LIFE INSURANCE CORPORATION OF INDIA Vs. SHIV MURTI SINGH
LAWS(NCD)-2020-7-25
NCDRC
Decided on July 09,2020

LIFE INSURANCE CORPORATION OF INDIA Appellant
VERSUS
Shiv Murti Singh Respondents


Referred Judgements :-

LIC OF INDIA VS. INSURE POLICY PLUS SERVICES PVT. LTD [REFERRED TO]


JUDGEMENT

C. Viswanath, Member - (1.) The present Revision Petition is filed by the Petitioner under Section 21(b) of the Consumer Protection Act, 1986 against Order passed by the U.P. State Consumer Disputes Redressal Commission (hereinafter referred to as the "State Commission") in Appeal No.591/2013 dated 14.12.2017.
(2.) The Complainant/Respondent No.1 obtained a LIC New Insurance Investment 2002 Policy No.291967097 on 10.07.2002 for a sum of Rs.80,000/- maturing on 10.07.2007 from the Petitioner, Insurance Company/Opposite Party No.1. Mr. Rajender Singh S/o Ram Sundar Singh R/o Village Haider Thana Gaur, District Basti took a loan of Rs.2 lakhs from Respondent No.2/Opposite Party No.2, Punjab National Bank, Lakshmanpur, Basti on 28.07.2003. Respondent No.1/Complainant stood guarantor to the loan by assigning his insurance policy to Respondent No.2 Bank as a surety, vide assignment dated 14.07.2003. The case of the Complainant was that Respondent No.2/Bank did not resort to any coercive measures against the debtor for default in payment of the loan, nor was any attempt made to recover the loan amount from the second guarantor of the debtor, who was a government servant. Conspiring with Respondent No.1/ Insurance Company, Respondent No.2 Bank received the payment of the Complainant's bond and deposited the same in the account of the debtor Rajender Singh. Respondent No.1 did not seek any permission from the Complainant nor inform him that the said bond was paid to Respondent No.2/Bank. Alleging this to be deficiency in service on the part of the Insurance Corporation, Complainant filed a Consumer Complaint before the District Forum with the following prayer: - "(a) The Respondent No.1 be directed to pay amount of the policy No.291967097 with all the benefits and from the date of 10.07.2017 till today an interest on the said amount be also paid to the complainant. (b) The Respondent No.2 be directed to keep safe the policy bond of the complainant and for recovery of its outstanding take an appropriate action. (c) The complainant be also given the cost of the litigation and compensation from the respondents. (d) be also grant any other relief as this Hon'ble Forum may deem fit and proper in favour of the complainant."
(3.) The Complaint was contested by the Petitioner/Opposite Party No.1 admitting that Respondent No.1/Complainant had taken an insurance policy from them. The Petitioner contended that while standing guarantee, Respondent No.1/Complainant mortgaged the LIC policy, the policy bond was kept in security and a discharge certificate was also given to the Bank giving it right to collect amount from the policy and deposit it into the loan account of the debtor, in case any defect or default was noticed. The Complainant had assigned his policy to Respondent No.2 Bank and directed them to register the assignment in the Petitioner- Corporation's book/register. Respondent No.1/Complainant and Respondent No.2/Bank had given a notice of assignment to the Petitioner Insurance Company. Upon maturity of the policy the petitioner-Corporation paid sum assured to the assignee i.e. Respondent/Bank on 29.09.2007. Since the entire funds had been transferred to Respondent No.2- Bank, there was no relationship between the Complainant and the Insurance Company as per the Consumer Protection Act, 1986.;


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