1.       The present Revision Petition (RP) has been filed by the Petitioner against Respondent as detailed above, under section 58(1)(b) of Consumer Protection Act 2019, against the order dated 01.07.2021 of the State Consumer Disputes Redressal Commission, Punjab, Chandigarh (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No.62/2021 in which order dated 04.02.2021, District Consumer Disputes Redressal Commission, Mansa (hereinafter referred to as District Commission) in Consumer Complaint (CC) no 43/2019 was challenged, inter alia praying to set aside the order passed by the State Commission.

 2.      While the Revision Petitioner (hereinafter also referred to as OP) was Respondent and the Respondent (hereinafter also referred to as Complainant) was Appellant in the said FA/62/2021 before the State Commission, the Revision Petitioner was OP and Respondent was Complainant before the District Commission in the CC no. 43/2019.

3.       Notice was issued to the Respondent. Parties filed Written Arguments/Synopsis on (13.06.2022) Petitioner and 30.09.2022 (Respondent) respectively.

4.       Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Commission and other case records are that:-

The complainant procured insurance policy No. 161181130 from the OP on 15.03.2000, spanning the period until March 2019. She fulfilled all premium payments owed to the OP. On 04.02.2019, seeking information about the policy's status, a printout labelled  Ex.C-1 was issued on the same date, reflecting the surrender value as Rs. 5,78,942/-. Upon the policy's maturity, the complainant submitted all pertinent documents, accompanied by original receipts (Ex.C-2 to C-4). However, contrary to the status report dated 04.02.2019 (Ex.C-1), the OP erroneously transferred only Rs. 4,79,806/- to her via NEFT. Consequently, the complainant, on 13.03.2019, submitted an application to the OP, challenging the deficiency in service and urging the release of the remaining amount of Rs. 99,138/-. Despite her persistent efforts, the OP did not rectify the situation. The complainant asserted a deficiency in service on the part of the OP and sought an order mandating the OP to disburse Rs. 99,136/- with 18% interest.

5.       Vide Order dated 04.02.2021, in the CC no. 43/2019 the District Commission has dismissed the complaint.

6.       Aggrieved by the said Order dated 04.02.2021 of District Commission, Respondent/complainant appealed in State Commission and the State Commission vide order dated 01.07.2021 in FA No. 62/2021 has allowed the appeal and directed OP to pay Rs. 99,136/- @9% p.a. from 11.03.2019 till its realization; to pay compensation and litigation expenses.

7.       Petitioner has challenged the said Order dated 01.07.2021 of the State Commission mainly on following grounds:

1. The State Commission failed to recognize that the policy in question had a fixed guaranteed amount with an endowment plan 122-E. The respondent’s/complainant's entitlement was allegedly fixed at Rs. 4,85,000/-. The State Commission committed a material illegality by converting it into a policy with life cover, which is impermissible under the law. The State Commission did not consider the terms of the policy, overlooking the fact that plan 122-E with a guaranteed amount of Rs. 4,85,000/- was duly mentioned in the policy. The complainant never disputed this. The terms of the policy, including the endowment plan with option F mentioned in the proposal form, are considered binding between the parties. The court's observations are erroneous and illegal, warranting reversal.

2. The judgment by the Hon'ble Supreme Court (AIR 2009 SC 2493) asserts that an insurance contract must be construed strictly according to its own terms. The State Commission exceeded its authority by changing the terms of the policy, converting it from Policy 122-E to Policy 122-Y with life cover, and awarding an amount not due under the policy purchased by the complainant. The impugned decision is, therefore, illegal on its face.

3. The State Commission failed to consider that a corrupted computer record and a bona fide mistake in communication do not entitle the complainant to benefits from a policy she never purchased. The surrender of the policy before maturity, as per the terms of Plan 122-E or Plan 122-Y, required surrendering the policy for the entire amount upfront. The surrender of the policy has no connection to the alleged wrong communication by the OP. The findings of the State Commission are illegal and perverse. The State Commission erred in stating that there is no evidence on record that the complainant applied for Plan 122-Y or Plan 122-E.

4. The proposal of the policy clearly mentions "endowment type option F," and in the policy bond, Plan 122-E is specified with the guaranteed amount of Rs. 4,85,000/-. If it were Plan 122 with life cover, the amount could not have been mentioned. The State Commission erred in stating that on Ex OP-3 (Proposal Review Slip), there is an indication of Life Cover with Plan 122 W/L-endowment, and the full forms of E or Y are not mentioned. The State Commission failed to differentiate between Plan 122-E (a guaranteed amount plan) and Plan 122-Y (a non-guaranteed amount plan). The words "E or Y" are used by the office for convenience, and in the policy bond, the terms are clearly mentioned. The findings of the State Commission are illegal, and they should be set aside.

