Jharkhand

Bokaro

CC/16/125

Rajesh Kumar - Complainant(s)

Versus

Chif Manager, LIC of India, Bokaor Branch - Opp.Party(s)

M. Narayan

30 May 2019

ORDER

Complainant Rajesh Kumar has filed this case with prayer for issuance of instruction and direction to the O.P. (a) not to change/ reduce original accidental benefit amount of Rs. 50,00,000/- and premium amount of Rs. 4,55,265/- of policy No. 544843552 dated 11-01-2008 which was under plan of 048 15 10 (b) not to consider of letter dated 14-08-2013 to avoid any change/ alteration in the original policy mentioned above. It is further claimed that compensation of Rs. 5,00,000/- for mental harassment and punitive damages of Rs. 50,000/- for Mis-conduct, breach of trust by O.P. and litigation cost of Rs. 50,000/- after adjusting deduction Rs. 1,500/- towards less payment made by complainant at the instance of O.P. in January 2013 and other reliefs.

2          The case of the complainant is that in first week of January 2008, the Chief Manager LIC of India Bokaro Branch approached the complainant and persuaded him to take at least one LIC policy with accidental benefit for Rs. 50,00,000/-. Complainant informed him that he had already taken three LIC policy having No. 543896386 (January 2006) for Rs. 15,00,000/-, Policy no. 382554155 (January 2013) for Rs. 2,00,000/- and Policy No. 112461889 ( September 1998) for Rs. 1,00,000/- with accidental benefit covers but the O.P. has said that these policies have nothing to do with a new proposed policy and ultimately the complainant had  taken one policy for Rs. 50,00,000/- under plan 48 15 10 with double benefit accidental with profit having annual premium of Rs. 4,55,265/-

            The complainant mentioned all the three policies details for Rs. 18,00,000/- in the proposal no 130895 and handed over to O.P. with premium amount through cheque dated 07-01-2008 and payment receipt dated 07-01-2008 was issued. The O.P. has issued bond certificate to the complainant and complainant used to pay of annual premium regularly vide receipt dated 07-01-2008, 31-01-2009, 30-01-2010, 07-12-2011 and 30-01-2012. In the month of 2013 when the complainant was out of India, the agent of the O.P. to collect the cheque of premium, approached to the father of the complainant and asked for the payment of the premium for Rs. 4,53,765/- for the policy no. 544843552. The complainant’s father could not verify the premium amount and believing the agent and he issued a cheque under his own signature and handed over to him and receipt was also issued by O.P.

            In the year 2013 after lapse of 5 year 8 month and from the date of approval of the policy and receiving the premium @ of Rs. 4,55,265/- p.a. by O.P., LIC vide letter Ref. “Bokaro- 1/NB/DD dated 14-08-2013 intimated the complainant that since maximum accidental policy allowed by LIC is Rs. 50,00,000/-, therefore, the accidental benefit is under policy no. 455843552 has been reduced from Rs. 50,00,000/- to Rs. 35,00,000/- taking into the amount the policy no 543896386, the premium has been reduced from Rs. 4,55,265/- to Rs. 4,53,765/-. It is also mentioned that the reference of letter dated 10-09-2012 which is false has been sent to the complainant, which was never received by complainant. The complainant objected the letter regarding arbitrarily and unilaterally amendment. Through registered post and e-mail complainant requested the O.P. to withdraw the letter to 14-08-2013. It is submitted that O.P. never furnished the details of clause 10(A) which is mentioned in the policy terms and condition received by the complainant.

            In this way O.P. has with malafied intention and ill motive to get higher commission and to enhance his business achievement higher, dragged and befooled the complainant and this is clearly deficiency in service, for which O.P. is liable.

3          Following documents have been filed by the complainant in support of his case:-

            Anx-1 to 1/4-  Photo copy of bond paper of L.I.C.

            Anx-2- Photo copy of certificate of L.I.C.

