SAMPOORAN SINGH vs Life Insurance Corporation of India

THE appellant Dr. Sampooran Singh, a retired Government servant, had brought a complaint before the District Forum, Chandigarh against the respondent Insurance Company claiming refund of the full amount of premiums along with interest and bonus etc. which he had paid towards an insurance policy obtained in 1982 for the sole purpose of payment of Estate Duty on his only residential house in Chandigarh in the event of his death. His claim for refund was based on the ground that the Government of India had abolished Estate Duty on one residential house and as such the policy had been rendered in fructuous.

THE important facts of the case relating to the insurance policy the premium paid by the complainant and the legislation exempting an owner wish one residential house from the liability of Estate Duty are not disputed and they are set out in the order of the District Forum. THE appellant''s grievance with the order of the District Forum is in respect of the Forum''s acceptance of the pleadings of the respondent Insurance Company regarding the extent of its liability in the matter. THE Insurance Company''s case is that the policy having become infructuous, it is liable to pay only its surrender value as stipulated in the contract between the two parties and this surrender value comes to Rs. 3355.90. THE appellant''s contention is that this is not a case of his voluntarily surrendering the insurance policy but a consequence of Government of India''s policy decision and there is no justification for the respondent Company paying him a mere fraction of the amount of premiums which he had paid. THE respondent Company counters this argument by stating that they had covered the risk for more than 3 years and that in the circumstances the amount being offered is not that meager. In our view it is a matter which calls for an equitable and fair settlement. The complainant had obtained a policy as a measure of prudence and abundant caution and never defaulted in his obligation. The policy was rendered abundant as a result of Government of India''s decision to exempt his category of house owners from the liability of Estate Duty. And in our view he is fully entitled to at least his own money. The element of risk etc. is more than covered by the fact that the Insurance Company has had full use of the complainant''s money for nearly a decade. And it is one of those cases in which the interest accruing on the principal can be more than the principal amount

In our view the ends of justice would be met by calling upon the Insurance Company to refund to the complainant the amount of Rs. 11,220/- less the amount already paid. To this extent we accept the complainant''s appeal.

THERE is no order as to costs. Appeal allowed.