Delhi

North East

CC/59/2015

Shankar Kishor Shrivastha - Complainant(s)

Versus

LIC Branch - Opp.Party(s)

12 Mar 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 59/15

 

In the matter of:

 

	Shri Shankar Kishore Shrivastav S/o Late Hanuman Prasad SHrivastav House No. 44, Block C-7, Yamuna Vihar, Delhi -110053.	Complainant
	Versus
	Life Insurance Corporation of India Branch 11-D, Plot No. 6, Jeevan Pragati Building, Vanijaya Sansthan, Laxmi Nagar, Delhi-110092.	Opposite Party

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION      :

09.02.2015 05.03.2018 12.03.2018

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

Ravindra Shankar Nagar, Member

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. The case of the complainant is that he is a senior citizen retired from Government Job. In April 2013, the complainant had come into contact with Mr. Ramesh Aggarwal, agent of OP code No. 0191911D and had discussed his desire with the said agent to take post retirement policy to secure future for next ten years with a sum assured of approximately Rs. 19,00,000/-. The said agent had informed the complainant that since his age was 59 years, therefore no policy coverage can be given to him without proper medical examination for which the said agent had given the complainant Data Sheet/Special Report Required Form and asked the complainant to take the same to Life Line Diagnostic Centre located at C4, Anand Vihar Delhi and get himself medically examined and also asked the complainant to handover a blank cheque with his signature. The complainant accordingly got himself examined and underwent certain test at above mentioned diagnostic centre and also handed over a blank cheque bearing No. 4486 drawn on Delhi Nagrik Sahkari Bank Ltd, Yamuna Vihar Branch duly signed by the complainant to the said agent. The complainant has further stated that after few days the said agent handed over a premium receipt No. 3237725 dated 27.05.2013 wherein the premium of Rs. 1,08,090/-  for the year 2013 -2014 was charged from the complainant and policy No. 126624777 was issued in favour of the complainant by the OP with the wife of OP as nominee therein for a total sum assured of Rs. 19,62,500/- and thereafter the complainant received LIC certificate by registered post in which an additional Rs. 127/- was charged towards the yearly premium thereby the total premium was to the tune of Rs. 1,08,217/-. That thereafter the complainant continued to pay the same premium amount for the subsequent period of renewal of the said policy for 2014-2015 vide cheque No. 77985 dated 11.04.2014 for which the OP issued the premium receipt dated 11.04.2014. However the OP vide letter dated 27.08.2014 to the complainant informed the complainant that his policy was accepted by their higher office with class IV health extra, but through an oversight due to some technical error only class I extra was charged. This was pointed out during the audit of their branch which was going on at that time. On the basis of that and on proper scrutinizing & checking that OP found that the actual premium that is chargeable on the basis of health extra comes to Rs. 1,50,221/- instead of Rs. 1,08,217/-. Since the complainant had already paid two yearly premiums the recovery comes to Rs. 84,008/- (42004x2) and requested the complainant to deposit the same at the earliest so that the risk is properly covered.

