U.P. State Commission Holds LIC Liable For Wrongful Repudiation Based On Insufficient Evidence

Brief Facts:

The Complainant's husband held two policies with the Life Insurance Corporation of India (“LIC”). The Complainant was a nominee of her husband. During the subsistence of the policy, the Complainant's husband passed away due to an accident. The Complainant intimidated LIC and submitted a claim. However, it was repudiated based on the fact that the deceased was never involved in an accident, instead, his dead body was thrown on the road after his death to make it look like an accident. Further, LIC investigated and discovered that the deceased was not a man of good character. He never resided in his main residence and never got married, in the first place. He was just staying with the Complainant for the past few years.

Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Azamgarh (“District Commission”). The District Commission accepted the arguments put forth by LIC, based on lack of evidence regarding a road accident in the post-mortem report. Hence, the complaint was dismissed.

Dissatisfied by the order of the District Commission, the Complainant filed an appeal in the State Consumer Disputes Redressal Commission, Uttar Pradesh (“State Commission”).

Observations of the Commission:

The State Commission observed that the postmortem report mentioned neck injuries as the cause of death. However, even an accident could be the reason why the deceased developed injuries on the neck. Further, the State Commission rejected the deceased's character as a reason for repudiation. LIC was basing its contention on the statements made by the deceased's brother and the local Gram Pradhan that the deceased was a man of bad character. The State Commission held that these allegations were just 'imaginary'. LIC failed to present any evidence regarding any past offences/crimes committed by the deceased.

Lastly, the State Commission held that the status of the Complainant as the deceased's 'wife' was irrelevant because irrespectively, she was named as the nominee in the policies. Therefore, the repudiation was held to be wrongful.

Conclusively, the appeal was allowed and LIC was directed to reimburse the amount under both policies, totalling Rs. 2,50,000/- and pay Rs. 15,000/- compensation to the Complainant.