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WEST BENGAL STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, KOLKATA
Hon’ble Mr. Justice S.C. Datta, President;
Mr. D. Karforma & Mrs. S. Majumder, Members
LIFE INSURANCE CORPORATION OF INDIA—Complainant
versus
MAHABIR PRASAD HANSARIA—Respondent
Case No. SC/03/A of 1999—Decided on 21.3.2003
The court emphasized the importance of timely settlement of death claims in life insurance cases and the need for insurance companies to establish the suppression of material facts by the insured.
Headnote:
Insurance - Life Insurance Claim - The court upheld the decision of the Forum in favor of the complainant, finding deficiency in service on the part of the LIC due to inordinate delay in settling the death claim. The court also reduced the rate of interest granted by the Forum from 18% to 10% per annum.
Fact of the Case:
The complainant's wife was insured by the Life Insurance Corp. of India. The LIC repudiated the claim on the ground that the deceased had withheld material facts regarding her health. The Forum decreed the claim in favor of the complainant, citing deficiency in service and inordinate delay in settling the death claim.
Finding of the Court:
The court upheld the decision of the Forum, finding deficiency in service on the part of the LIC due to inordinate delay in settling the death claim. The court also reduced the rate of interest granted by the Forum from 18% to 10% per annum.
Issues: Dispute over life insurance claim, repudiation of claim by LIC, deficiency in service, inordinate delay in settling the death claim, and grant of interest.
Ratio Decidendi: The court found that the LIC failed to establish the suppression of material facts by the deceased and noted the inordinate delay in settling the death claim, leading to deficiency in service. The court also adjusted the rate of interest granted by the Forum.
Final Decision: The court upheld the decision of the Forum in favor of the complainant, with a modification to reduce the rate of interest granted by the Forum from 18% to 10% per annum.
Mr. Justice S.C. Datta, President—This is an appeal against the order of the Forum at Jalpaiguri decreeing the claim of the petitioner in toto together with interest. The wife of the complainant was insured by the Life Insurance Corp. of India for the sums of Rs. 15,000/- and Rs. 25,000/-. Her husband was the nominee. Dr. K.S. Basak was the Medical Officer of the Insurance Company. He examined the wife of the complainant namely, Gayetri Devi but did not notice any ailment. She fell ill suddenly on 26.11.1994 and was shifted to North Bengal Medical Clinic where she expired on 29.11.1994. According to Dr. S. Banerjee, the attending Physician the cause of death was due to cardiac arrest, encephalitis and diabetes mellitus.
On 22.3.1995 the complainant preferred claim but on 18.12.1996 the LIC repudiated it on the ground that the deceased has withheld material facts regarding her health. According to the LIC the deceased was suffering from vomiting and phileria from long time past and as such the repudiation was rightly done.
The Forum however negatived the contention of the LIC and passed the award in favour of the complainant.
2. It is not in dispute that two policies were taken out on the life of the deceased Gayetri Devi and while the policies were current, she expired. There is no paper to show that Gayetri Devi was suffering from vomiting and phileria for long. Incidentally it may be mentioned the onus is upon the LIC to establish the fact there had been suppression of material fact by the deceased at the time of submitting the proposal. The Medical Officer of the LIC examined the insured and found nothing wrong in the health of the deceased. The death certificate shows that she died of cardiac failure. The Forum noticed that the claim was repudiated after a long lapse of time. There was, therefore, inordinate delay in the matter of settlement of the death claim of the complainant. So there was deficiency in service on the part of the LIC. We have thoroughly gone through the judgment and find no reason to disagree with the views taken by the Forum.
3. Regarding the grant of interest @ 18% per annum we think that the Forum was not justified in granting interest at such a high rate. In our view it would be just and proper if the rate of interest is reduced to 10% per annum from the date of submission of the claim i.e. 22.3.1995 till the final payment is made of the assured sum of Rs. 25,000/- and Rs. 15,000/-, in all Rs. 40,000/- together with bonus and other benefits accruing thereon which we hereby do. The LIC is directed to make payment of this amount within a period of 2 months from this date.
The order of the Forum regarding payment of damages is set aside.
With this modification the appeal be disposed of.
Appeal disposed of.
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