Kerala

Idukki

CC/189/2018

shija jose - Complainant(s)

Versus

Divisional manager - Opp.Party(s)

27 Jun 2022

ORDER

                                                            DATE OF FILING :17.10.2018

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the    27^th   day of  June, 2022

Present :

SRI. C. SURESHKUMAR                   PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.189/2018

Between

Complainant                                           :   Shaji Joseph, S/o. Joseph,

                                                                  Cheruvillathu House,

                                                                  Anchiri P.O.,

                                                                 Thodupuzha, Idukki.

       (By Advs: Georgy George & K.M. Sanu)

And

Opposite Parties                                     :  1.  L.I.C. of India,

                                                                     Represented by

                                                                     The Divisional Manager,

                                                                     Divisional Office,

                                                                     Jeevan Prakash, P.B. No.609,

                                                                   Nagampadam, Kottayam – 1.

                                                                 2.  The Branch Manager,

            LIC of India, Branch Office,

           Pulimoottil Plaza, Thodupuzha.

           (Both by Adv: M.V. Francis)

      3.  Divya Varghese,

                                                                    LIC Agent,

                                                                     Kattimattam House,

                                                                   Vengalloor P.O.,

                                                                   Achan Kavala, Thodupuzha.

(By Adv: Dipu Chandran)

 

O R D E R

 

SRI. C. SURESHKUMAR, PRESIDENT

 

1. This is a complaint filed under Section 12 of the Consumer Protection Act, 1986 (the Act, for short).  Complainant’s case if briefly discussed hereunder :

                                                                                                                (cont….2)

 

• 2  -

          Complainant had taken a new Bima Gold Policy in the year 2012, of Life Insurance Corporation of India from 2^nd opposite party which is represented by its branch manager at Thodupuzha.  1^st opposite party is Divisional Manager of LIC having its office at Nagampadam, Kottayam.  Complainant had duly paid the premium of policy until 2017.  Due to financial exigencies, he was unable to continue the policy. Complainant was informed by the office of 2^nd opposite party that if policy is surrendered, he will get the money paid as premium less survival benefit given to him, with interest.  Believing this, complainant had surrendered the policy on 19.8.2017.  However, to his disappointment, he had received only Rs.52,846/- as surrender value.  He has paid Rs. 2,62,235/- towards premium. Complainant is entitled to get back Rs.1,09,389/-, which is the amount remaining after deducting survival benefit availed by him from Rs.2,62,235/-, the total premium amount paid until 2017, after deducting aforesaid surrender value also.  Complainant had filed a petition before DLSAThodupuzha on 19.2.2018 claiming the amount due.  However, opposite parties have filed written statement disputing the claim.  Hence this complaint.  Complainant prays for reimbursement of Rs.1,09,389/- with 9% interest and also for adequate compensation towards deficiency in service from the side of opposite parties.

 

          2.  Opposite parties 1 and 2 have filed a joint written version disputing the claim raised by complainant.  Their case is briefly discussed hereunder :

 

          According to opposite parties 1 and 2, complaint is not maintainable in law or upon facts.  It is true that complainant had taken a policy bearing No.395462263 issued from the Thodupuzha branch of LIC under its New Bima Gold Plan (T 179), as per proposal No.11362, dated 5.3.2012, submitted by complainant.  Date of commencement of risk as per the policy was from 10.3.2012.  Sum assured was Rs.10 lakhs.  Period of policy was 20 years from the date of commencement of risk.  Complainant had opted to pay yearly premium at the rate of Rs.52,447/-.  Complainant paid 5 premiums totaling to Rs.2,62,235/-.  Opposite parties had paid Rs.1 lakh as survival benefit on 10.3.2016 to complainant.  Allegations that office of 2^nd opposite party had informed the complainant that he will get back premium amount paid by him less surrender value with nominal interest, are not true.  Complainant had signed application for surrender cum discharge form after filling answers therein and had given it to 2^nd opposite party on 17.8.2017.  Basis of contract is the proposal form for insurance signed and given by complainant on 5.3.2012.  Complainant had chosen the term of policy as 20 years and to pay yearly premium.  Accordingly he has to pay early premium due at the rate of Rs.52,447/- till March, 2031, maturity date of the policy being 10.3.2032.  As admitted by complainant, he had discontinued paying premium for his own reasons.   As per clause 4 of conditions                                                                                                                         (cont….3)

