Chairman, Life Insurance Corporation of India vs TAMIL NADU CONSUMER PROTECTION COUNCIL

THIS appeal is directed against the order dated 30.9.1999 in O.P. No. 141/1999 on the file of the District Consumer Disputes Redressal Forum, Tiruchirapalli.

THE appellants are the opposite parties while the respondents are the complainants. Short facts may be related in order to understand the crux of the issue arising for consideration in this action.

One R. Rajalakshmi is the daughter of one V. Rajamani (complainant). The said Rajalakshmi took an Endowment Policy with profit non-medical (with accident benefit) salary savings scheme with the Life Insurance Corporation of India (for short, "LIC of India") of which the 1st opposite party is the Chairman while the 2nd opposite party is the Senior Divisional Manager, Thanjavur. The sum insured under the policy is Rs. 25,000/-. The instalment premium payable per month is Rs. 107/-. The premium has to be paid on or before 20th of every month. The policy was for a period of 20 years. The nominee under the policy is the 2nd complainant. The policy had come into force on and from 22.2.1995. The date of maturity of the policy was 20.2.2015. The last payment to be made was on 20.1.2015.

THE policy so taken was preceded by a proposal dated 22.2.1995. In the proposal submitted by the insured R. Rajalakshmi, she has answered under various sub-divisions of the question No. 11 relatable to personal history in the negative. Question 11(c) runs as under : "Qn. No. 11(c) : Have you remained absent from place of work on grounds of health during the last 3 years ? THE answer given by her was ''No''."

Within a few months after the taking of the policy, the assured R. Rajalakshmi died in a fire accident on 8.5.1995. THE nominee/complainant/father made a claim of the amount due under the policy. THE LIC of India repudiated the claim on the ground that the assured suppressed certain material facts in the proposal. However, the Insurance Company was prepared to grant an ex-gratia payment of Rs. 20,000/- for the loss of life of the assured in the fire accident. In such a backdrop and setting, the complainant/nominee knocked at the doors of the Forum below alleging deficiency in service on the part of the opposite parties and for certain reliefs as prayed for in the complaint.

THE opposite parties in pith and substance contended that the assured R. Rajalakshmi suppressed certain vital factors affecting her health in the proposal she had submitted before ever the policy of insurance she had taken. THErefore, the claim by the nominee was repudiated. In such a circumstance, it cannot at all be stated that the repudiation so made by the LIC of India would tantamount to deficiency in service on their part. THE complaint as such is liable to be dismissed. The Forum below after taking into consideration the materials placed on record, recorded a finding that there was deficiency in service on the part of the opposite parties and consequently directed them to pay to the complainant/nominee a sum of Rs. 50,000/- the amount due under the policy with interest thereon @ 12% p.a. on and from 8.5.1995 the date of death of the assured. This apart, the Forum below also directed the opposite parties to pay to the complainant a sum of Rs. 1,000/- by way of compensation for the deficiency in service on their part besides awarding a cost in a sum of Rs. 300/- to each of the respondents/complainants. Aggrieved by the order as above, the opposite parties resorted to the present action by engaging a Counsel of their choice namely, learned Counsel M/s. R.S. Ramanathan.

WE heard the arguments of learned Counsel M/s. Uma Ramanathan representing learned Counsel M/s. R.S. Ramanathan appearing for the appellants/opposite parties and arguments of Mr. Pushpavanam, Secretary of Tamil Nadu Consumer Protection Council, Tiruchi.

FROM the pith and submission of learned Counsel appearing for the appellants and the Secretary of Tamil Nadu Consumer Protection Council, Tiruchi, the one and only question that crops up for consideration is as to whether the order of the Forum below is sustainable in law, on the facts and in the circumstances of the case. Ex. B2 is the proposal dated 22.2.1995 submitted by the assured to the LIC of India. In the proposal, she has answered Question No. 11(c) which we have extracted above in the negative. The LIC of India, of course, marked an employer''s certificate under Ex. B3. A perusal of the said certificate reveals that the assured R. Rajalakshmi was working as a Steno-typist in the District Family Welfare Office, Pudukkottai. While she was so serving, she availed of earned leave on medical certificates for different spells during the years 1993 and 1994 for a total period of 57 days [10+11+36] either on account of gastritis or on account of peptic ulcer. It is the contention of the Insurance Corporation that this sort of a suppression of vital material facts would entitle the Corporation to repudiate the claim made by the nominee/complainant. We have to take into consideration at this context, whether the malady or the disease from which she was suffering for which she had taken earned leave on medical certificate had any sort of a nexus or correlation or connection with regard to the cause of death of the deceased/insured. The deceased/insured admittedly died of a fire accident as evidenced by Ex. B4 the report submitted by the Revenue Divisional Officer, Pudukkottai to the Collector in his office reference D. Dis. No. 5338/95 A4 dated 6.8.1996. Such being the case, the repudiation as made by the LIC of India cannot at all be stated to be sustainable in law. In this view of the matter, the order of the Forum below in recording a finding that there was deficiency in service on the part of the opposite parties in repudiating the claim cannot at all be stated to be not sustainable in law.

The Forum below after all directed the opposite parties to pay the amount of Rs. 50,000/- the amount due under the policy with interest @ 12% p.a. on and from 8.5.1995 the date of her death. Such a direction cannot at all be found fault with inasmuch as the Apex Court of this country laid down the dictum that the Insurance Company like the LIC of India can very well be directed to pay interest at a rate not exceeding beyond 12%.

THE Forum below of course granted compensation quantified in a sum of Rs. 1,000/- in addition to the grant of interest as stated above. THE superior Courts of jurisdiction laid down the dictum that either one of these two things, either payment of compensation or interest on the sum due alone is capable of being granted and not both. In this view of the matter, the grant of compensation quantified in a sum of Rs. 1,000/- as granted by the Forum below is ordered to be deleted. The Forum below granted costs quantified in a sum of Rs. 300/- each to the respondents 1 and 2 which we feel is rather reasonable not calling for interference and we confirm that part of the award.

IN fine, except to the extent of modification of the order of the Forum below as indicated above, the appeal shall stand dismissed in other respects. We however make no order as to costs on the facts and in the circumstances of the case. We however make it crystal clear that the order of the Forum below as modified by us is required to be complied with by the opposite parties within a month from the date of receipt of the order or otherwise it would be perfectly open to the complainants to invoke the jurisdiction under Section 27 of the Consumer Protection Act, 1986. Appeal dismissed.