LIC ordered to Repay defrauded Premium Amount to Chikkamagaluru Villagers
- Consumer Court Chikkamagaluru to the rescue of LIC defrauded villagers
Udupi: The Consumer Court of Chikkamagaluru District granted justice to the policyholders of LIC, Udupi Region wherein crores of the premium amount was embezzled by its agents. Meanwhile, Chikkamagaluru Police headed by SP Annamalai IPS arrested LIC agent Devaraj and sent him to judicial custody. Another accused Shobha Rani obtained an anticipatory bail said, Dr Ravindranath Shanbhag, President, Human Rights Protection Foundation, Udupi.
He was speaking at a press meet held at the Vaikunta Baliga Law College Kunjibeetu here on November 16, Ravindranath Shanbhag said that Sometime around June-July 2016, some people of Kadur in Chikkamagaluru District, who had taken life insurance from LIC, under the Jeevan Madhura Micro Insurance Scheme (MI Scheme) approached the Human Rights Protection Foundation, Udupi (HRPF) for assistance to find a solution for their problems with the LIC.
We observed that thousands of MI policyholders were dropped from the scheme by LIC, allegedly for not paying the premium. In most of the lapsed policies, only one or two instalments of premium were paid to LIC and some claims were also rejected for the same reason. Every policyholder had the receipts of his payment of premium for all these years. Further, all the receipts carried LIC’s official logo as well.
Three NGOs were appointed by the LIC as MI agents. In turn, these MI agents appointed sub-agents (SPs) who were mostly Anganwadi Teachers and Agriculture labourers, with the approval of the LIC.
These NGOs collected lakhs of rupees from MI policyholders through their Sub-agents (SPs). All was going on well till some MI claims were rejected on the grounds that the policies had lapsed due to non-payment of premium. It was found that the premium paid to the MI agent by SPs was not transmitted further to the LIC.
Most of the policyholders were illiterate, innocent villagers and believed that the SPs pocketed the amount paid by them towards MI premium. The SPs were not in the position to show their faces to the public, from fear of being manhandled and beaten by irate mobs. These SPs were forcibly made to refund the amount to policyholders to the tune of Rs One to Three lakhs, in order to remain in the villages. Some SPs had taken a loan from private banks and pawnbrokers by pledging their jewellery to pay off the policyholders. Some even sold their small pieces of land they owned. This incident had driven most of them to disappointment and disgust in life due to the financial crunch.
HRPF observed that many of the defrauded poor Anganawadi teachers (SPs) were psychologically depressed and may end up in committing suicide. If anyone of them takes up such a recourse, then it may go viral and result in a greater disaster affecting the better-earned fame and image of LIC. HRPF, as a public interest organisation, offered our wholehearted support in resolving this issue.
After scrutinizing all the documents it was found that the agencies were appointed without any background checks. For three years, these agents had not paid the premium paid by the policyholders and LIC had not taken any action against them.
With these two main points in mind, a case was filed at the Consumer Court, Chikkamagaluru District. After 16 months of proceedings, the Court passed the order in favour of the policyholders and ordered the LIC to pay the policyholders Rs 3000/- each as compensation and Rs 1000/- each as Court costs, within one month from the date of order.
25 days have elapsed since the Court passed its Order but LIC has not yet paid the policyholders. Now the policyholders have written to Prime Minister Narendra Modi and Finance Minister Arun Jaitley to direct LIC to follow the Court Order. The Foundation implores with LIC not to delay delivery of justice by filing an appeal against this Court order, he said.