Thread: lic of india

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
BATHINDA (PUNJAB)

CC. No. 220 of 21-08-2008 Decided on : 24-03-2009


Harpreet Kaur aged about 45 years, widow of Sh. Hardeep Singh Toor, R/o Village Lelewala, Tehsil Talwandi Sabo, District Bathinda. ... Complainant
Versus

1. LIC Of India, Divisional Office, urban Estate, Phase 1, Dugri, Ludhiana through its Senior Divisional Mnager. LIC Of India
2. LIC Of India, Divisional Office, Jeevan Parkash Building, Near Shopping Complex, Ranjit Avenue, Amritsar, through its Senior Divisional Manager.
3. LIC Of India, Branch Office, Jeevan Jyoti Building, Bibi Wala Road, Bathinda, through its branch Manager
4. LIC Of India, Branch Office, Jeevan Jyoti Building, Thana Road, Abohar, through its Branch Manager

... Opposite parties

Complaint under Section 12 of the Consumer Protection

1. Act, 1986.

QUORUM


Sh. Pritam Singh Dhanoa, President
Dr.Phulinder Preet, Member
Sh. Amarjeet Paul, Member

Present : Sh. Ashok Gupta, Advocate, counsel for the complainant
Sh. S.N. Baghla, Advocate, counsel for the opposite parties

O R D E R


SH. PRITAM SINGH DHANOA, PRESIDENT

1. This complaint has been filed by Smt. Harpreet Kaur, widow of Sh. Hardeep Singh Toor, a resident of Village Lelewala, Tehsil Talwandi Sabo, District Bathinda, under Section 12 of the Consumer Protection Act, 1986 (in short called the 'Act') against LIC Of India through its Senior Divisional Managers at Ludhiana and Amritsar and Branch Managers at Bathinda and Abohar, for passing direction to them to make payment of Insurance claim in the sum of Rs. 8,00,000/-, alongwith bonus and interest at the rate of 12 percent per annum from the date of lodging of complaint till the date of payment or any other additional or alternative relief to which she may be found entitled by this Forum. Briefly stated the case of the complainant may be described as under :-
   That Hadeep Singh, husband of the complainant during his life time has secured Life Insurance Policy of LIC Of India No. 471491566 on 16-11-2005, for a sum of Rs. 8,00,000/- from opposite party No. 2 ( LIC Of India) through agent at his village who got the policy issued from Abohar office of the Insurance company (LIC Of India). The insured has appointed the complainant as his nominee to receive the amount of claim in case of his demise. The policy was valid from 16-11-2005 to 19-11-2026. It was issued after verifying the health of the insured who was subjected to medical examination by a doctor out of the penal of doctors appointed by the LIC Of India. The insured expired on 16-02-2007. He was hale and hearty. After the insured made complaint about minor pain suffered by him, he was shifted to the hospital of Dr. Harbhajan Singh at Talwandi Sabo and was accompanied by his co-villager viz Sukhminder Singh son of Sohan Singh. The opposite parties vide their letter dated 20-01-2008, asked the complainant to submit the original policy bond and her bank account number to enable them to consider her claim with further information that they will depute one of their field officers to help and guide her in case of need. They also intimated her that her claim is outstanding in their record, but vide letter dated 31-03-2008, they repudiated the same on the ground that deceased insured had withheld the state of his health at the time of filling proposal form and used to take alcohol and was a patient of sugar and blood pressure. The action of the LIC Of India in repudiating her claim is misconceived, illegal and arbitrary, violation of statutory provisions and terms and conditions of the Insurance policy.
2. On being put to notice, LIC Of India filed written version resisting the complaint by taking preliminary objections; that it is not maintainable; that complainant is not consumer within the ambit of its definition given in the Act; that contract of Insurance is based on utmost good faith; that life assured has suppressed real facts about state of his health in the proposal form filled before issuance of Insurance policy although he was suffering from various ailments and was addicted to liquor although specific question were put to him in the proposal form which he denied in the negative, as such, complaint deserves to be dismissed; that complainant has not approached this Forum with clean hands and intricate questions of law and fact are involved which cannot be adjudicated in summary manner but after leading of elaborate evidence by the civil court; that this Forum has no jurisdiction to entertain and try the complaint which being false and vexatious, is liable to be dismissed with special costs. On merits, it is admitted that Insurance policy of LIC Of India in question was issued in the name of the complainant, but it is submitted that his claim has been repudiated after verifying state of health of her deceased husband. It is submitted that examination of life assured is conducted as per disclosure of diseases made by him but in the present case Hardeep Singh, has concealed consumption of liquor and diseases suffered by him. It is also contended that as per report of Dr. Harbhajan Singh, the life assured prior to his death was under influence of liquor. It is denied that complainant paid the premium of Insurance policy of LIC Of India to the agent of the at his village Lelewala or her husband hired his services. Rather it is averred that life assured himself deposited the amount of Insurance premium at branch office of the LIC Of India at Abohar, which is working under Divisional Office Amritsar. It is admitted that claim lodged by the complainant has been repudiated by the LIC Of India vide letter dated 31-03-2007 rightly on the ground that life assured has died within two years from the date of issuance of policy, as per terms and provisions of Section 45 of the Insurance Act. The insured had not been enjoying good health and was under influence of liquor at the time of his death. It is denied that the action of the LIC Of India in repudiating the claim of the complainant was arbitrary, illegal or malafide. Rest of the averments made in the complaint have been denied and prayer has been made for dismissal of the same with compensatory costs.
3. On being called upon, by this Forum, to do so, the learned counsel for the complainant tendered affidavits of complainant Ex. C-1 & Ex. C-8 and affidavits of Sh.Sukhmander Singh and Sh. Jasveer Singh Ex. C-7 & Ex. C-9 respectively, and copies of documents Ex. C-2 to Ex. C-6, before he closed his evidence. On other hand, learned counsel for the LIC Of India tendered in evidence affidavit of Sh. J P Arya, Manager Ex. R-1, and photocopies of documents Ex. R-2 to Ex. R-5 before he closed their evidence.
4. We have heard, learned counsel for the parties and perused the oral and documentary evidence adduced on record by them, carefully, with their kind assistance.
5. At the outset, Sh. S N Baghla, learned counsel for the LIC Of India argued that Insurance policy, in question, had been purchased by the husband of the complainant and claim has been preferred by her at Abohar, as such no cause of action accrued in her favour within territorial jurisdiction of this Forum. Learned counsel argued that in view of the above said facts, this Forum lacks jurisdiction to entertain and try this complaint. In support of his contentions, he placed reliance on 2007(1) CLT 523 Life Insurance Corporation of India Vs. Kewal Krishan Kampani, wherein it has been held by the Hon'ble State Commission, Punjab, that a case can be filed by a person where the LIC Of India has a branch office.
6. On the other hand, Sh. Ashok Gupta, Advocate, learned counsel for the complainant has submitted that cause of action for complainant to file the complaint has accrued within the territorial jurisdiction of this Forum because insured has expired at his Village Lelewala , which falls within the jurisdiction of this Forum and she has received letter of repudiation at the address of her village. Learned counsel has also submitted that the LIC Of India are also carrying on their business through their office situated at Bathinda, as such, this Forum has the territorial jurisdiction to entertain and try the complaint. In support of his contentions, he placed reliance on 2003 (IV) CPJ 26 (NC) Puran Chand Wadhwa Vs. Hamil Era Textiles limited, wherein debentures were issued from Bombay. They were to be redeemed at the same place on account of which, it was held by the Hon'ble National Commission that no action wholly or in part took place at Chandigarh, as such, Consumer Forum at Chandigarh, has no territorial jurisdiction to entertain and try the complaint. Learned counsel has further relied upon 2003 (III) CPJ 144 (NC) National Insurance Company Limited Vs. Sonic Surgical, wherein fire broke in godown in Ambala Cantt and the policy was obtained from Ambala and the claim was also lodged and compensation was paid at the same place. It was held that mere dealing with claim at some stage by Regional office at Chandigarh, would not furnish part of cause of action, as such, State Commission, Union Territory, Chandigarh, has no territorial jurisdiction and order passed by Consumer Forum was set aside.
7. We find merit in the argument advanced by the learned counsel for the complainant. Section 11 (2)(a) of the Act provides that a complaint shall be instituted in a District Forum within the local limits of whose jurisdiction the LIC Of India, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain. In the instant case, it is not disputed that the LIC Of India are also carrying on business through their branch offices situated at Bathinda and village Lelewala of the complainant which falls in the District Bathinda. Moreover, complaint can be instituted in the District Forum, within local limits of whose jurisdiction the cause of action wholly or in part arises as envisaged in Section 2(1)(c) of the Act. The complainant has produced on record a copy of Death Certificate issued by Gram Panchayat showing that her husband died in his village Lelewala, District Bathinda, on 16-02-2007. She has also produced on record letter dated 31-03-2008 Ex. C-3, addressed to her by the Senior Divisional Manager of the opposite parties at her village Lelewala informing her about the repudiation of claim lodged by her after demise of her husband, as such, cause of action also accrued to the complainant to file the instant complaint within the territorial jurisdiction of this Forum. In these circumstances, we are escaped from holding that this Forum has territorial jurisdiction to entertain and try this complaint and no ground is made out to dismiss the complaint on this technical ground.
8. Learned counsel for the complainant has submitted that complainant has been nominated by the insured who was her husband to receive the amount of claim in case of his death and she is also legal heir of her husband. Learned counsel has further submitted that the opposite parties have neither examined the doctor who treated her husband nor any person who may be conversant with his hand writing, as such, the reliance cannot be placed on the copies of documents tendered in evidence by the opposite parties. Learned counsel has argued with full vehemence that taking of liquor is no disease in itself and no oral and documentary evidence has been produced on record by the LIC Of India to establish that deceased insured was alcoholic or used to take any intoxicants, as such, the repudiation of claim merely on the information given by doctor, is not justified especially when consumption of alcohol in itself is no disease. In support of his contentions, learned counsel has placed reliance upon 2005(1) CPC 52 L.I.C. Of India Vs. Joginder Kaur and Another, wherein Insurance company repudiated the claim on the ground that insured has concealed actual disease suffered by him at the time of submitting proposal form and tried to justify that insured was a chronic alcoholic for the last 15 years and has also history of jaundice, but no evidence was adduced to prove that any doctor had treated the deceased for these diseases. It was held by the Hon'ble National Commission that simple allegation is not sufficient to prove the case of concealment of disease by the insured in the proposal form. Learned counsel has also relied upon 2008(3) CPC 472 Life Insurance Corporation of India Vs. Satinder Kaur, wherein claim of the insured was repudiated on the ground that insured deceased had concealed the fact that he was a habitual alcoholic and had a pre-existing heart disease. District Forum gave verdict that repudiation of claim was unjustified as it was proved on record that death of insured was proved, due to heart attack, from the certificate of hospital but nothing was brought on record to prove that death was due to drinking of alcohol or deceased had any pre-existing disease. It was held by our own Hon'ble State Commission, that mere medical opinion that “Acute Pancreatitis can cause sudden death and can occur to average one especially to an alcoholic” does not prove the case of appellant. Hence, the order passed by the District Forum is well reasoned. Learned counsel has further relied upon 2008(2) CPC 34 Life Insurance Corporation of India & Another Vs. Sukhpal Kaur , wherein claim was repudiated on the ground that insured has not disclosed the fact that he was habitual drunker for a period of six years and was suffering from hypertension for the last 10 years and the said fact was concealed from proposal form. After District Forum allowed the claim, opposite party preferred appeal in which it was held that taking of liquor is not a material fact which requires to be disclosed at the time of taking a policy and if liquor was a disease, he could not survive for such a long time. It was also held that order passed by the District Forum does not suffer any any illegality. Learned counsel has further relied upon 2008 (1) CPC 675 Life Insurance Corporation of India Vs. Smt. Sukhwinder Kaur, wherein reason for repudiation given by the Insurance company was that deceased was a chronic alcoholic for 20 years, but he concealed the said fact in the proposal form. It was held by our own Hon'ble State Commission that reason for repudiation of claim given by the Insurance Company is unjust and unrealistic as taking of liquor is not a disease. It was further held that deceased remained alive for a period of 20 years, then it cannot be treated as disease or he cannot be held to be guilty of suppression of material facts.
9. On the other hand, learned counsel for the LIC Of India has submitted that as per provisions of Section 45 of Insurance Act, the insurer has liberty to repudiate the claim if the death of the insured takes place within a period of two years and it is established that he has concealed the pre-existing disease. Learned counsel has argued that in the proposal form Ex. R-5, furnished by the insured, he has claimed that he has good health and does not take liquor or any other drug , narcotics, tobacco etc., but as per documents tendered in evidence by the LIC Of India, he was under the influence of liquor at the time of admission in the hospital before his death and cause of his death was respiratory arrest and during last three years, he was treated by doctor for abdominal pain and vomiting, as such his claim has been rightly repudiated by the LIC Of India and there is no deficiency in service on their part for which liability may be fastened upon them. In support of his contentions, he placed reliance on 2008 (1) Civil Court Cases 206 (S.C.) P.C. Chacko & Another Vs. Chairman, Life Insurance Corporation of India & Others, wherein Insurance policy was repudiated by the Insurance company on the ground of mis-statement of facts on account of which it was held by the Hon'ble Apex court that Insurance company can repudiate the policy within a period of two years and on expiry thereof, it cannot be called in question, but mis-statement itself is no material for repudiation thereof unless the same is material in nature. Learned counsel has further relied upon 2004(I) CPJ 88 (NC) LIC of India & Another Vs. Naveen Dhingra, where deceased having ailment on day, filed policy revival form suppressing the said information. The complaint was dismissed by District Forum and was allowed by the State Commission in appeal filed by LIC. It was held by the Hon'ble National Commission that Insurance contract is a matter of good faith, as such deceased knowingly gave incorrect information on personal health in his statement made at the time of revival of lapsed policy form, then he is not protected by Section 45 of Insurance Act, as such, repudiation of claim was justified and the order passed by the District Form was restored. Learned counsel argued that material brought on record and proposition of law laid down in the authorities cited above, the complaint is bound to fail and is liable to be dismissed with costs.
10. The argument advanced by the learned counsel for the LIC Of India has failed to sound well with us. The complainant in her affidavit Ex. C-1 has reiterated the averments made in the complaint on solemn affirmation that her husband died natural death after he was shifted to hospital of Dr. Harbhajan Singh on 16-02-2007 at Talwandi Sabo with complaint of minor pain. The contents of affidavit of the complainant are corroborated by the affdavits Ex. C-6 & Ex. C-7, of Sukhmander Singh, who accompanied the complainant and her husband from their village and Sh. Jasveer Singh. Learned counsel for the opposite parties have relied upon medical attendant certificate issued by Dr. Harbhajan Singh, who treated the deceased husband of the complainant. As per contents of the said document, the insured expired on 16-02-2007 in his hospital at Talwandi Sabo. The primary cause of the death of the insured has been mentioned by the said doctor in the certificate Ex. R-3, as “Respiratory arrest” and secondary cause mentioned as “effect of liquor”. It is further mentioned that he had been treated by the above named doctor for a period of ten years for abdominal pain and vomiting. The LIC Of India have neither examined the doctor who treated the insured before his death nor they examined any person who may be conversant with his hand writing and signatures. They have also not produced any other record of treatment of the insured by the said doctor, maintained in his hospital or any prescription slip issued by him. There is nothing on record indicating that inquiry was conducted regarding the disease suffered by the insured before he filled up the proposal form for issuance of Insurance policy. Therefore, on the basis of certificate Ex. R-3, we are unable to conclude that deceased has suppressed material facts concerning his health or disease was suffered by him while filling up proposal form Ex. R-5. Moreover, no question has been imposed to the complainant in the proposal form that as to if insured had ever suffered respiratory disease, abdominal pain or vomiting etc., On the basis of facts borne on record, we are unable to accept the plea of the LIC Of India that deceased insured had been suffering from chronic ailment and had intentionally suppressed the same while filling the proposal form.
11. Being fortified by ratio judgements delivered in the authorities relied upon by the learned counsel for the complainant, we have no hesitation in holding that consumption of liquor itself is not a disease. As such, even if it be presumed for the sake of discussion that Insured has denied the factum of taking alcohol by him in the proposal form, even then, relief to the complainant cannot be denied on that score.
12. We have carefully gone through the authorities relied upon by the learned counsel for the LIC Of India, but have come to the conclusion that facts and circumstances thereof, were quite distinguishable from those of the case in hand. In those cases it was established that insured had deliberately concealed the material facts regarding their health and diseases suffered by them whereas in the case in hand, this fact is not established by any positive evidence.
13. In the light of our above discussion, we have come to the conclusion that repudiation of insurance claim lodged by the complainant of his deceased husband, upon the Insurance company on the ground of concealment of state of his health or any disease or chronic disease suffered by her husband or drinking habit, is not justified and there is deficiency in service on their part because of which complainant has faced mental agony and has to incur unavoidable expenses for filing of this complaint. Therefore, opposite parties have no option but to release the amount under the policy secured by her deceased husband and to pay her compensation and costs.
14. For the reasons discussed above, we accept the complaint and set aside letter of repudiation dated 31-03-2008 and direct the LIC Of India to pay a sum of Rs. 8,00,000/- to the complainant in terms of policy secured by her deceased husband Hardeep Singh Toor son of Kartar Singh Toor, and any other benefit permissible therein, alongwith interest at the rate of 9 percent per annum with effect from 31-03-2008 till the date of actual payment. The LIC Of India are further directed to pay Rs. 1,000/- to the complainant on account of costs incurred by her for filing of instant complaint. The compliance of this order be made within a period of two months from the date of receipt of copy of its order. The copies of this order be sent to the parties, free of costs as permissible under the rules, on the subject.