The complainant vide reply dated 22.09.2014 had shown his opposition to the arbitrary enhancement of premium amount by the OP and expressed his inability to bear the additional burden since he was a retired senior citizen. The said letter was acknowledged by the OP on the same day vide acknowledgement slip duly stamped on 22.09.2014. The OP vide reply dated 13.10.2014 reiterated its stand taken vide previous letter dated 27.08.2014 and requested the complainant to pay the differential premium amount of Rs. 84,008/- within 15 days of receipt of this letter to continue the valuable risk cover failing which the OP shall cancel the policy and recover the extra. The OP had also given an option to the complainant to go for reduction in sum assured if the complainant was unable to pay the premium. The complainant vide reply dated 30.10.2014, protested the enhancement of the premium amount and demand / threat by OP that his policy shall be cancelled in the event of failure to pay as the same was illegal and that the complainant should not be punished for fault of the agent of OP. The OP vide reply dated 16.12.2014 reiterated the option given by them to the complainant to either accept the reduced sum assured or pay the difference of premium of Rs. 84,008/- (deficit of two years) as decision taken by their medical officer after looking into the special reports and medical reports of the complainant on prognosis factors and not on diagnostic factors, to cover which, extra premium is charged. Lastly the OP vide letter dated 19.01.2015 to the complainant gave the complainant the requisite information as desired by him to the effect that on payment of balance of extra premium, the complainant shall continue to have benefit of full sum assured of Rs. 19,62,500/-, or in the alternate he can go for a reduction of sum assured of Rs.14,13,250/- for which the premium shall come to Rs. 1,08,223/- which may be done from the inception of the policy and the difference of the premium is Rs. 6/- per year only. The OP further informed the complainant that on maturity of the policy, Maturity Sum Assured + Loyalty Addition will be payable to the complainant and that the complainant should confirmed the option within 7 days of receipt of the said letter failing which the OP shall cancel the policy and refund the money of the complainant afterdue deduction. Therefore the complainant was constrained to file the present complaint raising preliminary objection that firstly the OP, without any discussion or prior intimation enhanced the premium amount to Rs.1,50,221/-, secondly was the OP sleeping for two years i.e. 2013 – 2014 and 2014 – 2015 when the premium was charged on due medical examination of the complainant? thirdly why is the complainant made to suffer due to carelessness of the OP for which no action has been taken against the concerned officer of the OP? fourthly had the complainant been earlier apprised of the annual premium amount of Rs. 1,50,221/- by the OP, the complainant would not have taken the policy cover given his financial condition and fifthly the complainant was dependent on his pension for subsistence & paying such a higher premium would cause great difficulty. The complainant therefore vide present complaint has prayed to this Forum for directions to the OP to continue his existing policy on the rate of premium of Rs. 1,08,217/- as had been taken by him. The complainant has further prayed that in April 2015 when his third premium is due, the OP be directed to receive the old premium amount of Rs. 1,08,217/- till the complaint is adjudicated upon so that the policy does not get cancelled and that the OP should continue with the current policy with all its benefits for the entire duration i.e. 18.04.2024 without any changes. The complainant lastly prayed that in the event the OP cancels his 2013-2014 policy, the entire money alongwith interest and 50% of sum insured be directed to the OP to pay to the complainant as compensation.

2. Notice was issued to the OP. OP entered appearance on 20.08.2015 and filed written statement wherein the OP took the preliminary objection that after medical examination of the complainant, it was found that the health of the life assured i.e. the complainant was not up to the mark and hence it was decided that class IV extra premium was require to be paid for which inadvertently complainant was charged class I extra premium which mistake was noticed during the regular audit by which time the complainant had already deposited two installments of premium. The OP further submitted that it had repeatedly requested the complainant to deposit the deficit amount of premium or get the coverage / sum assured reduced to Rs. 14,13,250/- against Rs. 19,62,500/-. The OP took the plea that the Hon’ble Supreme Court in H.P. Forest Company Ltd. Vs M/s United India Insurance Co. Ltd, Civil Appeal No. 6347 of 2000, held that on basis of typographical mistake which has been rectified in the records of the Company before the occurrence, insured cannot get benefit of typographical mistake. The OP further cited the decision of Hon’ble NCDRC in revision petition No. 2802 of 2011 in LIC Vs Anil Kumar Jain decided on 11.02.2013 and decision of Hon’ble NCDRC in revision petition No. 3833 of 2011 in Virupaxappa I. Yaragatti Bs Senior Branch Manager LIC decided on 19.03.2014 in its defence where the Hon’ble SC and NCDRC had justified the corrections in the policy. The OP took the plea that since the medical report of the complainant was not satisfactory, therefore class IV extra premium was required to be paid by complainant against the coverage given to the complainant by OP. The OP further took the defence that the complainant failed to avail of the option given by the OP to either pay the differential / balance premium amount or agree for the decreased sum assured which the complainant failed to exercise and therefore prayed that the complaint merits dismissal with heavy cost.
3. The complainant did not file rejoinder to the written statement despite several opportunities granted and therefore vide order dated 21.10.2015, his right to file rejoinder was closed.
4. Evidence by way of affidavit was filed by both the parties. The complainant therein exhibited the relevant documents from the data sheet for medical check-up, premium receipt, policy certificate and all the correspondence between himself and the OP from 27.08.2014 up till 19.01.2015.
5. Written arguments were filed by both the parties. The complainant delineated and reiterated the entire sequence of events from April 2013 when he took the policy from Shri Ramesh Aggarwal Agent for OP till last correspondence with the OP dated 19.01.2015 agitating the arbitrary enhancement of premium and pressure tactics adopted by the OP to coerce the complainant into either paying the enhance differential premium or agree for reduced coverage or face cancellation of policy.

