GHANSHYAM LAL KABRS vs DIRECTOR, STATE INSURANCE AND P.F.DEPt.

THE complainant before the District Forum has filed this appeal under Section 15 of the Consumer Protection Act, 1985 ("the Act" herein) against the order dt : 29-5-1990 passed by the District Forum, Ajmer in Complaint Case No. 316/90. It is not necessary to recount the facts leading to this appeal. Suffice it to state that the complainant appellant retired on the post of Sr. Commercial Taxation Officer w.e.f. August 31,1988. He submitted an application for insurance claim before the opposite party in the beginning of August, 1988. It was accompanied by a verified service statement. It is said that order for pension was received on 27-9-1988. THE date of maturity for the insurance amount was 1-3-1988. Despite receipt of the order for pension, the insurance amount was not paid. Part payment of the insurance amount Rs. 17.802/- was paid to the complainant on 26-5-1989. THE payable amount Rs. 7,693/- was not paid. THE complainant, therefore, filed the complaint against the opposite party for a direction against it for the payment of Rs. 7,693/-as detailed at page 2 of the complaint and also for interest on Rs. 17,802/- @ 12% until the date of payment i.e. 26-5-1989 and the award of interest on Rs. 7,628/- from the date of maturity until payment. With the complaint Photostat copy of the order sanctioning payment from 1-9-1988, statement issued by the opposite party and certificate dt : 11-1-1990 were submitted. THE opposite party in its version of the case stated that opposite party has issued letter dt : 20-3-1990 for payment of Rs. 7,770/- to the complainant and information to this effect was also sent. THE photo stat copy of the letter in respect of Rs. 7,770/- dt : 20-3-1990 was submitted with the version of the case. THE District Forum by its order dt : 29-5-1990 passed the impugned order. It directed the opposite party to pay interest on Rs. 7,770/-from 1-3-1988 (the date of maturity) 12% per annum. Two months time was allowed by it to the opposite party for payment of the amount of interest. It, however, declined to grant interest on Rs. 17,802/ which were paid on 20-6-1989. For disallowing the interest on Rs. 17,802/ - the District Forum has only mentioned that it did not agree with the contention of the complainant.

WE heard the appellant in person and Mr. Durga Prasad Vaishya, Assistant Director on behalf of the respondent and considered the order under appeal and the record. It was pressed by the appellant that the District Forum seriously erred in not allowing interest on Rs. 17,802/- until the date of payment i.e. 26-5-1989 @ 12% per annum, for, there are no good reasons for not allowing it as the opposite party delayed its payment and for no fault of his, he was deprived of the use of the money until it was paid. It may be stated that the District Forum has ordered payment of interest on the balance of the amount Rs. 7,770/- from the date of maturity i.e. 1-3-1988 @ 12% per annum. The order for the payment of the amount of Rs. 7,770/- was issued on 20-3-1990. Before us the appellant submitted in writing that he submitted insurance claim before the Dy. Director of the opposite party in July 1988 and he retired from service w.e.f. 31-8-1988. This writing was shown to Mr. Vaishya who appeared for the respondent. A perusal of the complaint shows that the application with verified service statement was submitted by the complainant in the beginning of August, 1988 to the opposite party. The date of maturity is 1-3-1988. It is not in dispute that three months before the date of maturity the complainant should have moved the authority concerned which he did not do. He retired on 31-8-1988 and submitted the application and the verified service statement in August, 1988. Mr. Vaishya, Assistant Director, submitted that usually three months time is taken for settling the insurance claim. Rs. 17,802/-were paid to the complainant on 26-5-1989. The claim of the complainant should have been settled by the end of October, 1988. The amount of Rs. 17,802/-was paid on 26-5-1989. There was delay on the part of the opposite party in not paying the amount within a period of three months from the date of the submission of the application and the verified service statement for the settlement of the insurance claim and in the absence of any good reason there was no justification whatsoever for making the payment of Rs. 17,802/-as late as on 26-5-1989. The District Forum, as stated above, has merely mentioned that it did not agree with the contention of the complainant. It may be recalled that for the balance of the amount of Rs. 7,770/- an order for payment was made on 20-3-1990. The District Forum itself has awarded interest on Rs. 7,770/- @ 12% per annum from the date of maturity i.e. 1-3-1988. It has been held while affirming the order of the State Commission in Umedilal Agarwal v. United India Insurance Co. Ltd. I (1991) CPJ 3 (NC) (First Appeal Nos. 3&4/1989 decided on 28-7-1989 by the National Commission) that whenever there is a default or negligence in regard to the settlement of insurance claim that will constitute a deficiency in the service on the part of the Insurance Company and it will be perfectly open to the concerned consumer to approach the redressal forum under the Act seeking appropriate relief. As held by us, on account of the fault of the opposite party the complainant was deprived of the use of the amount of Rs. 17,802/- which was paid on 26-5-1989 and, therefore, he is entitled to interest by way of compensation on this amount. WE hold that opposite party-respondent shall pay interest on Rs. 17,802/-(part of the insurance claim) to the complainant from 1-11-1988 to 26-5-1989 the date of payment of the amount @12% per annum in addition to the interest that has been awarded to the complainant on the amount of Rs. 7,770/-. It is necessary to mention that the opposite party-respondent remained satisfied with the order of the District Forum by which interest on Rs. 7,770/- @ 12% from the date of maturity i.e. 1-3-1988 until the order (dt. 20-3-1990) for the payment of the aforesaid order was passed. The result is that the appeal is partly allowed and the order dt. 29-5-1990 passed by the District Forum Ajmer in Complaint Case No. 316/90 is modified. The opposite party respondent is directed to pay interest on Rs. 17,802/-from 1-11-1988 to 26-5-1989(2) 12% per annum. Appeal Partly allowed.