The Respondent/complainant filed a complaint before the District Forum, Chennai (South) alleging deficiency against the opposite party and praying to pay the matured amount of Rs.43,100/- with 24% interest, to pay a sum of Rs.50,000/- as compensation towards mental harassment, to pay a sum of Rs.10,000/- towards cost of this proceedings. The District Forum allowed the complaint. Against the said order, this appeal is preferred by opposite party, praying to set aside the order of the District Forum, Chennai (South) dt.3.10.2007 in CC.No.575/2005.
After hearing the arguments of both parties, finally on 2.2.2011, this Commission made the following order :
A.K.ANNAMALAI, PRESIDING MEMBER JUDICIAL
1. The opposite party is the appellant.
2. Respondent/Complainant filed complaint against the opposite party for deficiency of service in settling LIC policy claim and claiming payment of Rs.43,100/- as maturity value of policy with 24% interest and Rs.50,000/- as compensation for mental agony and appellant Rs.10,000/- towards cost. The opposite party before the District forum repudiated the allegations of the complainant stating that the claim amount was already settled as pre paid surrender value and the claim form was wrongly sent to the complainant by over sight and the claim of the complainant is not valid and there is no deficiency of service.
3. After enquiry on bothside the District Forum allowed the complaint and directed the opposite party to pay Rs.43,100/- as surrender value of the policy with 12% from the date of surrender and addition to that to pay Rs.20,000/- as compensation for causing monetary loss and mental agony without costs.
4. Aggrieved by the order of the District Forum the appellant has come forward with this appeal and in the grounds of appeal it is stated that mere receipt of legal notice and acknowledging the same by the opposite party could not entitled the claimant to receive the policy value and award of Rs.20,000/- as compensation is exorbitant without any basis and without following the procedure adopted for settling the claim by LIC will not possible and the complainant failed to produce the original policy and not executed indemnity bond and thereby the District Forum erroneously allowed the complaint.
5. When the appeal is taken up for arguments the respondent/complainant remained absent and after hearing the appellants arguments this order is being passed on merits.
6. Whether the complainants claim of policy amount and non payment of the same by the opposite party would amount to deficiency of service ?
Point : While considering bothsides arguments, averments and contentions, it is not in dispute that the complainant taken a policy for Rs.1,00,000/- from the opposite party for the term of 25 years for which a premium of Rs.4181/- p.a. payable from 15.9.1979 and even though the opposite party disputed the annual premium amount. But as per Exhibit A1, a claim form was sent for the maturity amount for Rs.43,100/-. According to the policy, the maturity date is only on 15.9.2004 and according to the complainant he has not paid the entire premium after paying the same for few years and lost his policy and is entitled for the surrender value of Rs.43,100/- for which as per the claim form Exhibit A1 he has sent Exhibit A2 an undertaking for non pledging of policy with any other agency and a letter Exhibit A3 requesting for early settlement of claim as per the claim form Exhibit A1 in which he has stated that he had already submitted indemnity bond around October 10, 2004 and the letter was sent by RPAD for which proof of postal receipt also found as Xerox copy on the face of Exhibit A3. But even after sending the legal notice Exhibit A9 for non payment as Exhibit a4 which was acknowledged by the opposite party on 4.5.2005 as per Exhibit B5, no reply was sent and the claim was not settled. According to the written version and proof affidavit filed by the opposite party which was stating that the policy premium was paid on 10.4.1985 for 3/85 and afterwards no premium was paid and total premium is Rs.1064/- which is not mentioned either it is for quarterly or for half yearly or annually. Further it was stated the policy was surrendered prayer to 1.3.93 though the date of maturity falls on 15.9.04. Even though such claim is made by the opposite party/appellant no proof was filed to prove the same by the opposite party. When the complainant proved, that he had sent the indemnity bond in and around October 2004. As per the letter Exhibit A3 and even after sending the legal notice, which was acknowledged by Exhibit A5, the opposite party did not care to reply or to trace out the papers relating to the earlier settlement of the policy in 1993 and in that case if really it was surrendered the original policy should have been with the opposite party and the payment details like disbursement of cheque for payment and other bank details could have been filed by the opposite party to disprove the complainants case. When the claim form Exhibit A1 was sent by mentioning specific amount of Rs.43,100/- as claim payment which shows that the claim was not for entire policy amount of Rs.1,00,000/- and as pleaded by the complainant there could be a possibility of lesser value of the policy by non payment of premium after particular period. It is the bounden duty of the opposite party. A Public Sector Organization to maintain proper records and by simply stating that due to oversight the claim form was wrongly sent to the insured cannot be considered as a proper and valid reason for refusing to settle the claim of the policy holder without any other valid grounds and in the circumstances on perusal of the District Forums order and the documents relied upon by the complainant we find that the District Forum has considered bothsides materials and thereby came to the proper conclusion by finding deficiency of service by the opposite party against the complainant and thereby directed the opposite party to settle the claim amount of Rs.43,100/- with interest. As far as compensation is concerned, the District Forum awarded a sum of Rs.20,000/- and for which no proper reason adduced. Since there is a lapse on the part of complainant also for not surrendering the original policy and failure to intimate the loss of the same to the authorities i.e. Life Insurance Corporation of India which has to dispose the claim amount, the compensation awarded is some what excess in nature and we are inclined to reduce the same.
6. In the result, this Commission directs the opposite party/appellant to pay a sum of Rs.43,100/- with 12% interest from the date of surrender till realization after obtaining fresh indemnity bond from the complainant, if the indemnity bond already sent by the complainant is not available, 2) to pay a sum of Rs.5,000/- as compensation for causing monetary loss and mental agony to the complainant. 3) The complainant is directed to furnish indemnity bond within one month from the date of this order and thereafter within one month the opposite party to settle the claim as directed above.
There will be no order as to cost in this appeal.