Mother Fights Lic 12 Years Insurance Court Orders Rs 1 26 Crore

A Mumbai woman has won a 12-year legal battle against the Life Insurance Corporation of India (LIC) after the National Consumer Disputes Redressal Commission (NCDRC) ruled that the insurer wrongly denied her late son’s Rs 60 lakh life insurance claims.

The NCDRC ordered the payout with a 9 per cent annual interest retroactive from 2014 – the accumulated penalty alone has crossed Rs 64.8 lakh, pushing the total payout to over Rs 1.26 crore.

A bench comprising Dr Inder Jit Singh (presiding member) and Shashi Nandkeolyar (member) was hearing cross-appeals filed by the LIC and Mumbai resident Jayshree Suresh Gambhir against a 2016 order of the Maharashtra State Consumer Disputes Redressal Commission.

“After considering all the facts and circumstances of the case, we hold that the insured has not suppressed any material facts with respect to any pre-existing disease in the proposal form. Hence, the rejection of the claim by the Insurance Company in all five cases on these grounds was not justified,” the commission said on June 9.

The case relates to Nitin Suresh Gambhir, who had submitted proposals for five life insurance policies with LIC in June 2010. The policies carried a combined sum assured of Rs 60 lakh. His mother, Jayshree Suresh Gambhir, was the nominee under the policies.

The 38-year-old died on June 11, 2013, due to cardiac arrest. Following his death, his mother filed insurance claims under all five policies.

However, LIC rejected the claims on July 11, 2014, alleging that the deceased had withheld material information regarding his health while obtaining the policies.

According to LIC, he was suffering from diabetes mellitus and had been admitted to PD Hinduja Hospital in September 2010 for treatment of a non-healing ulcer and cellulitis, but had failed to disclose those facts.

The commission further observed that Gambhir died nearly three years after the alleged diagnosis and that the cause of death was a heart attack. It held that there was no evidence showing any nexus between the alleged diabetes and the eventual death claim.

Referring to Supreme Court precedents, the commission said the insurer had failed to demonstrate that the alleged non-disclosed condition had any connection with the claim being made.

Allowing the mother’s appeal and dismissing LIC’s challenge, the commission ordered the insurer to pay the entire insured amount of Rs 60 lakh under all five policies.

The prolonged legal delay will ultimately cost the insurer dearly. The mandated 9 per cent simple interest adds Rs 5.4 lakh to the tally every year, accumulating to a staggering Rs 64.8 lakh over the 12-year dispute.

When added to the Rs 60 lakh principal, Rs 1 lakh for mental agony, and Rs 50,000 in litigation costs, LIC’s total final payout stands at Rs 1,26,30,000 (Rs 1.26 crore).

With the ruling, Jayshree Gambhir’s long legal fight that began after her son’s death in 2013 has finally come to an end, securing the full insurance benefits that had remained locked in litigation for more than a decade.

Vineet Upadhyay is an Assistant Editor with The Indian Express, where he leads specialized coverage of the Indian judicial system. Expertise Specialized Legal Authority: Vineet has spent the better part of his career analyzing the intricacies of the law. His expertise lies in "demystifying" judgments from the Supreme Court of India, various High Courts, and District Courts. His reporting covers a vast spectrum of legal issues, including: Constitutional & Civil Rights: Reporting on landmark rulings regarding privacy, equality, and state accountability. Criminal Justice & Enforcement: Detailed coverage of high-profile cases involving the Enforcement Directorate (ED), NIA, and POCSO matters. Consumer Rights & Environmental Law: Authoritative pieces on medical negligence compensation, environmental protection (such as the "living person" status of rivers), and labor rights. Over a Decade of Professional Experience: Prior to joining The Indian Express, he served as a Principal Correspondent/Legal Reporter for The Times of India and held significant roles at The New Indian Express. His tenure has seen him report from critical legal hubs, including Delhi and Uttarakhand. ... Read More