Media Release

Udupi, May 29: The Udupi District Consumer Commission has delivered a major verdict in favour of an 83-year-old senior citizen, Annappa Poojary, directing the Life Insurance Corporation of India (LIC) to refund Rs 15 lac in full and pay Rs 20,000 as compensation for mental harassment and legal expenses.

Addressing the media at a press conference held at Vaikunta Baliga College of Law on Thursday, May 29, Dr Ravindranath Shanbhag, president of the Human Rights Protection Foundation, narrated the ordeal faced by Poojary.

A resident of Belur in Kundapura taluk, Annappa Poojary had returned to his native village 15 years ago after suffering a paralytic stroke.

A former businessman in Hubballi, he settled in Kundapur with his wife. With no financial support from his children, he sold his property and decided to invest Rs 30 lac in fixed deposits to ensure regular interest income for his daily needs and medical expenses.

Seeking financial advice, he approached an LIC agent, who convinced him to invest the entire sum in the Pradhan Mantri Vaya Vandana Yojana (PMVVY) — a government-backed pension scheme for senior citizens. The agent falsely assured him of high returns and flexibility for premature withdrawal in emergencies. Relying on the agent’s assurances and being illiterate, Poojary invested Rs 15 lac each in two separate policies.

Several months later, he was alarmed to discover a sharp discrepancy in the interest earned —Rs 9,250 on one policy and only Rs 6,519 on the other, though both were issued on the same day. Already paralysed and newly diagnosed with Parkinson’s disease, Poojary was dependent on regular treatment at Manipal Hospital, located 45 km away. The annual return of Rs 15,000 proved grossly inadequate for his medical and daily expenses.

When he attempted to surrender the lower-interest policy, LIC informed him that the surrender value was just Rs 10,73,412, leading to a loss of Rs 4,26,588. This significant penalty had never been disclosed to him at the time of investment.

With no help forthcoming from LIC’s Kundapura branch or the agent, Poojary approached the Human Rights Protection Foundation, which guided him to the Udupi District Consumer Commission.

In its defence, LIC claimed that one policy was under the PMVVY scheme, which has a cap of Rs 15 lac per senior citizen, and the second policy was under the Jeevan Akshay plan, which carries different terms and lower returns. LIC also argued that the policyholder had a 15-day “free-look” period to cancel the purchase.

However, the Commission held that LIC had failed to demonstrate that the terms were properly explained to the illiterate couple. It ruled this as a deficiency in service, and ordered LIC to refund the full Rs 15 lac from the disputed policy and pay Rs 20,000 as compensation for mental distress and legal costs.

“There are many senior citizens who are not properly guided and are misled. They must come forward and demand justice,” said Dr Shanbhag.

The press meet was also attended by Annappa Poojary and Anil Devadiga, secretary of the Human Rights Protection Foundation.