Life Insurance Corporation of India vs BIRESH KUMAR SINHA

THIS appeal has been preferred by the O.P. - appellant (L.I.C.) against the order dated 25th September, 1996 passed by District Forum, Bhagalpur in Complaint Case No. 106/1995 directing the appellant to pay a sum of Rs. 10,000/- with 18 per cent interest to the complainant besides Rs. 500/- as litigation cost.

THE brief fact of the case is that complainant''s wife, Sushila Ambastha, had an insurance policy bearing No. 510380362 which commenced from 28.11.1990 for a sum of Rs. 10,000/-. THE mode of payment of the premium was quarterly. THE life assured deposited eleven quarterly premiums till 2.12.1992. She died on 13.12.1992. THE complainant submitted death claim in prescribed form and other queries of the LIC were also complied with by the complainant. THE complainant also approached the LIC office several times but did not get the sum assured. THEreafter he had filed the case before the District Forum. In pursuance of the notice LIC appeared and filed show cause. Its main contention is that it repudiated the claim of the complainant on the basis of an enquiry conducted by the LIC. The life assured submitted the proposal form on 26.12.1990 in which she declared herself to be a school teacher of C.M.S. Primary School at Bhagalpur and claimed that she was working there since 27.8.1982. The LIC came to know about the death of life assured on 6.1.1993 and after investigation, it was revealed that she was appointed as a teacher by the managing committee of the school on 27.8.1982 and subsequently her appointment was approved by the District Superintendent of Education and she got salary from 27.8.1982 to 31.8.1982 but, thereafter the payment of salary was stopped by the employer. Therefore, her averment in the proposal form that she was still in the service of the Government School was wrong and this fact was enough for repudiation of her claim. The LIC sent a letter dated 20.9.1995 repudiating the claim and hence there was no deficiency in service on the part of the LIC.

The District Forum after hearing the parties and considering the facts has held that complainant''s wife was found in service at the time of filling of the proposal. It is different matter that she was not getting salary which is usual feature these days in the Government Department. Therefore, she has not filled up the form with false fact. The District Forum held that the ground taken by the LIC for repudiating the claim is not justified. Other facts being admitted the District Forum allowed the claim of the complainant. The learned appellant''s lawyer submitted that the grounds for repudiating the claim was justified. Her affidavit stating that she was still in the Government service was incorrect. The life assured died within three years, therefore, her claim was investigated and thereafter it was repudiated by the LIC. It was further submitted that rate of interest allowed by the District Forum at the rate of 18 per cent is excessive.

FROM the perusal of the impugned order it is clear that complainant''s wife was found to be in service of the school and the letter written by the District Education Officer support this fact. It is different matter that she was not getting salary regularly. We are of the view that the ground taken by the LIC for repudiating the claim of the complainant is not tenable. The District Forum has rightly held that complainant was entitled to the amount of the insurance along with interest thereupon because the LIC has made delay in the payment of the claim. However, the rate of interest at the rate of 18 per cent appears to be excessive. It is reduced to 9 per cent per annum from 1.9.1995 till the date of payment. With this modification in the impugned order the appeal fails. Appeal disposed of.