IMPORTANT POINT
Insurance Policy – Deficiency in service – Compensation of Rs.1.50 lacs awarded to complainant.

ORDER

Dr. S. Sundaravadivelu, Presiding Member.—This appeal has been filed under section 15 of Consumer Protection Act against the order of the District Consumer Disputes Redressal Commission, Puducherry (hereinafter referred as District Commission in short)in CC No.30/2012 dated 19.07.2023. The District Commission had heard the complaint on remittance from the Hon’ble National Consumer Disputes Redressal Commission and has given its order. In the complaint before the District Commission, the appellants herein were the Opposite parties 1 to 3 and the Respondent 1 herein was the complainant and the Respondent 2 herein was the Opposite Party 4.Herein after, the parties are referred to by the same nomenclature as in the original complaint before the District Commission for the sake of convenience.

The Gist of the complaint is as follows:

2. The complainant had taken a money back policy from the LIC vide policy No.730568459 for a period of 15 years i.e. from 28.08.1995 to 28.09.2009. The annual premium amount of Rs.4310/- was to be transferred from the complainant’s EPF account No.PC/20/6297 to the LIC. The sum assured was Rs.50,000/-. 25% of the sum assured (Rs.12,500/-) was to be transferred to the PF Account on the life assured surviving five years i.e on 28.08.2000 and for this amount, PF authority will pay interest at 9.5 % per annum till the period of maturity. Another 25% of the sum assured (Rs.12,500/-) was to be transferred to the PF account on the life assured surviving ten years ie on 28.09.2005 and for this amount, the PF authority will pay interest at 9.5% per annum till the period of maturity. The remaining 50% of the sum assured (Rs.25,000/-) alongwith accrued bonus of Rs.32,500/- arrived tentatively to be transferred to the PF account on the maturity date of 28.08.2010 and for this also, the PF Authority will pay the interest. Intimation would be received from the LIC one month before the maturity date. But the complainant/policy holder had not received any intimation even after lapse of three months from the date of maturity. When the complainant approached the Puducherry Branch of LIC, they reported that the yearly premium had been received only for the period of 1996 to 1999. The PF authority had transferred the yearly premium of Rs.4310/- for the year 2000 to 2003 in the year 2003-2004 and the remaining installments had been transferred till the year 2008-2009 without default. It is the duty of LIC to recover the premium without default. The complainant had sent registered letters on 15.07.2011 and 25.04.2012 to the LIC but there was no response and hence the complaint before the District Commission seeking the claim of Rs.2,31,446/-as claim settlement amount with penal interest of 20% per annum. He also sought Rs.30,000/- towards compensation and Rs.10,000/- towards costs.

The proceedings in the District Commission when the complaint was heard for the first time is summarised below.

3. In the reply version, the opposite parties 1-3 stated that the yearly premium was received upto August 1998 only. The premium for first five years was not received continuously upto August 2000. Hence, the first survival benefit payable on completion of five years was not settled. The PF authorities had not settled the premium amount in time and the premium amount was sent belatedly without any late fee. The cheque for the dues pertaining to August 2007 and August 2009 were received only on 01.10.2007 and 04.09.2009 respectively. As per non-forfeiture regulations since the policy is in default and not in full course only a reduced paid up amount can be paid as maturity benefit to the complainant. The fourth opposite party in his reply version admitted that the complainant is a member of EPF scheme with EPF account No.PC/20/6297. They had paid the annual premium of Rs.4310/- from 1995 to 2009 to the opposite parties 1 to 3. The said premiums were duly received and they have not received any objection from the Opposite parties 1 t