Life Insurance Corporation of India vs ABHISHEK GHOSH DASTIDAR

THIS appeal, under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 15.3.2002 by District Consumer Disputes Redressal Forum, Durg (hereinafter called the District Forum for short) in Case No. 419/01, awarding compensation to the complainant/respondent herein.

UNDISPUTEDLY the complainant/respondent had obtained a short term policy for a period of 5 years. The premium was to be paid in 5 annual instalments of Rs. 10,432/- each. The first premium was payable on 15.11.1995 and the last premium was to be paid on 15.11.1999. It is not in dispute that the premiums payable from 15.11.1995 to 15.11.1998 were duly paid and that a cheque for the last premium was also issued by the complainants mother as his guardian for the payment of the last premium falling due for payment on 15.11.1999. However, since the account number in the said cheque was wrongly mentioned, the cheque was returned back and the premium amount could not be collected through the drawee Bank. Appellant insurer undisputedly paid Rs. 40,000/- to the complainant insured as paidup value of the policy. The complainant on inquiry was informed at the time of maturity i.e., on 15.11.2000 that the said premium has not been deposited as the cheque was dishonoured. The complainant averred that the amount of policy claimed by him be directed to be paid, with interest thereon.

The complaint was resisted by the appellant/insurer. It was averred that the paid up value of Rs. 40,000/- was paid to the complainant by the appellant/insurer, and that it was not liable to pay any further amount.

THE learned District Forum in the impugned order held that there was deficiency in service on the part of appellant/insurer, inasmuch as the appellant/insurer did not bring it to the notice of the complainant insured that the cheque was dishonoured. Accordingly, the learned District Forum awarded interest on the amount of premium paid by the complainant insured towards the said policy. The learned Counsel for the insurer appellant submitted that the cheque of the last premium was dishonoured, hence amount thereof was not paid to the appellant/insurer. Hence the appellant/insurer was only liable for payment of the paidup value of the policy, and as such it has already paid the amount of Rs. 40,000/- to the complainant insured. It was further urged that the learned District Forum erred in awarding the interest on the instalments paid by the complainant insured, which amounts to contract de novo between the parties.

HOWEVER, as against the above, the learned Counsel for the respondent insured submitted that, had the complainant been intimated about the non-collection of the amount of cheque, he would have arranged the payment thereof. It was further submitted that there was bona fide attempt on the part of the complainant insured to pay the last premium, but due to inadvertence the account number on the cheque was wrongly mentioned. It was, therefore, submitted that the complainant was entitled to receive interest on the payment of premium as awarded. The impugned order is, therefore, just and proper. The question that deserves consideration in the foregoing circumstances is as to whether the complainant insurer is entitled for compensation and if so, to what extent? It is clear that the complainant had tried to pay the premium by cheque. However, unfortunately the account number on the cheque appears to have been wrongly mentioned which resulted in it being dishonoured and non-collection of the amount of premium. However, it may be noticed that though the cheque was dishonoured before the date of payment of last premium i.e., 15.11.1999, yet the appellant insurer did not care to intimate about it to the insured and kept silent for a period of one year till maturity of the policy, and till the complainant insured laid claim for the maturity amount, with the insurer appellant. Had the appellant insurer intimated the complainant that his cheque was dishonoured, there was all the possibility that the complainant would have rectified his mistake and issued fresh cheque or would have taken action to correct the account number in the cheque already issued. Thus, though the complainant inadvertently committed a mistake in issuing the cheque, bearing wrong account number, yet the fault on the part of the insurer appellant was much graver and it has to bear the blame of its omission of not intimating the complainant that the cheque was dishonoured.

THUS there was deficiency in service on the part of appellant insurer. The learned District Forum rightly held so. The finding of the District Forum in the above regard is affirmed.

NOW the next question that arises for consideration is as to what should be the quantum of compensation that deserves to be awarded. It is clear that the complainant insured would get nothing more than what he would have got had the last premium amount been collected. It is stated by the learned Counsel for the appellant insurer, that the maturity value of the policy was Rs. 65,600/-. since the last premium amount of Rs. 10,432/- remained unpaid, the said amount deserves to be deducted from the maturity value. It is also clear that had the amount of the last premium been received by the appellant insurer, he would have utilised it for its usual business. However, appellant could not do so due to non-collection of amount of premium. It is also clear that there was some initial default on the part of complainant insured in mentioning wrong account number in the cheque. In the foregoing circumstances, in our opinion besides the paidup value of Rs. 40,000/- which undisputedly has already been disbursed to the complainant insured, a further sum of Rs. 11,000/- as compensation deserves to be awarded in his favour. Besides above, the appellant shall also be liable to pay to the complainant respondent the cost of this litigation amounting to Rs. 1,000/- (one thousand only). The amount as above shall be payable by the appellant insurer within one month from the date of receipt of certified copy of this order, failing which the appellant insurer shall also be liable to pay interest @ 12% p.a. on the above amount till payment. The impugned order stands modified as above and the appeal stands disposed of accordingly. Appeal disposed of.