1. File be indexed and consigned.

Pronounced :
24-03-2009 (Pritam Singh Dhanoa)
President

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
BATHINDA (PUNJAB)

CC. No. 139 of 8-05-2008Decided on : 17-03-2009

1. Jatinder Kaur widow of Gurmej Singh S/o Sh. Mehtab Singh
2. Parneet Kaur )
3. Navdeep Singh )
   minor children of Gurmej Singh son of Sh. Mehtab Singh, through their natural mother and next friend Smt. Jatinder Kaur widow of Gurmej Singh
4. Gurmit Kaur wife of Mehtab Singh (mother of Gurmej Singh)
   - all residents of Quarter No. 56, Police Colony, Lal Singh Basti, Bathinda. ... Complainants

Versus

1. LIC Of India, Urban Estate, Phase-I, Dugri Road, Ludhiana, through its Zonal Manager.
2. Senior Divisional Manager, LIC Of India, Urban Estate, Phase -I, Dugri Road, Ludhiana.

... Opposite parties


Complaint under Section 12 of the Consumer Protection

1. Act, 1986.

QUORUM


Sh. Pritam Singh Dhanoa, President
Dr.Phulinder Preet, Member
Sh. Amarjeet Paul, Member

Present : Sh. Abhey Singla, Advocate, counsel for the complainants
Sh. Sanjay Goyal,Advocate, counsel for the opposite parties

O R D E R


SH. PRITAM SINGH DHANOA, PRESIDENT

1. This complaint has been filed Smt. Jatinder Kaur widow of Sh. Gurmej Singh and her minor children Parneet Kaur and Navdeep Singh and their grand mother Gurmit Kaur, under Section 12 of the Consumer Protection Act, 1986 (in short called the 'Act') against LIC Of India through its Zonal Manager and Senior Divisional Manager, Ludhiana, for giving them direction to pay double the amount payable under the Insurance Policy secured by deceased Gurmej Singh son of Sh. Mehtab Singh, covering risk of his life with further direction to pay a sum of Rs. 70,000/- on account of damages and compensation and any other additional or alternative relief deemed fit by this Forum.
2. Briefly stated the case of the complainant is that the insured Gurmej Singh had been suffering from cough and cold for several days prior to his death on 26.10.05 and had been taking homeopathic medicine. The deceased insured confused the homeopathic medicines taken by him with tablet meant for killing rats and consumed the said poisonous substance by mistake on 26.10.2005. He died on the way to hospital and on account of his death, F.I.R. was registered and police officials in the course of investigation came to the conclusion that insured had died due to taking poisonous tablets presuming them to be homeopathic medicine taken by him. The deceased had purchase LIC policy bearing Account No. 300237616 from the LIC Of India. After his demise, complainant No. 1, lodged claim with the LIC Of India for seeking release of amount payable under the policy fo LIC Of India, but they repudiated her claim vide their letter dated 06-10-2006, on the ground that deceased has committed suicide within a period of one year from the date of issuance of policy of LIC Of India. On receipt of intimation, complainant No. 1, made representation on 27-02-2007 to the Zonal Manager of the LIC Of India, but he did not pay any heed. However, in terms of letter dated 11-10-2007, written by her, claim was referred by LIC Of India to Insurance Ombudsman, Chandigarh, but he too vide order dated 24-01-2008, rejected the same accepting version of the LIC Of India although the insured had expired accidental death and had not committed suicide. The complainants have suffered mental and physical agony due to repudiation of their claim by the LIC Of India, in arbitrary manner, hence this complaint.
3. On being put to notice, LIC Of India filed written version resisting the complaint by taking preliminary objections that complainants have not approached this Forum with clean hands, as such, their complaint deserves to be dismissed; that complaint is not maintainable because earlier representations filed by the complainants before Zonal Level Committee chaired by retired judge of Hon'ble High Court and Insurance Ombudsman, Chandigarh, which is a statutory body, have been dismissed; that complaint is false, frivolous and baseless and there is no deficiency in service on the part of the LIC Of India, as such, it is liable to be dismissed. On merits, it is admitted that Insurance policy in question was purchased by the deceased insured in terms of which claim is not payable if insured committed suicide, within the period of one year from the date of issuance of policy. It is submitted that as the insured has committed suicide within a period stipulated in the policy, as such, claim has been rightly repudiated by the LIC Of India. It is submitted that representations were filed by the complainants before Zonal Level Committee, which is an independent body and before Insurance Ombudsman, a statutory body for the areas covered by States of Punjab, Haryana, Himachal Pardesh, J & K and Chandigarh. As such they have availed the remedy open to them before the Zonal Level Committee of the LIC Of India and orders passed by the said committee and Insurance Ombudsman have become final and are binding upon the parties. It is also contended that the said authorities have accepted the version of the LIC Of India and have passed the orders with independent mind without their influence after providing opportunity of being heard to the complainants. It is also submitted that complainants have no cause of action to file the present complaint and this Forum has no jurisdiction to readjudicate the controversy in view of the orders passed by the above said authorities. Rest of the averments made in the complaint have been denied and prayer has been made for dismissal of the complaint.
4. On being called upon, by this Forum, to do so, the learned counsel for the complainants tendered affidavit of Jatinder Kaur, complainant and copies of documents Ex. C-2 to Ex. C-23, before he closed their evidence. On other hand, learned counsel for the LIC Of India tendered in evidence the affidavit of Sh. J P Arya, Manager Legal and copies of documents Ex. R-2 to Ex. R-5 and he closed their evidence.
5. We have heard, the learned counsel for the parties and perused the oral and documentary evidence adduced on record by them, carefully, with their kind assistance.
6. At the outset, learned counsel for the complainants Sh. Abhey Singla, Advocate, has submitted that factum of issuance of Insurance policy in the name of deceased insured is not disputed by the LIC Of India and cause of death is proved by the copies of documents produced on record by the complainants and affidavit of complainant No. 1 Smt. Jatinder Kaur, but no evidence to the contrary has been adduced on record by the LIC Of India, on the basis of which their plea may be accepted by this Forum that deceased insured has committed suicide within a period of one year from the date of issuance of Insurance policy. Learned counsel argued that even the Investigator appointed by the LIC Of India Sh. Vikas Aggarwal, has reported after recording the statements of the witnesses that claim of the complainants being genuine may be paid to them, but they preferred to reject the claim on the basis of no evidence. Learned counsel submitted that decisions given by Zonal Level Committee and Insurance Ombudsman on the representations made by the complainants are not binding upon them and complaint filed by them before this Forum, is maintainable. In support of his contentions, learned counsel has placed reliance on 2005(2) CLT 37 Kamleshwari Prasad Singh Vs. National Insurance Co. Ltd., wherein it has been held that decision of Ombudsman is not binding upon the complainant and action of Insurance Company of repudiating the claim is subject to adjudication by Consumer Forum constituted under the Act. Learned counsel has also relied upon 1997(2) CLT 43 Dev Dutt Dhiman and M.R. Dhiman Vs. State Bank of India, wherein it has been held that decision of Banking Ombudsman is only recommendatory in nature and there is no legal sanction for such a decision to get it implemented and thus cannot be a bar for a consumer to approach the authority under the Act. Learned counsel argued that in view of the material placed on record by the complainants and law laid in the authorities cited above, the LIC Of India cannot escape liability to release the amount payable under the policy alongwith compensation and costs, as demanded in the complaint.
7. On the other hand, Sh. Sanjay Goyal, Advocate, learned counsel for the LIC Of India has submitted that as per documents placed on record by the complainants themselves, deceased has consumed poisonous substance and their plea about consuming of said substance due to confusion created in mind for medicine, which he has been taking earlier, is not supported by any positive evidence, as such, the LIC Of India have rightly repudiated their claim as per terms and conditions of the policy because insured had committed suicide within a period of one year after the date of issuance of Insurance policy. Learned counsel argued decisions given by Zonal Level Committee chaired by retired judge of High Court, which is independent body and Insurance Ombudsman, which is a statutory body, are binding upon the parties. Learned counsel argued that proper remedy for the complainants was to file appeal to avail further remedy against the decisions given by the above said authorities, but they have failed to do so and any conclusion drawn by the Investigator appointed by the LIC Of India, is not binding upon them as the same is subject to final decision which may be taken by them as per facts and circumstances of the case. In support of his contentions, learned counsel has placed reliance on 2005(2) CPC 440 Rural Postal Insurance through its Postmaster and Another Vs. Chandro Devi and others, wherein insured consumed poison which resulted in his death after which his legal heirs lodged claim for payment of the amount under the policy secured by him, which was repudiated by the petitioners on the plea that he committed suicide, within a period of one year from the date of issuance of policy in terms of decision by by the Hon'ble National Commission in revision petition No. 417 of 1997 titled as Branch Manager, LIC and Another Vs. Ramchander Singh dated 19-09-1994, to the effect that policy in question had become void and no claim could have been entertained by the District Forum, accepting the appeal of the insurer. Learned counsel has further relied upon 2001(1) CPC 633 National Insurance Co. Ltd., Vs. Dinesh (S.C.), wherein it has been held by the Hon'ble Apex court that Insurance company can dispute the correctness of report made by surveyor as his report is not always binding upon, with further observation that State Commission has wrongly ordered that entire amount as suggested by Surveyor should be paid to claimant, whereas Hon'ble National Commission has not considered the said question because of which impugned order was set aside accepting the appeal of the Insurance company. Lastly, learned counsel relied upon 2003(1) CPC 303 Punjab State Electricity Board Vs. M/s. Aneja Food Products, wherein dispute was referred to Dispute Settlement Authority, but complainant was not given the representation. District Forum accepted the complaint and set aside the impugned demand raised by the electricity board with direction to refund the amount paid by the complainant alongwith interest and costs. However, it came into evidence that complainant had acquiesced to the jurisdiction of Dispute Settlement Authority. It was held by the Hon'ble State Commission, Chandigarh, that once the matter was taken up by Dispute Settlement Committee, the District Forum could not sit over its decision as an appellate authority and order passed by District Forum was set aside by allowing appeal filed by Punjab State Electricity Board.
8. There is no dispute regarding settled proposition of law that decision given by Insurance Ombudsman on the reference made at the instance of the complainants, does not debar them from availing remedy under the Act because the same is recommendatory in nature and remedy before Consumer Forum is additional remedy in terms of section 3 of the Act.
9. However, the perusal of Ex. R-2 & Ex. R-3 reveals that appeal No. 4489 preferred by the complainants on account of death of Gurmej Singh, has been dismissed by ZOCRC and repudiation of claim by the LIC Of India has been upheld with the direction to inform them in case they are not satisfied with the decision of ZOCRC, then they can file further appeal to COCRC. The complainants have not denied the fact that they had availed remedy before Zonal Level Committee constituted by the opposite parties headed by High Court Judge, for adjudication of insurance claims. There is nothing on record that complainants have availed further remedy of appeal before COCRC or that they invoked the writ jurisdiction of the Hon'ble High Court under Article 226 of Constitution of India. After they have availed the remedy by filing appeal before Zonal Level Committee constituted by the LIC Of India and its order has become final binding upon the parties to the complaint, the complainants cannot invoke remedy under the Act.
10. Even otherwise the plea of the complainants that deceased Insured had been suffering from cough and cold is not corroborated by any documentary proof like prescription slip or bill secured by the deceased after purchase of homeopathic medicine. They have also not examined any doctor who treated the deceased prior to the date of his death. They have produced on record copy of report of Investigator namely Sh. Vikas Aggarwal appointed by the opposite parties Ex. C-16 and copies of witnesses recorded by him Ex. C-21 to Ex. C-23 in the course of Enquiry. The report of surveyor or investigator appointed by the LIC Of India to verify the factum of cause of death of the insured is not binding on them. It is always subject to approval by competent authority and the insurer can always has liberty to differ with report of Surveyor or Investigator. The statements of witnesses recorded by him are no substitute for the statements made in the course of trial before the Consumer Forum. The complainants have not produced any of the person whose statement has been recorded in the course of Enquiry by the Investigator appointed by the opposite parties or the signatory of Panchyatnama Ex. C-15 relied upon them as to cause of death of insured. It may not be out of place to mention here that deceased insured was employed on the post of a Constable in Police and Investigator appointed by the LIC Of India arrived at a conclusion that Insured has not committed suicide on the basis of statements of his colleagues or their wives. Similarly Panchyatnama Ex. R-15 also bears the signatures of police officials alone. As mentioned in the Claimant's statement Ex. C-18, insured had expired after consuming Sulphas tablets. In the copy of postmortem report Ex. C-19, it has been mentioned that exact cause of death can be declared only after seeking report of chemical analyst. The complainants have themselves tendered in evidence the report of Chemical Examiner Ex. C-20, given after analysis of viscera as per which 'Aluminum Phosphate Insecticide' was detected in the Exhibits. In view of different size and shape of homeopathic tablets and Aluminum Phosphate tablets, the plea of the complainants that insured confused the above said insecticide and consumed them by mistake, does sound well to the conscience.
11. The initial onus to prove the above said facts was upon the complainants, but they have failed to discharge the same by producing any reliable and convincing evidence. As such, they cannot succeed on the basis of any weakness in the case of the LIC Of India and liability cannot be fastened upon them merely because of non-production of any evidence to the contrary, especially when insured had been living in the police quarters prior to his death and none of his colleagues and their family member has come forward to reveal the truth before the Investigator appointed by the LIC Of India, who has given his report without recording evidence of any person having no departmental or personal dealing with the deceased insured.
12. In the light of our above discussion, we have come to the conclusion that the LIC Of India were justified in repudiating the claim of the complainants as per terms and conditions of the Insurance policy, which provide that in case of death of insured within one year after the date of issuance thereof, claim can be repudiated if death of the insured has taken place due to suicide.
13. For the aforesaid reasons, we dismiss the complaint and leave the parties to bear their own costs. The copies of this order be sent to the parties, free of costs as per rules, on the subject.

1. File be indexed and consigned.

BEFORE THE DISTRICT CONSUMER FORUM AT ADILABAD
Date of filing : 26.05.2008.
Date of disposal : 30.03.2009.

