Heard learned counsel for petitioner – Corporation.  Notice issued against the respondent has not been received back undelivered or otherwise.  Since more than a month is over, notice will be deemed to have been served on respondent. 

Following death of policy holder, claims were lodged by nominees with the insurance company for accepting claim in terms of benefits covered by the policy.  The claims were resisted by insurance company holding suppression of material fact at the time of securing policy. Eventually a complaint was filed with District Forum by respondent which was resisted by insurance company reiterating the grounds of repudiation.  The District Forum, however, having accepted claim directed petitioner – Corporation to make payment of Rs.51,000/- along with interest @ 9% p.a.  The compensation of Rs.2000/- too was awarded.  In appeal that preferred with State Commission though State Commission did not find petitioner – Corporation liable to indemnify the respondent in terms of policy, yet saddled petitioner – corporation to pay ex-gratia payment of Rs.20,000/- to respondent.  The aggrieved petitioner – Corporation is in revision.

Ex-gratia payments are  acts of grace if damage caused is outside the scope of policy terms.  That apart, as has been noticed by State Commission that ex-gratia payments are considered when there is no legal liability to honour  claim of claimant and such payments are made by authorities obviously to mitigate sufferings of the parties by way of equitable relief.  The very import of word ‘ex-gratia’ recognizes payments made by authority out of kindness or grace without recognizing liability or legal obligation. That apart, a party may be made answerable to meet grievance of the victim and can be saddled with liability to make payment for loss or injury caused only on evidence of deficiency in service or negligence under the well recognized parameters under the Consumer Protection Act.  Learned counsel appearing for petitioner has brought to our notice a decision of three Member Bench of this Commission in RP/858/2009 in which Commission has held that Consumer fora by very construction of the Act have not been empowered to direct party to grant ex-gratia payment.  This case is fully covered by ratio of decision cited above.  We accordingly, while setting aside order of State Commission, allow the revision petition, there being no liability with the petitioner – Corporation to make ex-gratia payment.  However, it is open to the petitioner – Corporation to consider the issue for making such payment if the circumstances so warrant in their prudence.  There will be no order as to cost.