8.       Heard counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

1. The learned counsel for the Petitioner/OP contends that the State Commission's failure to recognize the explicit details outlined in the policy, specifically designating it as a Jeewan Raksha Endowment Funding policy with Guaranteed Additions, represents a critical lapse. The clear disclosure within the policy document of the guaranteed amount of Rs.4,85,000/- and the monthly annuity sum of Rs.4785/- is significant, particularly in the context where the respondent/complainant opted against surrender value before the maturity date, thereby warranting only the monthly annuity in accordance with the policy terms. The counsel further argues that the State Commission overlooked the accidental error in communication resulting from computer record corruption. It is emphasized that such bona fide mistakes should not entitle the respondent to a sum surpassing the maturity amount stipulated by the policy.

2. Moreover, the counsel asserted that the State Commission's observation on the absence of evidence regarding the complainant's application for Plan 122-E or 122-Y is flawed. The explicit mention of Endowment type Option F in the Proposal Form directly contradicts the Commission's assertion, clarifying that if it were Plan 122-Y, it would have been explicitly indicated as Life cover Option F. The State Commission's order effectively transforms the policy from 122-E to 122-Y, a contention impermissible under prevailing legal principles.

3. The counsel for OP further asserts that the State Commission committed an error in its observations concerning Ex OP-3 by incorrectly asserting the presence of an indication of Life Cover with Plan 122 W/L-endowment. The commission failed to distinguish between Plan 122-E, characterized as a guaranteed amount plan, and Plan 122-Y, identified as a non-guaranteed amount plan. Emphasis is placed on clarifying that Option F is merely indicative of various options available to the policyholder for obtaining benefits under Plan 122-E upon maturity.
4. The counsel argued that the mention of Life Cover with Plan 122 W/L-endowment on Ex.OP-3 signifies a policy without Life Cover endowment, and the guaranteed amount of Rs.4,85,000/- is explicitly stated, confirming it as a fixed guaranteed amount plan. Furthermore, the usage of terms E or Y by the office for convenience does not alter the explicitly mentioned terms and guaranteed amount in the policy bond. The argument asserts that if the complainant had any doubts about applying for Plan 122 with Life Cover, objections should have been raised within the 19-year period, and the complainant is now estopped from claiming a different plan. The counsel contends that the findings of the State Commission are illegal and should be set aside.

5. The counsel relied on the precedent set in Vikram Freentech India Ltd v. New India Assurance Company Ltd., AIR 2009 SC 2493,

“16. An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. 

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18. The endeavor of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in rewriting the contract or substituting the terms which were not intended by the parties…….”

6. The learned counsel representing the respondent/complainant contended that the complainant procured insurance policy No. 161181130 on March 15, 2000, from the petitioner/OP. She diligently fulfilled all premium payments from the policy's inception until March 2019, channelling payments to the OP. On 04.02.2019, the complainant inquired about the policy's status, prompting the issuance of printout Ex.C-1 on the same date, reflecting a surrender value of Rs. 5,78,942/-. Upon the policy's maturity, the complainant submitted all requisite documents, including original receipts, to the OP. However, the OP disbursed only Rs. 4,79,806/- to the complainant through NEFT, a sum deemed inaccurate and unlawful according to Ex.C-6. The complainant asserts a rightful claim to the complete amount of Rs. 5,78,942/-.

(vii)   The counsel for the complainant/respondent further contends that the OP has asserted that the policy master was compromised, resulting in the erroneous reflection of the complainant's policy with life cover (Y) and an entitlement of Rs.5,78,942/-. The counsel for complainant emphasized that policy master is an employee/agent of the OP and the policy master have no affiliation with the complainant. Despite documentary evidence (Ex-C-1) confirming the complainant's entitlement to Rs.5,78,942/-, the counsel contends that the policy master, without the complainant's knowledge, altered the policy purchased as 'Y' with life cover. The OP has failed in disclosing information about the policy change over the period of 19-years during which consistent premium of payments were made. The counsel further asserts a service deficiency that the OP neglected to notify the complainant about the transition from option 'E' to 'Y', as evidenced by document Ex.C-1.

(viii)   In support of her case, the counsel for complainant/respondent relies

on a judgment from the Hon'ble Supreme Court of India for highlighting the insurer's obligation to inform policyholders about important changes in policy conditions in Jacob Punnen & Anr. Vs. United India Insurance Co. Ltd. (reported in 2022 (1) RCR Civil 466), Civil Appeal No. 6778 of 2013.

