Life Insurance Corporation of India vs SUNITA MITTAL

THE Life Insurance Corporation of India appeals against the order of the District Forum, Kaithal directing the payment of the insurance amount to the heires of the insured with interest @ 12 percent.

IN view of what follows the facts may be noticed with the utmost brevity. Shri Puyush Kumar Mittal deceased had taken out a Life INsurance policy in the sum of Rs. 50,000/- wherein Shri Dharam Dev Mittal, his father was a nominee. The insured aforesaid died in a road accident on the 11th of October, 1990. He left behind as the heirs his mother Srtit. Kailash Wati, his widow Smt. Sunita Mittal and a minor son Nishu. The respondent widow filed a claim on behalf of herself and her minor son for the payment of 2/3 rd of the insurance amount. However, there was considerable delay in the settlement thereof because the insurance company took up the stand that the claim must be filed jointly with Sh. Dharam Dev Mittal, the nominee, father-in-law of the complainant. However, the claimant-respondent being not on good terms with her in-laws, was unable to accede to the said request. In the written statement tiled on behalf of the appellant, some preliminary objections including the bar of territorial jurisdiction was pleaded. On merits, the primal plea taken was that the nominee was entitled to receive the policy money but in case of dispute the appellant-Corporation can consider to pay the policy money to class I heirs without evidence of title provided such heirs submit Form No. 3806/A and Indemnity Bond as per Form No. 3805 and other formalities of a surety form and a joint discharge. The primal reason for non-payment of the insured amount was that the respondent-widow had not been able to confirm to the necessary formalities.

Apparently because of the fair stand taken by the learned Counsel for the appellants before the District Forum, no evidence was led by either of the parties. Shri R.K. Bindish, Advocate representing the appellants therein stated that as soon as an order was passed by the Forum, the amount would be paid to the heirs. After hearing the Counsel and holding that Class I heirs were entitled to preference over the class II categories of heirs under the Hindu Succession Act, it was directed that l/3rd of the insurance amount be paid to the three Class I heirs each with interest @12 percent.

MR. H.K. Kohli, the authorized representative of the appellant apparently for lack of any meaningful argument on merits, took up technical plea that the District Forum did not have the territorial jurisdiction to decide the matter. This stand at the appellate stage has only to be noticed and rejected. It would appear that the question of territorial jurisdiction though mentioned in the reply was not at all pressed or urged as a threshold ground. Far from that being so, the appellants who were fully represented by Counsel themselves invited a judgment in the matter by taking a firm plea that the District Forum should decide the matter and as soon as the order was passed, the amount would be paid. The reading of the short order of the District Forum indicates virtually that the same was a wholly consensual one. In this context the hyper technical plea of lack of territorial jurisdiction now being raised at the belated stage must necessarily be rejected. Mr. H.K. Kohli had then primarily assailed the levy of interest on the insured amount directed by the District Forum. It was stated that the appellant-Corporation had very fairly not denied the claim, but had merely required the compliance of necessary formalities in the absence of the nominee in the insurance policy namely Shri Dharam Dev Mittal, father of the deceased. In this context, it was the stand that the delay in the settlement of the claim was wholly bonafide and the Corporation cannot be burdened with interest.

THERE is considerable merit in the aforesaid submission. It is common ground that the nominee in the insurance policy was the father of the deceased. It would appear that he did not either individually or jointly make the claim for the payment of the insurance amount. In that situation, the appellant-Corporation was on firm ground that the sum insured could only be paid over to the nominee or in any case to class I heirs after the completion of necessary formalities in order to guard its legal position. On the respondent-complainant''s own showing she was not on good terms with her in-laws and could not join the nominee with her claim. In fact she had made the claim only on behalf of herself and her minor son. In such a situation, it is not easy to lay any serious blame on the appellant-Corporation for the delay that occurred in the settlement of the claim. We are consequently of the view that in the present context the levy of interest would not be justified particularly so when the appellant-Corporation took up a very fair stand before the District Forum inviting it to decide the matter and undertaking to pay the amount in accordance therewith. For the foregoing reasons, this appeal is partly allowed and the award of interest @ 12% against the Corporation is hereby set-aside. Otherwise, the order of the District Forum is affirmed. However, there will be no order as to costs. Appeal partly allowed.