DIVISIONAL MANAGER, LIC OF INDIA vs V.JEYAMANI

THIS appeal is directed against the order dated 5.6.1998 in O.P. No. 12/1996 on the file of the District Cunsumer Disputes Redressal Forum, Pudukkottai.

THE appellants are the opposite parties while the respondent is the complainant. Short facts may be related in order to understand the crux of the issue arising for consideration in this action. One K. Velmurugan employed as an educator in Karaiyur Primary Health Centre, had taken an Endowment Assurance Policy with Accident Benefits with Life Insurance Corporation of India for a sum of Rs. 2,00,000/- which is to enure for a period of 14-15 years. The date of commencement of the policy is 14.11.1992. The half yearly premium for the policy is Rs. 7,726/-. His wife is one V. Jeyamani (complainant) and she is the nominee in the policy. The said Velmurugan, however, dies on 7.11.1993. The cause of death is stated to be myocardial infarction. The wife/nominee/complainant sent a claim petition dated 2.6.1994 to the Life Insurance Corporation of India and the petition so sent had been received by the said Corporation on 6.6.1994. The claim so made was, however, pending for pretty long without any sort of a settlement. Consequently, the complainant/wife/nominee launched a complaint before the Forum below against the opposite parties namely, (1) Divisional Officer, Life Insurance Corporation of India, Thanjavur Division and (2) Branch Manager, Life Insurance Corporation of India, Aranthangi alleging deficiency in service on their part in the sense of honouring the claim for pretty long and praying for certain reliefs as made in the complaint.

The opposite parties, however, on service of process entered appearance and filed their version and additional version, in pith and substance what the opposite parties contended is that since the life assured died within a year of the commencement of the policy, the Life Insurance Corporation of India started investigation of the matter so as to ascertain the cause of death. During the course of investigation, it was found out that the insured had been suffered from chronic ill-health and ailment. On health grounds he had applied for medical leave for various spells such as on 8.4.1992 to 30.4.1992, 2.11.1992 to 29.11.1992, 2.1.1993 to 5.2.1993, 6.2.1993 to 9.3.1993, 15.10.1993 to 31.10.1993 and 1.11.1993 to 15.11.1993. The death of the life insured occurred on 7.11.1993 while he was on leave on medical grounds. All these factors had been suppressed by the life asured while submitting the proposal for taking the policy of insurance. As such, the policy of insurance had been taken the policy of insurance. As such, the policy of insurance had been taken by the life assured and wilfully suppressing the material factors. The policy is, therefore, void. The claim as made by the nominee/wife/complainant has to be rejected. While the material factors are being collected during the course of investigation, the complainant knocked at the doors of the Forum below. There is, as such, no deficiency in service on the part of the Life Insurance Corporation of India. The complaint is, therefore, liable to be dismissed. Along with the version, the opposite parties did not choose to file any document in support of version they have filed.

FOR the reasons best known to learned Counsel appearing for the opposite parties as well as the opposite parties did not appear before the FORum below on 25.5.1998 the date on which the inquiry was posted. The opposite parties were, therefore, set ex parte and consequently the inquiry proceeded further. During the course of inquiry, the complainant filed Ex. A1 to Ex. A5. On consideration of the material placed on record, the Forum below recorded a finding that there was deficiency in service on the part of the opposite parties in honouring the claim petition within the reasonable time and consequently directed them to pay to the complainant the policy amount of Rs. 2,00,000/- with interest at the rate of 12 per cent per annum on and from 6.6.1994, the date on which the claim petition had been received by the Life Insurance Corporation of India, to pay a sum of Rs. 5,000/- towards mental agony and anguish and to pay cost quantified in a sum of Rs. 1,000/- within 30 days from the date of its order.

AGGRIEVED by the order as above, the opposite parties resorted to the present action by engaging a Counsel of their choice namely, learned Consel Mr. R.S. Ramanathan. On service of process, the respondent/complainant also entered appearance through a Counsel of her choice namely, learned Counsels M/s. G. Krishna Rao and N. Elango. We heard the arguments of learned Counsel Mr. R.S. Ramanathan appearing for the appellants/opposite parties and learned Counsel Mr. V. Srinivasan representing learned Counsel M/s. G. Krishna Rao and N. Elango appearing for the respondent/complainant.

FROM the pith and submission of learned Counsel appearing for the respective parties, the one and only question that crops up for consideration is as to whether the order of the Forum below is sustainable in law on the facts and in the circumstances of the case. The order of the Forum below consists of 4 components namely, (1) direction for the payment of the policy amount of Rs. 2 lakhs; (2) direction for the payment of interest at the rate of 12 per cent per annum on and from 6.6.1994, the date on which the claim petition had been received by the Life Insurance Corporation of India; (3) compensation quantified in a sum of Rs. 5,000/- towards mental agony and anguish said to have been suffered by the complainant; and costs quantified in a sum of Rs. 1,000/-.

