Life Insurance Corporation of India vs BAIDHAR PATRA

BY order dated 5.10.2002 passed in C.D. Case No. 71 of 2001 the Kendrapara District Consumer Disputes Redressal Forum has directed the appellant to pay a sum of Rs. 1,10,000 as the sum assured against LIC policy bearing No. 581989682 together with interest thereon at the rate of 12 per cent per annum within two months of the date of communication of the order, with costs at the rate of Rs. 100 per day. Being aggrieved by the said order, Officers of the LIC have filed this appeal.

THE respondent No. 1 is the complainant. He filed the complaint alleging deficiency in service on the part of the appellants in not settling his claim. His case is that he is the husband of the life assured deceased Ranjulata Das who was serving in M/s. Kalinga Packers, New Industrial Estate, Jagatpur, Cuttack. She obtained LIC policy bearing No. 581982823 for a sum of Rs. 40,000, its date of maturity being 28.7.2013. While the said policy was in force respondent No. 2 who happened to be a LIC agent persuaded the deceased to take a second LIC policy in Bima Kiran scheme bearing No. 581989682 for a assured sum of Rs. 1,10,000. The policy-holder expired on 23.1.2000. The respondent No. 1 being a nominee in respect of two policies mentioned above lodged claim. The appellants paid the sum assured in respect of the first policy but illegally repudiated the claim in respect of second policy i.e., 581989682.

The common case of the appellants is that the second policy was based on incorrect information supplied by the deceased inasmuch as although she was working in a Private Company, in the proposal form for assurance it was stated that she was working as a peon in Government Civil Supplies Office for 3 years. This information is false which misled the Corporation to accept the policy under plan No. 3 Bima Kiran for which sum assured was Rs. 1,10,000. Later it was detected that the deceased was not serving under the State Government. The claim made in respect of the second policy is repudiated because it was based on incorrect and false statement regarding her status as serving under the Government.

RESPONDENT No. 2 who was the LIC agent did not contest the proceedings. The District Forum has held that the LIC agent is internal part of the LIC and, therefore, any information furnished by him is binding upon the corporation and it cannot absolve itself from its liability to pay the sum assured.

WE have perused the impugned order and the relevant documents on record. WE have heard Counsel for the appellants. The contesting respondent No. 1 did not appear on the date of hearing although the matter was adjourned on three occasions to enable him to be present in the Court. The short question that arises for consideration is as to whether the claim can be repudiated if it is found that it was based on incorrect or false information mentioned in the proposal form. The case of the respondent No. 1 is that the LIC agent got the form filled up and although the informations mentioned therein are not correct, the Corporation is bound by such action. It is an undisputed fact that the disputed policy was taken under plan 3 i.e., Bima Kiran. The said policy is not applicable to the employees of a Private Firm. The LIC agent might have filled in the proposal form by furnishing wrong or false informations but he is not a servant under the Corporation. There is no master-servant relationship between the Corporation and the LIC agent. Therefore, for the wrong and illegal action of the LIC agent the Corporation cannot be held liable. Respondent No. 1 claimed that the disputed policy was a valid one. Therefore, it was for him to establish that her deceased wife was serving under the State Civil Supplies Department. There is no iota of evidence to hold that she was a Government servant serving under the Civil Supplies Department. For the reasons aforesaid, the impugned order cannot be supported and the same is liable to be set aside.

IN the result, the impugned order passed by the District Forum is set aside. The complaint filed by the respondent No. 1 stands rejected. This appeal is allowed. No costs. Appeal allowed.