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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Honble Mr. Justice S. Parvatha Rao, President &
Mr. K. Ranga Rao, Member
LIFE INSURANCE CORPORATION OF INDIA & ANR.—Appellants
versus
LOTAVATH MIRYALI—Respondent
F.A. No. 323 of 1997—Decided on 24.6.1998
Counsel for the Parties :
For the Appellants :Mr. M.V.S. Suresh Kumar, Advocate.
For the Respondent:Mr. B.V. Krishna Murthy, Advocate.
Delay in settlement of insurance claim amounts to deficiency in service and the Insurance Company is liable to pay the insured sum with interest.
Headnote:
CONSUMER PROTECTION ACT, 1986 - INSURANCE POLICY - DELAY IN SETTLEMENT OF CLAIM - DEFICIENCY IN SERVICE - INTERPRETATION OF SECTION 2(1)(c), 2(1)(d), 2(1)(m) - COURT HELD THAT DELAY IN SETTLEMENT OF INSURANCE CLAIM AMOUNTS TO DEFICIENCY IN SERVICE AND DIRECTED THE INSURANCE COMPANY TO PAY THE INSURED SUM WITH INTEREST.
Fact of the Case:
The complainant's husband was insured under a policy for a sum of Rs. 80,000/-. He died on 14.10.1993. The complainant, being the nominee, filed a claim on 15.11.1993. The claim forms were presented on 22.3.1994. As there was no response for six months, the complainant approached the District Forum on 18.5.1994. The Insurance Company contended that the complainant was not a 'consumer' as per Section 2(1)(d) of the Consumer Protection Act, 1986, that the averments in the petition did not fall within the meaning of 'complaint' under Section 2(1)(c), that the complainant did not satisfy the definition of a 'person' within the meaning of Section 2(1)(m), and that the Consumer Forum had no jurisdiction to entertain the complaint.
Finding of the Court:
The court held that the delay in settlement of the insurance claim amounted to deficiency in service and directed the Insurance Company to pay the insured sum with interest. The court also held that the complainant was a 'consumer' as per Section 2(1)(d) of the Consumer Protection Act, 1986, that the averments in the petition fell within the meaning of 'complaint' under Section 2(1)(c), that the complainant satisfied the definition of a 'person' within the meaning of Section 2(1)(m), and that the Consumer Forum had jurisdiction to entertain the complaint.
Issues: 1. Whether the complainant was a 'consumer' as per Section 2(1)(d) of the Consumer Protection Act, 1986? 2. Whether the averments in the petition fell within the meaning of 'complaint' under Section 2(1)(c) of the Consumer Protection Act, 1986? 3. Whether the complainant satisfied the definition of a 'person' within the meaning of Section 2(1)(m) of the Consumer Protection Act, 1986? 4. Whether the Consumer Forum had jurisdiction to entertain the complaint? 5. Whether the delay in settlement of the insurance claim amounted to deficiency in service?
Ratio Decidendi: 1. The court held that the complainant was a 'consumer' as per Section 2(1)(d) of the Consumer Protection Act, 1986, as she was a beneficiary under the insurance policy and had paid the premiums. 2. The court held that the averments in the petition fell within the meaning of 'complaint' under Section 2(1)(c) of the Consumer Protection Act, 1986, as they related to a deficiency in service by the Insurance Company. 3. The court held that the complainant satisfied the definition of a 'person' within the meaning of Section 2(1)(m) of the Consumer Protection Act, 1986, as she was a natural person. 4. The court held that the Consumer Forum had jurisdiction to entertain the complaint as the dispute related to a deficiency in service by the Insurance Company. 5. The court held that the delay in settlement of the insurance claim amounted to deficiency in service as the Insurance Company had not taken a decision on the claim within a reasonable time.
Final Decision: The appeal was dismissed with costs of Rs. 1,000/- payable to the respondent/complainant. The sum of Rs. 80,000/- together with bonus and other permissible benefits and interest thereon @12% per annum from 18.5.1994 as directed by the District Forum till the date of payment and costs in all Rs. 1,300/- shall be deposited by the appellants within four weeks from today i.e. by 22.7.1998 in the Nalgonda District Forum to the credit of C D. No. 102/ 1994.
Mr. Justice S. Parvatha Rao, President — Heard the learned Counsel on both sides. The policy bearing No. 644003867 dated 28.3.1991 under which the husband of the complainant was insured for a sum of Rs. 80,000/- is not disputed. It is also the accepted case of the appellant Insurance Company that no premia were due by the time the insured died on 14.10.1993. The complainant was the nominee and that is also not disputed. She laid claim on 15.11.1993 and the claim forms admittedly were presented on 22.3.1994. As there was no response for six months after the claim was laid the complainant approached the Nalgonda District Forum by her present complaint on 18.5.1994.
2. On 19.5.1994, on behalf of the Insurance Company the Counsel for the complainant was informed that some more time would be required for taking a decision. Counter was filed on 27.7.1994. Even by that date the claim of the complainant was not repudiated. The contentions raised in the counter are all very frivolous—like (1) the complainant could not be described as 'consumer' as she did not fulfil the requirements of the definition of 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986 ('the Act' for short); (2) the averments in the petition did not fall within the meaning of 'complaint' under Section 2(1)(c) of the Act; (3) the complainant did not satisfy the definition of a 'person' within the meaning of Section 2(1)(m) of the Act; and that the Consumer Forum had no jurisdiction to entertain the complaint. It was stated in para 6 of the counter as follows :
"..... As it is an early claim, it will take some more time to take a decision. Until the claim is admitted there is no liability upon the Corporation. As such payment of interest to the claimant does not arise".
and yet the appellants claimed in their counter that there was no deficiency in service on their part.
3. For the first time, in the course of examination of witness on behalf of the appellants, it was sought to be adduced in evidence that in the voters' list marked as Ex. B-l the age of the deceased insured was shown as 78 years and that in the ration card marked as Ex. B-2 his age was shown as 55 years and that therefore it must be taken that the declaration he gave of his age as 45 years was false. The claimant examined herself as PW 1. She gave her age as 42 years and in Ex. B-l voters' list her age was shown as 75 years. In her cross-examination it was suggested that her husband was aged 75 years at the time of his death and she denied the same and reiterated that her husband was aged 45 or 50 years old at the time of his death. She also stated that Ex. A- 1 was the certified copy of the extract of the births and deaths register issued by the Mandal Revenue Officer in which the age of the deceased husband was shown as 47 years at the time of his death on 14.10.1993. The death registration was shown as done on 14.10.1993 itself.
4. In view of all these materials the District Forum held that the age of the deceased and of the complainant were not consistently recorded in Ex. B-2 and Ex. B-l and it was not safe to rely upon them and that the Insurance Authorities never asked her to establish the age of her deceased husband after she laid the claim and that the disputation regarding the age of the deceased insured at a belated stage did not stand to reason. The District Forum also observed that it was admitted by the RW 1 in his cross- examination that there was possibility of printers' mistake in the voters' list. Though there was no specific finding by the District Forum that there was deficiency in service on the part of the appellant, on the facts narrated by us and stated by the District Forum in its order deficiency in service screams loud in this case because admittedly even by the date of filing of the counter there was no final decision taken by the appellant. We asked the learned Counsel whether at least subsequently there was any repudiation by the Insurance Company. He sta
