State Consumer Disputes Redressal Commission
Smt.P.Vasundara vs Life Insurance Corporation Of India on 29 January, 2008
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTAPUR DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTAPUR PRESENT:- Sri M.Subbarayudu Naidu, B.Com., B.L., President-Incharge Smt.S.Lalitha, M.A., M.L., Member, Tuesday, the 29th day of January, 2008 C.C.No.94/2007 Between: Smt.P.Vasundara W/o Late V.S.N.Kumar Working in B.C. Girls , A.P.Residential School,Tekelodu, r/o Chilamathur Village & Mandal Anantapur District Complainant Vs. 1. The Branch Manager Life Insurance Corporation of India Hindupur, Anantapur District. 2. The Divisional Manager, Life Insurance Corporation of India Kadapa. Opposite parties This complaint coming on before us for final hearing on 22-01-2008 and upon perusing the complaint, written version and other relevant material papers on record and on hearing, Sri B.Mallikarjuna, counsel for the complainant and Sri T.Viswanath, counsel for the opposite parties 1 & 2 and having stood over till this day for consideration, this Forum made the following: O R D E R
Delivered by Sri M.Subbarayudu Naidu, Incharge President on behalf of the Bench:-
1. This complaint is filed under section 12 of Consumer Protection Act, 1986 to pass an order directing the opposite parties 1 & 2 to pay the amount as claimed by the complainant in the complaint, to pay interest at 24% p.a. till the date of realization, grant costs of this complaint and also grant such other relief or reliefs to the complainant as the Honble Forum may deem fit and proper in the circumstances of the case and in the interests of justice.
2. The factual matrix leading to the filing of this complaint is set out as hereunder:-
(a) The case of the complainant is that Smt.P.Vasundara is the legally wedded wife of late V.S.N.Kumar. She is a permanent resident of Chilamathur Village & Mandal, Anantapur District. Her husband late V.S.N.Kumar was working as attender in A.P.Residential School, Kodiganahalli at Parigi Mandal of Anantapur District. While so, the above said V.Seshanarasimha Kumar was in service as attender of the said school, took 4 policies from the 1st opposite party herein and the particulars of the said polices are mentioned below:
Sl.No. Policy No. Assured amount with bonus Amount Rs.
1.
651348141
-do-
35,000/-
2. 651351956
-do-
25,000/-
3. 652162206
-do-
1,00,000/-
4. 652164378
-do-
50,000/-
(b) During the life timeof the above said late V.S.N.Kumnar was regularly paying the premium amounts to the 1st respondent. The above said policies were also covered with accidental benefits of Rs.1,00,000/- for each policy. The above said complainants name was shown as nominee in the above said 4 policies by her husband Sri V.S.N.Kumar. Her husband died on 29-07-2001 while he was proceeding on his Motor Cycle alongwith one Siva Reddy. A case was also registered as Crime No.90/2001 by Gowribidanur Police Station, Karnataka, under Sections 279, 337 and 304-A of I.P.C. The Xerox copies of F.I.R. and Postmortem Certificate filed for our perusal.
3(a) The complainant further submitted that as per the terms and conditions of the above said polices issued by the opposite parties, she is entitled to get the amounts covered under the said polices apart from the accidental benefits of Rs.4,00,000/- from the opposite parties. The opposite parties paid amounts only the assured amount with bonus to the complainant after the death of the husband of the complainant. The complainant applied to the opposite parties for the payments of the amounts for which she is entitled. To her surprise, the opposite parties failed to pay the accidental benefit amount of Rs.4,00,000/- covered under the above said policies.
There-after, the complainant approached the opposite parties number of times and gave number of representations with a request to pay the accidental benefit amount covered under the above said 4 policies, but the opposite parties are evading the payment on one pretext or the other. Later on, the complainant submitted a representation to the opposite parties on 01-03-2005 requesting them to pay the amount. But, the opposite parties gave a reply on 09-03-2005, stating that they will decide the issue in question within 45 days, but so far no action is taken by the opposite parties in paying the amount. Hence, the complainant is constrained to file this complaint before this Forum. The office copy of representation dt.01-03-2005 submitted by the complainant to the opposite parties and the reply letter dt.09-03-2005 issued by the opposite parties to the complainant herein are filed for our perusal and consideration.
(b) Inspite of demands made by the complainant, the opposite parties failed to pay the amount to the complainant. Due to careless action of the opposite parties, the complainant suffered severe mental agony and she was forced to spend huge amounts to visit the offices of the opposite parties situated at Hindupur and Kadapa. So the complainant is entitled to claim interest on the delayed payment at 24% p.a. till the date of realization. There are causes of action to file this complaint before this Honble Forum and it is within the jurisdiction of this Forum.
(c) Particulars of claim of the amount by the complainant:-
1.
Accidental benefit amount covered under 4 polices . Rs.4,00,000/-
2. Interest on Rs.4,00,000/- at 24% p.a. from 20-07-01 till the date of realisation.
3. Amount claimed towards mental agony Rs.20,000/-
4. Amount claimed towards expenses Rs.
5,000/-
-----------------
Total Rs.4,25,000/-
Hence, there is deficiency in service on the part of the opposite parties. So, this complaint is filed against the opposite parties for the above said reliefs on 09-08-2005.
