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2013 DIGILAW 121 (SC)

Kolapalli Ganga Bhavani v. L. I. C. Corp. of India

2013-01-24

G.S.SINGHVI, H.L.GOKHALE

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ORDER : Leave granted. This is an appeal for setting aside the order passed by the Division Bench of the Andhra Pradesh High Court, whereby the writ petition filed by the appellant against the order of the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad reducing the assured sum payable to the appellant from Rs. 1,00,000/- to Rs. 50,000/- was disposed of by declaring that she is entitled to twice the sum assured along with bonus without interest and the balance amount, if any, payable to her shall carry interest at the rate of 9% per annum. 2. The appellant is the widow of Shri Surya Kanna Rao, who had taken an insurance policy from respondent No.1 - Life Insurance Corporation of India. The policy contained a stipulation that if the insured dies before the expiry of the term of policy then his legal representatives shall be entitled to receive twice the assured amount. The appellant's husband died on 11.3.2002 but respondent No.1 declined to pay the amount in terms of the policy on the ground that the deceased had acted in contravention of the policy. 3. The appellant filed complaint under Section 12 of the Consumer Protection Act, 1986 and prayed that respondent No.1 may be directed to pay Rs. 1,00,000/- with interest. District Consumer Disputes Redressal Forum, Machilipatnam, Krishna District (for short, 'the District Forum') allowed the complaint and directed the respondents to pay Rs. 1,00,000/- to the appellant. The appeal filed by respondent No.1 was partly allowed and the amount payable to the appellant was reduced from Rs. 1,00,000/- to Rs. 50,000/-. However, the direction given by the District Forum for payment of interest was not disturbed. 4. The review petition filed by the appellant was dismissed by the State Commission vide order dated 5.2.2008 and the writ petition filed by her questioning the orders of the State Commission was disposed of by the Division Bench of the High Court in the following terms: "8. The Writ Petition is, accordingly, disposed of. The petitioner is not entitled to interest till today. The LIC shall pay the balance amount due to the petitioner within one month from today. If the LIC does not pay the same within one month, the balance amount due to the petitioner shall carry interest at 9% per annum from today only. No costs." 5. The petitioner is not entitled to interest till today. The LIC shall pay the balance amount due to the petitioner within one month from today. If the LIC does not pay the same within one month, the balance amount due to the petitioner shall carry interest at 9% per annum from today only. No costs." 5. We have heard learned counsel for the parties and perused the record. 6. In our view, the High Court committed serious error by holding that the appellant shall not be entitled to interest. The impugned order is totally silent on the issue of payment of interest to the appellant. The High Court has not assigned any reason for upsetting the direction given by the District Forum for payment of interest at the rate of 9% per annum. The High Court also failed to notice that respondent No.1 had not challenged the order of the State Commission by which the award of interest to the appellant was not disturbed. 7. In view of the above, the appeal is allowed and it is held that the appellant is entitled to Rs. 1,00,000/- along with interest at the rate of 9% per annum from the date of filing the complaint till realization. 8. Respondent No.1 is directed to pay the balance amount to the appellant and interest within a period of three months. Appeal allowed.