State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India, vs Paras Ram Sethi on 28 May, 2007
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 28-05-2007 First Appeal No. 359/2006 (Arising out of Order dated 01-12-2005 passed by the District Forum-II, Qutub Institutional Area, New Delhi, in Complaint Case No.792/2004) Life Insurance Corporation of India, Divisional Office-I, Jeevan Prakash, 25, K.G. Marg, New Delhi 110001. . . . Appellant Through Mr. N.P. Nidaria, Manager, (Legal & HPF). Versus Shri Paras Ram Sethi, 230-Hauz Rani, Malviya Nagar, New Delhi. . . . Respondent CORAM: Justice J.D. Kapoor, President Mr. Mahesh Chandra, Member
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor (Oral)
1. Respondent took a life insurance policy from the appellant on yearly premium of Rs. 1342/50, the risk date being 01-07-1980.
He also took a loan of Rs. 4150/- on 06-02-1986 on the security of his policy. Inspite of having received letters from the appellant for yearly premium prior to the due date and also demand of loan amount or the interest due thereon, the respondent did not make any payment. However, insurance policy matured and became due for payment on 01-07-2002. From the maturity amount of Rs. 61,300/-the appellant deducted Rs. 4,150/- and interest of Rs. 13,439/-.
2. Feeling aggrieved the respondent filed the instant complaint before the District Forum for the refund of the same as it was not permissible under the law.
3. Vide impugned order dated 01-12-2005 the District Forum allowed the complaint with the directions to the appellant to refund Rs. 9,297/- and also pay Rs. 3,000/- as compensation and cost of proceedings, by holding that the appellant company was not entitled to recover from the respondent double the sum of the loan and adjust an amount of Rs. 13,439/- as interest against the maturity amount. Feeling aggrieved the appellant has preferred this appeal.
4. A perusal of the impugned order shows that the District Forum relied upon the decision of the Delhi High Court in the case - Life Insurance Corporation of India Vs Shyam Surat Singh - AIR 1981 Delhi Times 291, wherein it was held that Damdupat referred to in Section 30 of the Punjab Relief of Indebtedness Act, 1934, which is applicable in Delhi also is applicable to the loan taken from the Life Insurance Corporation of India. In the above referred case, the LIC had filed a suit for recovery of the loan granted to the defendant at the rate of 7.5% with half yearly rest against a mortgage deed.
5. On the contrary, the Ld. Counsel for the appellant has relied upon Section 7 of the Punjab Relief of Indebtedness Act, 1934 which defines the word Debtor as a person who owes a debt and:-
i) earns his livelihood mainly by agriculture, and is either a landowner, or tenant of agricultural land, or a servant of a landowner or of a tenant of agricultural land, or
ii) earns his livelihood as a village menial paid in cash or kind for work connected with agriculture, or
iii) Whose total assets do not exceed five thousand rupees.
6. According the Ld. Counsel the respondent does not fall in the category of debtor as defined in Section 7 of the said Act and, therefore, Rule-30 applies to the appellant Corporation if it files a suit for recovery.
7. Even if we accept the contention of the counsel for the appellant, we still are not convinced and is beyond our comprehension as to what was the reason for not allowing the respondent to continue making the payment of premium and allowed the policy to be matured without insisting upon him to pay interest on the loan advanced to him and to recover interest by allowing it intentionally to accumulate for years together till the time of maturity is neither justified nor conscionable.
8. Aforesaid reasons persuade us to dismiss the appeal being devoid of merits. Impugned order shall be complied with within one month from the date of this order.
9. Appeal is disposed of in above terms.
10. Copy of order as per statutory requirement be forwarded to the parties and to the concerned District Forum and thereafter the file be consigned to record.
11. FDR/Bank Guarantee, if any, be released under proper receipt.
(Justice J.D. Kapoor) President (Mahesh Chandra) Member HK