THERE is no pale controversy that the husband of the complainant one Mr. K. Velmurugan, whilst alive, took an Endowment Assurance Policy with accident benefits with the Life Insurance Corporation of India for a sum of Rs. 2,00,000/- ensuring for a period of 15 years and the policy so taken commenced on and from 14.11.1992. Yet another fact about which there is no dispute is that the life assured K. Velmurugan died on 7.11.1993 due to myocardial infarction. Yet another admitted fact is that the complainant filed a claim petition dated 2.6.1994 with the Life Insurance Corporation of India, which has been received by it on 6.6.1994. One more single factor to be taken note of here is that the claim petition so filed had not been settled till the date of filing of the complaint by the complainant before the Forum below which even happened on 5.2.1996 as evidenced by the seal affixed on the copy of the complaint. The Life Insurance Corporation of India took up a stand in the version filed by them that the life assured suppressed vital factrors relatable to his health in answering questions contained in the proposal form and from such suppression of vital fators, it is open to the Life Insurance Corporation of India to reject the claim as made by the complainant. Though such a hyperbole statement had been made in the version filed by them, no document worth the name has been filed along with the version in support of the stand they have taken therein. What is further worse is that though adequacy of opportunity had been given to the opposite parties to prove the stand they have taken in the version during the course of inquiry, yet for reasons best known to them, the opposite parties and the Counsel were absent on 25.5.1998, the date on which the inquiry was posted before the Forum below. No body is to be blamed except themselves for the lapses. Such being the case, it cannot at all be stated that no adequacy of opportunity was given to the opposite parties in proof of the stand as taken by them in their version. From the fact that the opposite parties were absent on the date of inquiry besides no document having been filed in support of the stand they have taken in their version alongwith the version filed by them, it is well-nigh possible for us to infer that if really they did possess documents relatable to the suppression of vital factors affecting the health of the life assured, definitely such documents could have been filed. Such being the case, we are impelled or compelled to come to the conclusion that the life assured did not at all suppress any vital factors relatable to health in the proposal he had filed before ever he took up the policy of insurance. In this view of the matter, the act of the opposite parties in not honouring the claim petition as made by the complainant till upto the date of the filing of the complaint which even happened on 5.2.1996 would definitely tantamount to deficiency in service on their part on the facts and in the circumstances of the case. The opposite parties are, therefore, liable to pay to the complainant the assured amount of Rs. 2,00,000/- under the policy. Despite a claim having been made, the opposite parties did not honour their commitment. Consequently, the Forum below ordered interest at the rate of 12 per cent per annum on and from 6.6.1994 on the amount of Rs. 2,00,000/- till realisation. The rate of interest ordered by the Forum below rather appears to be excessive. The Supreme Court on occasions more than one laid down the dictum that the rate of interest payable by the Insurance Company cannot be more than 9 per cent. In this view of the matter, the order of the Forum below ordering interest at the rate of 12 per cent per annum is reduced to 9 per cent per annum and the opposite parties are directed to pay interest at the rate of 9 per cent per annum on and from 6.6.1994 on the policy amount of Rs. 2,00,000/- till realisation.

The Forum below also awarded compensation quantified in a sum of Rs. 5,000/- for the mental agony and anguish said to have been suffered by her. This amount of compensation for mental agony and anguish as ordered by the Forum below is apart from the direction for the payment of interest at a specified rate on the policy amount on and from 6.6.1994, the date of receipt of the claim petition by the Life Insurance Corporation of India. Superior Courts of jurisdiction namely National Commission as well as the Supreme Court laid down the dictum on several occasions that payment of interest on the amount due to the complainant by the opposite parties as well as payment of compensation for mental agony and anguish said to have been suffered by the complainant are not payable and one of them alone is capable of being granted. Therefore, grant of compensation for mental agony and anguish as well as the payment of interest on the amount due to the complainant by the opposite parties as ordered by the Forum below cannot at all be stated to be sustainable in law. In this view of the matter the order of the Forum below granting compensation quantified in a sum of Rs. 5,000/- for the mental agony and anguish said to have been suffered by the complainant deserves to be deleted and we accordingly do so.

THE Forum below ordered costs after all quantified in a sum of Rs. 1,000/-, which, we rather feel, is not unreasonable calling for interference. THE award so made is, therefore, confirmed. In fine, except to the extent of modification of the order of the Forum below made by us as above, the appeal shall stand dismissed in other respects. We, however, make no order as to costs on the facts and in the circumstances of the case. We, however, make it crystal clear that the modified order of ours is required to be complied with by the opposite parties within a month from the date of receipt of the order or otherwise it would be perfectly open to the complainant to invoke jurisdiction of Section 27 of the Consumer Protection Act, 1986 (for short, "the Act, 1986"). Appeal disposed of.