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Udupi : A senior citizen, who was deprived of rightful interest due to the negligence by an agent of Life Insurance Corporation of India (LIC), has now won a legal battle and secured complete justice from the District Consumer Court. 

Background of the Case:

Annappa Poojary, aged around 83, originally hails from Belur in Kundapur taluk. He used to run a business in Hubballi for his livelihood but returned to his hometown after suffering a paralytic stroke fifteen years ago and started living with his wife. Though he had children, they were not financially capable of supporting their parents, forcing Poojary to sell his property in Kundapur. 

After selling the property, he decided to deposit the proceeds of ₹30 lakh in fixed deposits, intending to live off the interest income. 

Agent’s Negligence:

When Poojary consulted an LIC agent, he was advised to invest the amount in the "Pradhan Mantri Vaya Vandana Yojana" (PMVVY), a subsidized scheme for senior citizens. The agent assured him that the scheme offered higher returns and allowed premature withdrawal in case of emergencies. Trusting the agent, Poojary invested his entire ₹30 lakh in LIC’s scheme under the condition that he could withdraw the amount if needed. 

Soon after, he received two policies (Nos. 633610464 & 633610465) of ₹15 lakh each. Being illiterate, Poojary and his wife could not read the policy documents which were in English but relied on the agent’s assurances. 

Shockingly Low Returns:

Months later, when Poojary checked his passbook, he noticed that the first deposit earned ₹9,250 in interest, while the second earned only ₹6,519. Despite both deposits of ₹15 lakh being made on the same day, the interest rates differed significantly. When questioned, the agent failed to provide a proper explanation. 

Suffering from Parkinson’s Disease:

Already battling paralysis, Poojary was also diagnosed with Parkinson’s disease. He frequently had to travel all the way to Manipal Hospital for treatment travelling 45kms every time. The combined interest of around ₹15,000 from both deposits was insufficient for his expenses. 

He decided to withdraw the lower-interest deposit and repeatedly contacted LIC’s office and the agent. Receiving no response, he formally requested the surrender of Policy No. 633610465 on 11-01-2023. 

Shocking Surrender Value: 

LIC’s reply left him devastated. The policy, purchased on 06-09-2021, had a surrender value of only ₹10,73,412 after 16 months—meaning he would lose ₹4,26,588 of his hard-earned money! 

Neither LIC nor the agent had informed him about such a massive penalty for premature withdrawal. 

Approaching the Human Rights Protection Foundation: 

After multiple failed attempts to resolve the issue with LIC’s agent and Development Officer in Kundapura, Poojary sought help from the Human Rights Protection Foundation in Udupi. The foundation reviewed his documents and guided him to file a complaint in the Udupi District Consumer Commission. 

LIC’s Defence: 

LIC argued that: 

1. The first policy was under the PMVVY, a subsidised scheme by the central government with higher interest and a ₹15 lakh cap per senior citizen. 

2. The second policy was under "Jeevan Akshay", which had different terms and lower interest. 

3. The policy holder had a 15 days free look period to cancel the policy but failed to do so. 

However, LIC could not produce any evidence that they had explained these terms to the illiterate Poojary couple. 

Court’s Verdict: 

The Udupi District Consumer Commission ruled in Poojary’s Favor, ordering LIC to: 

- Refund Rs.15lakhs, the deposited amount in full.

- Pay ₹20,000 as compensation for mental harassment and legal expenses.

Dr. Ravindranath Shanbhag, 

President, Human Rights Protection Foundation, 

Kunjibettu, Udupi – 576102

Ph: 8971033582.

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Box Item

What is Pradhan Mantri Vaya Vandana Yojana?

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a central government subsidized pension scheme for senior citizens, launched in 2017. The Scheme offers higher interest rates compared to banks.

- Senior citizens can invest up to ₹15 lakh (now increased to ₹30 lakh) for10 years. 

- In case of the depositor’s death, the spouse can continue the scheme or the amount is paid to the nominee. LIC of India was given the responsibility to manage the scheme. Now, the scheme has been discontinued.

At present, a Similar scheme (Senior Citizens Savings Scheme) is offered by the Post Department.