Incorrect disbursement by an insurer does not absolve it of liability to the rightful policyholder.

JUDGMENT

The petitioner company, which is engaged in the business of General Insurance, has approached this Court challenging the award passed by the Permanent Lok Adalat for Public Utility Services constituted under Section 22C of the Legal Services Authorities Act , 1957. The said order, a copy of which is produced as Ext.P1, is passed in a complaint submitted by the respondents herein, stating that the amount payable in respect of the insurance policy obtained by the respondents was not released to them, even after the maturity of the policy.

2. Earlier, the respondents obtained a policy based on the proposal dated 21.09.2007, wherein, the sum assured was Rs.2,00,000/-. The date of maturity contemplated in the policy was 24.09.2022 and the respondents remitted the premium without any default. After the policy matured on 24.09.2022, the respondents approached the petitioner company for the release of the said amount. Thereupon, the respondent was asked to furnish the details of the policy and he was made to surrender the original policy certificate on 05.11.2022. Despite the above, the amount was not released and it was in these circumstances, the complaint was submitted before the Permanent Lok Adalat.

3. In the written statement submitted by the petitioner before the Permanent Lok Adalat, the contention raised was that, after the policy matured, the amount was transferred by National Electronic Funds Transfer (NEFT) to one Arunkumar K., and the same was encashed on 07.10.2022. The amount involved was Rs.8,05,344.74, which included Policy Fund Value and Guaranteed Special Addition. Therefore, it was contended that, since the amount is already disbursed to the petitioner, they are not under any further obligation.

4. On the basis of the pleadings, evidence was let in before the Permanent Lok Adalat and ultimately Ext.P1 order was passed, by which, the Adalat came to a definite finding that, even though the petitioner transferred the amount as per the policy, the said transfer was effected to one Arunkumar K, son of Balakishnan, who was not the complainant before the Permanent Lok Adalat. Thus, it was found that as the petitioner herein failed to establish that the maturity amount was paid to the respondent herein, the complaint is to be allowed. Accordingly, it was ordered that the petitioner shall pay an amount of Rs.8,05,758.44/- to the respondent herein as the sum assured, along with Rs.50,000/- as compensation, together with 9% interest per annum from 25.01.2023, the date of application. A further amount of Rs.12,000/- was also awarded as cause of the application.

5. After carefully going through the observations made by the Permanent Lok Adalath in Ext.P1, I am of the view that the petitioner herein failed to establish that the amount was paid to the respondent herein. Of course, even though the documents were produced to show that, the amount were disbursed to one Arunkumar K., there is nothing to show that the said person was the respondent herein. This would indicate that the release of the amounts were made without properly verifying the identity of the person to whom the said payment was made. Since the identification of the person was the responsibility of the petitioner, under any circumstances, the respondent herein cannot be put to suffer, if the amount was disbursed to a wrong person by the petitioner herein. The Permanent Lok Adalath after examining the evidence adduced by the parties came to a factual finding that the petitioner failed to establish that the payment has been made to the respondent herein. As far as the scope of this writ petition to interfere in the award passed by the Permanent Lok Adalath for public utility services is concerned, the same is very limited, as it does not include