The Allahabad High Court recently pulled up the Life Insurance Corporation of India (LIC) for filing a writ petition against a ₹74,508 award given by the Permanent Lok Adalat, Aligarh, in favour of a policyholder, Megh Shyam Sharma.
Justice Prakash Padia, who was hearing the case, called it "very surprising" that LIC chose to challenge such a small amount. He directed that a senior officer from LIC must file a personal affidavit explaining why the awarded amount should not be paid to the policyholder.
Read Also:- Supreme Court Questions Gujarat Over 12-Foot Wall at Gir Somnath, Seeks Reasonable Height
"It is very surprising that against a very pity amount, the petitioner, i.e., Insurance Company filed the present writ petition which practice has been deprecated by this Court from time to time," the Court observed.
The dispute arose when Megh Shyam Sharma, who had purchased five insurance policies from LIC, filed an application before the Permanent Lok Adalat seeking a refund of the premiums he had paid. Since the full terms and conditions of the policies were not met, the policies had lapsed, and no benefits were available. Despite this, Sharma requested the refund of the amounts deposited by him.
LIC, in response, argued that Sharma was not entitled to any refund because he failed to fulfil all policy conditions. However, the Lok Adalat ordered LIC to refund ₹74,508 along with 7% interest and ₹5,000 as litigation expenses.
Before the High Court, LIC maintained that Sharma did not comply with the policy conditions. However, the High Court noted that Sharma was not seeking any additional relief beyond the refund of his deposited money, and the Lok Adalat’s award was fair and justified.
Highlighting the unnecessary litigation, the Court pointed out that the legal fees and costs involved in filing the writ petition were likely higher than the amount being contested.
"From perusal of the averments made in the petition and considering the fees of lawyer, this Court is of the opinion that the cost of filing of the present petition is more than the awarded amount," the Court stated.
The Court also referenced the Supreme Court’s observations in Haryana Dairy Development Cooperative Federation Limited v. Jagdish Lal and Subrata Roy Sahara v. Union of India, emphasizing the problem of frivolous litigation in India.
"The Indian judicial system is grossly afflicted, with frivolous litigation. Ways and means need to be evolved, to deter litigants from their compulsive obsession, towards senseless and ill-considered claims," the Supreme Court had noted in Subrata Roy Sahara.
Read Also:- Allahabad High Court: GST Claims Are Barred After NCLT Approval of Resolution Plan
Considering the situation, the High Court directed that a senior LIC officer must file an affidavit within two weeks, justifying why the Lok Adalat’s award should not be paid. The case will be heard again on May 7, 2025.
Advocate Ashutosh Mani Tripathi appeared for LIC.
Case title - Life Insurance Corporation Of India vs. State of U.P. and Another