• 3  -

and privileges of policy, he was eligible for paid up value amounting to Rs.1,57,235/- on the date of maturity, that is on 10.3.2032.  However, complainant had terminated the policy much earlier to the maturity date.  Hence he is eligible only for present value of benefits payable at maturity calculated by applying surrender value factors in accordance with the regulations.  Surrender value payable on the date of surrender was only Rs.52,846/-.  This is equal to the present value of paid up value.  Clause 4  of Non forfeiture Regulations are reattriated in the written version are  reproduced here with :  If after at least two full years premium have been paid and any subsequent premium be not duly paid, full death cover shall continue for a part two years from the due date of the First Unpaid Premium (FUP).  This period of 2 years from FUP shall be called Auto Cover Period.  During the Auto Cover Period the Life Assured can pay one or more instalments of premium with interest without submission of any evidence of death.  On payment of part or full arrears of premiums with interest the Auto Cover Period of 2 years from the due date of new FUP shall be available during the term of the policy.

 

Notwithstanding what is stated above, if after at least three full years premiums have been paid in respect this policy, any subsequent premium be not duly paid, this policy shall not be wholly void after the expiry of two years.  Auto Cover Period, from the due date of the First Unpaid Premium, but shall subsist as a paid up policy for amount equal to the total premiums paid (any extra/optional premium) less survival benefits paid earlier if any.  This amount shall be called as paid up value.  This paid up value shall be payable on the date of expiry of policy term or at life assureds’ prior death.  No survival benefits shall be payable under paid up policies.  The policy, thereafter, be free from all liabilities for payment of the within mentioned premiums. 

 

The Accident Benefit Rider will cease to apply if the policy is in lapsed condition.  During the Auto Cover Period, the Accident Benefit Rider shall not be available.

 

The policy terms and conditions Clause 8 Guaranteed Surrender Value :  This policy can be surrendered for cash after completion of at least three policy years and at least three full years premiums have been paid.  The guaranteed surrender value is equal to 30% of the total amount of premiums paid excluding the for the first policy year, all extra premiums paid for Accident Benefit Rider and the amount of survival benefits paid earlier.  There shall not be any Guaranteed Surrender Value under the policy during the Extended Term as mentioned in the policy schedule.

 

Contentions raised on para 4 & 5 are not entirely true.  Complainant has given a declaration in his surrender application that he was well aware of the loss occasioned due                                                                                                                       (cont….4)

• 4  -

to surrender of policy.  He had signed the discharge form after fully understanding the method of calculating surrender value.  All plans of LIC, Conditions and Privileges thereof have been approved by Insurance Regulatory and Development Authority (IRDA).  Opposite parties have to abide by those regulations and cannot make payment outside the same.  Opposite parties have filed a written statement outlining true facts in answer to the complaint filed by complainant before DLSA Thodupuzha.  LIC had received premiums for the policy from complainant only for 5 years. Conditions and privileges of the policy did not provide refund of premium upon any contingencies.  LIC of India is only custodian of public fund and payment of amount higher than that envisaged by policy terms and conditions will be a drain on public fund.  Nobody is authorized to sanction such payments.  Therefore, complainant is not entitled to get back Rs.1,09,389/- with or without interest from opposite parties as it is outside the terms and conditions of policy.  LIC has not authorised its officers to give assurances or to make promise beyond the terms of policies issued.  Complainant is therefore to be dismissed with cost.

 

          3. Subsequently, complainant had filed an application to implead the LIC agent, who according to him had canvassed for the policy upon new allegations that the agent had also made representations  that complainant will get back the premium paid less survival benefit given to him, with interest.  3^rd opposite party had appeared and filed a written version contending that no such assurance or representation was given or made respectively.  3^rd opposite party had only represented actual terms and conditions of policy in accordance with the regulations of IRDA.   No misrepresentations were made.  Therefore, complaint is to be dismissed.

