Delhi consumer forum directs LIC to pay Rs 5L and compensation for repudiating claim

Rejecting LIC's claim that a policy-holder lied about his health condition before purchasing an insurance, the district consumer forum here has directed the firm to pay Rs 5 lakh along with Rs 20,000 as compensation to his widow.

The New Delhi District Consumer Redressal Forum asked the Life Insurance Corporation of India to pay the claim amount to Rohini resident Ritu Sharma, the widow of Praveen Kumar Sharma, along with an interest of nine per cent on the amount counted since May 5, 2008, the date when a complaint was filed.

The commission held LIC guilty of deficiency in services.

"We are of the view that repudiation by the Opposite P (LIC) is unjustified and arbitrarily which amounts to deficiency in services on the part of OP. Therefore, we hold OP guilty of deficiency in services," said a bench of forum's President Arun Kumar Arya and members Nipur Chandna and H M Vyas.

The forum asked LIC to pay Rs 20,000 as compensation for "harassment, mental agony and pain" suffered by Sharma and to pay her Rs 10,000 towards litigation expenses.

Praveen had purchased the policy on August 30, 1998.

According to Sharma's complaint, her husband was admitted to Jaipur Golden Hospital in Rohini on October 14, 1998 for treatment. He died at the hospital the next year.

LIC repudiated Sharma's claim on March 3, 2001, stating that the policy-holder mis-stated facts regarding his health and the company also alleged that he was suffering from GI Bleed Ascites Alcoholic Cirrhosis before taking the policy.

The complaint alleged that Sharma's husband was medically fit and did not suffer from any type of sickness at the time of taking the life insurance policy.

The commission also said that LIC has failed to place on record any evidence to substantiate its case.