C.C.No.64/08
Between:-
Vodnala Rayamallu, S/o.Late.Yellaiah,
Age:35 years, R/o.Seetharampally village,
Mandal Mancheiral,
Dist.Adilabad. …Complainant.

//AND//

LIC Of India,
Branch Mancherial. …Opp.Party.


Counsel for Complainant : Mr.C.Sudhkar Reddy.


Counsel for Opposite Party : Mr. P.Mohan Singh.

QUORUM:-
SRI.P.THIRUPATHI REDDY, M.A., L.L.B. : PRESIDENT.

SRI.G.SRINIVAS, B.COM., L.L.B. : MEMBER.

MONDAY THE 30th DAY OF MARCH 2009.

-:ORDER:-

Order Pronounced by President:-

This complaint is filed under section 12 of C.P. Act 1986.
The brief facts of complaint are as follows:

1. The complainant is resident of Seetharampally village R/M. Mancherial. The brother of the complainant by name Vodnala Srinivas, S/o.Late.Yellaiah, R/o.Seetharampally insured his life with the LIC Of India for an amount of Rs.2 lakhs on 20.12.2005. Therefore, the LIC Of India issued Policy Bond bearing No,683991025 for Rs.2,00,000/- in favour of Vodnala Srinivas. Later, the brother of the complainant paid the premium installments regularly till his death. The maturity date is 20.12.2023 and in case of death of the insurer, the policy amount of Rs.2,00,000/- plus vested bonus is to be paid to the Nominee. At the time of issue of the policy, the complainant was nominated as Nominee by the Policy holder Vodnala Srinivas. The policy holder, i.e., the brother of the complainant died on 15.07.2007 leaving behind him the complainant as his nominee. The complainant filed an application before the LIC Of India on 30.08.2007 for payment of the policy amount and vested bonus to him. The complainant also got issued a legal notice on 07.04.2008 demanding the LIC Of India to pay the amount. But the LIC Of India failed to pay the amount to the complainant.
Hence the complainant prayed this Forum to direct the LIC Of India as below:

a). To pay an amount of Rs.2,00,000/- (Rupees Two Lakhs Only) with vested bonus and interest at the rate of 24% per annum from the date of death of insurer till the realization.

b). To pay Rs.5,000/- (Rupees Five Thousand only) towards compensation on account of causing agony and pain both mentally, physically and monetarily and also on account of rendering deficient services.

c). To pay costs of the complaint.

d). To award any other relief or reliefs which this Hon’ble Forum deems fit and proper in the circumstances of the case.

2. The LIC Of India contested the petition and filed counter. The contents of counter is as follows:
It was found by the LIC Of India Corporation in the enquiries that the Life Assured was not a healthy person at the time of taking the said policy and suffering from cancer before issue of policy and taken treatment from Sai Orthopedic Clinic on 14.06.2004. That the life assured suppressed material facts about the status of his health, details of treatment taken for illness etc., in the proposal for insurance and fraudulently obtained the policy. That the proposal for Assurance dt:16.12.2005 the deceased Life Assured had answered the following questions as under noted:

QUESTION

ANSWER

(a).

During the past 5 years did you consult any Medical Practitioner for any ailment requiring treatment for more than a week.

No.

(b).

Have you ever been admitted to any Hospital or Nursing Home for general check-up observation, treatment or operation?

No

(c ).

Are you suffering from or have you ever suffered from any ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney Brain or Nervous System?

No

(d).

Are you suffering from or have you ever suffered from any Diabetes, Tuberculosis, High Blood Pressure, Cancer Epilepsy, Hernia, Hydrocele, leprosy, or any other diseases?

No

(e).

What has been your usual State of health?

Good.

That as per the Sai Orthopedic Clinic, Mancherial LA was admitted on 14.06.2004 and discharged on 21.06.2004 and was suffering from Fibromyxoid Sarcoma (cancer). This vital information was suppressed by the life assured in the Proposal dt:16.12.2005. Therefore, it is evident that the deceased life assured had made incorrect statements and withheld correct information from the Opp.Party regarding his health at the time of effecting the assurance. The LIC Of India prayed to dismiss the petition.

3. Both parties filed Proof Affidavits.

4. On behalf of complainant Ex.A1 to A7 are marked. Ex.B1 to B5 are marked on behalf of LIC Of India.

5. Now the point for consideration is whether there are grounds to allow the petition?

6. Heard both sides. The plea of the Ld. Advocate for complainant said that the deceased Srinivas was hale and healthy. He never suppressed that facts about his health and he never underwent any treatment prior to taking policy and he prayed to allow the claim. On the other hand the Ld. Advocate for LIC Of India in his counter and arguments constantly maintained that the Late.Srinivas underwent treatment from Sai Orthopaedic Clinic on 14.06.2004 and that he was patient and in support of the contention of LIC Of India they filed treatment particulars from Sai Orthopaedic Clinic Mancherial. A perusal of Ex.B3 shows:
Soft tissues swelling

(R ) Gluteal Region
Size: 8” X 6” X 5”
Excessive Burns

SA by Dr.Murthy.
By standard southern’s approach that sub gluteal region was exposed and found to be occupied by a cyst. The cyst wall was bluish, vascular and not adherent to surrounding tissues. The cyst wall was nearly ruptured and contents evacuated. Profuse, Ooze, was noted. Sciatic nerve was found extended in the sheath of the cyst wall. Haemostiasis was secured as much cyst as possible was excised.

7. The LIC Of India further relied on the Affidavit of the Doctor Sai Orthopaedic Nursing home it is marked as Ex.B5. Ex.B5 reads as follows:
I am the deponent herein and I know the deceased Vodnala Srinivas, S/o.Yellaiah, Age:22 years, R/o.Seetharampally, Post:CCC Naspur, Mdl:Mancherial, Dist.Adilabad. Who has taken treatment in my Nursing home for the disease Soft tissues swelling gluteal region as patient vide P.No.12/139 from 14.06.2004 to 21.06.2004. That earlier on the requisition of the LIC Of India I have given treatment Certificate on the basis of Records maintained by me in my Nursing Home.
A perusal of Ex.B4 i.e., opinion of the Dr.Thirupathi Rao ( consultant Doctor of LIC of India Karimnagar) shows that this case was referred to him for opinion and he passed remarks as follows: Life assured was suffering from Fibromyxoid Sarcoma (Cancer). Doctor passed his remarks on information furnished by LIC Of India it is as follows:

Please refer Case Sheet from Sai Orthopaedic Clinic dt:14.06.2004. Please ascertain 1). The disease suffered by the person. 2). The conformation of Histopathology report.

A perusal of Ex.B2 application proposal for insurance the contents are as follows:
Column 3 B.
Q: Have you understood fully the terms and conditions of the plan you propose to take?
Answer : Yes.
8. Coming to in personal history in Page No.3 column No.11F
Q: Do you have any bodily defects or deformity?
Answer : Yes.
In column No.11G Q: Did you ever have any accident or injury?
Answer : Yes.
In 4th page in column NB for Medical cases only

“ I certify that the Proposer has signed/put this/her thumb impression in my presence after admitting that all the answers to Questions No.’s 10 and onwards of this form have been correctly recorded”.

But where as column No.11 a to e

PERSONAL HISTORY

Answer Yes or No.

a). During the last five years did you consult any Medical practitioner for any ailment requiring treatment for more than a week?

No

b). Have you ever been admitted to any Hospital or Nursing Home for general check-up observation, treatment or operation?

No

c). Have you remained absent from place or work on grounds of health during the last 5 years?

No

d). Are you suffering from or have you ever suffered from any ailments pertaining to Liver, Stomach, heart, Lungs, Kidney, Brain or Nervous system?

No

e). Are you suffering from or have you suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other diseases?

No

9. Ex.B4 is dated three years after issue of policy. It is obtained for repudiating the claim. Thus a perusal of Ex.B3 & B4 clearly reveals that late.Srinivas was suffering from Cancer disease and he underwent treatment prior from 14.06.2002 onwards. This policy was Ex.B2 application for obtaining policy was made on 16.12.2005 i.e., one year after treatment in the Sai Orthopaedic Nursing Home.

10. Knowingly or unknowingly in column no.11 F & G Late.Srinivas admitted that he has bodily defects and injuries. But in column No.11 a to e the Late.Srinivas replied in negative, it amounts suppression of material facts about his status of health. Basing on this the Ld. Advocate for the LIC Of India relied on following Case Law.
Re: Case Laws in support of suppression of material facts by the proposer/life assured.

III (2002) CPJ 10 (NC)

1. L.I.C. of India

V/s.

Minu Kalitha.

Repudiation of claim – Insured suffering from cancer took treatment in hospital not disclosed. Incorrect information regarding health. Insurance contract invalid ab initio. No deficiency in service. Repudiation justified.
It is settled that law that contract of insurance is based on good faith. It is for the respondent insured to give correct information on his health which he did not disclose at that time.
This ground of incorrect information and false statements make the insurance contract null and void. We find there is no deficiency in service by LIC of India.
We are convinced that LIC Of India rightly repudiated because the said policy had been rendered void and invalid ab initio in view of the false answers given by the life assured and the policy was unenforceable.

III (2003) CPJ 15 (NC)

2. Panni Devi

V/s.

LIC of India

If a person with holds any information, Doctor would not know it unless it is visible. Life Assured violated the very good faith on which contract of Insurance Stands. Suppression of material facts at the time of policy proved. Repudiation of Claim justified.

III (2002) CPJ 56 (NC)

3. LIC of India

V/s.

Gangamma & ANR (Respondents)

Repudiation of Claim – Suppression of material fact. Deceased had malignancy, obtained treatment, proved by documents on record. Suppression proved. Order of State Commission allowing claim is set aside. Suppression of information itself violates the terms of the contract, utmost good faith is a tenet of Insurance Policy which was not observed by the deceased.

V (2003) CPJ 91 (NC)

4. LIC of India

V/s.

Sashi Bala (Respondent)

Repudiation of Claim – concealment of material information. Deceased suffering – Not disclosed. Repudiation Justified. Complaint dismissed. Insurance policy is issued on trust and good faith. Order passed by State Commission is set aside.

II (2007) CPJ 51 (NC)

5. LIC of India

V/s.

Krishan Chander Sharma … (Respondent)

Repudiation of Claim – because of concealment of material facts regarding health. Insured is guilty of suppression of ailment. Repudiation justified. Complaint dismissed.

I (2005) CPJ 77 (NC)

6. Sree Devi Amma

V/s.

LIC of India … (Respondent)

Repudiation of Claim – Suppression of material facts. Death within short period of taking policy. District Forum rightly dismissed the complaint on the ground of suppression of material facts by life assured at the time taking policy.

Civil Appeal No.5322/2007 arising out of SLP (C ) No.23951/2005

7. P.C.Chacko and another …Appellant.

Vs.

Chairman, LIC of India and others …Respondents.

AIR 1962 SC 841

8. Mithoolal Nayak …Appellant.

Vs.

LIC of India …Respondent.

(Revision Petition No.3362 of 2004)

L.I.C. of India …Petitioner.

Vs.

Smt.Ayesha. …Respondent.

Head notes: Claim repudiated on the ground that the assured suppressed the material fact about his sickness and on being on medical leave before purchase of the policies. The cause of death had no relevance to the non disclosure of health at the time of purchase of policy.

I (2009) CPJ 231 (NC)

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI.

LIC Of India …Petitioner.

Vs.

M.Bhavani …Respondent.

Revision Petition No.649 of 2005 from Order dated 28.10.2004 in Appeal No.421 of 2003 of A.P.State Consumer Disputes Redressal Commission, Hyderabad – Decided on 14.01.2009.
Consumer Protection Act, 1986 – Section 21(b) – Life Insurance – Suppression of material facts – Deceased disclosed at time of revival of policy – False declaration given at time of revival of policy – Deceased guilty of suppression of fatal pre-existing disease, from which he was suffering at time of getting policy revived – Lower For a erred in allowing claim – Orders set aside in revision – No relief entitled. ( Paras 11,12 and 13.)

11. On the other hand the Ld. Advocate for complainant submitted that the allegations raised by the LIC Of India are not established and it is an allegation for allegation sake. The Citation relied on by the LIC Of India has no application to the facts and circumstances of the case. In support of his contention he relied on the following citations.

1993(2) CPR 427

Padmaned Haribhai Parmar

Vs.

Divisional Manager LIC of India

LIC – Suppression of material facts: not proved repudiation of claim un- justified.

1998 (1) CPR 463.

Narmada Devi.

Vs.

The LIC Of India.

LIC Of India – Suppression of material facts – Plea that insured suffered from Sciatica but not disclosed in proposal. No such mention in confidential report of LIC Of India’s doctor – Repudiation of claim held improper.

1996 (2) CPR 46.

LIC of India.

Vs.

Smt.Laxmi Kumar.

LIC Of India – Suppression of material facts – plea of – no evidence to substantiate it adduced before District Forum inspite of adequate Opportunity – Remand – Refused.

1995 CPJ 388, 1995 (1) CPR 313.

Smt. Gangamma.

Vs.

LIC Of India.

LIC Of India – Suppression of material facts – failure of LIC Of India to prove that insured made false representation – Death of insured due to Myo Cardinal infraction – claimant held entitled to amount under the policy – LIC Of India has failed to prove that the life assured suppressed the material facts and made false representations regarding his health at the time of obtaining life insurance policies.

II (1994) CPJ 55: 1994 (1) CPR 884.

LIC of India.

Vs.

Smt.Chandrakanth.

LIC Of India – Suppression of material facts – Evidence relating to not adduced by LIC Of India in spite of adequate opportunity – claim – Repudiation of – amount to deficiency.

12. Coming to the background of this case the Date of Birth of complainant is 16.06.1987. 18 years 6 moths on the date of taking policy. V.Yellaiah the father of Srinivas was no more. Late.Srinivas admitted in First year Medical Course in Gandhi Medical College on 29.05.2005 (Ex.A5). He took this policy about 4 months. Prior to his death while studying 1st year Medical course.

13. Admittedly Late.Srinivas has no recognize job of any type. As seen from Ex.B2 application source of income of his family or assets was not shown. As seen from column no.5 the Annual Income of Late.Srinivas by way tuitions was shown as at Rs.70,000/-. The Ld. Advocate for LIC Of India submitted that Medical student of the first year cannot spare single minute to towards tuitions for attending classes for others. As Medical study it is a intensive course of study. The Ld. Advocate for LIC Of India further submitted that another policy was taken on the name of Late.Srinivas (CC.No.70/08) and the premium p.a. is Rs.33,450/-. The premium in the case on hand is Rs.11,749/- and the total amount payable is Rs.45,199/-. Thus according to Ld. Advocate for LIC Of India said that the Financial capacity of the Late.Srinivas was doubt fully and it was the pre planned plot to take illegal advantage of the situation.

14. Perused the citation relied on by both parties. There is no dispute on the principle laid in those citations. The facts and circumstances of the case on hand in a way a bit different from the cases in the citations except the oral submission that the insured was earning so much income per annum by way of tuitions, there is no reliable evidence to show that deceased Late.Srinivas was getting so much income. The Ld. Advocate for Opp.Parties submitted that generally tuitions are being given in Residential Schools and Colleges for 10th and Inter students by the experienced Post Graduates Lecturers and they will be likely to get reasonable fees. Where as Late.Srinivas was Inter student, and not expected to give tuitions for 10th class students. If Late.Srinivas gave tuitions for below 10th class students he may not get that much income as stated by complainant. That according to the Ld. Advocate for LIC Of India the contention of complainant that Late.Srinivas was getting Rs.75,000/- p.a. by way of tuitions is not believable and reliable. In this regard we agree the contention of the Ld. Advocate for LIC Of India.

15. Admittedly Late.Srinivas died while he was doing his first year MBBS course. It is not an accidental death, it is pre matured death due to disease at young age. The Doctor who treated Late.Srinivas gave Proof Affidavit about the treatment given to Late.Srinivas that affidavit stands un rebutted. Thus a perusal of the application form and the nature of filing of the columns appears to be filled up without taking care.