 

          4. After providing sufficient opportunity to take steps, case was then posted for evidence.  On the side of complainant, he himself was examined as PW1.  Ext.P1 was marked on his side.  Exts.R1 and R2 were admitted upon admission by him during his cross examination. An Officer of the Corporation attached to its legal section was examined as RW1.  Exts.R3 to R9 were further proved by him.  Thereafter evidence was closed.  Both sides have not filed any notes.  Oral arguments were addressed by counsels appearing on behalf of the parties.  Now the points which arise for consideration are :

 1)  Whether complainant is entitled to get back Rs.1,09,389/- after deducting survival benefit of Rs.1 lakh and surrender value of Rs.52,846/- received by him, upon surrender of policy ?

2)  Whether 2^nd opposite party’s employees or 3^rd opposite party had given any assurance to complainant that he will receive balance amount of premium paid by him after deduction of surrender value along with nominal interest ?                                                                                                                                                 (cont…..5)

-  5  -

3)  Whether non-payment of balance amount as aforesaid after deducting survival benefit and surrender value paid would constitute deficiency in service ?

4)  Whether misrepresentation made purportedly from the office of 2^nd opposite party and 3^rd opposite party would constitute deficiency in service ?

5)  Whether complainant is entitled to get back balance amount from total premium paid by him after deducting surrender value and survival benefit received by him ?

6)  Reliefs and costs ?

 

5.  Point Nos.1 to 5 were considered together :

 

          Able counsel for the complainant has briefly narrated the case of complainant and submitted that his case has been proved by evidence tendered by him in this regard and further by Exts.P1, R1 and R2.  Exts.R6 to R8 are only copies of Ext.P1.  He would pray for an order awarding repayment of balance amount of premium after deduction of surrender value and survival benefit along with adequate compensation for deficiency in service and costs.

 

          Learned counsel for opposite parties 1 and 2 would argue that complainant is not entitled to get back balance premium amount after deduction of surrender value and survival benefit.  Surrender value is calculated in accordance with the terms and conditions of policy in the present case as per clause 4 and 8 of conditions mentioned in Ext.R4.  Complainant is only entitled for surrender value calculated at 30% of total amount of premium paid after excluding premium for the 1^st policy year, all extra premiums paid, premium paid for Accident Benefit Rider and amount of surrender benefits paid earlier.  There shall not be any     additions to   surrender value under the policy during extended period as mentioned in the policy schedule.  As per clause 4 of conditions, any policy where atleast 3 full years premium has been paid, policy will not be wholly void until after expiry of 2 year Auto Cover period from due date of 1^st unpaid premium.  Thus policy has an extended  life period of 2 more years  during which it can be extended.  However, there will be no accrued benefit for this period as per clause 8, of conditions of policy.  Learned counsel also pointed out that surrender value can be paid only in accordance with terms and conditions of policy.  In this context, he is relying upon the decision of Apex Court, in  Civil Appeal No.2568 of  2019,  Anandrao Ramachandra Salunke Vs. Life Insurance Corporation of India and another.  He would further contend that pleadings and evidence to the effect that there was misrepresentation from the office of 2^nd opposite party and lately by 3^rd opposite party also, is met with  contra evidence tendered by RW1 and RW2.  Complainant’s case in this regard is  inconsistent and unbelievable. More over, Ext.R1 questionnaire which was in Malayalam,                                                                                                                           (cont….6)

• 6  -

filled up and signed along with surrender proposal has been admitted by complainant during his cross examination.  He has signed the questionnaire declaring that he had signed it after fully understanding the amount of surrender value and method of its calculation.  That being so, case of the complainant is to be rejected.

 

          Thus these are rival contentions.  Before impleading supplemental 3^rd opposite party, complainant has not raised any allegation against him with regard to misrepresentation of facts.  3^rd Opposite party was impleaded after filing of written version by 1^st and 2^nd opposite parties wherein they have contended that no specific employee is named in the complaint who had purportedly  misrepresented the terms and conditions of policy to the complainant owing to which he had surrendered the policy believing that he will get back the premium amount paid by him less survival benefit along with nominal interest.  Evidence of complainant with regard to alleged representation made by 3^rd opposite party also has been challenged during his cross examination and also in the evidence tendered from the side of opposite party.  The fact that no specific employee of the 2^nd opposite party was named in the complaint earlier would make the case of complainant that there was misrepresentation from the office of 2^nd opposite party and also by 3^rd opposite party unbelievable.  Complainant has not succeeded in proving that there was any misrepresentation on the lines stated by him in his complaint or in box.

