Mohali Consumer Forum Directs LIC and PNB to Pay ₹2.20 Lakh for Denying Valid PMJJBY Insurance Claim After Mother’s Death
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In a significant ruling addressing consumer rights and institutional accountability, the District Consumer Forum in Mohali has held both the Life Insurance Corporation of India (LIC) and Punjab National Bank (PNB) guilty of gross deficiency in service and unfair trade practices. The consumer court ordered the financial institutions to pay a total compensation of ₹2.20 lakh to a grieving son after they unjustifiably withheld a valid insurance claim following his mother's unfortunate demise. The ruling reinforces the legal obligations of banks and insurance providers toward policyholders under government-backed welfare schemes.
Background of the Case and Regular Premium Deductions
The legal battle was initiated by Gaurav Kumar, a resident of Nayagaon in Mohali, who filed a formal complaint against LIC and PNB. According to the case details, Kumar's late mother, Rajrani, had enrolled in a ₹2 lakh insurance policy under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) through her bank account back in 2015, with the required annual premiums being regularly deducted directly from her savings account. To substantiate his claims, Kumar presented thorough bank statements to the forum, which verified that premium amounts—including ₹342 deducted on May 24, 2022, and ₹436 on June 18, 2022—had been successfully processed, confirming that the insurance cover was fully active when tragedy struck.
Rejection of Claim and Financial Institutions' Absence in Court
Rajrani tragically passed away due to natural causes on November 1, 2022. Following her death, her son Gaurav Kumar promptly lodged an insurance claim with both the bank and LIC. However, despite repeated follow-ups and requests, the claim was neither officially processed nor granted, and no valid justification was provided for the delay or rejection, forcing the complainant to approach the consumer forum for justice. During the judicial proceedings, formal notices were issued to both LIC and PNB. Due to their consistent failure to appear or present a defense, the forum proceeded against them ex-parte on May 8, 2024. The complainant submitted comprehensive documentary evidence, including bank records, death certificates, affidavits, and scheme documentation.
Consumer Forum's Final Verdict and Penalty Breakdown
After meticulously examining all submitted evidence, the District Consumer Forum concluded that the insurance policy was undoubtedly valid at the time of the insured's death, and the uninterrupted premium deductions proved the active status of the policy cover. The forum strongly condemned the arbitrary denial of benefits to the legal nominee, labeling it a serious deficiency in service. Consequently, the Forum directed LIC and Punjab National Bank to disburse the original insurance sum of ₹2 lakh within 60 days of receiving the order. Additionally, factoring in the mental agony and litigation expenses, the court ordered an extra compensation of ₹20,000, bringing the total mandatory payout to ₹2.20 lakh.
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