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					 National Commission request LIC to consider if as small as a
 sum of Rs.10,000/- Ex gracia payment would need be paid to
            complainant as a benevolent gesture.

                     NEW DELHI

              REVISION PETITION No. 1065 of 2010
 (From the Order dated 15.12.2009 in First Appeal No. 1506 of 2008
    of Rajasthan State Consumer Disputes Redressal Commission)

Life Insurance Corporation of India
Through Branch Manager
Near Old bus Stand, Tonk                                Petitioner


Smt. Manna Devi
W/o Badrilal Mali                                     Respondent
R/o Mehendwas Ki Johpariya
Tehsil and District Tonk

Hon’ble   Mr.   Anupam        Dasgupta                       Presiding
Hon’ble Mrs. Vineeta Rai                          Member

For the Petitioner                              Mr.   Anil    Sharma,
For the Respondent                       NEMO

Dated 23rd August 2010

Anupam Dasgupta
      This revision petition challenges the order dated 15.12.2009 of

the Rajasthan State Consumer Disputes Redressal Commission, (in

short, ‘the State Commission’), in appeal no. 1506 of 2008, by which

the   State   Commission    directed   the   petitioner   (Life   Insurance

Corporation – LIC) to pay Rs.10,000/- as ex-gratia to the respondent /

complainant who is the widow of the deceased life assured.

2.    The brief facts are the husband of the respondent / complainant

obtained a life insurance policy from the LIC for a sum of Rs.1 lakh on
29.03.2006. Life assured expired on 27.04.2007, whereupon a claim

for the amount assured was filed by the complainant with the LIC. By

its letter dated 28.02.2008, the LIC repudiated the claim on the

ground that the life assured had suppressed material facts regarding

the status of his health in the proposal dated 29.03.2006 by stating

that he was not suffering from any kind of disease. Though, in fact, he

had been under treatment during February 2006 and May 2006 for

hypertension and chronic renal failure. In fact, he had been admitted

to the SMS Hospital, Jaipur on 23.05.2006 and was diagnosed with

said disease and also treated therefore.

3.    The respondent / complainant filed a consumer complaint against

the LIC before the District Consumer Disputes Redressal Forum, Tonk

(in short ‘the District Forum’) alleging deficiency in service on the part

of the LIC in repudiating the aforesaid claim. The District Forum

dismissed the complaint on the ground of suppression of material facts

relating to status of health of the life assured at the time of obtaining
of life insurance policy in question. In appeal filed by the complainant,
the State Commission discussed at length on the inadmissibility of a

claim of life insurance in the case of material facts relating to status of

health of the life assured. However, the State Commission, ended up

passing the impugned order with the aforesaid direction regarding ex-

gratia payment by the LIC to the respondent.

4.    The question of ex-gratia payment by the same insurer came-up

for   consideration   of   this   Commission   in   a   batch   of   revision

petitions. By its order dated 17.12.2009, the Commission held,
interalia, as under:-
                   “While going through the Aims &
             Objectives of the Consumer Protection Bill
             1986, as highlighted by the learned Counsel for
             the respondent, we are of the view that a
             distinction needs to be made between justice –
             natural or otherwise-and, „favour‟. There is no
             room      for  favouritism     while  dispensing
             justice. The    word     „ex-gratia‟ has   been
             interpreted / understood to mean „favour‟,
             rendered „voluntarily‟ and on „moral grounds‟,
             thus, clearly ousting the jurisdiction of quasi
             judicial bodies like ours to direct a party to
             show „favour‟. If we do this, this will not only
             run counter to the letter and spirit of
             Consumer Protection Act but also assume /
             confer powers which are not conferred upon us
             by Law / mandate. Any direction by Consumer
             Fora to the party concerned to grant „ex-gratia‟
             payment will defeat the very purpose and
             meaning of „ex-gratia‟, i.e., favour, grace
             shown voluntarily on moral grounds.

                  However, this order would not deter
            directing payment on „ex-gratia‟ basis by the
            Consumer Forums, provided, the concurrence
            of the sanctioning authority of Insurance
            company, is obtained through their counsel
           (counsel for the Insurance Company)             for
           making the payment on „ex-gratia‟ basis.

                 In the aforementioned circumstances, we
           are of the view that Consumer Fora, by the
           very construction of the Act, are not
           empowered to direct any party for grant of „ex-
           gratia‟ payment, in view of which we are
           unable to sustain the orders passed by the
           State Commission, directing the Life Insurance
           Corporation to pay „ex-gratia‟ amount(s) in
           view of which the order(s) passed by the State
           Commission are set aside. All the Revision
           Petitions are allowed and complaints are

                 However, keeping in view the facts and
           circumstances in each case, we request, the
           Life Insurance Corporation to consider the case
           sympathetically   for   grant   of „ex-gratia‟
           payment to the complainant(s) in each case.”

5.   In view of the legal interpretation of the term ex-gratia, it is clear

that the order of the State Commission, particularly paragraph 19,

cannot be sustained. However, in keeping with the spirit of the

observations in paragraph 20 of the impugned order, we too would
request the LIC to consider if as small as a sum of Rs.10,000/- could

need be paid to the respondent / complainant as a benevolent gesture.

                                                  [Anupam Dasgupta]

                                                     [Vineeta Rai]