16. The facts and circumstances of this case coupled with Case Law. We feel that in a way Late.Srinivas suppressed previous treatment under gone by him. Any how he died about 2 years after commenced of the policy. So we feel it is a fit case to allow the claim.

17. In the result complaint is allowed. The LIC Of India is directed to make a payment of Rs.2,00,000/- (Rupees Two Lakhs Only) with interest @ 9% p.a. from the date of filing of complaint i.e., Dt:26.05.2008 within a period of one month from the date of receipt of this order, failing which the complainant shall be at liberty to proceed against them U/S.25/27 of Consumer Protection Act 1986.
Dictated to Steno, transcribed by her, corrected by us and pronounced in the Open Forum on the 30th day of March 2009.

Complaint is filed on 29-08-2008Compliant disposed on 30-03-2009BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM::AT:: K A R I M N A G A RPRESENT: KUM. G.V.N.R. BHANUMATHI, M.A. B.L.,Ist ADDL. DIST. & SESSIONS JUDGE & PRESIDENT (F.A.C.)ANDSMT. E. LAXMI, M.A.LL.B., MEMBERMONday, THE THIRTY DAY OF MARCH, TWO THOUSAND NINECONSUMER complaint NO. 117 OF 2008

Between:
Chinthala Rajitha, W/o. Late Ch. Laxmaiah, age 35 years, Occ: Household, R/o. Mettupalli village of Mogullapalli mandal of Warangal district.

…ComplainantAND

The LIC Of India, rep. by its Branch Manager, Branch Office, Huzurabad of Karimnagar district.

…Opposite Party

This complaint is coming up before us for final hearing on 18-03-2009, Sri G. Rajendra Prasad, Advocate for complainant being absent and in the presence of Sri P. Ashok, Advocate for LIC Of India, and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:

::ORDER::

1. This complaint is filed under Section 12 of C.P. Act, 1986 seeking direction to the LIC Of India to pay an amount of Rs.1,75,000/- towards sum assured, compensation, bonus, interest and costs.

2. The brief averments of the complaint are that the husband of the complainant by name Chintala Laxmaiah obtained Life Insurance Policy from the LIC Of India bearing no.684385920 Dt: 28.3.2006 for an assured sum of Rs.1,00,000/- and the complainant is nominated as nominee under the said policy. As per the terms and conditions of the said policy the LIC Of India undertook to pay an amount of Rs.1,00,000/- towards the sum assured with bonus in case of death of the policy holder. The husband of the complainant paid annual premium of Rs.5,873/-. After submission of the proposal the LIC Of India verified the age, occupation, health of the proposer and issued the policy. Unfortunately the policy holder died on 28.6.2006 on account of ill-health. After his death, the complainant being a nominee submitted claim form informing death of the policy holder by claiming assured sum of Rs.1,00,000/- with bonus and interest. Even after lapse of 2 years the LIC Of India did not settle her claim, therefore, the complainant got issued a Legal Notice Dt: 14.7.2008 to the LIC Of India to pay the claimed amount, inspite of service of Legal Notice the LIC Of India failed to settle the claim. The acts of the LIC Of India constitutes deficiency of service, therefore, the complainant sought direction for payment of assured sum of Rs.1,00,000/- with bonus, interest, compensation and costs.

3. The LIC Of India filed counter admitting that the policy holder obtained Jeevan Anand policy on 28.3.2006 for an assured sum of Rs.1,00,000/- and the complainant is nominee under the said policy. After receiving death intimation from the complainant, the LIC Of India is causing enquiries to know the cause of death of the policy holder as he died within three months from the date of policy. As the investigation report is not received from its Parkal Branch the claim of the complainant could not be settled, as such there is no deficiency of service on their part. Therefore, the LIC Of India prayed for dismissal of the complaint.

4. The complainant filed her Proof Affidavit reiterating the contents of the complaint and filed documents which are marked as Ex.A1 to A7. Ex.A1 is the original Premium Deposit Receipt in the name of deceased. Ex.A2 is the Xerox copy of Death Certificate Dt: 10.7.2006 of deceased issued by Panchayat Secretary, Mettupally Village, Mogullapally Mandal, Warangal District.Ex.A3 is the Legal Notice Dt: 14.7.2008 issued by counsel for the complainant addressed to LIC Of India. Ex.A4 & A5 are the Postal Acknowledgement Cards addressed to LIC Of India. Ex.A6 & A7 are the postal receipts.

5. After filing Proof-Affidavit of the complainant, the LIC Of India deposited a sum of Rs.1,04,400/- in this Forum through a Demand Draft on 9.3.2009 towards the claim made by the complainant. Therefore, the present complaint is confined only for payment of interest and cost of the proceedings.

6. The points for consideration are:
(1) Whether the complainant is entitled to claim compensation, interest and costs?
(2) To what relief?

7. Admittedly the husband of the complainant obtained insurance policy for an assured sum of Rs.1,00,000/- by paying premium amount of Rs.5,873/- under Ex.A1. Subsequently the LIC Of India issued policy Bond undertaking to pay Rs.1,00,000/- with bonus in case of death of policy holder. The complainant informed the LIC Of India that her husband died on 28.6.2006 on account of ill-health and requested them to pay the assured sum with bonus by submitting Death Certificate of the policy holder under Ex.A2. Since the LIC Of India did not settle her claim she got issued a Legal Notice on 14.7.2008 under Ex.A3. Inspite of service of the same it was not settled, therefore, she filed the present complaint. In the counter filed by the LIC Of India it is stated that they are making enquiries regarding cause of death of the deceased and as the report is not received claim is not settled. However when this case is pending for enquiry, the LIC Of India deposited a sum of Rs.1,04,400/- towards the settlement of claim made by the complainant.

8. As the LIC Of India deposited the assured sum with incidental bonus, the claim is confined regarding payment of interest, compensation and costs. After receiving the claim, the LIC Of India conducted investigation to know the cause of death of the policy holder as he died within 3 months from the date of issuance of policy and on account of delay in receiving the report from Parkal Branch the claim of the complainant could not be settled immediately. The delay in paying the amount is explained by the LIC Of India, therefore, the complainant is not entitled for compensation. However, the LIC Of India is liable to pay interest on the assured sum of Rs.1,00,000/- from the date of submission of claim by the complainant till the date on which the LIC Of India deposited amount in this Forum. In view of the above said reasons, we hold that the LIC Of India is liable to pay interest @ 7.5% per annum on assured sum of Rs.1,00,000/- from the date of submission of claim till 9.3.2009 on which date the LIC Of India deposited Rs.1,04,400/-. The complainant is entitled to withdraw the deposited amount of Rs.1,04,400/- from this FORUM. The LIC Of India is also liable to pay cost of Rs.500/- towards the expenses incurred in filing the complaint.

9. In the result the complaint is partly allowed directing the LIC Of India to pay interest @ 7.5% per annum on Rs.1,00,000/- from the date of submission of claim till 9.3.2009 along with Rs.500/- towards costs of this case within one month from the date of receipt of this order.

Typed to my dictation by Stenographer, after correction the orders pronounced by us in the open court this the 30th day of March, 2009.

Complaint is filed on 14-08-2008

Compliant disposed on 25-03-2009

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

::AT:: K A R I M N A G A R

PRESENT: KUM. G.V.N.R. BHANUMATHI, M.A. B.L.,

Ist ADDL. DIST. & SESSIONS JUDGE & PRESIDENT (F.A.C.)

AND

SMT. E. LAXMI, M.A.LL.B., MEMBER

MONday, THE TWENTYFIFTH DAY OF MARCH, TWO THOUSAND NINE

CONSUMER complaint NO. 114 OF 2008

Between:
Nandagiri Sunitha, W/o. Late Srinivas, age 30 years, Occ: Household, R/o. Nizamabad, V/o. Konaraopet mandal in Karimnagr district.

…Complainant

AND

The L.I.C. of India represented by it’s Senior Divisional Manager, Divisional Office, Karimnagar.

…LIC Of India

This complaint is coming up before us for final hearing on18-03-2009, in the presence of Sri K. Shravan Kumar, Advocate for complainant, and Sri P. Ashok, Advocate for LIC Of India, and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:

::ORDER::

1. This complaint is filed under Section 12 of C.P. Act, 1986 seeking direction to LIC Of India to pay a sum of Rs.1,00,000/- towards accident benefit together with interest, compensation and costs.

2. The brief averments of the complaint are that the husband of the complainant Nandagiri Srinivas obtained Jeevan Anand Policy from the LIC Of India with accident benefit coverage for a sum of Rs.1,00,000/-. As per the terms and conditions of the said policy in case the policy holder dies in an accident a sum of Rs.1,00,000/- will be paid towards accident benefit apart from assured sum of Rs.1,00,000/- with bonus. The complainant is the nominee under the said policy. On 3.12.2006 the policy holder met with an accident near Nizamabad village and died as he was hit by RTC bus when he was going on a motor cycle. After his death the complainant submitted claim for payment of the assured sum of Rs.2,00,000/- with bonus, but the LIC Of India allowed her claim for Rs.1,00,000/- and paid Rs.1,13,600/- consisting of Rs.1,00,000/- towards basic sum assured and Rs.13,600/- towards bonus and did not consider her claim for 1,00,000/- payable on account of accident benefit clause. Since the policy holder died in an accident the LIC Of India ought to have paid the said amount and failure to pay the same amounts to deficiency of service. Therefore, the complainant sought direction for payment of Rs.1,00,000/- together with interest @ 18% Per Annum, compensation and costs of the complaint.

3. The LIC Of India filed counter admitting the issuance of Jeevan Anand Policy with accident benefit to the husband of the complainant. It is also admitted that they received a claim from the complainant as she is the nominee under the policy and on receiving the same they considered it and paid Rs.1,13,600/- on 24.9.2007. The claim for Rs.1,00,000/- under accident benefit is not considered as the complainant failed to submit driving license of the deceased policy holder. It is submitted by the LIC Of India that if the policy holder does not hold driving license he is not entitled for the sum assured under accident benefit clause. Since the complainant failed to establish the driving license her claim for payment of Rs.1,00,000/- is not considered. Therefore, the LIC Of India prayed for dismissal of the complaint.

4. The complainant filed her affidavit reiterating the contents of the complaint and the documents filed by her are marked as Ex.A1 to A6. Ex.A1 is the Xerox copy of First Information Report in Crime No.68 of 2006 Dt: 3.12.2006 issued by Sub Inspector of Police, Police Station, Konaraopet (in 2 sheets). Ex.A2 is the Xerox copy of Inquest Report Dt: 3.12.2006 (in 2 sheets). Ex.A3 is the CC of Post Mortem Examination Report in Crime No.68/2006 of Police Station, Konaraopet Dt: 3.12.2006. Ex.A4 is the CC of Charge Sheet in Crime No.68/2006 of Police Station, Konaraopet. Ex.A5 is the copy of Jeevan Anand Policy (with accident benefit) bearing no.684154278. Ex.A6 is the Letter issued by LIC of India, Senior Divisional Manager, Divisional Office, Karimnagar Dt: 21.9.2007.

5. When the matter is pending for filing of the Proof Affidavit of LIC Of India, a lodgment is filed by the LIC Of India enclosing a D.D. for Rs.1,00,000/- towards amount claimed by the complainant under accident benefit clause. In view of the payment of the said amount, now the claim of the complainant is confined regarding payment of interest, compensation and costs. In view of the same the following points are to be decided.

6. The points for consideration are:
(1) Whether the complainant is entitled to claim interest, compensation and costs of the complaint?
(2) To what relief the complainant is entitled to under the circumstances of the case?

7. The claim of the complaint for payment of Rs.1,00,000/- payable under accident benefit clause is accepted by the LIC Of India by depositing the said amount in this FORUM through a Lodgment. Admittedly the husband of the complainant obtained Jeevan Anand Policy under Ex.A5 for an assured sum of Rs.1,00,000/- along with Personal Accident Benefit Scheme. As per the terms of the said policy in case if the policy holder dies in an accident the Nominee would be paid Rs.1,00,000/- apart from the basic sum assured. Admittedly the policy holder i.e. husband of the complainant died in an accident on 3.12.2006 at 2.00 P.M. when he was hit by RTC bus at the outskirts of Nizamabad village. The criminal case records under Ex.A1 to A4 (4) discloses that the driver of the RTC bus is charged for causing death of the policy holder on account of rash and negligent driving of the RTC bus. The said documents clearly established the death of policy holder in an accident. When the complainant submitted claim to the LIC Of India for payment of Rs.2,00,000/- with bonus, the LIC Of India considered her claim only to the extent of basic assured sum of Rs.1,00,000/- along with bonus of Rs.13,600/- and sent a letter under Ex.A6 stating that the claim for payment of amount under accident benefit is not payable in the absence of driving license.

8. Admittedly the deceased policy holder died in an accident and as per the terms and conditions of the policy the nominee is entitled to claim Rs.1,00,000/- under accident benefit clause. Without any valid and tenable reason the LIC Of India did not consider her claim, making her to approach this FORUM for payment of the said amount of Rs.1,00,000/-. However the same is considered after filing the case by depositing Rs.1,00,000/- in this FORUM Since non-payment of the said amount within in time is unjustified, the complainant is entitled to claim interest on the said amount. The LIC Of India deposited 1 lakh on 19.1.2009 with Lodgment. In view of the said payment the complainant is entitled to claim interest on 1 lakh @ 7.5% Per Annum from the date of payment of basis sum i.e. 21.9.2007. Since interest is awarded the complainant is not entitled for compensation. Therefore, we hold that non-payment of amount of 1 lakh under accident benefit clause within the stipulated time, there was deficiency of service on the part of the LIC Of India. Since the said amount is deposited the present order is passed with regard to payment of interest and costs only. The complainant is entitled to withdraw the amount of Rs.1,00,000/- already deposited by the LIC Of India.

9. In the result the complaint is partly allowed directing the LIC Of India to pay interest @ 7.5% Per Annum on Rs.1,00,000/- from 21.9.2007 (the date on which the basic assured sum was paid) to 19.1.2009 on which date the amount of Rs.1,00,000/- is deposited in this FORUM and Rs.500/- towards costs of the complaint within a period of one month from the date of receipt of this order.

Typed to my dictation by Stenographer, after correction the orders pronounced by us in the open court this the 25th day of March, 2009.

Sd/- Sd/-
MEMBER PRESIDENT

BEFORE THE DISTRICT FORUM CONSTITUTED UNDER THE CONSUMER PROTECTION ACT (ACT NO. 68 OF 86) AT SRIKAKULAM


P R E S E N T

01. Sri P.Gurunadha Rao,
President, District Consumer Forum,
Srikakulam
02. Smt. D.Raj Kumari, B.A.(Hons.), B.L.,
Lady Member.

Dated this the 12th day of March, 2009

C.C.No.51/2008


BETWEEN:

Kuna Lakshmi, W/o.Ravikumar, Aged about 30 years, Household
duties D.No.14-90, Agraharam Street, Ponduru, Srikakulam Dist. ...Complainant.

AND:

01) Branch Manager, LIC of India, Branch Office,
Women’s College Road, Srikakulam Town and District.

02) The Divisional Manager, LIC of India, Divisional Office,
Dabagardens, Visakhapatnam. …opposite parties.

This complaint coming on 03-03-2009 for final hearing before us in the presence of Sri B.Rama Mohana Rao, Advocate for complainant and Sri K.N.B.V.Prasada Rao, Advocate for LIC Of India Nos. 1 and 2 and having stood over to this day for consideration, this Forum made the following:

O R D E R

(By Smt.D.Rajkumari, Lady Member)

This is a complaint filed under Section 12 of the Consumer Protection Act, 1986 and facts of the case briefly are as follows:
Complainant is nominee under a policy. Sister of the complainant by name Kancharapu Rangamma obtained policy for Rs.1,00,000/- with effect from 28-3-2006 and she died on 27-7-2006. Complainant claimed amount under the policy, but the LIC Of India refused the claim by letter dated 10-3-2008. Hence complaint is filed for a direction to the LIC Of India to pay the amount of Rs.1,00,000/- with interest at the rate of 24% p.a., from 1-11-2006 and compensation of Rs.30,000/- and costs of Rs.2,000/-.
2) LIC Of India No.2 filed counter stating that the LIC Of India conducted investigation and found that the life assured was mentally ill since childhood.
LIC Of India No.1 filed memo adopting the counter filed by LIC Of India NO.2.
3) Exs.A1 to A8 are marked on behalf of the complainant. No documents are marked on behalf of the LIC Of India.

