Punjab

Ludhiana

CC/21/569

Roop Singh - Complainant(s)

Versus

Life Insurance Corp.of India - Opp.Party(s)

Nitesh Jha

10 Oct 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:  569 dated 27.12.2021.                                       Date of decision: 10.10.2024. 

Roop Singh aged 71 years son of Parshotam Singh, resident of Village and Post Office Bhawanipur, Tehsil Garshankar, Distt. Hoshiarpur, Punjab-144523. 

M. 95015-49388.

                                                Versus

1.  Life Insurance Corporation of India, Opp. Bhadaur House, CBО-І, Ludhiana through its Chief Branch Manager/ authorized signatory,
2. Life Insurance Corporation of India, PCMC, Network, Operating Center, 1st Floor, Jeevan Seva Annexe, S.V.Road, Santacruz (W), Mumbai-400 051 through its Managing Director/Chairman/ Authorized Signatory.
3. Vikas Kumar Pathak son of Jagdish Pathak, resident of B-31-1136/191/117, Street No.2, Harjap Nagar, 33 Foota Road, Mundian Kalan, Ludhiana.
4. Varinder Dutta Development Officer, LIC Office, СВО-1, Opp. Bhadaur House, Ludhiana.                                                                                                                                                                   …..Opposite parties 

Complaint U/S. 35 of Consumer Protection Act 2020 as amended up to date.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Nitesh Jha, Advocate

For OP1 and OP2          :         Sh. Rajeev Abhi, Advocate.

For OP3 and OP4          :         None.

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that on the allurement of the OPs, the complainant purchased Plan 165 (Jevan Saral) insurance policy No.302181595 having premium paying term 10 years, policy term 10 years commenced from 28.03.2011 by paying monthly premium of  Rs.2399/-. According to the complainant, he never defaulted in making payment of premium and after elapsing the time of policy, he deposited Rs.2,87,880/- with the OPs. After maturity of the policy, the complainant requested the OPs to made the maturity amount to him. However, the OPs instead of making the assured amount of Rs.4,25,808/- on completion of the period of policy, claimed that the complainant is entitled for Rs.87,182/- only and said amount was disbursed to him in March 2021. The complainant apprised the OPs regarding disbursement of maturity amount of Rs.4,25,808/- but all in vain. The complainant further stated that he many times approached the OPs with request to pay the said promised amount but the postponed the matter on one pretext or the other. However, after few days, the OPs refused to pay anything to the complainant which they assured to pay the maturity amount of Rs.4,25,808/- to the complainant. The complainant claimed to have suffered mental torture, pain, agony and harassment due to deficiency in service and unfair trade practice on the part of the OPs for which he is entitled for compensation of Rs.2,00,000/-. The complainant sent a legal notice dated 20.11.2021 to the OPs but no reply was received. Hence this complaint, whereby the complainant has prayed for issuing directions to the OPs to pay the appropriate claim along with compensation of Rs.2,00,000/- and litigation expenses of Rs.22,000/-.

2.                Upon notice, OP1 and OP2 appeared and filed joint written statement and assailed the complaint by taking preliminary objections on the grounds of maintainability; the complainant being estopped by his own act and conduct; the complainant has not come with clean hands; suppression of material facts; lack of jurisdiction etc.  OP1 and OP2 stated that they have already paid a sum of Rs.87,182/- on 28.03.2021 (i.e. due date of maturity) being the maturity sum assured of Rs.61,180/- plus loyalty addition of Rs.26,002/- as declared by them in full and final settlement of the claim of the complainant and credited to the bank account of the complainant on 28.03.2021, which the complainant has accepted in full and final settlement of the claim voluntarily, unconditionally, without any protest and without reserving any right to recover any balance amount under the claim. The complainant has neither returned the amount of Rs.87,182/- as referred above nor raised any protest immediately on the receipt of the said amount of Rs.87,182/-. Further in the complaint the complainant has not averred that the said amount is received under coercion, undue pressure, financial constrains etc. in terms of law laid down by the Appellate Authority constituted under Consumer Protection Act. According to OP1 and OP2, it raises the presumption that the aforesaid amount of Rs.87,182/- has been received by the complainant in full and final settlement of the claim. The said amount has been paid as per the terms and conditions of the policy No.302181595 obtained by the complainant where it is clearly stated in the policy bond that the maturity sum assured will be Rs.61,180/- and death benefit sum assured under the main plan is Rs.5 lakh and accidental benefit sum assured Rs.5 lakhs.

                   OP1 and OP2 further stated that immediately on the receipt of the claim it was duly registered, entertained and processed. The complainant had obtained LIC's Jeevan Saral with profits policy No.302181595 from LIC of India under Table Term 165/10/10 with monthly premium of Rs.2399/-. As per terms and conditions of the policy printed on the policy bond itself that Maturity sum assured is Rs.61,180/- and death benefit sum assured under the main plan is Rs.5 lakh and accidental benefit sum assured is Rs.5 lakh. No allurement was made as alleged by the complainant. The complainant paid monthly premium of Rs.2399/- through ECS mode up to 2/2021. The maturity payment of Rs.87,182/- (i.e. maturity sum assured of Rs.61,180/- plus loyalty addition of Rs.26,002/- as declared by LIC of India) was processed on 09.03.2021 and credited to the policy holder's bank account i.e. complainant on 28.03.2021 i.e. due date of maturity as per the terms and conditions of the policy in full and final settlement of the claim. Now nothing more is payable under the policy in question.