            Anx-3- Photo copy of policy certificate of L.I.C.

            Anx-4- Photo copy of letter dt. 14-08-2013.

            Anx- 5 to 5/1 Photo copy of E-mail letter dt. 24-11-2013

            Anx-6- Photo copy of Revision petition of Honorable National

 Commission

            Anx-7- to 7/4 Photo copy of letter dt. 06-09-2016 of L.I.C along 

with attachment relied on (2008) 13 SCC 597 BSNL Vs. BPL mobile Cellular Ltd. & others.

            Anx-8- Photo copy of Renewal premium receipt.

4          Complainant has filed oral evidence with an affidavit and he is also cross-examined by the O.P.

           

5          O.P. M/s LIC of India appeared and filed W.S. it is admitted that the complainant has taken three policies earlier and the 4^th one was taken under plan 48 in Year 2008 for Rs. 50,00,000/- with double accidental benefit. It is stated that the 3^rd and the 4^th policy became Rs. 65,00,000/-  (Rs. 15,00,000 + Rs. 50,00,000/-) which is violation of norms of the IRDA circular and LIC norms.

            It is further stated that nobody can take accidental benefit more than Rs. 50,00,000/- but the last policy exceeded the amount, hence as per circular of LIC, Rs 15,00,000/- accidental benefit was reduced in policy no. 544843552 and a letter was communicated to the complainant on 10-09-2012 and 14-08-2013. Therefore, the premium of the policy was changed and reduced to Rs. 4,53,765/- from Rs. 4,55,265/- and the same was communicated vide letter dated 06-02-2014 and requested the complainant to submit the policy bond for its correction but the complainant did not submit the policy bond and did not send a letter that he was out of the country and the error came into the light of the O.P., and accordingly the correction was made as per the circular Ref. Act./1838/4 23-11-2002 and 19-12-2002 regarding increase in accidental benefit cover line ceiling of accidental benefit cover from present level of Rs. 25,00,000/- to Rs 50,00,000/- which is acceptable for all insurance policy. In view of these instruction, it is necessary to insure that the total accidental benefit cover should not be exceeded to Rs. 50,00,000/- on single life. It is submitted that clause 10(A) is applicable on policy of minor life and in the instant case the complainant is not minor as such complainant is not entitled for any compensation as claimed.

6          No document has been filed by the O.P.

F I N D I N G S

7          We perused the record, since the complainant has paid premium for LIC policy of the O.P., therefore, he is consumer and dispute is consumer dispute.

8          The grievance of the complainant is that inspite of three polices, having total Rs. 18,00,000/- value of the accidental benefit cover, the Chief Manager of O.P. approached to complainant to take a fresh LIC Policy with accidental benefit Rs. 50,00,000/-. The complainant had also mentioned all the previous policies in his new proposal and handed over to the O.P. with premium of Rs. 4,55,265/- dated 07-01-2008 which was duly accepted by the O.P. and policy bond was issued. It is also admitted by the O.P. that the premium has been paid by the complainant regularly but subsequently a mistake was discovered that the total amount of all four policies exceeded maximum benefit cover of Rs. 50,00,000/- as per IRDA regulation and its circular. Accordingly, premium of the last and the 4^th policy was reduced to Rs. 4,53,765/- from initially proposed and accepted premium Rs. 4,55,265/- p.a. It is claimed by the complainant that after 5 years and 8 months and having received amount of Rs. 23,00,000/-, the O.P. sent a letter dated 14-08-2013 and reduced the amount of Rs. 50,00,000/- to Rs. 35,00,000/- of policy no. 543896386 as being maximum accidental benefit allowed by the LIC and this is the crux for the dispute between both the side.