Heard both parties.
Point for consideration is:
Whether there is deficiency in service on the part of the LIC Of India.
4) Point: Complainant filed affidavit with the same facts contained in the complaint. LIC Of India filed affidavit with the same facts contained in the counter. LIC Of India refused the claim on the ground that the life assured was mentally ill since childhood and the agent had deliberately suppressed the material facts while getting the life assured insured. It is further stated that the agent is no other than the husband of the complainant. LIC Of India have not adduced any evidence to show that the life assured was mentally ill since childhood and there was suppression of material facts by the life assured. If the agent had played fraud for obtaining the policy, the LIC Of India may take action against him, but cannot repudiate the claim on that ground. There is no evidence on record to show that the life assured was suffering from mental illness since childhood. It cannot be presumed that there was suppression of material facts. We therefore hold that there is deficiency in service on the part of the LIC Of India in not paying the insurance amount to the complainant. Hence, we answer the point accordingly.
In the result, complaint is allowed. LIC Of India are directed to pay Rs.1,00,000/- (Rupees one lakh only) to the complainant with interest at the rate of 12% per annum from the date of filing the complaint i.e., 28-4-2008 till the date of payment and costs of Rs.1,000/- (Rupees one thousand only). Advocate’s fee is fixed at Rs.1,000/- (Rupees one thousand only).
Dictated to the Shorthand Writer, transcribed by him, corrected and pronounced by us in open Forum on this the 12th day of March, 2009.

1. Tirumalapudi Chittemma,
W/o Subba Rao, Housewife,
R/o Vijaya Ashram,
Cherukupalli Mandal,
Guntur district.
2. Tirumalapudi Subba Rao,
S/o Nagaiah,
R/o Vijaya Ashram,
Cherukupalli Mandal,
Guntur district. … Complainants

AND

1. The Divisional Manager,
LIC of India, Machilipatnam Division,
Krishna District.
2. The Branch Manager,
LIC of India, Gurazala,
Guntur district.
3. Tirumalapudi Lakshmi,
W/o Kalidasu,
Durgapuram,
Near Durga Cement Factory,
Dachepalli Mandal,
Guntur district. … LIC Of India


This complaint is coming up before us today for consideration, upon perusing the material on record, this Forum made the following:

O R D E R

Per Sri T. Anjaneyulu, President:-
Bothsides present. IAs 32, 33/09 are allowed. Affidavit of the complainant is received. Amendment of the complaint is also allowed. Neat copy of the complaint is also filed. Now the present claim is amounting to Rs.2,00,000/- instead of Rs.1,00,000/- under two policies. The learned counsels for the LIC Of India (1 and 2)/ insurance company has also deposited the DD for Rs.2,04,130/- in favour of the Forum to satisfy the claim of the complainant and as well as 3rd LIC Of India under two policies.
The present complaint is filed by the parents of the deceased while making the wife of the deceased as 3rd LIC Of India. The complainants as well as 3rd LIC Of India being legal heirs of the deceased are entitled to receive the insured sum. It appears that the matter is amicably settled between the complainants and the 3rd LIC Of India. In this regard a compromise memo is also filed. Accordingly, the complainants and the 3rd LIC Of India would share the amount in deposit. Both the complainants 1 and 2 are entitled to Rs.70,000/- and the balance amount is entitled to be received by the 3rd LIC Of India as per the said compromise memo. As this dispute is settled in view of the deposit of the aforesaid DD by the LIC Of India and as there is amicable settlement between the complainants and the 3rd LIC Of India in respect of sharing the amount, the dispute is closed as settled.

This the 19th day of March, 2009.

O R D E R
SRI.K.T.SIDHIQ, PRESIDENT
.

Dr.Shri.K.S.Ganeshkumar the husband of the complainant Geetha had two Life Insurance Policies with Nos.791889296 and 791889450 for the sum assured Rs.50,000/- each. He was working as Asst. Surgeon, Medical Officer at Primary health Centre run by the government at various places. For the payment of monthly premium to the said policies he had availed salary savings scheme pertaining to Kerala Government employees. Thus the premium amounts were remitted as and when he drew the salary. While so the life assured who was then working at PHC Panathur was selected for PG course under the department. He was to report for the course on 27-3-04. Thus he was eligible for the salary up to 27-03-04. Thereafter he was entitled to get only stipend as PG student. Since the deceased was busy with his admission for the PG course he could draw the salary for the months of December 2003 to March 2004 only on 31-05-04. The premia for the month of December 2003, January 2004 and February 2004 were deducted on 31-5-04. Hence the premium for the month of March 2004 was paid on 3-6-04. Thereafter the premiums for the month of April 2004 and May 2004 were recovered by LIC Of India. Shri.K.G.Ganeshkumar expired on 13-6-04. When the complainant lodged claim for the policy benefits’ the first LIC Of India sent a reply dated 12-10-04 stating that the policies were lapsed as on the date of death of the deceased and sought some documents for considering the claim. The documents sought by LIC Of India were duly submitted. But the LIC Of India failed to settle the claim so far. Whenever the complainant approached the LIC Of India they sought time for settlement on one pretext or other. Hence alleging deficiency in service in the delay of settlement of the claim, this complaint is filed.


2. According to LIC Of India the claim is barred by limitation. On facts LIC Of India admitted that the deceased Dr .K.S. Ganesh kumar has taken two life insurance policies. Both policies were issued under salary savings scheme to Kerala State Government Employees. While taking policy, deceased was working as Assistant Surgeon, a Gazetted Officer rank and hence he was a self drawing officer. So it is the duty of the life assured to recover the policy premiums from his salary and to remit to the concerned treasury for onward transmission to LIC Of India. The premium due from 12/03 to 2/04 was received by LIC Of India in April 2004 through sub treasury Hosdurg, like wise premium due for 3/04 was received in the month of May 2004. On the date of death i.e. on 13-06-04 the policies were in lapsed condition due to the non-payment of premium for 4/2004 and 5/2004. Though the complainant was asked by way of a letter dtd.12-10-04 to produce documents to show the receipts for the payment of premium for the subsequent month i.e. April 04 & May 04. It was not produced. Hence the claim was rejected and it was informed to the complainant on 12-11-04. Hence there is no deficiency in service on the part of LIC Of India.


3. Complainant filed affidavit in support of her claim. Exts A1 to A3 marked on the side of the complainant For LIC Of India Shri.V.P.Gopalan, Manager, Legal Department, LIC Divisional Office, Kozhikode filed counter affidavit and Exts B1 to B4 marked. Both sides heard and the documents perused.


4. The issues to be answered in this complaint are:
i)Whether the complaint is barred by limitation?
ii)Whether the complainant is entitled for the claim benefits as per the policies in dispute?
iii)Relief and Cost.



5. According to LIC Of India the claim of the complainant is rejected on 13-11-04 as per Ext.B4. Hence the complaint ought to have been filed on or before two years from 13-11-04 before the Forum. But the complaint is filed on 27-04-07 i.e. after 2 years 4 months and 14 days. But according to the complainant she has received the letter dated 12-10-04 demanding her to produce some more documents to consider the claim, that is otherwise not honourable since policies are in lapsed stated due to non-remittance of premium in due time. Even though by way of abundant caution an application to condone the delay if any caused is filed, in the said application also the complainant affirmed that the claim is pending before LIC Of India and they have not rejected the claim.



6. The settled position of law is that limitation in respect of insurance claims runs only from the date of repudiation/rejection or refusal of the claims by the insurer. Since the complainant has no case that the claim is rejected, viewing that the complaint is within the period of limitation, the petition to condone the delay was not considered. But the LIC Of India in their version submitted that the claim was rejected and it was intimated to the complainant as per letter dated 13-11-04. Ext.B4 is only a copy of the letter. But no documents like postal receipt, acknowledgement card etc were produced by LIC Of India to prove that the said letter was consigned to complainant. Ext.B4 also did not show the mode of it’s despatch. In the absence of such supporting documents we are unable to accept that Ext.B4 was delivered to complainant. If so it can be regarded that the claim was subsisting with LIC Of India on the date of filing the complaint. Hence we hold that the complaint is not time barred. This issue is therefore found infavour of the complainant.



7. Issue No.2: The learned counsel for the LIC Of India Shri.P.V.Jayarajan, relying on the decisions Jagadish Prasad Dagon V. Senior Divisional Manager, LIC reported in II (1993) CPJ 493 (NC) LIC of India & Anr V. Subbammal reported in II (2006) CPJ 512, LIC of India V. Ramesh Chandra reported in 1997 (2) CPR 8 (NC), Oriental Insurance Co.Ltd V. Sony cheriyan reported in AIR 1999 SC 3252, United India Insurance Co.Ltd V. Harchand Rai Chandanlal reported in (2004) 8 Supreme Court cases 644 argued with considerable vehemence that the terms of policy shall be strictly construed and once the claim is considered and rejected on due application of mind in good faith, it cannot be considered as deficiency in service.



8. According to learned counsel for LIC Of India as evident from Ext.B4 the relevant pages of laper book, the policies were in lapsed condition on the date of death of the life issued for want of payment of premium for the month of April 2004 and May 2004. According to him the policy were lapsed on the date of death. Hence the claim is rejected considering all these aspects.





9. The learned counsel for the complainant relying on the decisions Delhi Electric Supply Undertaking V. Basanti Devi & Anr reported in III (1999) CPJ 15 (SC), Rajani Patwari V. LIC of India & Anr reported in III (1997) CPJ 48 (NC), Branch Manager, LIC V. Smt.Mohawa Devi & Anr reported in 2002 (2) CPR 149, General Manager, Hotel Kanishka V. Saroj Attal & Another reported in III (1997) CPJ 72 (NC) LIC of India V. Pushpa Devi Yadav reported in I (2005) CPJ 593 has argued that under the salary savings scheme of the life assured, it is the duty of the employer to recover the premium from the salary of the employee and remit to the insurer and the non-payment of premium by the employer will no way absolve the insurer from the payment of policy benefits. But the said facts and circumstances of those cases are not applicable to the instant case since at the time of death, according to the complainant, the life assured was not a government servant since on 27-3-04 on the date on which the life assured was joined for his PG course. Hence the salary savings scheme ceased to operate as on 27-03-04. Even otherwise according to learned counsel for LIC Of India the life assured was a self drawing officer hence it was his duty to remit the premium from the salary.



10. DW1 filed affidavit in lieu of oral evidence to support of the contention of the LIC Of India. He has been cross examined by the counsel for the complainant. DW1 in cross-examination has stated that the policies were lapsed as on 28-4-04 since there were no payment of premiums for the month of April. He further stated that a lapsed policy can be revived within 6 months if the premium arrears is paid with interest. But for revival after 6 months a letter is necessary. The mode of payment of premiums shows that 4 payments are made after the policy is lapsed. But the LIC Of India are accepted the same without charging any interest. That is repugnant to the deposition of DW1.


11. According to DW1 the policies are lapsed as on 28-4-04 for non-payment of premium for the month of April 2004. But the question now arose before us is why the LIC Of India collected premium even on 31-5-04 and on 3-6-04. If it is lapsed on 28-4-04? The terms and condition of salary saving scheme is also not brought before us to ascertain the duties and liabilities of both the insurer and insured in case the employee leaves the service.



12. From the character and conduct of the life assured it is evident that the life assured was never wished to oust the insurance coverage, since he had remitted 3 consecutive monthly premiums on 31-5-04 and the subsequent one after three days i.e on 3-6-04 just 10 days prior to his death. Had he been made aware about the sate of his insurance policies that it was in lapsed condition, of course he could have get a chance to revive it. The LIC Of India were go on with the acceptance of premiums paid irrespective of the state of policies and without giving a hint about it to the life assured. That means the premium were accepted without any uberrimae fide to honour the claims. It is nothing but an unjust enrichment at the expense of the policy holder and an unscrupulous exploitation of consumer. As stated by the LIC Of India if the life assured was a self drawing officer and there is no employer over him to recover the premium from his salary and to pay it to the L.I.C. then of course it was the duty of the LIC Of India to inform the life assured about the dues pending payment to revive the policy that was lapsed. But the LIC Of India have no case that they have informed about the lapse of policy at any point of time particularly when the life assured’s monthly premiums those were pending from December 2003 onwards till the life assured remitted it on 31-5-04. On that day the life assured had remitted 3 monthly premiums together. If any policy had lapsed then the subsequent premiums should not have been accepted by the LIC. Even if the version of DW1 is taken in to account then ofcourse at least Interest should have been collected from the life assured when premiums were accepted on a lapsed policy. If so the life assured would have been aware about the condition of his policy. But no such interest is seen collected. No communication is also seen sent to the life assured in this regard. All this would goes to show that the LIC Of India have no consistent and clear rules regarding the acceptance of premium and the revival of policies. Hence the non-settlement of claim according to the whims and caprices of the LIC Of India warrants interference and we find deficiency in service on the part of LIC Of India.


13. Reliefs and Costs:
In the light of the above discussions we allow the complaint and direct the LIC Of India to honour the claim of the complainant arising out of the two policies Nos. 791889296 and 7918894501 of the life assured Shri.K.S.Ganeshkumar and pay the assured amount Rs.50,000/- each as per both parties. LIC Of India further directed to pay interest @ 9% for the said amount of Rs.1,00,000/- from the date of death of the life assured till payment by way of compensation. LIC Of India also directed to pay Rs.3000/- towards the cost of these proceedings.

O R D E R
Paul Gomez, Member.


1. Shortly, the facts of the complainants' case are as follows:-
The 1st complainant's husband had taken a policy of assurance from the L.I.C. of India for sum assured Rs. 3,00,000/- with policy No. 774864202 and date of commencement of the policy was 19-02-2005. T.M. Abdul Salam, the husband died on 27-04-2005 within a very short span of 2 months and 8 days from the date of policy. He had remitted only the first premium under the policy. The death claim lodged by the first claimant who is the nominee under the policy was repudiated on the ground of suppression of material facts, rendering the contract of insurance null and void.

2. According to the version filed by LIC Of India company, on enquiry, it was revealed beyond doubt that the deceased Abdul Salam was an alcoholic and due to his heavy drinking habit he did not enjoy sound health and that he had undergone treatment for alcohol dependence syndrome.

3. Both parties were represented by their respective counsel. The complainant produced documents that were marked as Exts. A1 to A16 on their side. The complainant was examined as PW1, whereas witness on complainant's side was examined as PW2. On closing the evidence of the complainant, the LIC Of India adduced evidence on their side by getting Exts. B1 to B12 marked as well as by examining DW1 as their witness. After closing the evidence on both sides, the parties' counsel were heard.
4. The points of law that crop up for our consideration :-

i) Whether the complainant's deceased husband had

suppressed material facts to defraud the LIC Of India?

ii) Whether the complainants are entitled for compensation

and other reliefs?