4(a) The complaint was resisted by the opposite parties by filing their written version on 13-09-2007. A memo was filed on behalf of the 1st opposite party adopting the written version of the 2nd opposite party. The affidavit of the complainant was filed on 09-08-2005, whereas the chief affidavit of the 2nd opposite parties representing its Manager(Legal), Mr.A.Udaya Sankar (L & HPF), LIC of India, Divisional Office, Kadapa filed on 13-09-2007. In the objections, in the written version filed on behalf of the 2nd opposite party while denying the material averments made in the complaint, it is interalia stated that originally the complainant filed a complaint before this Forum and later on this Forum has ordered in C.F.No.1112/2005 dt.09-08-2005 that this complaint can not be entertained on the ground of limitation. The Honble State Commission in its proceedings F.A.No.934/2006 against C.F.No.1112/2005 on the file of this Forum, set-aside the order of this Forum and remand the matter to this Forum again with a clear direction to register the complaint, issue notices to the opposite parties and decide the issues arising out of pleadings on 13-03-2007. Later on, the complaint was registered by this Forum on 17-07-2007 and proceeded as per the procedure subsequently.
(b) The 2nd opposite party narrated its version by saying in para 11 of its written version that the complainants alleging that Rs.4.00 lakhs is due as accident benefit is not correct. The accident benefit will be equivalent to the basic sum assured under a policy. Hence, the maximum accident benefit will be of Rs.2,10,000/-
under all the 4 polices put together. The accident benefit will be paid only if the opposite party No.2 is satisfied with the genuineness of the accident in which the deceased life assured was involved and if there is no breach of law by the deceased life assured in connection with the accident.
(c) Further, it is submitted by the 2nd opposite party in para 12 that it is true that the deceased life assured Mr.V.Seshanarasimha kumar during his life time had taken the following policies on his own life.
Sl.No. Policy No. Plant & Term DOC SA A.B.
1. 651351956 75-20 3.2.98 25,000/-
Yes
2. 651348141 14-30 14.3.96 35,000/-
Yes
3. 652162206 111-30 28.06.99 1,00,000/-
Yes
4. 652164378 14-28 28.8.2K 50,000/-
Yes All the above said policies are admitted and claim amounts together with accrued bonus paid to the claimant as per the conditions of the policies. The opposite parties called for original driving license of the deceased life assured for payment of accident benefit to the complainant herein. Instead of submitting the original driving licence of her husband the complainant had approached this Forum. It is also submitted in paras 14, 15 and 16 of written version of 2nd opposite party that the Life Insurance Corporation is bound by the condition that all the privileges and benefits conferred on the life assured are those that are clearly laid down in each policy bond and therefore, the claims are to be decided according to the conditions of Policies. Since, the conditions laid down in each policy bond under the heading Accident Benefit the LIC is not liable to pay accident benefit, if the accident is as a result of the life assured committing any breach of law. As per the provisions of A.P.Motor Vehicles Act, the driving of a vehicle neither with a valid license nor with a learners licence shall be deemed as a breach of law and punishable offence. Therefore, the LIC has sought the original driving licence in order to ascertain whether the deceased life assured V.Seshanarasimha Kumar had committed any offence and decide accordingly. It may be observed that at no point of time LIC has refused to pay the accident benefit. We have only asked the complainant to submit the original driving licence of her deceased husband. On examining the driving licence only, the corporation shall be able to decide keeping in view of the conditions mentioned on the policy bond, whether to admit the accident benefit or not. The opposite parties are waiting for the driving licence of the deceased life assured submission of it, to decide about accident benefit. Hence, there is no deficiency in service on the part of the opposite parties. So, the Forum may direct the complainant to submit the driving licence of her deceased husband to decide the claim.
5. In support of the averments made in the complaint, the complainant filed her affidavit on 09-08-2005. The complainant also filed 4 documents, which are marked as Ex.A1 to A4. Ex.A1 is the letter of requisition dt.01-03-2005 in Telugu version by the complainant addressed to Life Insurance Corporation, Zonal Manager, Hyderabad. Ex.A2 is the letter dt.09-03-2005 of Life Insurance Corporation, South Central Zonal Office, Saifabad, Hyderabad 500 063 addressed to the complainant.
Ex.A3 is the letter of certificate of death of complainants husband dt.31-07-2001 of Executive Officer, Gram Panchayat, Kodiganahalli-515 202, Anantapur District and Ex.A4 is the F.I.R. in Kannada version issued by Sub Inspector of Police, Gowribidanur, Karnataka State. There is no Postmortem Certificate on record even-though it is mentioned about it in the complaint by the complainant for the reasons best known to her.
6. In support of their case in the written version, the opposite parties filed 6 documents, which are marked as Ex.B1 to B6. Ex.B1 is the 20 years Money Back Policy bearing No.651351956 with profits + accrued benefit issued by the 1st opposite party in the name of complainants husband late V.S.N. Kumar, mentioning the name of nominee i.e. complainant herein.