9          We perused the documents filed by the complainant and the Ref. letter raised by the O.P. in para 6 under sub para regarding circular Ref./1838/04 dt. 23.11.2002 and Ref. Act/ 1844.04 dt. 19.12.2002, it appears from the Anx-7 to 7/3 which was replied under RTI Act of the O.P., it has been mentioned in Anx-7 of the question point (B) in reply that “ there is no requirement to publish the circular in Gazette”. Anx/3 dt. 02.05.2005 said the new circular Ref. Act/2018/04 dt. 02.05.2015 the LIC has decided to increase the ceiling of accident benefit cover from Rs. 25,00,000/- to Rs. 50,00,000/- which will be applicable for all insurance policy and it is necessary to obtain the details of existing accident benefit cover at the proposal stage as per enclosed form has to be insured, with all policies put together, do not exceed to Rs. 50,00,000/-.

            But in the instant case the O.P. has not filed any such filled form of the complainant to show that the complainant had not disclosed about all the policies. The fact asserted in the complaint petition that  after 5 years and 8 months having received the premium @ Rs. 4,55,265/- p.a for the last 4^th policy of Rs. 50,00,000/-, the O.P. unilaterally  reduced the amount of Rs. 50,00,000/- to Rs. 35,00,000/- as being maximum accidental benefit allowed by the LIC.

10        Having considered the facts and circumstances and the law citied by the complainant, reported in 2008 (13) SCC 597 BSNL Vrs. PBL Mobile Cellular Ltd.  and others, which has been held in para 5 and 6 by the Apex Court “Office circular and orders are basically for internal and office use and unless the relevant contents thereof, are specifically made known to the party, it cannot be presumed that these are generally known to them. Therefore, internal circular would have no effect on the terms of the concluded contract (LIC proposal). “In para 32, it is also been held by the Apex Court that “a mistake can be rectified, if it appears on the face of the record, but it cannot be rectified unilaterally. Mistake if any, sought to be rectified after long period, at least after a period of 3 years in law when rectified after long period the same in law may not be treated to be one”.

            Even if assuming correctness of the reducing the insured amount from Rs. 50,00,000/- to 35,00,000/-under table 48 15 10. The premium must be reduced as per the table of the LIC as mentioned in columns page  169 of,  being ready reckenor  for LIC premium, 24 editions, which is not been done by the O.P.

            Moreover the unilaterally change of the insured amount and fixing the premium on account of the mistake that the O.P. found a mistake no doubt after 5 years and 8 months which is against the natural principal of justice and cannot be allowed.

11        Anx7/4 is also a RTI reply from IRDA that the authority did not issued circular in respect of upper ceiling limit of accident benefit cover. However, Regulation 3 of IRDA 2002 stipulated that any benefit arising under each of the riders was not to exceed sum assured under the basic product.

            This Anx also does not authorize the O.P. to change the upper ceiling limit of the policy. However, the O.P. admittedly detected the mistake as per their internal circular which has not been placed in public domain. Therefore, the complainant would not have given opportunity to tell the O.P. at the initial stage of proposal. However, complainant had already disclosed all the 3 previous policies of the O.P., even then the last proposal of Rs. 50,00,000/- was accepted and the policy bond was issued.

12        In the above facts and circumstances and the law citied by the complainant it is apparent on the face of the record and material available on the record, O.P. has made unilaterally alteration in the sum assured of the last proposal policy NO. 544843552 dt. 11.01.2008 which cannot be accepted after long period of 5 years which is against the principal of natural justice and therefore, the O.P. is liable for deficiency in service and unfair trade practice causing mental harassment as well as physical harassment to the complainant.

13        Accordingly, we allow relief as prayed by the complainant. The O.P. is hereby directed not to reduce or change the original accident benefit amount of Rs. 50,00,000/- of LIC policy No. 544843552 dt. 11.01.2008 under plan 48 15 10 and not to reduce premium amount Rs. 4,55,265/- yearly.

We further direct to the O.P. to pay compensation for harassment of Rs. 25,000/- (Rs. Twenty five thousand) only and litigation cost of Rs. 10,000/- (Rs. Ten thousand) only within 45 days of this order.