5. Point No. i) :- In this background, let us begin with analysis of documentary evidence produced by both the parties. The certificates issued by doctors underlines the fact of his having undergone treatment for the alleged alcohol dependence syndrome. Here, we have to keep in mind the fact he had of his own, chose to undergo treatment for the alcohol dependence syndrome. Incidentally, alcohol dependence syndrome cannot be classified as a disease or ailment. This is amply brought out by the dictionary meaning of the word syndrome. “Syndrome : 1. “a set of physical conditions that show you have a particular disease or medical problem. For example; PMS or premenstrual syndrome.” 2. A set of opinions or a way of behaving that is typical of a particular type of person, attitude or social problem.” - New Oxford Advanced Learner's Dictionary. In the second sense, those who suffer from a particular syndrome is prone to a particular attitude. A person having alcohol dependence syndrome will have an exceptional liking for alcohol. Hence it cannot be characterised as a disease; it indicates only an attitude of mind towards something. The doctor had stated in Ext. A11 certificate at the end of the treatment, that at the time of discharge he was perfectly healthy and was fit to join the duty. Similarly in Ext. B1 certificate of hospital treatment the doctor had remarked against the question, “What was his condition when he was discharged,” as “improved and recovered”. In this context, the statement made by one M. Sirajuddin .


6. Ext. B8 outpatient record goes to show that he was undergoing treatment as an out patient. As the doctor has not noted anything against “Provisional diagnosis”, the presumption that can be drawn is that he had been there due to some simple ailment. The columns on personal history on Alcohol consumption also is left blank is note worthy. By putting all the above pieces of materials together, we get to know the reason why the policy holder, while filling up the proposal form has answered the questions referred in Ext. B11 in the negative. He was thinking that he had never been undergoing treatment in hospital for any ailment as according to him it was a clinical exercise to liberate himself completely from alcoholism. According to Islam alcoholism of any degree is anti-religious. Moreover, he was not under treatment at any time in relation to alcohol related diseases affecting vital organs like liver kidney etc. If we look at his disclosures made in proposal form in this background, we cannot rush to the conclusion that it was made with an intention to defraud the proposee namely Life Insurance Corporation.


7. Several rulings of higher courts and National tribunal have been cited at the bar. But we think for the present purpose, one need turn to the Hon'ble Apex Court decision in Mithoolal Nayak Vs. L.I.C. Of India (AIR 1962 SC 814) where in an identical issue of suppression of material facts was the central issue involved. An illuminating exposition of law has been made by the learned judges where it has been stated with reference to Section 45 of L.I.C. Act as follows:
“The three conditions, the application of the second part of Section 45 are;
a) the statement must be on a material matter or must suppress facts which it was material to disclose.
b) the suppression must be fraudulently made by the policy holder and
c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.”


8. It may be noted that the operative part of Section 45 corresponds with the factors to be established to show that the contract of insurance was null and void for suppression of material facts. In short, to impugn the legality on this score, the LIC Of India has to prove that
i) there was suppression of fact
ii) the fact suppressed was material one
iii) the suppression was effected to defraud the other party.


9. In the light of analysis of facts of the complaint we have earlier made, one cannot come to the conclusion that the suppression of facts made in the proposal form satisfied all the legal requirements specified in the pronouncement of Apex Court earlier referred. Eventhough, it can be admitted without any difficulty that he had suppressed facts, but one cannot conclude with certainty that he was knowing that the facts suppressed were material to the contract of insurance. The possibility cannot be ruled out as the complainant claimed, that her deceased husband was emboldened by the agent, who personally filled up the form, gave him the impression that those questions he answered in the negative were not of much significance or consequence. Moreover, he might have been under the bonafide impression that the treatment he had undergone was not for any disease but to get himself rid of drinking habit. In this perspective, one cannot say that the statements were made by the proposer to defraud the other party. Moreover, these are things of the past one would like to forget. Contract of insurance is a contract of uberrima fides. Of course, good faith forms the corner stone of such contracts. Eventhen, no body would like to reveal everything openly. Take the case of marriage, another instance where utmost good faith is called for. Generally, relatives will be slow in revealing everything regarding their girls. One cannot expect that relatives will announce every blemish of their bride from house top. Nevertheless, facts which are material to marriage have to be scrupulously disclosed to the other party. The same rule is applicable in the contract of insurance also. The facts alleged to have been suppressed in the present case, appears to our mind, not of much significance especially in the backdrop of facts peculiar to the the complaint. Hence, we hesitate to conclude that the complainant's deceased husband had suppressed material facts to defraud the LIC Of India. With due respect to the chairman of the Review Committee, we make it clear that we have been left with no option but to defer with the finding of the Review Committee and we hold that repudiation of the claim preferred by complainant is not well founded.


10. Point No. ii) :- The complainants are the wife and children of the insured person. When the claim for the assured sum was made, it was repudiated by authorities of the LIC Of India in different rungs of the hierarchy. In such an occasion, mental agony, humiliation depression and dejection undergone by a helpless widow and her children is quite conceivable. Therefore they deserve some consolation in the form of compensation. We quantify it as Rs. 50,000/-. In the same way, the complainants have been striving very hard, knocking at the doors of different bodies to get her legitimate monetary relief for which they have incurred money. Therefore, we think they are entitled for costs of proceedings in the Forum.


11. Accordingly, we allow the complaint as follows :-
i) The LIC Of India shall pay the insured amount of Rs. 3,00,000/- (Rupees three lakhs only) to the complainants with interest at the rate of 12% p.a. from 27-04-2005, the date of death of the insured, till realisation.
ii) The LIC Of India shall pay Rs. 50,000/- (Rupees fifty thousand only) as compensation for mental agony, suffered by the complainants in repudiation of their claim.
iii) Pay Rs. 1,000/- towards cost of the proceedings to the complainant.
The order shall be complied with, within a period of one month from the date of receipt of a copy of this order.

C.D.R.F. KOLLAM : CIVIL STATION - 691013

CONSUMER DISPUTES REDRESSAL FORUM ::: KOLLAM

consumer case(CC) No. CC/03/360

Uthaman.L, Thoppil Veedu,Thazhamel Muri
...........Appellant(s)
Vs.

Regional Manager, LIC of India and Another

The Branch Manager,LIC of India,Punalur
...........Respondent(s)

BEFORE:
1. K. VIJAYAKUMARAN : President
2. RAVI SUSHA : Member


ORDER ADV. RAVI SUSHA, MEMBER

The complainant had availed Ashadeep policy from the LIC Of India bearing No.781547082 and other policy bearing No.781084865 and 78073302. The Ashadeep Policy bearing No.781547082 was proposed on 25.2.1998 and the policy was granted on 28.7.2008 for a sum of Rs.50,000/- to be matured on 28.7.2013. The premiuym was fixed at Rs.2,714/- half yearly. The complainant had undergone renal transplantation on 7.4.2003 as he happened to be directed as a chronic patient of ‘Renal failure”. Expenses for the surgery and treatment and continued use of medicine exceeded Rs.4 Lakhs and the complainant is entitled to medical benefits to the tune of double the sum of insurance and accordingly he placed a claim before the LIC Of India. The LIC Of India changed the Asheep claim benefit [B] policy one of endorsement type plan 14-15 from 28.7.2003 onwards and demanded the certificate for further endorsement. The change was without the knowledge and consent of the complainant and the rate of premium was also changed accordingly The change was advised to the benefit of the complainant suggesting disability of policy conditions, against his demands for medical imbursement on 25.3.2003. The complainant had suffered mental agony which is estimated to Rs.25,000/- which is to be compensated by the LIC Of India. Hence the complaint.

The LIC Of India filed a version contending, interalia, that the complaint is not maintainable either in law on or facts. The LIC Of India issued Life Insurance Policy No.781547082 [Asha Deep Policy] to the complainant viz. L. Uthaman. Uner this plan [121-15] either of the two benefits mentioned A & B below are payable.
AThe sum assured with vested bonuses is payable either on the date of maturity
Or on earlier death
B.However if the Life assured, during the term of the policy
a.Undergone cornary Artory By-ass surgery
b.Undergoes regular Heemo –Dialysis of Kidney Transplant.
c.Is afflicated with cancer [Malignant
d.Suffers a paralytic stroke causing total permanent disability of two or more limbs persisting for 3 months after suffering the stroke and produces evidence there to satisfactory to the Corporation, then the following payments will be made.
1.Immediate payment of 50% of the sum assured
2.Payment of the balance 50% of the sum assured along with vested bonus on full
Sum assured payable either on the date of maturity or on earlier death
3.An amount equal to 10% of the sum assured will be paid every year commencing
From the policy anniversary falling on or after the date of eligibility till maturity
Or death whichever is earlier.
4. The premiums [including accident premium] will be waived, subject to recovery of
unpaid premiums till the next anniversary after the date of eligibility.
A lien in respect of the benefits mentioned in para 2 [B] above will be operative commencing from the date of risk and ending one year from the date of the policy. These benefits are not payable if contingency occurs during the lien period and in such event, the policy will be altered to a corresponding Endowment Assurance with profit plan [Table 14] from the first policy anniversary The life assured underwent Kidney Transplantation on 7.4.2003 and put forth a claim for benefits B mentioned above. But the life assured is not eligible for benefit B since the contingency occurred within one year from the date of revival of the policy. In this caselien is operative for a period of one year from the date of revival and since the occurrence of the contingency is within this lien period, the plan of assurance has been altered from Asha Deep to Endowment Assurance Plan with consequent change in instalment premium. There is no illegality or impropriety in altering the plan and denying benefit ‘B’ of the policy. The life assured becomes eligible for benefit B of the policy only when the conditions given under 11 [A] is satisfied. In this particular case the lapsed policy was revived on 27.2.2003 and the contingency occurred which is within on year from the date of revival. Hence benefit B is not payable in this case. The medical claim of the complainant cannot be entertained as the policy conditions are not satisfied as mentioned above. There is no lack of service or deficiency of service on the part of the LIC Of India vide letter dt. 30.7.2003 the 2nd LIC Of India informed the complainant that his claim under benefit B is disallowed for reasons stated thereunder and vide letter dt. 6.8.2003 the original policy was returned to the complainant after changing the Asha Deep Policy to Endowment Assurance Plan with profits. Hence no relief is admissible against the LIC Of India.

Points that would arise for consideration are:
1.Whether there is deficiency in service or unfair trade practice on the part of the LIC Of India
2.Reliefs and costs.
For the complainant PW.1 is examined. Ext.P1 to P5 are marked.
For the LIC Of India DW.1 is examined. Ext. D1 is marked.
Points 1 and 2
The complainant filed this complaint against the repudiation of his claim in connection with the policy taken by him. The contention of the LIC Of India is that the renal transplantation was done within one year of the revival of policy. LIC Of India has also then converted the said policy into an ordinary Endowment Assurance Policy with effect from 28.7.2003. According to them the complainant has revived his lapsed policy on 27.2.2003 and the contingency occurred within one year from the date of revival. Hence 11 B benefit is not payable to the complainant and therefore the policy claim was repudiated and as per Administrative condition LIC Of India has converted the policy into an ordinary Endowment Assurance Policy.
The definite contention of the complaint is that the complainant had paid premium of Rs.2174/- from 28.7.1998 upto 2002. On 28.1.2003 the LIC Of India has asked the complainant to pay the entire arrear with interest and late fee through Ext.P2 letter for Renewing the policy. On the basis of Ext.P2, the complainant paid the entire arrears including the interest and late fee and LIC Of India issued Ext.P3 Renewal Premium Receipt. According to the complainant after collecting the arrears, with interest and late fee, the LIC Of India cannot contend that the policy is starting a fresh on revival. On verifying Ext.P3, it can be seen that the LIC Of India had received the entire arrears with interest and also late fee and issued Renewal Premium Receipt and also it is seen that Ext.P2 letter was issued by LIC Of India themselves and not on the request of the complainant asked to pay the entire dues with interest and with late fee for renewing the policy. The complainant had paid the amount on the basis of Ext.P2. After P3 renewal of policy, the denial of Benefits B of Edt.P1 Policy on the ground of contingency occurred within one year from the date of revival is not legal. In these circumstances were of the view that the repudiation of the complainant’s claim is not proper and there is deficiency in service on the side of the LIC Of India. Point found accordingly. The complainant is entitled to get 11 B benefit in the policy

The next point to be decided is that whether the conversion of policy from Ashadeep to an Endowment Assurance Policy is legal and proper. According to the complainant, the said conversion was done without issuing any letters to the complainant or without his knowledge. LIC Of India contend that they have power to convert such policy as per Administrative condition. By converting into ordinary Endowment Assurance Policy the features of the medical reimbursement was taken away. In this case the complainant has paid the outstands arrears with late fee on 27..2.2003. The renal transplantation was done on 7.4.2003. The opp..party has no case that the complainant has suppressed his existing renal diseases at the time of revival of policy. In these circumstances without giving the above said conditions to the complainant along with Ext.P1, the LIC Of India cannot convert the policy unilaterally by which the features of the medical reimbursement was taken away. Hence the act of LIC Of India of converting the policy amount to unfair trade practice.
In the result the complaint is allowed, directing the LIC Of India to pay the complainant Rs.25,000/-[50% of the assured amount] with interest at the rate of 12% per annum from12..9..2003 till payment and also 10% of the assured amount on every succeeding year along with waiver of future premiums. LIC Of India 1 to 3 are also to pay Rs.25,000/- towards compensation for unfair trade practice. The order is to be complied with within one month from the date of this order.

Complaint filed on 08.12.2008
and Decided on 17.03.2009
BEFORE THE UDUPI DISTRICT CONSUMER DISPUTES REDRESSAL FORUM
AT UDUPI (KARNATAKA)

PRESENT: 1. Sri P.C.Gopal, President,
2. Sri Bekal Lakshmana Nayak, Member.

Consumer Complaint No. 145/2008
Clubbed with
Consumer Complaint No. 146/2008
Order Dated 17.03.2009
Between:

Smt.Vijayalakshmi
Aged about 58 years,
W/o Vittal Hegde,
Darkhas House, Seethanadi Post,
Karkala – 576 112, Udupi District.

(Sri Mohandas Shetty, Advocate for the Complainant)
……. Complainant
Versus

Life Insurance Corporation of India,
Divisional Office,
“Jeevan Krishna”,
P.B.No.8,
Ajjarkad, Udupi – 576 101.

(Sri Dayananda K., Advocate for the LIC Of India)
…………..LIC Of India
WRITTEN BY SRI P.C.GOPAL, PRESIDENT.

1. In both the above complaints bearing CC No.145/08 and CC 146/08, the Complainant is the same, filed against the same LIC Of India i.e. LIC Of Indiain respect of two different policy certificates, arising out of same cause of action. Hence these two complaints are clubbed together and common order is passed.

2. The Complainant Smt.Vijayalakshmi is the mother of Late Vijaykuamr Hegde. During his life time, he had obtained the insurance policies coverage on his life as detailed below:
Complaint No.
Policy Certificate No.
Date
Sum Assured
145/2008
624353904
26.12.2005
Rs.2,00,000/-
146/2008
624156395
15.12.2004
Rs. 50,000/-
Contd……..2
Vijaykumar Hegde died on 20.01.2007 due to heart failure. The Complainant filed claims documents with the LIC Of India furnishing all the details. But the LIC Of India did not respond to the claim.

3. The Complainant got issued lawyer’s notice dated 15.12.2007 to the LIC Of India and the LIC Of India replied the same by letter dated 23.3.2008 intimating the repudiation of the claim alleging that deceased Vijaykumar has suppressed the truth with respect to the pre existing ailment which is false. The reason assigned for the repudiation is wholly false and baseless and imaginary. The cause of death of Vijaykumar Hedge is nothing to do with the ailment stated in the letter dated 23.3.2008. Hence the above complaints.

4. After service of notice of complaint, LIC Of India appeared through the counsel and filed the versions contending that the complaints are false, frivolous and not maintainable under law or on merits and the same are filed with a view to have unlawful gain for herself.

5. On issuance of notices in both the C.C.Nos.145/08 and 146/08 LIC Of India represented by advocate and filed a memo for clubbing the matter and the same was considered since Complainant has no objection.

7. LIC Of India admits having issued policy Nos. referred in the Complaints for sums of Rs.2,00,000/- under table and term 091-30 30 commencing risk from 26.12.2005 and for Rs.50,000/- under table and term 91-30 commencing risk from 15.12.2004 to the son of the Complainant Vijayakumar Shetty hereinafter refereed to as the life assured, denies that the life assured had undergone all the medical tests conducted by the medical practitioner/s belonging to the LIC Of India. The captioned policies are issued under non medical general case for which no medical check up/s were insisted/conducted by the LIC Of India.

