SENIOR DIVISIONAL MANAGER, L.I.C. OF INDIA vs NIRANJAN PANDA

THIS appeal is directed against the decision of the District Forum, Kendrapara in C.D. Case No. 164 of 1995. The present respondent as complainant filed the aforesaid case praying for compensation and other reliefs alleging deficiency in service on the part of the present appellants. The wife of the complainant was a policy-holder under the Life Insurance Corporation of India (for short L.I.C.) and after the first premium was paid by her on 10.9.92, she expired on 28.10.92. The death intimation was given to the L.I.C. on 16.11.92 and the claim form was filed by the complainant on 10.3.93. The claim was not settled for a long time for which the complainant filed the aforesaid case on 15.9.95 alleging deficiency in service. The present appellant filed a show cause denying their liability. The appellant explained the circumstances under which the claim could not be settled earlier saying that various information''s and documents were necessary to be referred to some of which were filed late by the complainant and some of which were to be verified from different sources. They also stated that the matter was required to be scrutinised at different stages by the Corporation which took some time. Ultimately they said that the claim has been settled on 26.10.95. But before the complainant was intimated about the settlement, he rushed to the District Forum and filed the aforesaid case.

THE District Forum after analyzing the matter and perusing all the documents filed before it, came to the conclusion that there has been inordinate delay in settlement of the claim of the present respondent by the opposite parties. It, therefore, directed that the assured amount should be paid to the complainant together with interest at the rate of 18% per annum from 16.11.92 till the date of payment. It also saddled the appellants with compensation of Rs. 2000/- and cost of Rs. 500/- and an additional amount of Rs. 1000/- saying that it would be towards other expenses incurred by the complainant. Hence this appeal. We have heard the learned Counsel for the appellant and the Counsel appearing for the respondent-complainant. Admittedly, the wife of the complainant was a policy holder who met her death on 28.10.92. Death intimation was given to the appellant on 16.11.92, but as rightly pointed out by the learned Counsel appearing for the appellant no process for the settlement of any claim could be initiated before filing of the claim form which was in fact filed on 10.3.93. Therefore, the question that is required to be determined is as to whether there has been inordinate delay in settlement of the claim. We find that at various stages, the L.I.C. required different documents to be filed by the complainant and the process went on for quite some time. What was necessary is that whatever documents the Corporation wanted to see and verify could have been asked for at a time so that the claim could have been settled earlier. Taking into consideration the time that may be necessary for the Corporation to settle the claim by examining the documents making due verifications and passing through different official stages, a period of four months in our opinion is sufficient for settlement of a claim arising out of death of a policy-holder. Therefore, in our opinion, the claim of the complainant could have been settled latest by the end of July, 1993. if the claim was not settled by that date the Corporation incurs the liability of paying interest with effect from 1.8.93 till the date of payment. We are told that during the pendency of the proceeding before the District Forum, the complainant was offered the settled amount but he did not accept the same saying that the proceeding is pending, the aforesaid fact is not admitted by the respondent and there are no materials before us to hold either way. Thus, there can be no doubt that the complainant becomes entitled to the assured amount together with interest with effect from 1.8.93 till the date of payment. The District Forum has allowed interest at the rate of 18% per annum which is over and above the rate of interest claimed. When only 12% interest was claimed there was no justification for the District Forum to award more than what was claimed. In our opinion, interest at the claimed rate should have been allowed and, therefore, we reduce the rate of interest from 18% to 12% per annum. The District Forum has allowed a compensation of Rs. 2000/- which we do not think appropriate in the facts and circumstances of the case inasmuch as the interest also compensates the complainant for the delayed payment. The District Forum has allowed a cost of Rs. 500/- and Rs. 1000/- towards expenses which in our opinion in nothing but costs. We, therefore, scale down the cost to Rs. 1000/-. Therefore, the judgment of the District Forum would be modified to the extent indicated above, that is, the complainant will be entitled to the assured amount with 12% interest per annum from 1.8.93 up to the date of payment. He would also be entitled to a cost of Rs. 1000/- (Rupees One thousand) only. The learned Counsel for the appellant also urged that there was no justification for the District Forum to direct realisation of the amount awarded from the defaulting Divisional Manager and Branch Manager. There are no materials before the District Forum and nothing has been brought to our notice that the delay in settlement of the claim was due to default on the part of the Divisional Manager or the Branch Manager. We, therefore, set aside the aforesaid direction given by the District Forum. The appeal is, therefore, allowed in part as indicated above. The awarded amount should be paid within one month from today. Appeal allowed in part.