BEFORE THE DISTRICT FOUM: KURNOOL
Sri K.V.H. Prasad, B.A., LL.B., President
And
Smt C. Preethi, M.A., LL.B., Member
Sri R.Ramachandra Reddy, B.Com., LL.B., Member
Wednesday the 31st day of August, 2005
C.D NO. 71/2005
Smt A.Parvathi,
W/o. Lingamaiah,
R/o. Madanathapuram (V),
Maddikera (P & M),
Kurnool Dist. . . . Complainant.
-Vs-
1. The Divisional Manager,
LIC of India,
Nellore.
2. The Branch Manager,
LIC of India,
Giddalur Branch,
Prakasam Dist. . . . Opposite parties
This complaint coming on 29.08.2005 for arguments in the presence Sri A. Ramasubba Reddy, Advocate for complainant, Sri P. Sivaprasada Reddy, Advocate for opposite party No.1 and opposite party No.2 set exparte and stood over for consideration till this day the Forum made the following.
O R D E R
(As per Smt C.Preethi, Hon’ble Lady Member)
1. This CD complaint of the complainant is filed under section 12 of C.P. Act, 1986, seeking a direction on the opposite parties to pay assured sum of Rs. 49,000/- with bonus along with 24% interest per annum from the date of death, Rs.10,000/- as compensation, costs of the complaint and any other relief or reliefs which the complainant is remaining entitled in the circumstances of the case.
2. The brief facts of the complaint are that Late Anumaraju Lingamaiah, husband of the complainant has insured his life with opposite parties 1 and 2 for Rs.49,000/- vide policy bearing No. 841635711 by paying yearly premium of Rs. 3,439/- and nominated the complainant as his nominee. The said policy holder on 25.9.2003 died due to vomitings and motions. The death intimation was given to opposite party No.2 and the complainant submitted claim form and complied all the required formalities. But the opposite parties did not settle the claim inspite of several approaches by the complainant, hence, constrained the complainant to file this complaint for redressal.
3. In substantiation of her case the complainant relied on the following documents Viz (1) letter dt nil of the complainant addressed to the opposite party No.2 and (2) memo issued by opposite parties, besides to the sworn affidavit of the complainant in-reiteration of her complaint averments and the above documents are marked as Ex A.1 and A.2 for its appreciation in this case and caused interrogatories to opposite party No.1.
4. In pursuance to notice of this Forum as to this case of the complainant, the opposite party No.1 made their appearance through their standing counsel and contested the case by filling written version. The opposite party No.2 was made exparte and remained absent through out the case proceedings.
5. The written version of opposite party No.1 denies the complaint averments as no maintainable either in law or on facts. But it admits that the complainant’s deceased husband has taken a policy bearing No. 841635711 for assured sum of Rs. 49,000/-. On the death of the policy holder on 25.9.2003 due to vomiting and motions, the complainant put forth a claim. As the death aroused within one year nine months investigation was conducted which revealed that the deceased was suffering from TB and has taken treatment in Governments General Hospital, Kurnool. As the deceased suppressed the above material information of his health from the opposite parties prior to taking the policy, therefore, the claim of the was not accepted by the opposite parties and the contract became null and void and seeks for the dismissal of complaint with costs.
6. In support of its case the opposite party No.1 filed sworn affidavit in reiteration of its written version and did not file any documents.
7. Hence, the point for consideration is to what relief the complainant is remaining entitled alleging deficiency of service on part of opposite parties:-
8. It is the case of the complainant that she is entitled to the assured amount and bonus of her deceased husband’s policy, who nominated her as his nominee. The opposite parties after the complaint is filed before this Forum settled the claim after a lapse of one year 10 months for Rs. 54,684/- (i.e sum assured of Rs. 49,000/-, + vested bonus of Rs. 2,842/- Interim Bonus of Rs. 2,842/-. Totaling Rs.54,684/-). The complainant alleges that for the delayed period of one year 10 months she is entitled to interest at the rate 24% per annum on the said amount and compensation also. But the learned counsel for opposite parties argued that as the complainant received sum assured with vested and interim bonus, she is not entitled to get any thing more than that.
