Consumer Protection:
Deficiency of service – Appellant-consumer submitted a proposal to Life Insurance Corporation (LIC) under one of its plans – Alongwith proposal, paid Rs.1,75,000/- –The policy not issued nor money refunded – Complaint seeking refund of money with interest and also compensation of Rs.5,00,000/- – District Forum directed refund of the amount and in addition compensation of Rs.4,25,000/- – State Commission confirmed the order – National Commission maintained the order of refund alongwith 12% interest, but refused the compensation – Review petition dismissed – On appeal, held: In the facts of case, deficiency of service was clearly establlished – LIC held the money of the consumer wrongfully for five years – Its omission to refund has deprieved the consumer of the use of his money – Hence, mere direction of interest will not provide sufficient redress – To meet the ends of justice, in addition to the amount directed to be paid by National Commission, payment of further amount of Rs.2,00,000/- is directed towards all the claims. Disposing of the appeals, the Court
HELD: 1. It appears from the letter of the Branch Manager of LIC (dated 15th April, 2009) that he had already received a decision to complete the proposal with extra premium. Admittedly, even the extra premium of Rs.10,000/- was paid by the appellant as part of his payment of Rs.1,75,000/-. The remaining formalities that were required to be observed were to be fulfilled by the Development Officer and not by the appellant. LIC retained the moneys of the appellant for a period of nearly five years. No effort was made to refund the moneys. In this view of the matter, a deficiency of service was clearly established. [Paras 18, 19][213D-E]
2. The plan in question was not exclusively an insurance based product. By being linked to the equity market, it had an investment element. LIC held on to the moneys of the appellant wrongfully for five years. Its omission to refund has deprived the appellant of the use of his moneys. Hence, a mere direction for the payment of interest on the principal sum will not provide sufficient redress. The ends of justice would be met, if the direction, which has been issued by the National Commission, is modified and an additional amount of Rs.2,00,000/- is directed to be paid towards all the claims, demands and outstandings, including litigation expenses, in addition to what has been ordered by National Commission. [Paras 20, 21][213-G-H; 214-A-B, D]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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