Ex.B2 is the 30 years Endowment Assurance Policy with profits bearing No.651348141 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar, mentioning the name of the complainant his nominee. Ex.B3 is the 30 years Bima Kiran Policy (without profits) bearing No.652162206 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar, mentioning the name of the complainant as his nominee. Ex.B4 is another 28 years Endowment Policy with profits + accrued benefit bearing No.652164378 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar, mentioning the name of the complainant as his nominee. Ex.B5 is the letter dt.28-10-2002 issued to the complainant by the 1st opposite party intimating her to submit driving licence of the deceased. Ex.B6 is the letter dt.01-08-2003 issued to the 2nd opposite party by the complainant, to settle the accident benefit.
7. Both the counsels have not filed written arguments. We have heard the oral arguments at length of both the sides.
Both the parties have filed affidavit evidence in support of their case and also produced the documents, which are marked as exhibits.
8. On the basis of the pleadings and documentary evidence, the points that arise for determination are:-
1. Whether there is any deficiency in service on the part of the opposite parties 1 & 2 towards the complainant ?
2. Whether the opposite parties are guilty of fraud or willful act or default?
If it is so, is it punishable?
3. Whether the complainant is entitled for the reliefs as prayed for? If so, to what extent ?
4. To what relief ?
9. POINT NO.1(a):- The basic facts are not disputed and hence they are not reproduced here to avoid a repetition. Admittedly, the husband of the complainant herein, had taken 4 (four) Insurance Policies in different schemes as stated supra from the 1st opposite party.
With regard to the said policies, the complainant received claim amounts together with accrued bonus (death claim) from the 1st opposite party in different dates i.e. 15th November and 31st January, 2002 respectively. This fact is clear from the documents Ex.B1 to B4. To understand and appreciate the entire this consumer case on hand, it is essential to scrutinize the events that took place right from the date of death of the husband of the complainant i.e. 29-07-2001 till now. So, we have to find out where the fault lies. Justice delivery system by the Consumer Fora with utmost promptitude. Here is a classic case of delay defeats justice. We have noticed herein before that the issues involved addressed before us, veered around the question as to whether it was a sheer breach of contract by the complainants deceased husband or deficiency in service on the part of the opposite parties.
(b) To appreciate the controversy, it would be appropriate if we narrate all the circumstances of the case both on question of fact as well as question of law, in detail. For the accident of the deceased, there is no dispute, but non-production of his driving licence to the opposite parties to settle the claim, in that case what has to be done is the point for our consideration. The main question is whether the opposite parties are deficient in rendering service and wrongly disallowed insurance policies claim of the complainant.
Sri B.Mallikarjuna, learned counsel appearing for the complainant, before arguing a case filed a decision (unreported) alongwith a memo on 18-01-2008, which rendered by our State Commission on 31-11-2007, F.A.No.606 of 2007 against C.C.No.158 of 2006 on the file of this Forum.
The question involved in the case on hand, almost similar one disposed off by our State Commission recently. In order to appreciate the case, it can be looked into before adjudication. He stressed much about the factual aspects of the case during his arguments, how the complainant has been harassed by the officials of the opposite parties, even though she expressed her inability to produce driving licence of the deceased husband, which is lost in the accident still, the opposite parties are pressing for it. The learned counsel further argued that by way of requisition letter dt.01-08-2003 (Ex.B6) , the complainant expressed her inability to produce the same and concerned Police officials stated not traced out of the driving licence of her deceased husband, to the opposite parties (O.P.No.2). He further argued that on question of fact and law, the complainants case is very well established beyond any doubt. It is a fit case to be considered and the complainant is entitled all the reliefs with exemplary costs and punitive damages as well.
(d) On the other hand Sri T.Viswanath, the learned counsel appearing for the opposite parties vehemently argued before us, submitting that the deceased driven the motor cycle with rash and negligent manner and thereby caused the accident. He further argued that the facts of this consumer case are not identical one when compared to the unreported decision cited above by the complainants counsel. Hence, the decision quoted above, is not applicable to the facts of this Consumer case. He also further argued that the deceased husband of the complainant committed breach of law as per the terms and conditions of the policies. Because of that only, the officials of the opposite parties, delayed the matter, expecting the driving licence of complainants husband, to settle the claim.
Main thrust of argument advanced by the learned counsel for the opposite parties that even it is other-wise as stated in para 11 of written version that the accident benefit will be equivalent to the basic sum assured under policies, so the maximum accident benefit will be of Rs.2,10,000/- and not more than that.
