CHAPTER 3
DEPARTMENT OF CHEMICALS AND PETROCHEMICALS
Indian Drugs and Pharmaceuticals Limited
3.1.1 Avoidable expenditure due to non-remittance of insurance premium
Due to non-remittance of premium and consequent
discontinuance of the Group Saving Linked Insurance Scheme, the Company incurred
avoidable expenditure of Rs.72.51 lakh.
Indian Drugs and Pharmaceuticals Limited (Hyderabad Unit)
took out a master policy on 18 August 1988 under Group Saving Linked Insurance (GSLI)
Scheme covering 4181 employees from Life Insurance Corporation of India (LIC).
According to the terms and conditions attached to the policy, the Company was
required to renew the policy annually on twentieth day of July every year. In
case of delay in remittance of monthly contribution for more than two months or
repeated instances of delay, the Scheme would lapse.
Although the Company regularly effected the recoveries of
insurance premia towards GSLI Scheme from the salaries of employees, it did not
remit the same to LIC from April 1992. As a result, the master policy lapsed.
Consequently, the Company had to pay Rs.78 lakh as compensation to the
dependents of 154 employees who passed away during the period May 1992 to
February 2002. This was against the premia of Rs.5.49 lakh recovered from the
above employees.
Ministry in its reply stated (October 2001) that Management
proposes to examine the default in remittance of insurance premia afresh so that
the responsibility of officials concerned could be established.
Thus, the non-remittance of premium to LIC resulted in
discontinuation of the Scheme which also resulted in an avoidable expenditure of
Rs.72.51 lakh.
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