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ANDHRA PRADESH STATE CONSUMER DISPUTES REDRESSAL COMMISSION
D. Appa Rao, President and M. Shreesha, Member
P. RAM MOHAN RAO - Appellant
Versus
LIFE INSURANCE CORPORATION OF INDIA - Respondent
First Appeal No. 1640 of 2006
Decided on : 23-01-2009
M/s. Gopi Rajesh and Associates, Advocates, for the Appellant; Mr. M. Venkataramana Reddy, Advocate, for the Respondent
The central legal point established in the judgment is that the insurance company is obligated to pay the due amount to the policyholder, and the policyholder cannot be asked to go to another office for payment when the company itself agreed to pay the due amount.
Headnote:
Insurance - Jurisdiction - The complainant appealed against the inadequate amount granted by the District Forum and the lack of interest awarded by the respondent LIC. The court directed the LIC to pay the due amount with interest, confirming the compensation and costs awarded by the District Forum.
Fact of the Case:
The complainant took an insurance policy with the respondent LIC under a salary saving scheme. When the policy matured, the LIC claimed the policy records were not available and did not pay the amount due. The complainant appealed for the maturity amount with interest and compensation for mental agony.
Finding of the Court:
The court found that the complainant was entitled to the amount covered under the policy, compensation, and costs. The LIC was directed to pay the due amount with interest, confirming the compensation and costs awarded by the District Forum.
Issues: The issues involved lack of payment by the respondent LIC, jurisdiction, and adequacy of compensation.
Ratio Decidendi: The court held that the complainant, being a resident of Hyderabad, could not be asked to go to another Divisional Office for payment when the LIC itself agreed to pay the due amount. The court directed the LIC to pay the due amount with interest, confirming the compensation and costs awarded by the District Forum.
Final Decision: The appeal was allowed, and the complaint was allowed in part, directing the Insurance Company to pay the due amount with interest, compensation, and costs. The appellant/complainant was also entitled to costs in the appeal.
JUDGMENT
D. Appa Rao, President (Oral)- The complainant preferred this appeal against the order of the Dist. Forum in granting inadequate amount besides not awarding interest.
2. The case of the complainant in brief is that he took an insurance policy with the respondent LIC on 4.10.1976 for Rs. 10,000 under salary saving scheme wherein the employer had deducted monthly premium from his salary and paid it to LIC directly. When certain amounts were not credited properly he addressed letters and the LIC on its part informed that the records were not available in view of decentralization of its office. When the policy was matured in May, 1995 though the Divisional Office at Hyderabad requested the office at Raepally to pay the amount, it gave a reply stating that the policy was not available. Despite his approach to Ombudsman he could not receive any amount. Therefore he requested to pay the maturity amount with interest @ 24% p.a., from the date of maturity of the policy till the date of realization together with compensation of Rs. 10,000 towards mental agony, and Rs. 1,000 towards costs.
3. LIC respondent resisted the case. It averred that the complainant ought to have filed the case either within the jurisdiction of Kurnool or Machilipatnam not at Hyderabad as the entire record would be available at those places. They did not have the record of the complainant policy, and therefore prayed that the complaint be dismissed for lack of jurisdiction.
4. The complainant filed his affidavit evidence and got Exs. A1 to A22 marked, while the LIC did not file any documents. The Dist. Forum after considering the evidence placed on record opined that the complainant was entitled to Rs. 10,000 covered under the policy besides Rs. 3,000 towards compensation and costs of Rs. 1,000.
5. Aggrieved by the said decision, the complainant preferred this appeal contending that LIC itself admitted that it had to pay Rs. 19,869.24 and he being a retired employee suffering for finances, the amount of compensation awarded was inadequate. He is also entitled to interest.
6. It is an undisputed fact that the complainant had taken LIC policy for an amount of Rs. 10,000 under salary savings scheme wherein the premium would be deducted from out of his salary. The complainant being a Government employee worked at various places like Kurnool, Raepally, Nellore, Gudur, Machilipatnam, Ibrahimpatnam, Tadepallygudem, etc. Naturally the records pertaining to the complainant were accordingly transferred. When he was claiming the amount, the LIC itself addressed letters evidenced under exhibits that the policy records were not available and they were searching for the same. On 17.1.1994 by its letter addressed to the complainant it requested him to inform the office in which he was working at Hyderabad so that it could advise the concerned servicing branch to transfer the policy from Vijayawada branch. He was repeatedly requesting to pay the amount for which it gave reply "We verified our records and found that your policy records are not available at our end. However, we shall try to get the premium position within a short period and inform the same to you. Please co-operate in this regard".
7. Finally by letter dated 18.8.2006 it has agreed to pay sum assured Rs. 5,000, bonus of Rs. 5,233 together with penal interest at Rs. 9,210 and Rs. 426.24 towards refund of excess premium collected from him, in all Rs. 19,869.24. Despite its admission, it did not pay even when the complainant filed his complaint. The question of jurisdiction was raised forgetting the fact that they themselves gave reply that they would pay the amount when he addressed a letter from Hyderabad. The complainant is a resident of Hyderabad, he cannot be asked to go to some other Divisional Office, when they could process the claim, and pay it to him.
8. When the LIC itself agreed to pay Rs. 19,869.24 which was in fact due by them, we would direct the LIC to pay the said amount. Since it had calculated pen