(e) The essential facts need to be focused briefly in order to decide the present consumer case. No oral evidence was let in by the parties. The complainant was faced so far the difficulties not only from the date of death of her husband, but also right from the stage of admission of this consumer case. We have perused the record carefully. Ex.A2 is the letter dt.09-03-2005 of the opposite parties addressed to the complainant. it is as hereunder:-
We have received your representation/notice dt.01-03-2005 concerning the repudiation of claim(s) under above policy/ies by our Senior Divisional Manager, Cuddapah. In this connection, we would like to inform you that we are today calling for the records from Cuddapah Divisional Office for placing your representation before the Zonal Claims Review Committee for its consideration and decision. The decision of the Zonal Claims Review Committee would be communicated to you in due course of time. In case, you do not hear from us in 45 days from the date of receipt of this communication, you may be please get in touch with us by quoting the above reference No. & date.
Yours faithfully, Signed B.N. Murthy P.Zonal Manager Later on, there is no correspondence between the parties concerned for the reasons best known to them. Can it be treated as repudiation letter or any letter in course of time, the complainant is supposed to be expected from the concerned officials of the opposite parties about the fate of her claim. That is the existing position as on that date. How to determine the deficiency in service if at all if any or breach of the conditions of policy by the complainants husband, is the point for our determination?
(f) Before arriving at a decision of a case, it is also equally important to verify what are the objectives of LIC in total and the legal position applicable to the facts of the case.
Insurance, generally, is a contract of indemnity between the insured and the insurer, where the insurer promises to indemnify the insured against the loss, which may sustain due to a particular risk, which is covered under the policy. It is a contract of good faith and both the parties the insured and insurer have to disclose all the necessary facts within their knowledge to each other. The policies cover the risk of the death of the insured for a specified amount if the death occurs due to accident. No doubt, in every case, the terms and conditions of the policy would have to be looked into and only if the claim falls within the terms and conditions, the compensation would be paid. The terms and conditions of the policy will have to be perused and each case will have to be decided on merits and on facts and circumstances of the case. Though it is true that LIC vested with the monies of the public as a trustee, they have to safeguard and take all care and precaution before accepting a claim with a view to see that there is no unjust claim by persons. Still, at the same time, where we find that the claim appears to be a bonafide one and there is nothing to show that there is any tinge of doubt or suspicion, as far as possible the claim should be honoured. The entire purpose of LIC is to see that such persons (e.g. complainant) should get the assured amount in their difficult days and there is no harassment and delay in paying the amount to the insured or his nominee as the case may be or they are not required to spend in litigation. To avoid such litigation and its costs, officers of the LIC should keep in mind the observations of the Apex Court in the case of LIC of India Vs. Asha Goel (Smt) and another 2001 (2) SCC 160, wherein the Honble Supreme Court in para 16 has observed that In course of time, the corporation has grown in size and at present it is one of the largest public sector financial undertaking. The public in general and crores of policy-holders in particular, look forward to prompt and efficient service from the Corporation. Therefore, the approach of the Corporation in the matter of repudiation of the policy, admittedly issued by it, should be one of the extreme care and caution. It should not be dealt within a mechanical and routine manner. The umbrella of protection, which is sought by the complainant in this consumer case denied by delaying tactics adopted by the opposite parties.
(g) In para 6, decision of the Apex Court in the case of LIC of India Vs. Smt.Anuradha, II (2004) S.L.T. 1065, has been referred to wherein the Honble Supreme Court has observed that the LIC is a social welfare institution more-so, when life insurance has been nationalized and the service is not available in the private sector should think of devising a policy available in insurgency afflicted regions, which would take care of the assured and his family members in such areas.
(h) In this particular consumer case, the officers of the LIC took years together to finalise the whole issue that is yet to be seen the light of the day in future , if not now. It is crystal clear that the opposite parties had adopted so far a dogmatic, diffident and unhelpful approach in denying the rightful claim to the complainant herein. The approach of the opposite parties to say the least is wholly unwarranted under the circumstances of the case as against the very basis for which the policies of different schemes were launched to provide the relief or reliefs to the poor class of people in the event of unfortunate and sudden demise of the bread-winner of the family, stands nullified. We could not have come across better case of harassment of an insured at the hands of opposite parties than the case on hand. In the instant case, the insured has been made to run from pillar to post to receive lawful amounts in respect of her deceased husband, who met with an accident on 29-07-2001. Even after a lapse of 6 years, the insured is yet to get the fruits of her efforts.
The inordinate delay of opposite parties is writ large. Under these circumstances, who should be blamed and should be taken burden is the point for our determination and who are responsible for entire episode leading to this pitiable condition of the complainant herein and what type of treatment to be extended to the persons, who are guilty in a case of this nature is also another point to be resolved. Mental agony can not be measured in terms of money. Men may lie but not circumstances.
(i) With regard to question of law applicable to the facts and circumstances of the case, need to be focused in order to decide the present complaint. While the Forum/Court is exercising sovereign function of dispensation of justice, it is worthwhile to remember once that the proceedings before the consumer Fora are inquisitorial and not adversary. The orders are required to pass in accordance with justice and equity on the basis of the evidence available on record. Primarily, the Consumer Protection Act is for the protection of the consumers and matters are required to be decided by having a rationale approach and non-technical one that is the mandate of law. This is made clear in Indian Photographic Co. Ltd., Vs. H.D.Shourie 1999 (6) SCC, 428.
