HARISHANKAR SINGH vs Life Insurance Corporation of India

SINCE, both these appeals arise from the common order dated 9.2.2007 in Complaint No. 01/2006 by District Consumer Disputes Redressal Forum, Dantewada (hereinafter called the "District Forum" for short), they are being disposed of by this common order.

INDISPUTABLY, the complainant Harishankar Singh (appellant in Appeal No. 120/2007 and respondent in Appeal No. 101/2007) obtained a life insurance policy from Life Insurance Corporation of India (hereinafter ''LIC'' for short) (respondent in Appeal No. 120/2007 and appellant in Appeal No. 101/2007) under the Nav Prabhat Plan, without profits. It is also not in dispute that the policy was obtained on 28.6.2000 and the date of its maturity was 28.6.2005. It is now further not in dispute that all five annual premia of Rs. 9,977 each payable under the said policy, were duly paid by the complaint-Harishankar Singh to the LIC. It is further not in dispute that since the complainant-Harishankar Singh outlived the date of maturity of the policy i.e., 28.6.2005, he was entitled to maturity benefit as per terms thereof. It is further not in dispute that the LIC paid a sum of Rs. 44,210 after maturity of the policy to the complainant. Feeling dissatisfied with the payment as above, the complainant-Harishankar Singh, preferred complaint before the District Forum claiming compensation, etc. The complaint was resisted by the insurer-LIC. It was averred that since the complainant outlived the maturity date of the policy, the payment of Rs. 44,210 was made to him in pursuance of policy, under the terms thereof. It was further averred that under the policy, no further amount was payable to the complainant.

Heard the complainant and learned Counsel for the LIC. Perused the record.

AS noticed earlier, the complainant obtained Nav Prabhat Policy, under which annual premium of Rs. 9,977 was payable. It is not in dispute that the complainant paid all the five annual premia to the LIC. Thus, till the date of maturity of the policy i.e., 28.6.2005 total sum of Rs. 49,885 has been paid by the complainant to the LIC under the said policy. Since, the complainant has outlived the date of maturity of policy i.e., 28.6.2005 he is entitled to maturity benefit which thereunder is enumerated as below: "Maturity Benefit-in the event of maturity Life ASsured surviving date of maturity, a sum equal to the total amount of premiums paid excluding all extra premiums together with Loyalty Addition, if any, shall be payable."

In the instant case an amount of Rs. 44,210 has been paid to the complainant. The learned Counsel for the LIC states that no loyalty addition was declared, regarding the policy. It was submitted by the learned Counsel for the LIC that the amount of Rs. 9,977 included extra premium also. However, the copy of receipts issued by the LIC do not support the above contention. It would appear from the receipts that only premium was paid by the complainant and that no amount towards extra premium was paid by the complainant. Therefore, amount of Rs. 9,977 shall have to be treated as premium paid by the complainant; as it has been so mentioned in the receipts.

HENCE, on the maturity of the policy, the whole of the said amount was refundable to the complainant. However, the LIC has only refunded, an amount of Rs. 44,210. Thus the balance amount of Rs. 5,675 is payable by the LIC to the complainant. The finding as above of the District Forum is justified and affirmed. The complainant has alleged that the amount was not paid to him in due course. The District Forum has directed that not only premium with interest @ 9% p.a. be refunded, but has also directed that Rs. 60,000 be paid by the LIC to the complainant as compensation towards mental harassment to him. We find that the amount of compensation as above, is on the higher side. Accordingly, the aforesaid amount deserves to be modified and reduced. It appears that compensation of Rs. 5,000 towards belated action in payment of amount by the LIC to the complainant shall meet the ends of justice. Accordingly, the impugned order is modified. Instead thereof, it is directed that the LIC shall pay to the complainant Rs. 5,675 (Rupees five thousand six hundred seventy-five). In addition compensation of Rs. 5,000 (Rs. five thousand) shall also be paid by the LIC to the complainant. The amounts as above shall be payable by the LIC to the complainant within a period of 2 months from the date of this order, failing which interest @ 9% p.a. shall also be payable on the said amounts from the date of default. It is further directed that LIC shall pay to the complainant cost of this litigation including that of complaint as well as of this appeal, which is quantified at Rs. 3,000 (Rupees three thousand) only. Ordered accordingly.