The OP cited the case law of HP State Forest Company Ltd Vs United India Insurance in which the Hon’ble Supreme Court endorsed the stand of Insurance Company and held that in cases involving typographical mistake / error in which the premium was taken to make good the deficiency in policy, there was no deficiency in service. The judgment relied upon by the OP passed by The Hon’ble NCDRC in LIC Vs Anil Kumar Jain clearly ruled that typographical mistakes can be rectified as and when they are noticed and OP has not committed any error in asking complainant to make payment of premium to continue old term plan particularly when the premium shown was not correct, and on refusal by the complainant, OP had not committed any error in revising term plan specially when typographical mistake had been noticed in audit objection and therefore the Hon’ble NCDRC had directed the complainant to make further payment of premium to the insurance company. The Hon’ble NCDRC in the case of Virupaxappa I. Yaragatti Vs Senior Branch Manager LIC has held that typographical mistake can be rectified as and when they are noticed and the complainant cannot be allow to take advantage of such a mistake. Moreover, it is fundamental principle of insurance that utmost good faith must be observed by contracting parties and therefore no deficiency in service under these circumstances can be attributed on the part of insurance company.

6. We have heard the arguments address by the complainant as well as OP and have thoroughly perused the complete case file alongwith material documentary evidence placed on record and judgments / case laws cited by the OP in its defence.               

On perusal of file it has been seen that vide order dated 13.04.2015 on application filed by the complainant, this Forum had directed the OP to receive the premium amount of Rs.1,08,217/- from the complainant regularly as and when due without prejudice to the OP’s right to be determined on final disposal of this complaint.

We have applied our judicial mind to the present dispute. It is not in dispute that the premium amount of Rs. 1,08,217/- was charged by the OP from the complainant for policy year 2013 – 2014 and 2014 – 2015 for coverage/sum assured of Rs. 19,62,500/-. However, by own admission of OP, the same was erroneously and under charged as typographical error of class I extra premium instead of class IV health extra owing to which error, under class IV health extra which attracted a premium of Rs. 1,50,221/-, lesser premium of Rs. 1,08,217/- was charged for two consecutive terms 2013-14 & 2014-15 by the OP from the complainant and therefore on realizing the said error, the OP vide letter dated 27.08.2014 had asked the complainant to make good the deficit to the tune of Rs. 84,008/- (42004x2) for the sum assured 19,62,500/- and the same was repeatedly asked for by the OP from the complainant in subsequent correspondences with an option given to the complainant to either pay the deficit differential premium amount orreduce the sum assured from 19,62,500/- to 14,13,250/-. In the light of the settled case law highlighted by the OP passed by Hon’ble SC and NCDRC in such cases, no deficiency of service can be attributed to the OP in the present case and complainant cannot be allowed to take advantage of an inadvertent and bonafide typographical error admitted on the part of OP.

7. Deciding on the basis of parity of natural justice and considering the age and financial status of the complainant who is a retired senior citizen as well as the settled law pertaining to premium issues as laid down by Hon’ble SC and NCDRC and relied upon by the OP, it would be unfair and unjust to saddle the complainant with an enhanced premium of Rs.  1,50,221/-, in other words, an additional burden of Rs. 2,40,020/- towards short fall of premium by Rs. 48,004/- multiplied by 5 for the period of policy 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 since as per order dated 13.04.2015 passed by this Forum, OP was directed to continue the said policy and to receive the premium of Rs. 1,08,217/- from the complainant regularly as and when the policy came up for renewal during pendency of complainant which receipt of premium was without any prejudice to OP’s right to be determine at this stage of passing of final order. Therefore it would be fair and just that the option given by OP to the complainant vide letters dated 13.10.2014 & 19.01.2015 to continue the said policy against a premium of Rs. 1,08,223/- i.e. Rs. 6/- extra premium for reduction of sum assured i.e. death sum assured of Rs. 14,13,250/- be finalized and crystallized with retrospective effect i.e. from the period of inception of the policy 2013-14 till last renewal in 2017-18 i.e. for past 5 years for which the complainant is directed to pay Rs. 30/-(Rs. 6x5) as differential/additional sum of premium to the OP and henceforth for all subsequent renewals, the complainant is directed to pay a deposit of Rs. 1,08,223/- to the OP as premium for sum assured Rs. 14,13,250/-. The OP is directed to furnish revised LIC certificates from the date of commencement of policy i.e. 18.04.2013 till all subsequent renewals up till 2017-18 with reduced maturity sum assured/death benefit sum assured to the tune of Rs. 14,13,250/- with revised installment premium to the tune of Rs. 1,08,223/- and the same shall continue in future context i.e. policy coming up for renewal on 18.04.2018 onwards with all the existing benefits. Let the order be complied within 30 days from date of receipt of copy of this order.                 
8. Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
9.   File be consigned to record room.
10.   Announced on  12.03.2018   

 

(N.K. Sharma)     President

(Sonica Mehrotra) Member

(Ravindra Shankar Nagar) Member