8. The LIC Of India admits the date of death as 20.01.2007 and the lawyer’s regd. notice dated 15.12.2007 and states that it is not correct to say that the LIC Of India did not respond to the claim of the Complainant despite the fact that the Complainant had submitted all the details and that the claims were repudiated on false and imaginary reasons as contended. The claims were repudiated for valid reason of non disclosure of material facts by the life assured
Contd……..3
regarding his health and it was conveyed to the Complainant on 23.03.2008. The Complainant’s appeals before Zonal claims Review committee of LIC Of India had upheld the decision of repudiations on 17.9.2008 and same has been communicated to the Complainant on 6.10.2008.

9. The LIC Of India submits that on investigation it was revealed that the life assured had been suffering from Synovial Sarcoma for about 2 years at the time of proposing for the policies. The final diagnosis was left Popliteal Fossa Swelling (Pigmented Villonodular Synovitis). The life assured was admitted to the hospital with the history of inability to straighten and bend left knee since 5 years. Open biopsy of left knee was done. He was again admitted to the same hospital on 21.5.2004 and discharged on 11.06.2004. The final diagnosis was old operated case of Synovial Sarcoma left knee with fixed Flexion deformity. He was put on skin traction and discharge with advice to continue the skin tractions at home. The life assured did not however disclose these facts in his proposal for the subject policies as he was expected to do in terms of the declaration signed by him in the proposal form with a view to defraud the LIC Of India and to make unlawful gains if possible. Thereby the life assured made mis-statements and with held material information from LIC Of India. This LIC Of India has repudiated the claims under condition 6 of policy under heading forfeiture in certain events’ accordingly the LIC Of India is not liable for any payment under the policies and all moneys that have been paid inconsequence thereof belong to the LIC Of India.

10. The LIC Of India submits that the ultimate cause of death given in medical attendance certificate (claim form B) given by Doctor Satyanarayan B of Muniyal Ayurvedic Hospital and Research Centre, Muniyal the primary cause of death of life assured was a cardiac arrest due to metastasis of sarcoma. The life insurance contract is based on the doctrine of uberrima fides (utmost good faith) between the parties in so far as acceptance of risk under the life insurance policies. It is also submitted that had the life assured disclosed the facts the LIC Of India would not have accepted his proposal or refunded the initial premium received. Therefore the contention that cause of death of the life assured has nothing to do with the ailment that he suffered is not correct and no relevance.
Contd…………4
11. LIC Of India denies that the life assured had availed the services of LIC Of India against payment and the Complainant being the beneficiary of such service and repudiations are deficiency in service, since there was breach of contract on the part of life assured in suppressing material information at the time of submitting the proposal for insurance.

12. The LIC Of India submits that this Forum has no jurisdiction to entertain the complaint on the grounds under Sec.2(c)(iii) of Consumer Protection Act and denies there is indulgence of unfair trade practice. The LIC Of India submits that the Complainant be directed to approach civil courts as laid down in R.P. 435/95 and 874/95 by Hon’ble National Commission.

13. The LIC Of India admits that the Complainant is a nominee in the policies but not admitting her as legal heir or only legal heir of deceased. The Complainant is put to strict proof of the same and prays for dismissal of the Complaints with compensatory costs U/s 35A of CPC.

14. The Complainant filed 3 documents each in both the complaints which are marked as Exs.C-1 to Exs.C-3 and LIC Of India filed 11 documents in C.C.No.145/08 and relied them in both the Complaints, marked as Ex.R-1 to Ex.R-11. Parties filed affidavits, interrogatories and reply affidavits. LIC Of India filed written arguments and prayed to taken as heard. We heard the oral arguments of Complainant. These are the materials placed before the Forum to decide the Complaints.

The issues that arise out of the above two complaints are that:
1) Whether the Complainant is consumer? If so.
2) Whether this Forum has jurisdiction to entertain the complaint? If so.
3) Whether the LIC Of India is justified in repudiating the claims of the Complainant? If so.
4) Whether the Complainant is entitled to reliefs? If so.
5) What order?

Point No.1 & 2:
15. The LIC Of India’s contention is that the Complainant is not a consumer, since the life assured while taking life insurance policy had suppressed material
Contd…………5
facts of his health conditions. Therefore, he has breached the terms and conditions and the policy was obtained in breach of utmost good faith, uberrima fides. Since there is breach of good faith, the contract ends once it is found out therefore, there is no contract between the life assured and the LIC Of India. Since there is no contract, the Complainant nominee of life assured is not a consumer.

16. The Complainant’s case is that she is the nominee of the life assured and there was a valid contract of insurance between life assured and the LIC Of India. Therefore, she is a consumer.

17. We have gone through the merits of the case and find that the LIC Of India could not prove the breach of contract of insurance is of uberrima fides. Therefore, the Complainant is the nominee of the deceased life assured is a ‘consumer’.

18. The LIC Of India’s argument is that this Forum has no jurisdiction to entertain the complaint and referred to rulings in R.P. 435/95 and 874/95 delivered by Hon’ble National Commission and sought direction to Complainant to approach competent Civil Court. The Complainant’s argument is that she being a consumer and in exercise of power conferred under Section 3 of CPA this Forum has jurisdiction. We are of the opinion that this Forum has jurisdiction to entertain the complaint since point No.1, it is held that the Complainant is a consumer and CPA is applicable to her. Therefore point No.1 and 2 are answered in affirmative.

Point No.3:
19. The LIC Of India’s argument is that the repudiation is justified on the grounds of non disclosure of material facts, since the deceased life assured has undergone treatment for ‘left popliteal Fossa Swelling (Pigmented Villonodular Synovitis) during 3.2.2003 to 8.2.2003 prior to obtention of 1st policy and also subsequent to this he was undergoing treatment for Synovial Sarcoma. Hence he has breached the contract of utmost good faith and relied on Ex.R-1 and Ex.R-2 proposal Forms, Ex.R-3 to Ex.R-10. which are medical hospital records, discharge summary and medical attendants certificate (Ex.R-10) and submitted that in proposal forms at column 11(a) to (d) the Complainant has given negative answer
Contd……6
on his health condition during the last 5 years and at J, he has answered “good” on his usual states of health. Had the life assured disclosed his ailment particulars the LIC Of India would not have issued policies to him or would have issued with altered terms/with extra special reports called for. The life assured had made deliberate mis-statements and withheld correct information from the LIC Of India. Hence the terms of the policies of the contract becomes void-ab-initio.

20. The LIC Of India further argued that the life assured was admitted to KMC Hospital Manipal on 3.2.2003 with a complaint that he was unable to straighten and bend knees for the last 5 years. He was discharged on 8.2.2003 and he was readmitted as inpatient on 21.5.2004 and discharged on 11.6.2004 with a complaint of pain left, knee with deformity and with a history of Synovial sarcoma left knee on radio and chemotherapy. Past history of surgery swelling left knee. Physical findings of examination revealed that surgical scar was found on posterior part of left knee and other serious problem. He was further operated and skin traction was put. He was admitted to Muniyal Ayurvedic Hospital and Research Centre, Muniyal on 2.12.2006 and discharged on 10.12.2006. The diagnosis was Synovial Sarcoma (Asthyarbuda). For the 3rd time he was admitted to KMC Hospital, Manipal as an inpatient on 10.12.2006 and was discharged on 10.01.2007. Hence when he purchased the said policies, he had the said problems. It is further submitted that as per medical investigation the ultimate cause of death will be cardiac arrest only under all ailments. As per Ex.R-10 the primary cause of death of life assured was cardiac arrest due to metastasis of sarcoma. Under these circumstances, had he disclosed his ailments the LIC Of India would not have accepted the proposal for assurance at all or have cancelled his proposal and refunded the initial premium. The 11 documents produced by the LIC Of India disproves the case of the Complainant and relied upon rulings in
RP 1835/1999 LIC of India before Hon’ble National Commission.
RP 3362/2004 LIC of India before Hon’ble National Commission.
Appeal (Civil) No.5322/2007 S.C.
and prayed for dismissal of the complaints.

21. The Complainant argued that the LIC Of India admits the death by cardiac arrest. The LIC Of India also admits the policies, and also admits that the Complainant is nominee. The Opposite Parties main argument is that non
Contd….7
disclosure of material facts. The non disclosure of material facts does not arise in this case because, the reason for death “cardiac arrest” has no nexus with the Synovial Sarcoma. LIC Of India had canvassed that the ultimate reason of death will be cardiac arrest. But LIC Of India did not prove it that the material facts as contended by LIC Of India has lead to the death and relied upon IV CPJ (2008) 458 where the synopsis reads:
“Consumer Protection Act, 1986 – Section 15 – Insurance – Suppression of pre-existing disease – Reimbursement claim repudiated – complaint dismissed by Forum. Hence Appeal – Disparity found in hospital reports – Evidence of treating doctor not given – Onus to prove pre existing disease not discharged by insurer – mere mention of pain during urination for last two years, without positive finding of disease and treatment record; not amount to pre existing disease – Repudiation unjustified – order of Forum set aside – Insurer held liable under policy

And prayed for allowing the complaints. We observe that Ex.R-1 is dated 5.12.2004, Ex.R-2 is dated 26.12.2005. The nominee is the Complainant. The LIC Of India admits the issuance of policies, date of death, and Complainant as nominee. This dispute is as regards the cause of death which according to LIC Of India is on account of non disclosure of material fact in this case. The Complainant’s case is that the cause of death and non disclosure of alleged material fact has no nexus. There is nothing to prove that the cardiac arrest, the reason admitted by both the parties other than the Ex.R-10. The Complainant submitted during the course of argument that the deceased life assured was taken to hospital for admission but before admission he died because of cardiac arrest, hence the body was taken back home without any treatment in the hospital. The Ex.R-10 medical attendants certificate at “4(a) what was the exact cause of death” is answered “a) Primary cause: cardiac arrest, Secondary cause : Metastasis of Sarcoma”
at “(b) was it ascertained by examination after death or inferred from symptoms and appearance while alive”
“inferred from symptoms and appearance while alive (about 2 months)”

22. The last discharge summary is available for the period 2.12.2006 to 10.12.2006 from Muniyal Ayurvedic Hospital and Research Centre, Muniyal. The date of death is 20.01.2007 place of death is the life assured house. The LIC Of India had fair opportunities to prove the cause of death by producing the treating doctors but did not opt for proving the documents and cause of death. In the circumstances, the LIC Of India has failed to prove that the cardiac arrest, the primary reason for death is a consequence to Synovial Sarcoma.
Contd……8
23. The LIC Of India in its arguments relied on Sec. 45 of Insurance Act. In the case of policy No.624156395 dated 25.12.2004 on expiry of 2 years from the date of issuance policy, the policy was not capable of being called in question interalia on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false. Therefore, we hold that the repudiation of policy No.624156395 dated 15.12.2004 is deficiency in service in complaint No.146/08 and repudiation is not justified.

24. In the case of CC No.145/08 policy No.624353904 dated 26.12.2005 for Rs.2,00,000/- was taken and the life assured died on 20.1.2007. According to the Ex.R-10 the place of death is at deceased life assured house. The reason given in “medical attendant’s certificate (Ex.R-10). Primary cause of death is “cardiac arrest”. and secondary cause of death is metastasis of sarcoma”. The LIC Of India had failed to prove the cause of death and nexus to the non disclosed material fact. The Complainant relied on ruling in IV (2008) CPJ 458. Since the nexus is not proved and cardiac arrest is not disproved, the repudiation by the LIC Of India on the ground of non disclosure of material facts is deficiency in service and repudiation is not justified in the case of C.C.No.145/08. In the result, we answer point No.3 in Negative.

Point No.4:
25. In view of affirmative answers to point No.1 & 2, and Negative answer to point No.3 the Complainant is entitled for reliefs. The Complainant has claimed 12% interest on the policy amounts from the date of death. The parties have failed to mention or produce the document with date of claim. Therefore, the Complainant is entitled for the interest on insured amount and vested bonus from the date of death of life assured. The Complainant had further claimed Rs.25,000/- and Rs.1,00,000/- as compensation for mental agony.. No doubt there is agony till the policy amounts are realized and received. We allow Rs.5,000/- each in both the Complaints towards mental agony and harassment alongwith the cost of the proceedings. In view of the above, we answer point No.4 in affirmative and pass the following:
Contd……9

ORDER
The complaints are allowed. LIC Of India is directed to pay to the Complainant Rs.50,000/- and Rs.2,00,000/- alongwith vested bonuses in both cases alongwith 12% interest on the amounts from 20.01.2007 till payment. The LIC Of India also directed to pay Rs.5,000/- in each case (Total Rs.10,000/-) as compensation and Rs.5,000/- as cost of proceeding (consolidated) for both cases. The LIC Of India shall pay the above amounts within a month from the date of receipts of the order. Original order is kept in C.C.No.145/08 and copy in C.C.No.146/08.

(Order dictated to the Stenographer, after the same is typed, corrected and pronounced in the open court on this the 17th day of March 2009)


(BEKAL LAKSHMANA NAYAK) (P.C.GOPAL)
MEMBER PRESIDENT

::: O R D E R ::: -


1. The complainant has filed this complaint u/s 12 of the Consumer Protection Act against the LIC Of India for the deficiency of service in repudiating the claim of the complainant and prays for a direction to pay compensation along with the court costs as detailed in the complaint.


2. The facts of the case in brief are as follows:-
The complainant No.1 is the wife of the deceased insured and the 2nd and 3rd complainants are the children of the said deceased husband of the complainant No.1. The said deceased husband of the complainant No.1 had taken the insurance of Jeevan Anand With Profits for a sum of Rs.1,00,000/- in the year 2004 and the premium is Rs.3,406/- payable half yearly and the policy was in force. Such being the case, he died on 13.09.2007 and the death was natural and the policy was in force at the time of his death. As she is the nominee to the said policy, claimed for compensation under the policy by providing all the documents to the LIC Of India. But the LIC Of India have repudiated the claim of the complainant stating that the deceased husband was suffering from Chronic Pancreatitis. But the deceased husband died naturally at home and the LIC Of India have repudiated the claim without any valid reasons. Hence, the complainant issued a legal notice dtd.14.08.2008. Inspite of the receipt of the said legal notice also, the LIC Of India have failed to provide the compensation to the complainant. Hence, they are at deficiency of service and prays for the above referred reliefs.



3. After the service of the notice, the LIC Of India have appeared through their counsel and filed version contending that subsequent to the death of the deceased husband of the complainant, they have conducted an investigation and revealed that the said deceased was suffering from Chronic Pancreatitis for about 1 year 10 months before giving proposal and he has taken the treatment for the above said disease during 30.01.2003 to 06.02.2003 and he was a known alcoholic for about two years before taking the policy. The said deceased husband of the complainant No.1 was also hospitalized from 01.03.2003 to 19.03.2003 and underwent Pancreatectomy and Spleenectomy on 06.03.2003. As such the said deceased husband of the complainant had not disclosed these facts to the opponent Corporation at the time of giving the policy proposal.



4. The LIC Of India have further contended that the contract of insurance is of “Uberrima Fides (Utmost Good Faith), wherein the proposer is required to disclose correct status of his/her health to enable the insurer to assess the risk and to protect the interest of the other policy holders by avoiding bad selection of lives. The deceased husband of the complainant with ulterior motive of cheating the corporation did not disclose his ailments, which was material for the opponent for assessing the risk. If the assured disclosed his ailments particulars, the opponent would not have issued a policy to him or would have issued with altered terms with extra after called for various special reports. Hence, as the deceased life assured had made the deliberate mis-statements and withheld correct information from the opponent regarding his health. Therefore, they have repudiated the claim and there is no deficiency of service. Hence, prays for the dismissal of the complaint.




