Consumer panel asks LIC to pay Rs 85K to Ranga Reddy resident for not paying annuity on canceled policy

Hyderabad: District Consumer Redressal Commission, Ranga Reddy has directed Life Insurance Corporation of India (LIC) to pay Rs 75,000 with 8 percent interest and Rs 10,000 to a complainant.

Case details

Lakkaniki Sudha Bai, a resident of Jillelaguda, Meerpet, Ranga Reddy district, paid Rs 15 lakh under two policies towards PMVVY (Pradhan Mantri Vayo Vandana Yojana). In the first policy, she paid Rs 3 lakh with a yearly annuity on December 10, 2020. On January 20, 2021, she paid Rs 12 lakh with a yearly annuity for the second policy to the LIC branch in Kadapa of Andhra Pradesh.

LIC has not given a discount of Rs 50,000 to Sudha Bai despite her eligibility

This PMVVY is a pension scheme announced by the Government of India exclusively for senior citizens of 60 years and above which was available from May 4, 201. It provides assured returns under the policy during the term of the policy which is for 10 years from the date of taking the policy. Though Sudha Bai is eligible for a discount, the LIC has not given a discount of Rs 50,000 and collected a total of Rs 15 lakh from her.

Under the guise that the system has not taken the policy on the life of the complainant for Rs 15 lakh, the LIC had considered policies only for Rs 3 lakh and Rs 12 lakh separately. The LIC informed Sudha Bai and accordingly, he gave a letter on June 18, 2021, for the cancellation of the entire policy and refund of the premium paid. Sudha Bai handed over the original policy, canceled cheque, and details of his account/HDFC bank for crediting the amount under the canceled policy on August 13, 2021.

LIC refunds the entire amount, but Sudha Bai seeks an annuity on the canceled policy

The LIC has refunded the entire amount and credited into his bank account. However, Sudha Bai filed a complaint with the Consumer Redressal Commission seeking the annuity on the canceled policy from December 10, 2021, to March 3, 2022 costs, expenses, and compensation for suffering and mental agony. The LIC filed its written version admitting the issuance of two policies in favor of Sudha Bai but contends that due to technical problems, the details have not been entered into the system.

The system has not taken the policy on the life of the complainant for Rs 15 lakh and considered only Rs 3 lakh and Rs 12 lakh separately. The LIC branch office in Kadapa communicated the same to Sudha Bai on March 18, 2021, stating that the matter of correcting the technical error has been referred to the software development center since such corrections and manual intervention are not allowed in the interest of the safety and security of the policy data of the corporation.

LIC agreed to the settlement but didn't appear before the Commission

After filing this complaint, the LIC also issued a letter on December 12, 2022, offering to pay Rs 75,000 including all the pending claims, dues, and other items, and if Sudha Bai agrees. A joint memo signed by both parties was filed before this commission and both parties were ready to refer the matter to Lok-Adalat to be held on 16 December 2022 for recording the compromise. Accordingly, the case was also registered for settlement in the next sitting that is on 20 December 2022, but neither the LIC nor its counsel were present before this commission.

After going through the facts and circumstances, the court said that the LIC had admitted to settling the matter by paying Rs 75,000 to Sudha Bai to put an end to the litigation, but did not turn up for the best reasons known to them. Hence the court ruled in favor of Sudha Bai. The court said he is entitled to receive Rs 75,000 towards settlement along with compensation (with 8 percent interest from the date of filing of this complaint till its realization) and Rs 10,000 towards the cost of the complaint to meet the ends of Justice.