NEW DELHI: The apex consumer commission, NCDRC, has imposed a cost olf Rs 2.5 lakh LIC, and has directed it to pay the amount over and above the insured sum of Rs 1 lakh with 9% annual interest to a father and his mentally challenged daughter. The Commission has come down heavily on the LIC for its adamant “mechanical decision-making without application of mind” while refusing to pay the assured amount.
Anil Laxman Matade of Sangli in Maharashtra had taken Jeevan Aadhaar policy of LIC for his daughter with Down syndrome; suffering from congenital mental disabilities. The LIC had refused to pay the assured amount to Matade even years after he made full payment of premiums while citing conditions, which specified that only 20% of the amount would be released after his death and the rest in installments in 15 years.
Holding the public sector insurance company responsible for “intransigent mechanical decision-making” and for going for litigation as a matter of routine, a two-member bench comprising Dr S M Kantikar and Dinesh Singh advised its chief executive to inculcate systemic improvements in future for “apt logical decision-making” in such cases of congenital mental disabilities in which the dependent cannot think and act for herself or himself.
The order passed on Friday said, “Needless to add, in case of failure or omission in timely compliance, the District Forum shall undertake execution, for ‘enforcement’ under section 25(3) and for ‘penalties’ under section 27 of the Consumer Protection Act 1986.”
Both the district consumer forum and Maharashtra State Consumer Commission had ordered in favour of Matade, but the LIC challenged the order in the NCDRC. The age of Matade’s daughter is 34 and she has 75% mental disability.
The bench observed it was not amending the general terms and conditions of the policy, which specified that the sum assured is to be paid to the handicapped dependents/ nominees on the death of the insured. “However, the policy and its terms and conditions cannot be implemented in an arbitrary and mechanical manner without application of mind and without having regard to the facts and specificities of a particular case,” the order said.
It said the plight of a child and of her father and mother, and especially in the case of a girl-child having Down’s Syndrome, had to be understood and kept in view by the LIC with the due application of mind at the competent level while deciding Matade’s request to release sum assured immediately so that he may make adequate arrangements for his while he is still alive.
“The LIC failed to appreciate that a victim of Down’s Syndrome would be in no position to apply her brain and to act for herself so as to make appropriate arrangements for her well-being on her own, when her father is no more, and that she would be in no position to pursue her claim with the LIC, far less agitate it in the consumer protection fora/ civil courts,” the order said.


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