptly in depositing the premium amount with the Insurance Company. Such inaction and negligence on the part of the officers should not be condoned.
It is time that such benevolent schemes which are announced and promised by the Government which are to be enforced through the Petitioners should not be frustrated by unexplained delay on the part of the Central Government in sending their share of premium in time. A promise and guarantee of the Central Government to protect consumers cannot be withdrawn without any explanation which happened in the present case.
Further, the State
Commission rightly referred to the D.O. Letter dated 27.1.1997 of the Joint
Development Commissioner, Handlooms,
In any case, if there is any fault in not paying the part of the premium, the same lies with the Central Government which has floated the welfare scheme for the weavers. It would be open to the Insurance Company to recover the amount, payable to the weavers, from the Central Government. In this view of the matter, we direct the Insurance Company to assess the loss and pay it to the Complainants by account payee cheque.
Hence, the State Commission has rightly directed the Petitioners to settle the claims expeditiously within eight weeks alongwith interest and payment of Rs.5,000/- as costs. There is no reason to interfere with the well reasoned order of the State Commission. Hence, Revision petition is dismissed. The Petitioner shall pay Rs.2,000/- to the Respondent Nos. 1 to 18 by account payee cheque.
( RAJYALAKSHMI RAO )