5. The complainant has filed his affidavit evidence as PW.1 along with documents and the same have been marked as Exs.P1 to P17.


6. One Sri Niranjan Murthy, Asst. Administrative Officer of the opponent Insurance Company has also filed his affidavit evidence as RW.1 along with documents and the same have been marked as Exs.R1 to R5.


7. Heard the arguments on both the sides.



8. Now, the points that arise for consideration of this Forum are as follows:-

i) Whether there is any deficiency in service on the part of
the LIC Of India?
ii) If so, whether the complainant is entitled to the
reliefs as sought?
iii) What Order?


9. Our findings on the above points are as follows:-

i) Point No.1: In the Affirmative

ii) Point No.2: In the Affirmative

iii) Point No.3: See, as per order below
- ::: R E A S O N S ::: -


10. Point No.1 & 2: There is no dispute with respect to the policy taken by the deceased husband of the complainant No.1 and there is also no dispute with respect to the policy is in force at the time of death of the deceased husband of the complainant. The only dispute raised by the opponent in settling the claim is that the deceased husband of the complainant No.1 had suppressed the material facts at the time of proposal of the policy and he has suppressed the material facts with respect to the health condition. Hence, they repudiated the claim.


11. Whereas, the complainant had filed affidavit stating that her husband died naturally on 13.09.2007 at home and the LIC Of India have repudiated the claim without any valid reasons. Therefore, she prays for the direction of payment of claim along with the compensation.


12. The opponent has produced a proposal form, which is marked as Ex.R3, which was duly signed by the deceased husband of the complainant No.1 and a discharge summary is marked as Ex.R4 and another discharge summary is produced to show that the deceased husband was admitted to the hospital on 31.07.2007 and discharged on 07.08.2007, which is marked as Ex.R5.


13. The complainant has also produced a death certificate, which is marked as Ex.P3. The claim application is marked as Ex.P4 and the repudiation letter is marked as Ex.P5.



14. The complainant No.1 in her affidavit has sworn that her husband died at home naturally, whereas the opponent has taken a contention that the assured was hospitalized before taking policy with the history of abdominal pain and chronic alcoholic since 2002 and has produced discharge summaries, which are marked as Exs.R4 and R5. Ex.R5 is a discharge summary, which shows that the assured was hospitalized after taking the policy with a history of Chronic Pancreatitis. In the said Ex.R5 nowhere it is mentioned that the complainant’s husband was an alcoholic and we noticed in the column of history of present illness the patient was apparently normal 15 days back, when he noticed distension of the abdomen with on & off vague abdominal discomfort, no H/o of vomiting / constipation, no aggravating / relieving factors, h/o of jaundice for 3 days and it is also noticed in the said Ex.R5 all other conditions of the assured were normal. Such being the case, we cannot believe that the deceased husband of the complainant died due to the said disease as shown in Ex.R4 and R5 and the opponent has failed to prove that alcoholic and Chronic Pancreatitis is the cause of the death of the assured husband of the complainant. Therefore, the repudiation made by the opponent is not justifiable on the ground of suppression of material facts.



15. In this regard here we quote, the decision of Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur in the case of Life Insurance Corporation & Others V/s Shanta Mali, wherein it is held that:
Consumer Protection Act, 1986 – Section 2(1)(g) – Life Insurance – Suppression of material facts – Claim repudiated – Contention, deceased undergone operation of syndrome, not disclosed – Disease of syndrome very minor disease, if not mentioned in proposal form, not amounts to suppression of material facts – Alleged suppression had no nexus with cause of death – Mere incorrect/wrong answer to questions having no connection with cause of death, not absolves insurer from liability – Repudiation unjustified – Insurer liable under policy.
(Vide I (2009) C.P.J. Page 476)


16. Following the principles laid down in the above cited decision, here also the LIC Of India have failed to prove that the deceased husband was died due to the chronic pancreatitis as narrated in the Exs.R4 and R5 and it is pertinent to note that he died at home and the death was natural one. Therefore, the repudiation made by the complainant amounts to deficiency of service. Hence, the complainants 1 to 3 are entitled to get the assured amount of Rs.1,00,000/- with the benefits from the LIC Of India. The complainants are also entitled to get Rs.3,000/- compensation towards the deficiency of service along with the costs of Rs.1,000/- towards the litigation expenses. For the above said reasons, we answer the point Nos.1 and 2 in the affirmative.


17. Point No.3: In view of our findings on the above points the complaint filed by the complainant has to be allowed. In the result we pass the following order.
- :::O R D E R::: -
1. The complaint filed by the complainants against the LIC Of India is partly allowed.
2. The LIC Of India are hereby directed to pay a sum assured amount of Rs.1,00,000/- with benefits covered under the policy in question to the complainant No.1.
3. The LIC Of India are also hereby directed to pay compensation of Rs.3,000/- towards the deficiency of service along with costs of Rs.1,000/- towards the litigation expenses to the complainant, within one month from the date of this order, failing which the amount shall carry interest at the rate of 9% P.A. from the date of default till realisation.

ORDER

This is a complaint filed Under Section 12 of the Consumer Protection Act, 1986 (hereinafter called as Act for short)

2. Through this compliant the complainant prays for an award to recovery a sum of Rs.39,479/- with interest at at24% from 14-11-2006 till recovery, for cost and for such other reliefs.

3. The facts given rise to institute the complaint may be summarized as thus:
It is his case that, he had insured his life under the policy bearing No.610814713 dated 13-2-1991 with half yearly premiums at Rs.1756/- . It is alleged that, he had paid premiums regularly from 13-2-1991 to 14-11-2006. That on 14-11-2006, he surrendered the policy to the LIC Of India. He was informed by the LIC Of India that, the surrender value of the policy was Rs.39,427/- and cheque bearing No.0021031 had been drawn in his favour and sent for approval to the Hyderabad. But, inspite of lapse of 2 years the LIC Of India has not paid the surrender value. Hence, this complaint.

4. The LIC Of India who has notified of the complaint entered appearance to his counsel and resisted the same by filing his objection

5. In his objection, this LIC Of India while admitting the insurance policy taken by the complainant, certain payments of premiums however, contended that, the complainant had stLIC Of Indiaped paying the premiums from August 2004. It is also admitted by this LIC Of India that, the complainant had surrendered the policy and requested for paying the surrender value. It is further contended that, the LIC Of India on calculation worked out the surrender value at Rs.39,427/- and has issued an account payee cheque bearing No.21031 for said sum on 14-11-2006 drawn at State Bank of Mysore, Madhugiri branch in favour of the life assured towards the full settlement of the surrender value of the policy. It is contended that, as per the records available of the office of the LIC Of India, the cheque was presented through Madhu Patina Sahakara Sangha Niyamitha, Madhugiri on 14-11-2006 in S.B. Account No.3205 and it was encashed on the same day in the name of the complainant A.S.Parthsarathy. It is further contended that, on receipt of legal notice of the complainant, this LIC Of India has initiated an investigated into the matter and though the investigation is pending, a decision was taken to settle the surrender value of the complainant on the basis of taking an indemnity bond. This decision was communicated to the complainant on 26-12-2008 through courier, but it was returned with an endorsement “Address is not sufficient”. It is further contended that, pending investigation, this LIC Of India is prepared to pay a sum of Rs.46,737/- on a condition of executing an indemnity bond by the complainant. Accordingly, he prays for rejection of the complaint.

6. Both the parties have filed their affidavits.

7. On hearing both parties this forum has passed an order on 24-2-2009 as here under:
“Affidavit of the LIC Of India filed. Sri.KCN submits that, the complainant is ready to execute that bond as demanded by the LIC Of India subjected to the result of the investigation to receive this amount. Accordingly, this complainant is permitted approach the LIC Of India, Madhugiri branch for needful. This LIC Of India shall take apprLIC Of Indiariate steps to release this amount in favour of the complainant subject that result of investigation pending after taking the bond and call on for complainace 4-3-2009”.

8. In pursuance of the said order, on 4-3-2009 the complainant filed a memo reporting receipt of Rs.46,737/-. The LIC Of India has also filed a similar memo regarding the payment of the said amount.


9. Learned counsel appearing for the complainant insisted for cost and future interest. However, other side has LIC Of Indiaposed this move.

10. Heard.

11. From the nature of pleading, it is seen that, the surrender value of the policy amounting to Rs.39,427/- sent on 14-11-2006 drawn at State Bank of Mysore, Madhugiri branch in favour of the complainant has been drawn on that day vide S.B Account No.2305. The complainant claims that, he has not LIC Of Indiaened that account nor realized it. In this regard, an investigation was initiated by the LIC Of India and it is pending. However, without prejudice to his right, pending investigation, the LIC Of India has offered to pay Rs.46,737/- being the surrender value as on that date on a condition of executing an indemnity bond by the complainant. Though, the complainant had worked out, the claim at Rs.39,427/- as on the date of filing the complaint, a sum of Rs.46,737/- has been paid to the complainant after taking the indemnity bond. Therefore, having regarding to the facts and circumstances of the case, we are of the LIC Of Indiainion that, it is not just and prLIC Of Indiaer to impose cost and future interest on the LIC Of India. Thus, we hold that, it is a fit case to close the complaint by recording the payment of Rs.46,737/- by the LIC Of India to the complainant. Accordingly the complaint is disposed off.

Dictated to the stenographer, typed by him, corrected and pronounced on LIC Of Indiaen forum this 5th day of March 2009.



(Smt.Girija) (Sri.D.Shivamahadevaiah) (Sri.K.M.Thammaiah)
Lady member Member President

Date of Filing:23.10.2008

Date of Order : 06.03.2009

BEFORE THE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE - 20

Dated: 6th DAY OF MARCH 2009

PRESENT

Sri. Bajentri H.M, B.A, LL.B., President

Smt.C.V. Rajamma, B.Sc., LL.B., PGDPR, Member


COMPLAINT NO. 2270 OF 2008

Mr.Sunder Raj V.
A/a 55 yrs, R/at No.526,
A.T.ST.A.N.K. Road Cross,
V.V.Puram, Bangalore

…. Complainant.

V/s

01. LIC of India,
KG Road Branch,
PrithviBuildings, 2nd Floor,
P.O.Box No.9930, K.G.Road,
Bangalore.

02. LIC of India,
Residency Road Branch,
CanaraMutualBuilding,
Residency Road, Bangalore.

…. Opposite Parties

-: ORDER:-

This complaint is for a direction to the LIC Of India to refund the loan amount of Rs.15,000/- raised by the LIC Of India under the insurance policy and to pay compensation of Rs.30,000/-.


2. The case of the complainant is as under:-
He has obtained LIC policy No.610877940 from LIC Of India No.1 and policy No.612627760 from LIC Of India No.2. He received letter dated 13.11.2006 from LIC Of India No.2 stating that LIC Of India No.1 had made excess payment of Rs.25,000/- and he (complainant) has remitted the amount of Rs.7,000/- towards excess payment and the outstanding balance of Rs.18,000/- is to be repaid by him to LIC Of India No.2 as the same is required to be shown to Audit Department about the recovery. The LIC Of India requested the complainant to give authorization to raise loan for adjusting the excess payment of Rs.25,000/- and also provided blank loan application to be filled and submitted by the complainant. LIC Of India No.1 sent the letter dated:15.11.2006 stating that on receipt of the completed loan papers they have settled the loan and have sent cheque for Rs.14,999/-. The complainant has neither raised any loan nor sent any loan papers nor received any excess payment as alleged by the LIC Of India. LIC Of India No.2 endorsed that the cheque is adjusted towards the excess payment made in policy No.610877940 by LIC Of India No.2. The complainant never received any excess payment but received only the surrender value of the policy. He issued legal notice dated:11.08.2008 and in spite of it, the LIC Of India neither adjusted any payment nor gave reply. Hence, the complaint.


3.In the version, the contention of the LIC Of India is as under:-
The complaint is misconceived. The dispute raised is not a consumer dispute. The complainant has obtained one insurance policy from LIC Of India No.1 and another insurance policy from LIC Of India No.2. LIC Of India No.1 came to know from LIC Of India No.2 that a sum of Rs.15,000/- was due from the complainant to LIC Of India No.2 under policy No.61627760. In order to clear the dues, LIC Of India No.1 paid Rs.15,000/- to LIC Of India No.2 on behalf of the complainant treating the same as loan under policy No.610877940 and wrote a letter to the complainant to give consent for the same. Since the complainant did not consent for the transaction, LIC Of India No.1 brought back the sum of Rs.15,000/- from LIC Of India No.2 and cancelled the loan transaction. As such there is no loan transaction between the LIC Of India and complainant and deficiency in service on the part of the LIC Of India. The action of LIC Of India No.1 was to help the complainant to clear his dues as a matter of courtesy. It is the practice of the LIC Of India that if a Customer is due any amount, they will raise loan and then seek consent of the Customer. Accordingly the transaction of raising loan and then sending loan amount to LIC Of India No.2 was a courtesy service rendered in good faith that the complainant would give his consent. But when he did not consent for the same, the loan was cancelled. Thus, there is no deficiency in service on the part of the LIC Of India and as such the complaint is liable to be dismissed.


4.In support of the respective contentions both parties have filed affidavits. We have heard arguments on both side.


5. The points for consideration:-
1.Whether the complainant has proved deficiency in service on the part of the Opposite Parties?

2.Whether the complainant entitled to the relief prayed for in the complaint?




6.Our findings are:-

Point No.1 : In the Affirmative

Point No.2 : As per final order

For the following:-

-:REASONS:-

7. Though in the version it is contended that the complainant was due certain amount to LIC Of India No.2 – The Residential Road Branch of LIC, the details of the dues is not disclosed. In the letter dated:13.11.2006 addressed to the complainant it is stated by the LIC Of India that the complainant has remitted Rs.7,000/- towards excess payment of Rs.25,000/- made to him and requested the complainant to authorize them to raise loan on the policy held by him with LIC Of India No.1 and to adjust the loan amount towards excess payment. Along with the said letter, the LIC Of India also sent the copy of the loan application requiring the complainant to submit the same duly filled up. About two days thereafter namely 15.11.2008, the LIC Of India addressed a letter to the complainant that on receipt of loan papers a loan of Rs.15,000/- has been sanctioned and the same is adjusted towards excess payment. The complainant has denied that any excess payment was made to him or that he had consented for raising the loan on the policy held with LIC Of India No.1 and to adjust the loan amount towards excess payment alleged to have been made by LIC Of India No.2. In spite of this contention of the complainant, the LIC Of India have not bothered to furnish the details of the excess payment alleged to have been made to the complainant. From the statements in the version, it is clear that before the complainant gave consent by submitting loan application for raising loan and to adjust the loan amount towards alleged excess payment, the LIC Of India raised loan and adjusted the amount towards the alleged excess payment. It appears after the complainant issued legal notice, the LIC Of India cancelled the loan transaction and restored the policy to the original condition. But the fact remains that the LIC Of India had raised loan on the insurance policy of the complainant without his consent. This clearly amounts deficiency in service and also to unfair trade practice. We are unable to appreciate the contention of the LIC Of India that as a matter of courtesy they will raise loan on the insurance policy of a Customer and thereafter seek his consent for the same. No service provider is expected to raise loan without the consent of the Customer. In view of the fact that the LIC Of India have cancelled the loan transaction, the complainant is not entitled to claim payment of the loan amount. But for the deficiency in service on the part of the LIC Of India, the complainant is entitled to claim compensation. In our opinion, the compensation of Rs.30,000/- claimed by the complainant is on the higher side. Considering the facts and circumstances, we hold that it is just and proper to award compensation of Rs.5,000/-. In the result we pass the following:-

-:ORDER:-

* The complaint is ALLOWED IN PART.
* The LIC Of India are directed to pay compensation of Rs.5,000/- to the complainant inclusive of the cost of the proceedings. Compliance of this order shall be made within eight weeks from the date of communication.
* Send a copy of this order to both parties free of costs immediately.
* Pronounced in the Open Forum on this the 6th DAY OF MARCH 2009.