9. The only point involved in this case is whether after receiving assured amount with vested and interim bonus the complainant is remaining entitled to interest on the said amount or not. To substantiate her contentions the complainant relied on the decisions of National Commission between Mau Aima Sahkarikatai Milla Ltd Vs United India Insurance Co. Ltd., and others reported in 1993 III CPR Pg 197, where in it was held that in ordinate delay in payment of insurance amount under a policy amounts to deficiency in service and the insurance company is liable to pay interest for the delayed period.
10. Now the point for consideration is delay is settling the claim of the complainant, whether the delay in such a context would defeat the very purpose of the insurance. It appears that the explicit condition of the Insurance is that the insured’s claim must be settled with utmost expedition, either by way of acceptance or repudiating the same, what ever be the merit of the insurance claim, it is certainly not open to the insurer to hit smugly over the same and hang to sword of Damoclies inordinately for years, it would not be difficult for them either to settle or repudiate an Insurance claim within a reasonable period of three months. But unless it is established other wise for cogent reasons, a delay beyond three months to either settle or repudiate would in essence be a deficiency of service undertaken to be rendered by the opposite parties atleast within the Consumer jurisdiction as per the decision of State Consumer Disputes Redressal Commission, Haryana at Chandigarh between Smt Surrinder Kuul Vs The Oriental Insurance Co. Ltd reported in CPR 1993 (III) Pg 438.
11. The conclude, from the above discussions and following the aforementioned decisions, the reasonable time from within which the Insurance Company must settle or repudiate the claims would normally be a period of three months. Any delay beyond that would perse attract odium of deficiency of service. There is no doubt that this delay of one year 10 months for payment of assured amount with bonus by the opposite parties to the complainant must have caused serious financial difficulties to the complainant and there is no merit in the contention of the opposite parties that there is no provision to pay interest on payment of assured amount with vested and interim bonus. The liability of the opposite parties to pay interest on the delayed payment under the insurance policy arises because of deficiency in service due to its negligence for taking one year 10 months for settling the claim that too after the complainant approached Forum for redressal. Hence, in the circumstances discussed above there is clear deficiency of service on part of opposite parties. The complainant is certainly remaining entitled to the interest on the assured amount. As per the policy bond issued to the policy holder, the nominee is entitled to receive assured amount + vested bonus on the demise of the policy holder. But the opposite parties paid to the complainant assured amount, vested bonus and Interim Bonus and there is no reason averred by the opposite parties for payment of Interim Bonus to the complainant and hence the said Interim Bonus shall be deducted from the interest on the Assured amount + Vested Bonus.
12. In the result, the complaint is allowed directing the opposite parties to pay 12% interest on Rs. 51,842/-(i.e assured amount of Rs. 49,000/-+ Vested Bonus of Rs. 2,842/-) from the date of accrued to the date of payment adjusting from their the interim bonus of Rs. 2,842/- paid to the complainant, as interest is allowed. The opposite parties shall also pay an amount of Rs. 3,000/- as compensation for the mental agony suffered by the complainant in belated payment, as the opposite parties has driven the complainant to the Forum for redressal of the grievance an amount of Rs. 1,000/- as cost of this litigation. The opposite parties 1&2 jointly and severally are to comply the above said award within a month of receipt of this order. In default the award amount shall be payable by the opposite parties to the complainant which a further interest of 12 % per annum till realization.
Dictation to the Stenographer, Typed to the dictation corrected by us, pronounced in the Open Court this the 31st day of August, 2005.
Sd/-
PRESIDENT
Sd/- Sd/-
MEMBER MEMBER
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant For the opposite parties
-Nil- -Nil-
List of Exhibits Marked for the complainant:-
Ex A.1 Letter addressed to the opposite party No.2 of the complainant.
Ex A.2 Memo issued by opposite parties.
List of Exhibits Marked for the opposite parties:-
-Nil-
Sd/-
PRESIDENT
Sd/- Sd/-
MEMBER MEMBER
Copy to:-
1. Sri A.Ramasubba Reddy, Advocate, Kurnool for complainant.
2. Sri P.Sivaprasada Reddy, Advocate, Kurnool for opposite party No.1
2. The Branch Manager, LIC of India, Giddalur Branch, Prakasam Dist.
Copy was made ready on:
Copy was dispatched on:
Copy was delivered to parties:
