In a significant ruling, the District Consumer Dispute Redressal Commission (DCDRC) has directed the Life Insurance Corporation (LIC) and the Municipal Corporation of Delhi (MCD) to pay ₹40,000 in compensation to the family of a deceased sweeper, who faced rejection of two insurance claims totaling ₹5 lakh.
The consumer forum found both entities jointly accountable for the lapse in premium payments, which LIC cited as the reason for the claims being denied. The court, led by President Jeet Singh and member Rashmi Bansal, highlighted the failure of MCD to deduct monthly premiums from the employee’s salary and ensure timely remittance to LIC.
The case arose from a complaint filed by the late Joginder Kumar’s wife and daughter, challenging the dismissal of their claims—₹1.6 lakh and ₹3.2 lakh—following Kumar’s death in 2016. The forum ruled in favor of the family, mandating that the claims be honored along with an interest rate of 9% per annum from the date of death until actual payment is made.
In addition to the claim payouts, the consumer court ordered MCD and LIC to jointly cover ₹20,000 in litigation costs and the compensation for the distress caused by the denial of claims.
Kumar, who served as a Safai Karamchari with the MCD, had enrolled in three Salary-Saving Scheme (SSS) policies provided for municipal employees. It was alleged that premiums were to be automatically deducted from his salary, a procedure that ultimately failed due to negligence on the part of MCD.
The court emphasized that under the SSS, the responsibility of ensuring premium payments lies with the employer, and any failure to do so should not adversely impact the insured. The ruling reinforces that LIC should have proactively notified the insured regarding any premium lapses, which they failed to do.
The consumer forum’s findings underline a critical principle: employees should not suffer the consequences of administrative oversights by their employers or insurers. With this ruling, justice has been served for the family of the late Joginder Kumar, providing them with the financial support they rightfully deserve.
