M/s LIC of India V/S Mr. M. Guravaiah - Consumer Court Case

Andhra Pradesh

StateCommission

FA/536/06

Mr. M. Guravaiah - Complainant(s)

Versus

M/s LIC of India - Opp.Party(s)

Mr. M. V. Subramanyam

17 Sep 2009

ORDER

First Appeal No. FA/536/06

(Arisen out of Order Dated null in Case No. of District Visakhapatnam-II)

1. Mr. M. Guravaiah

H.No.7-2-31/1 Dwaraka Nagar Khammam

BEFORE:

PRESENT:

ORDER

BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION :HYDERABAD

F.A.No.536/2006 against C.D.No.172/2003, Dist. Forum, Khammam.

Between:

Mamidi Guravaiah,

S/o.Saravaiah,

R/o.H.No.7-2-31/1,

Dwaraka Nagar, Khammam. …Appellant/

Complainant

And

Life Insurance Corporation of India,

Divisional Office, P.B.No.17,

Jeevan Prakash,

Balasamudram, Hanumakonda,

Warangal – 506 001. … Respondent/

Opp.party

Counsel for the Appellant : Mr.M.Kari Basaiah

Counsel for the Respondent : M/s. M.Venkataramana Reddy -

CORAM:SMT. M.SHREESHA, HON’BLE MEMBER

AND

SRI K.SATYANAND, HON’BLE MEMBER

THURSDAY, THE SEVENTEENTH DAY OF SEPTEMEBER,

TWO THOUSAND NINE.

Oral Order (Per Smt M.Shreesha, Hon’ble Member)

***

Aggrieved by the order in C.D.No.172/2003 on the file of District Forum, Khammam, the complainant preferred this appeal.

The brief facts as set out in the complaint are that the complainant took insurance policy from the opposite party on 9.8.91 and also took a loan of Rs.45,000/- on that policy by mortgaging his house documents. The complainant submits that he paid fire insurance, premiums and interest regularly to the opposite party and discharged the entire loan amount. On account of his ill health the complainant surrendered his policy to the opposite party but on 20.10.2003 opposite party wrote a letter stating that the complainant is entitled to Rs.5000/- only towards the said policy. The complainant submits that he is entitled to Rs.82,714/- and that since he took loan of Rs.45,000/- he is entitled to Rs.37,714/- towards bonus and fire insurance. Hence the complaint seeking direction to the opposite party to pay the balance amount of Rs.37,714/- together with interest, compensation and costs.

Opposite party filed written statement admitting that the complainant taken loan of Rs.45,000/- by mortgaging his house documents and that he assigned an endowment policy as collateral security for the housing loan availed by him. This policy, issued for a sum of Rs.45,000/- commenced on 9.8.91 with premiums payable for a period of 15 years, the maturity date of the policy being 9.8.2006. The complainant approached opposite party on 20.10.2003 for paying his housing loan dues and he was informed on the same day that an amount of Rs.50,290/- including interest and principal amount was outstanding towards his housing loan dues. He was informed that he can opt to repay his housing loan dues by adjusting the surrender amount of Rs.55,294/- or availing policy loan of Rs.45,000/- or repayment by cash. In case of surrender, the balance amount payable to him will be Rs.5,004/-. In case he availed policy loan , the balance amount payable to him will be Rs.5,290/- and the complainant will be entitled to the sum assured and bonus only on the date of maturity i.e. 9.8.2006 and not before that date. In case of surrender of policy before maturity he will receive a lesser amount calculated as under :

(Paid up value + accrued bonus) x surrender value factor

(36,000/- + 35,550/-) x 77280 = Rs.55,294/- .

The District Forum based on the evidence adduced and pleadings put forward dismissed the complaint.

Aggrieved by the said order the complainant preferred this appeal.

The learned counsel for the appellant/complainant submitted that the District Forum ought to have directed the opposite party to refund the amount as claimed by the complainant and also to return the original documents of his house property.

The facts not in dispute are that the complainant had availed housing loan on 6.9.1991 from the opposite party for an amount of Rs.45,000/- vide loan account no.74060316 and he assigned an endowment policy as collateral security for the housing loan availed him. This policy was issued for a sum assured of Rs.45,000/- and commenced on 9.8.1991 with premiums payable for a period of 15 years. We observe from the record that the maturity date of policy is 9.8.2006. When the complainant approached opposite party on 20.10.2003 for payment of housing loan dues he was informed that in case of surrender, the balance amount payable to him will be Rs.Rs.5,004/- and in case he availed policy loan at 10.5% interest rate, the balance amount payable by him will be Rs.5,290/- and he will be entitled to the sum assured and bonus only on the date of maturity i.e. 9.8.2006. It is the case of the opposite party that in case of surrender of policy before the maturity date, he will receive only paid up value and accrued bonus X surrender value factor i.e. Rs.36,000/- + Rs.35,550/- x 77280 = Rs.55,294/-. It is the case of the opposite party that the complainant is not entitled for any amount towards bonus i.e. Rs.37,714/-. It is pertinent to note that the maturity date of policy is 9.8.2006 and since the maturity date is over during the pendency of this appeal we direct the complainant to approach the opposite party for payment of the amounts under the policy. Counsel for opposite party submitted across the bench that these amounts have been paid but did not file any proof of payment and the counsel for the complainant submitted that he is not aware of any such payments.

Keeping in view the facts and circumstances of the case, this appeal is allowed and the order of the District Forum is set side directing the complainant to approach the opposite party for payments, if not already paid. Since the maturity date has expired during pendency of the appeal, the opposite party shall pay these amounts to the complainant as per the terms and conditions of policy together with costs of Rs.2000/-.