The Delhi Consumer forum pulled up LIC and its officials for “recklessly” misplacing a premium cheque, which in turn caused a policy to lapse. Another reason for pulling up LIC was defending their mistake before the forum.

Background:

Mr. Manoj Kumar had approached the District Consumer Disputes Redressal Forum complaining that when he went to LIC to deposit the premium for 2009 of the policy which was purchased in the name of his minor daughter in May 2008 and was to mature in May 2017, he got to know about the policy that had lapsed because of non-payment of the last premium. But in fact, he was paying all the premiums very regularly.

Following this he approached the LIC and showed them the receipt by which he had paid the premium for 2008.

However, the officials ignored the matter and refused to listen to his complaint. He also mentioned, very importantly that even a legal notice of March 19, 2010 did not bring out any favourable response from the LIC.

Verdict:

The Forum presided by Mr. Rakesh Kapoor instructed Life Insurance Corporation of India to pay compensation of Rs 60,000 to Kumar for mental suffering that he underwent due to the company’s reckless ignorance and directed it to revive the policy of Rs 1 lakh.

The forum in its judgment said – “This case not only exemplifies a complete lack of empathy towards its customers at the hand of the officials of the LIC, it also shows a complete break down of supervision by its officers.”

Further, while expressing its disappointment, “We are pained to note that for the lapse of the officers of the LIC, a poor consumer had to fight litigation in this forum, which LIC stoutly defended rather than owning up to its mistakes,” it said.

About the refusal by the LIC in admitting its own mistake, the forum held, “This was not expected of an organisation which boasts of due credibility and serving the largest number of consumers in the country.”

This judgment of the forum clearly questions the credibility of the officials in company who have been serving their customers since decades. It also serves as a big blow to the age-old insurance company of India, the LIC.

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Picture from here.