(a) Insurance Company is bound by contract once it has accepted premium -
2005(2) C.P.R.
586.
(b) Insurance Claim is to be settled within two months of submission of material documents, other-wise, insured is entitled to interest @ 9% on awarded claim amount 2005(2) C.P.R. 640.
In AIR 2001 SC 1213 - it was held that no court ought to base its decision on technicalities alone.
(d) Protection and preservation of the rights of an individual and his free access to justice are indispensable constituents of the march of a civilized society. Its emphasis is more in a democratic set up based on rule of law where safeguarding human rights and assuring dignity of an individual is the responsibility of the State. The rule of law in the case of A.K.Kraipak Vs. Union of India, A.I.R. 1970 SC, 150 said the Rule of law pervades over the entire field of administration and every organ of the State is regulated by Rule of law. The concept of Rule of law would lose its vitality, if the instrumentalities of the state are not charged with the duty of discharging their functions in a fair and just manner .
(e) The Supreme Court considered in its decision in the case of Lucknow Development Authority Vs. M.K.Gupta III 1993 C.P.J. 7 (SC) = (1994) 1 SCC 243 and held that the Government Officer may be held liable in the tort if in the discharge of his official duties acts maliciously or with oblique motive or malafide in nature.
(f) The Supreme Court in Ghaziabad Development Authority Vs. Union of India and another-II (2000) C.P.J. 1(SC) has held that inspite of there being no provision in the Consumer Protection Act for awarding interest and inspite of the fact that provision in the Consumer Protection Act, still the Consumer Fora can award reasonable interest on the grounds of equity, good conscience and justice. It has also held that reasonable interest means that the interest should be neither too low nor too high. As per the provisions of section 34 C.P.C. the civil courts are required to award interest at the rate on which the money is lent or borrowed from the Nationalized Banks.
(g) In the case of Ghaziabad Development Authority Vs. Balbirsingh-II 2004 C.P.J. 12 (SC) , wherein it was held that interest was awarded by the Consumer For a by way of compensation/damages. In that case, the court observed that while awarding interest, it must be shown that there is a relationship between the amount awarded and the default/unjustifiable delay/ harassment.
(h) Justice, equity and good conscience it is a part of Indian law and must be deemed to have continued by virtue of Article 372 of the Constitution of India.
(i) The principles of natural justice are found on fairness, a right to be heard and dealt with fairly.
(j) The duty of court is to confine itself to the question of legality. Its concern should be (a) whether a decision making authority exceeded its powers; (b) Committed an error of law (c) Committed a breach of the rules of natural justice;
(d) reached a decision, which no reasonable tribunal would have reached or (e) abused its powers.
If the decision making body is influenced by considerations, which ought not influence it; or fails to take into account, the court will interfere. Justice is an attribute of human conduct.
(k) As per Honble Justice R.P.Sethi in Arundahati Roy Case 2002(3) SCC 343 Para 1 If the judiciary is to perform its duties and functions effectively and true to the spirit with which they are sacredly entrusted the dignity and authority of the courts have to be respected and protected by all costs.
(l) In AIR 1971 SC 2439, it was held that the evidence is to be judged by test of human probabilities. In AIR 1987 SC 1328 Dalbir Singh Vs. State of Punjab:-
No hard and fast rule can be laid down about appreciation of evidence it is a question of fact and each case has to be decided on the facts as they stand in that particular case This principle is laid down as in no two cases the facts are identical and the court should always keep in mind this aspect. Further, the principle that the standard of a prudent man should be adopted would show that a judge should always proceed to appreciate evidence on commonsense basis and ordinary human probabilities subject of course to any rule of law, which prohibits the admissibility of such evidence.
(m) In AIR 1978 A.P. 442, it was held that court has to frame an issue of law as per Order 14, Rule 3, even plea note taken by the parties.
(n) The proper function of the court is to adjudicate particular controversies between specific disputants. In each case, the court must support its conclusions by reference to and reliance upon legal rules that comport adequately with the existing legal order. Even if there is no directly applicable legal rule, the court can not abdicate adjudication expressing helplessness. The court must fine-tune, fashion, adjust or construct an appropriate rule to fit the controversy before it.
(o) The complainant being a beneficiary of contract, would be a consumer, entitled to file a complaint (I) 2000 C.P.J. 356.
(p) The above mentioned unreported recent decision of our A.P.State Commission is an identical case to the facts of the case on hand.
On failure to produce driving licence, one can not draw an adverse inference that the deceased husband of the complainant did not have a valid licence. The widow (complainant herein) of the deceased placed on record best piece of evidence (Ex.A1) in her possession in order to show that the delay on the part of the opposite parties to settle the claim. It does not warrant an adverse inference against the claimant. The opposite parties did not discharge its burden. The opposite parties could have placed on record the independent evidence to show that the deceased did not hold the driving licence on the date of accident and accident occurred because of rash and negligent driving of the deceased. The opposite parties have failed to place on record relevant material in order to justify the delay in settling the claim of the complainant herein.
