Sanjay Kothari vs LIC
- Posted by CERC India
- Posted in Landmark Cases
Virbalaben was married in 1966. On 20 July 1966 she delivered a male child in the U.K. She died two days later. She had an insurance of Rs.10,000/-. But LIC repudiated the claim of her family.
In 1986, her son, Mr. Sanjay Kothari, attained the age of 18 and three years later filed a claim with LIC. But his attempt to get justice was unsuccessful. A complaint was filed on 15 April 1991 with the Gujarat State Consumer Disputes Redressal Commission which ordered payment of Rs. 10,000/- with interest for last three years and damages of Rs.3,000/-.
Virbalaben was married in 1966. On 20 July 1966 she delivered a male child in the U.K. She died two days later. She had an insurance of Rs.10,000/-. But LIC repudiated the claim of her family.
In 1986, her son, Mr. Sanjay Kothari, attained the age of 18 and three years later filed a claim with LIC. But his attempt to get justice was unsuccessful. A complaint was filed on 15 April 1991 with the Gujarat State Consumer Disputes Redressal Commission which ordered payment of Rs. 10,000/- with interest for last three years and damages of Rs.3,000/-.
The Commission observed in this landmark case that the pregnancy clause was not applicable in cases where assured was expected to go to a qualified doctor. It further observed that even if the clause was applicable it could be waived by the LIC.
The fact that the application of the first pregnancy clause could be excluded by payment of an extra premium of Rs.5/- per Rs.1000/- was not disclosed by the insurer. The insured had the right to be informed of this important right. Though the commission upheld the right of the insured to be informed about the exclusions and fixed the liability of the opposite party to pay the claim amount the interest awarded could not be limited to last three years only. Deprivation of interest from 1968 to 1988 was not justified. CERS has filed an appeal before the National Commission for interest right from 1968 and for damages amounting to Rs.10,000/- for inconvenience and suffering.