 

          Complainant has not challenged the method of calculation of surrender value but has only contended that he had surrendered the policy believing the representation made from the office of 2^nd opposite party and also by 3^rd opposite party to the effect that he will get back balance premium amount paid less the money disbursed to him by the opposite parties as far as calculation of surrender value is concerned.  Learned counsel has given a statement showing method of calculation on the basis of a table which shows the percentage of premium paid which can be given as surrender value.  For the sake of convenience, we are reproducing the calculation given in the statement of the counsel hereunder:

Paid up Value Calculation:

 

Sl No.  Details

   1    Sum Assured                                                  10,00,000

   2   Period Of Insurance                                       20 yrs

   3   Number of premiums paid upto revival             5Nos

  4   Amount of yearly premium                           52,447

  5   DAB premium per year                                   1000

  6   Survival benefit paid                                  1,00,000                               (cont….7)

• 7  ­-

 

Calculation Of Paid up value

 

1 Total Premium paid                                                                         Rs.2,62,235

 

 

          Less

1  DAB premium paid for 5 years                                                                        5000

 2  Survival benefit paid                                                                               1,00,000

Paid up maturity value on 10/03/2032                                                    Rs. 1,57,235

 

Present surrender value on date of surrender 19/08/2017                       Rs. 52,846  

 

In this context, we also note that terms of surrender, conditions thereof are clearly mentioned in policy document itself as is evident from Ext.R4, which is a copy of the policy.  As rightly pointed out by learned counsel, clause 4 and 8 of conditions mentioned in the policy clearly show the method by which surrender value is to be calculated.  That being so, in the light of decision of Hon’ble Supreme Court, cited supra, complainant cannot contend that he is entitled to get back the premium paid by him less payment made to him by corporation.  At this juncture, we would like to add that Hon’ble Supreme Court itself has observed in the judgement that there is a misconception amongst the public that surrender value is misconstrued as one which is equal to the total amount of premium.  Paragraph 11 and 15 to 17 in the same judgement are very much relevant.  For the sake of brevity, we are not quoting those paragraphs in this order.  We have gone through the statement showing calculation of surrender value submitted by the learned counsel.  This appears to be in accordance with the terms and conditions of the policy issued to the complainant and R9 table.  In fact, the complainant has not disputed  the method of calculation.  That being so, we hold that complainant is not entitled to get back premium paid after deducting surrender value and survival benefit received by him.  There is no evidence to show that there was any deficiency in service rendered to complainant by opposite parties 1 to 3.  Hence we find that complainant is not entitled for any compensation or costs either.   Point Nos. 1 to 5 are answered accordingly. 

 

 

 

 

                                                                                                          (cont……8)

 

 

• 8  -

 

 

6.  Point No.6:

 

          In the result, this complaint is dismissed, considering the circumstances, without costs.

 

                                 Pronounced by this Commission on this the  27^th    day of June, 2022

 

 

                                                                                      Sd/-

                                       SRI. C. SURESHKUMAR, PRESIDENT

                            

 

                                                                   Sd/-

  SMT. ASAMOL P., MEMBER

 

                        Sd/-

SRI. AMPADY K.S., MEMBER

 

 

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1         -  Shaji Joseph.

On the side of the Opposite Party :

RW1        -  George C.D.

Exhibits :

On the side of the Complainant :

Ext.P1      -   Policy document.

On the side of the Opposite Party :

Ext.R1     -   surrender application.

Ext.R2     -   copy of complaint filed before DLSA, Thodupuzha.

Ext.R3     -  copy of proposal form.

Ext.R4     -  copy of policy document.

                                                                                                                   (cont....9)

• 9  -

 

Ext.R5     -  copy of written statement filed by opposite party before DLSA, Thodupuzha.

Ext.R6     -  copy of letter issued by complainant to opposite party.

Ext.R7     -  copy of letter issued by opposite party to complainant.

Ext.R8    -  copy of outward register of opposite party.

Ext.R9    -  copy of table for surrender value of policies.

 

                                               

                                                                                      Forwarded by Order,

 

 

 

                                                                                  ASSISTANT REGISTRAR