(q) The whole contentions of the complainant are fully supported by the decision of Maharashtra State Commission, which reported in III 2005 C.P.J. 576 in the case of LIC and another Vs. Ratan Kaur.
We have bestowed our best of consideration to the rival submissions of the parties. There should be material to hold the opposite parties were guilty of fraud or willful act or default. It is all abundantly clear and available as per the record.
We want to make this consumer case an exemplary case and eye-opener for every civic body, public authority, Government organization etc., who are engaged in the service for the public at large and also who are duty bound and have the obligations of maintaining service properly. Other-wise, they have to be dealt with strictly and punished for the offence of deficiency in service as defined under section 2(1)(g) of the Consumer Protection Act, 1986. We hold that there is an in ordinate delay, inexcusable and unpardonable attitude in settling the claim of the complainant for more than 6 years on the part of the opposite parties. So, there is ample and sufficient deficiency in service on the part of the opposite parties towards the complainant herein. This point is answered accordingly.
10. POINT NO.2 (a):- In view of the discussion in point No.1, it is crystal clear that the opposite parties have not at all responded at any stage for the calls of the complainant after Ex.A1 letter and settle her legitimate claim as per the terms and conditions of the policy. Simply, the opposite parties have communicated Ex.A2 letter dt.09-03-2005 to the complainant, stating the complainant; get in touch by quoting reference number and date with them. This sort of service rendered to the complainant.
There-after, there is no intimation from LIC, Zonal Office, Hyderabad, to the complainant about what happened to the decision of the claim, whether it is total repudiation of her claim or kept it pending disposal. The opposite parties left it open to the air. The complainant-widow, in the circumstances placed, what she can do, is it possible for her to litigate with mighty institution (LIC) by approaching courts against it for remedy. How long, she will wait for reply from LIC authorities to get her claim. When there is no option left open to her then she knocked the door of this Forum for justice. Again, she faced so many hurdles to get the complaint numbered on 17-07-2007. Initially, the complaint was filed against the opposite parties on 09-08-2005. One can visualize easily for what purpose, the deceased husband of the complainant, who was an attender in A.P.Residential School, obtain the policies (4) from the opposite parties, in case he died, his legal heir, wife will get death benefits to lead her life smoothly, that was the intention of the deceased. That has not been materialized because of the attitude of the officials of the opposite parties.
(b) Moreover, it is stated in the written version in para 11 of the opposite parties that maximum accident benefit will be of Rs.2,10,000/- . Even, that has not been disbursed by the opposite parties to the complainant. All these activities will definitely goes to show that the officials of LIC are not at all taken care to decide the claim. There is no repudiation of claim from them. What it amounts, is it not their bounden duty to inform the complainant. Poor complainant never anticipated all these delaying tactics adopted by the opposite parties. The 1st and 2nd opposite parties are just watching the entire fun from distance and left the matter to the Zonal Office, Hyderabad. The officials are not loosing anything by keeping quite and they are getting their salary every month and enjoying perks without any delay, whatsoever. They are not discharging their duties properly. The issue is not only of award of compensation but who should bear the burnt.
Now, the law is crystallized by passing the Insurance Regulatory and Development Authority (Protection of Policy-holders interest) Regulations, 2002. It gives step-by-step procedure and the maximum time limit does not exceed 56 months as per the procedure for settlement of claims. All the officers of LIC, perhaps, might have known about the existence of rules and regulations. Number of cases have been filed against LIC in Consumer Fora for their deficiency in service throughout India. It is continuing process, because of LIC officials, they are not discharging their duties and following the procedure. Officials of LIC are well aware of all the regulations that are in existence, today. LIC is a mighty institution. Officials never bothered about it, because they are not paying from their pocket to the policy-holders or their legal heirs, atlast in litigation. That is the attitude prevailing mostly among the officials of LIC. It should be prevented. There should be a change in their attitude. How, it is possible, is the question to be answered. If the officials are made responsible for their indifferent attitude, then they will perform their duties properly, without delay. The culture of window clearance appears to be totally dead.
So, the award of compensation for harassment by public authorities not only compensates the individual satisfies him personally, but helps in curing social evil. It may result in improving the work culture and help in changing the outlook.
(d) Here, in this consumer case, the officials of LIC, Branch Manager, Hindupur, Manager (Legal), Kadapa and Zonal Office (P.) Manager are solely responsible for delay in settling the claim and caused much loss to the complainant. Any authority, be it that of Government or any Department or civic agencies, who provide services like Road, Electricity, Water and their maintenance, traffic control through the source of public fund i.e. public exchequer contributed by the public by payment of various taxes or liable to compensate the citizen as to the loss, injury, mental agony and harassment suffered by them due to deficiencies on the part of these agencies as these services are provided against consideration. Liability of a provider of service under the provisions of the Consumer Protection Act is independent and in addition to and not in derogation of the provisions of any other law for the time being in force.