"….The Insurer had a duty to inform the appellants that a change regarding the limitation on its liability was being introduced. This duty to take the insured into confidence was breached. This was the deficiency in service……” 

9.       We have carefully gone through the order of the State Commission, other relevant records and rival contentions of the parties.  It is not in dispute that the Petitioner/Insurance Company conveyed the status report dated 08.02.2019 to the Respondent herein with respect to the policy in question in which the surrender value was mentioned as Rs.5,78,942/-.  But on maturity they paid only Rs.4,79,806/-.  It is contended by the Petitioner/Insurance Company that the said status report was sent by mistake due to computer generated error, the complainant was entitled to a fix sum of Rs.4,85,000/- only and it was a bonafide  mistake from the Insurance Company side due to corrupted computer record and such mistake should not entitle the complainant to the benefit of the policy which she never purchased.  However, it is to be noted that even after the issuance of that status report dated 08.02.2019, at no stage the Petitioner/Insurance Company has conveyed to the Respondent/complainant about such mistake.  In this regard extract of relevant paras of the order of the State Commission are reproduced bellow:-

14. In this case, the complainant had surrendered the policy only on the basis of document, Ex.C-1, on the record, as it has been proved on record, vide Ex.C-5 and C-6. The plea of the respondent/OP in para No.9 of the written arguments is that the document Ex.OP-4 is the proposal form filled in by the life assured Asha Kiran, wherein the complainant opted the endowment type option ‘E’ and ‘Y’ option was never opted by her. From perusal of proposal form, Ex.OP-4, it is clear that Endowment Type Option was within bracket as (F) and this F corroborates with the document Ex.C-1, wherein F has been shown towards Pension Option. Moreover, there is no option ‘E’ and ‘Y’ in the proposal form, where the complainant had marked the tick on E or not on Y and also there is no full form in the proposal form, Ex.OP-4, of the abbreviations i.e. E and Y and it raises adverse inference against the OP. Further from perusal of letter dated 13.03.2019, Ex.C-6, it is clear that the complainant accepted proposal of cash option of Rs.5,78,942/- as per letter dated 14.02.2019, Ex.C-1, and not F option, which denotes the pension option. We do not find on record any evidence wherein the complainant had opted the option of ‘E’ instead of option ‘Y’ at the time of taking the said policy from OP and also the abbreviation ‘E’ denotes the endowment. It is also pertinent to mention that ‘F’ option had not been changed by the corrupted Master Policy into other option, then why the system changed the only option ‘E’ into ‘Y’? This question remained un-explained on the record from the side of OP and gone against the OP. It is also pertinent to mention that the words i.e. life cover indication for plan 122: W/L- END have been mentioned in Ex.OP-3, which is the document of OP on the record. So, we are unable to accept the plea of the respondent/OP that it rightly disbursed the amount to the complainant. As such, this plea of the respondent/OP is not acceptable and we reject the same.

15. Further, it is pertinent to mention that after issuing the document Ex.C-1, to the complainant, the OP remained busy in corresponding with its Chief/Sr./Branch Manager, Mansa, vide Ex.OP-1 (colly). Neither OP informed the complainant about the above said correspondences nor it  gave any information to her about the change of option ‘E’ to ‘Y’. This is also a deficiency in service on the part of OP  for keeping the customer in dark about change of her entitlement of the amount. In these circumstances, we are of the view that this is a clear cut case of negligence and deficiency in service on the part of the OP, which failed to perform its duty to inform the customer about the above said change and about the change of surrender value amount due to above said corrupted Master Policy. Moreover, we are not impressed with the pleading of the OP with regard to change of old value ‘Y’ to new value ‘E’, as mentioned in Ex.OP-1 (colly) and there is no force in it. Further there is no full form of abbreviations ‘E’ and ‘Y’ in the proposal form. As such, the authorities relied upon by the respondents are not applicable to the facts of this case. In these circumstances, the appellant/complainant is entitled to the remaining amount of surrender value i.e. Rs.99,136/- with interest from 11.03.2019 till its realization and she is also entitled to compensation and cost of litigation as well for the above said deficient act and conduct of the OP.

10.     Keeping in view the entirety of the facts of the case  especially that the Petitioner/Insurance Company itself has conveyed the surrender value as Rs.5,78,948/- , which they now claim as having been done by mistake due to corrupted computer data but never issued any subsequent correspondence to the Respondent about such mistake, at this state, the Respondent/Policy holder cannot be made to bear consequence of the mistake on the part of the Petitioner/Insurance Company, hence, in the peculiar facts and circumstances of the case, we find no reason to interfere with the order of the State Commission, hence, the same is upheld.  Accordingly, the Revision Petition is dismissed. 

11.     The pending IAs in the case, if any, also stand disposed off.