(e) There is absolutely willful act, default and fraud played by the opposite parties in non-settling the claim of the complainant. It is evident from record. After death of her husband, she received sum assured for the said policies in the month of November, 15th, 2001 and 31st January, 2002, since then she is waiting eagerly for accidental benefits. The erring officials of the opposite parties are answerable and awarded compensation amount to the complainant shall be recoverable from the salaries of Sri Udayashankar, Manager (Legal), Kadapa P.Zonal Manager, Sri B.N.Murthy, Hyderabad and Branch Manager, Hindupur (the then Manager at that relevant time i.e. in the year 2992).
(f) We make it clear that it would be open to the LIC to recover the compensation amount from the concerned officials, who sufficiently delayed without any reason, the legitimate claim of the complainant herein, as laid down the principle by the Apex Court in the case of Lucknow Development Authority Vs. M.K.Gupta III 1993 C.P.J. 7 (SC). The relevant portion is as under:
The authority empowered to function under a statute while exercising power discharges public duty; it has to act to observe general welfare in common good; in ordinary matters a common man, who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system; where it is found that exercise of discretion was malafide and the complainant is entitled to compensation for mental and physical harassment and that the officer can no more claim to be under any protection cover.
The court pertinently held:
It should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries. We referred above already the names of officials of LIC, who are responsible for entire episode and they should be punished according to ratio laid down in the above mentioned case.
This would be in consonance with the provisions of section 14(1)(d) and 14(1)(i) of the Consumer Protection Act, 1986, which are as under:-
14(1)(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party (provided that the District Forum shall have the power to grant punitive damages in such circumstances as it deems fit).
(i) To provide for adequate costs to parties for better administration/governance, the aforesaid law is required to be implemented so that the public authorities exercise, with due courtesy, and consideration, the powers for general welfare and common good.
(g) The affidavit of the Manager (Legal) (opposite party No.2) is not at all convincing. He twisted the facts and circumstances of the case, without honouring the claim. Affidavits can be used as evidence under order 19 C.P.C. for a limited purpose and can be used as mode of proof. Under section 30 C.P.C., the court is empowered to order any fact to be proved by affidavit.
(h) Jeevan Mitra Policies:- An Endowment Assurance Plan providing for twice or thrice the sum assured payable on the death of the life assured during the policy of the term.
At most, Insurance company can be given 4 months time for settlement. In this context, it would be appropriate to examine the relevant conditions of the policies.
Death of life assured:- To pay an additional sum equal to the sum assured under this policy, if the life assured shall sustain any bodily injury resulting solely and directly from the accident caused by outward, violent and visible means and such injury shall within 120 days of its occurrence solely, directly and independently of all other causes result in the death of the life assured.
However, such additional sum payable in respect of this policy, together with any such additional sums payable under other policies on the life of the life assured shall not exceed Rs.5,00,000/-.
(i) The deceased life assured never involved in any violent activities. He died in an accident. The opposite parties admitted the accident and paid sum assured but refused to pay additional sum equal to the sum assured under the policies, without any valid defences. The opposite parties kept quite and left it to the discretion of this Forum for consideration, without doing their duty properly and the matter kept it abeyance since January, 2002. Is it permissible under law? The claimant suffered without any relief whatsoever from the opposite parties, years-together and approached this Forum stating her mental agony for the willful activities and default of the opposite parties in settling her claim. So, the willful default is clearly made out from their attitude and unpardonable behaviour of the opposite parties that they were sitting silent over the matter inspite of repeated complaints made by the complainant. This is a peculiar case where the negligence of the opposite parties is rampant and it speaks for itself. We hold that the attitude of the opposite parties is unjustified. Hence, they are required to reimburse the complaint on the basis of loss. This point is answered accordingly.
11. POINT NO.3(a):-
The Consumer Law is all about protecting the interests of consumers. The entire purpose behind setting up the consumer courts was to provide quick, easy and affordable justice to common people, who could not other-wise enforce their rights before a court of law. The very purpose of this law is to provide inexpensive and easy access to justice to individual consumers, who can not afford to pay court fee or engage a lawyer to fight long and expensive legal battles in a civil court.
(b) A short question, which arises for our consideration is as to whether clause 10(b) (iv) of the alleged policy is applicable to the facts and circumstances of the present case. Having paid the sum assured, the opposite parties ought not to have withheld the accidental benefits relying on clause 10(b)(iv) of the above said polices, which states that accidental benefits can not be paid for any breach of law. In the present consumer case, the accident has already been established.
The Insurance Company (opposite parties) is in fact under obligation to prove the breach of policy.
In these set of circumstances, it is apparent that there is negligence in discharging of duties by the opposite parties herein by showing irrelevant reasons and deficiency in service for which the opposite parties are required to pay adequate compensation to the complainant herein. In our view, this would amount to unfair trade practice which is required to be controlled by the higher ups such delay happened in this case not only frustrates the purpose of insurance policy but the insured may lose confidence in administration of the opposite parties and it ruins the insured or his nominee. An accident may ruin an entire family of the insured. We are of the considered view that awarding a sum of Rs.30,000/- towards compensation to the complainant would meet the ends of justice.
(d) Section 14 of Consumer Protection Act, 1986 provides for adequate compensation would certainly mean that the complainant, who is deprived of the benefit, which she was entitled for years together, she should be adequately compensated. Measure for adequate compensation can be a lump-sum amount, may be a reasonable rate of interest by way of damages. We are satisfied that it is a fit case wherein we have to give the releifs to the complainant. All the exhibits marked on behalf of the complainant will clearly go to show that the claim of the complainant can be said to be totally justifiable under the circumstances of the case. So, there is clear cut deficiency in service on the part of the opposite parties. It is therefore, necessary that the compensation amount is payable to the complainant from the public fund immediately but to recover the same from those, who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries.
(e) In view of the points 1 & 2 as discussed above and taking all the aspects into consideration, we are of the opinion that it is just and reasonable to award a sum of Rs.5,00,000/- (Rupees five lakhs only), being the accident benefit amount covered under four Insurance Policies Nos.(1) 651348141 (2) 651351956 (3) 652162206 & (4) 652164378 payable from the date of original complaint i.e. 09-08-2005 and thereafter interest @ 9% p.a. should be calculated, to pay a sum of Rs.30,000/- (Rupees thirty thousand only) towards compensation for mental agony and harassment suffered by the complainant and Rs.5,000/- (Rupees five thousand only) towards costs of the complaint. We, therefore, find that the complainant is entitled to the amount of Rs.5,00,000/- (Rupees five lakhs only) with interest at 9% p.a. from 09-08-2005, to pay a sum of Rs.30,000/- (Rupees thirty thousand only) towards compensation for mental agony and harassment suffered by the complainant and Rs.5,000/-(Rupees five thousand only) towards costs of the complaint. This point is accordingly answered.
12. POINT NO.4:- In the result, the complaint is allowed in part directing the opposite parties 1 & 2 to pay a sum of Rs.5,00,000/- (Rupees five lakhs only) being the accident benefit amount covered under four Insurance Policies Nos. (1) 651348141 (2) 651351956 (3) 652162206 & (4) 652164378 with interest @ 9% p.a. from 09-08-2005 till the date of realization, to pay a sum of Rs.30,000/- (Rupees thirty thousand only) towards compensation for mental agony and harassment suffered by the complainant and to pay Rs.5,000/- (Rupees five thousand only) towards costs of the complaint to the complainant within six weeks from the date of receipt of copy of the order.
It is further directed that Life Insurance Corporation of India shall fix the responsibility of the officers by holding enquiry, who are responsible for causing harassment and mental agony to the complainant within a period of 45 days from the date of receipt of copy of the order is served on it.
The amount of compensation of Rs.30,000/-
(Rupees thirty thousand only) awarded by this Forum for mental agony and harassment suffered by the complainant, shall be recovered from such officers proportionately from their salary. Compliance of this order shall be reported to this Forum within one month after expiry of the period granted for determining the responsibility. This point is answered accordingly.
A copy of this order, as per the statutory requirements, be forwarded to the parties, free of charge. Copy is sent to all leading National Dailies, Press for apprising the insurance companies and its policy-holders about their rights and obligations.
Dictated to the Steno, transcribed by him, corrected and pronounced by us in open Forum on 29th day of January, 2008.
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MEMBER PRESIDENT- INCHARGE DISTRICT CONSUMER FORUM, DISTRICT CONSUMERS FORUM, ANANTAPUR ANANTAPUR APPENDIX OF EVIDENCE WITNESSESS EXAMINED FOR COMPLAINANT :
NIL OPPOSITE PARTIES: NIL EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT Ex.A1 - Letter of requisition dt.01-03-2005 by the complainant addressed to Life Insurance Corporation, Zonal Manager, Hyderabad.
Ex.A2 - Letter dt.09-03-2005 of Life Insurance Corporation, South Central Zonal Office, Saifabad, Hyderabad 500 063 addressed to the complainant.
Ex.A3 - Letter of certificate of death of complainants husband dt.31-07-2001 of Executive Officer, Gram Panchayat, Kodiganahalli-515 202, Anantapur District.
Ex.A4 - F.I.R. in Kannada version issued by Sub Inspector of Police, Gowribida-
nur, Karnataka State.
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EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTIES Ex.B1 - Money Back Policy bearing No.651351956 issued by the 1st opposite party in the name of late V.S.N. Kumar.
Ex.B2- Endowment Assurance Policy bearing No.651348141 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar.
Ex.B3 - Bima Kiran Policy bearing No.652162206 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar.
Ex.B4 - Endowment Policy bearing No.652164378 issued by the 1st opposite party in favour of the deceased V.S.N.Kumar.
Ex.B5 - Letter dt.28-10-2002 issued to the complainant by the 1st opposite party.
Ex.B6 - Letter dt.01-08-2003 issued to the 2nd opposite party by the complainant.
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MEMBER PRESIDENT - INCHARGE DISTRICT CONSUMER FORUM, DISTRICT CONSUMERS FORUM, ANANTAPUR ANANTAPUR Typed by JPNN