                   On merits, OP1 and OP2 reiterated the crux of averments made in the preliminary objections. OP1 and OP2 have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                OP3 and OP4 appeared in person and they suffered statement that written statement filed by OP1 and OP2 may be read as written reply on their behalf.

4.                The complainant filed replication controverting the facts mentioned in the written statement and reiterating the averments mentioned in the complaint. However, the complainant stated that he is a senior citizen aged about 71 years and retired as Hony. Captain in army and now he is working as Security Officer in M/s. Eveline International, Ludhiana where he met and worked with OP3 as a co-worker in the said company and developed faith upon him. OP3 and OP4 convinced him to make monthly payment of Rs.2399/0 for 10 years he could get Rs.4,25,808/- as sum assured, upon which the complainant agreed to take policy and paid first premium in receipt of which the sum assured was mentioned as Rs.5,00,000/-. The complainant further stated that the OPs taking advantage of gullible Indians blindly buying LIC’s product, they mis-sold their product like Jeevan Saral plan, which was withdrawn in December 2013. The said product assures to give higher insurance cover which helped as a sales pitch in which the people of age of 50+ were attracted with expectation of getting positive returns. According to the complainant, there were some other policy holders of LIC to which the OPs mis-sold their policies  on the assurance to get higher returns but instead of paying the maturity sum assured despite paying premium for 10-12 years, they only got a meager amount than promised. The complainant further stated that how can the proposal have only ‘sum assured’ field when the product has two ‘sum assured’ (death and maturity). As the proposal did not mention the pathetic maturity sum assured, it tantamount to gross mis-selling by LIC. The policy was sold with inaccurate, faulty ad misleading proposal form.  Even a financially literate person may miss it, as the LIC proposal form only has One field for ‘sum assured’ (Paid only on death). So, paying close attention to the policy document specifying the maturity SA is important when it is different from the death SA. Further at least LIC should have mentioned two sum assured, one saying at the time of maturity and second at the time of death during policy period, in the proposal form which we signed at the time taking policy. In this manner, many other policy holders all over the India were duped by the OPs by giving wrong information. As such, the OPs are guilty of mis-selling the insurance policy to him.   

5.                In evidence, the complainant tendered his affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents  Ex. C1 to Ex. C11 and closed the evidence.

6.                On the other hand, the counsel for OP1 and OP2 tendered affidavit Ex. RA of Sh. Sant Ram Singh, Manager (Legal & HPF) of LIC of India, Divisional Office, Dugri, Ludhiana  along with documents R1 to Ex. R30 and closed the evidence.

                   OP3 suffered statement not to produce any evidence and closed his evidence.

                   OP4 tendered document Ex. OP4/1 and closed his evidence.

7.                None turned up on behalf of OP3 and OP4 today also. We have heard the arguments of the counsel for the complainant as well as OP1 and OP2 parties and also gone through the complaint, replication, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by the parties. We proceed to decide the case on merits. 

8.                The complainant, a senior citizen, a holder of Honorary rank of Captain in Army, was working as Security Officer with a Private Firm came into contact with OP3, a LIC agent and OP4, a Development Officer of OP1 and OP2, both prevailed upon the complainant for subscribing to an insurance policy. OP3 obtained  a proposal form No.19874 dated 10.02.2011 Ex. R1 from the complainant. Perusal of proposal form shows that a plan and term 165-15 along with sum assured of Rs.5,00,000/- has been mentioned in the proposal form and the details of benefits are missing. The complainant underwent medical examination and tests as prescribed by empanelled doctor of OP1 and OP2. Its report is Ex. R12 dated 13.03.2011 Thereafter, the policy in question known as “LIC’s Jeevan Saral (With Profits)” under table term 165/10/10 with monthly premium of Rs.2399/- (Ex. R2) was issued. The complainant dutifully paid a total premium of Rs.2,87,880/- without any fail or default and got a paltry sum of Rs.87,182/- on maturity though an amount of Rs.4,25,808/- was promised by OP3 and OP4. Hence the present complaint.

9.                Now the first and foremost point of determination arises for consideration before this Commission whether OP3 and OP4 being the authorized agent and representative of OP1 and OP2 had mis-sold Jeevan Saral policy No.302181595 Ex. R2 to the complainant or not? If so, whether they are liable to indemnify the complainant and to what extent.

10.              The material particulars in the policy Ex. R2 have been reflected in the following tabulated manner:-

It appear that nomenclature of the benefits has been mentioned in the upper table box while the amounts mentioned in the corresponding lower tabular box but in disjoint and incoherent  manner. Any prudent man even after examining the same with his best diligence and wisdom would find it difficult to decipher the co-relation between the contents of two tables. Thus, it made these terms and conditions opaque, ambiguous, unfair and unreasonable and at very outset put the prospecting gullible purchaser of the policy  to the disvantageous position. In such situation, the duty of OP3 and OP4 becomes more important so to explain the complainant the details and consequences meticulously. But OP3 and OP4 even at the time of proposal did not mention the name of the policy and just mentioned a sum proposed to be Rs.5,00,000/- which in fact was not in case of maturity. A false promise of disbursement of Rs.4,25,808/- as maturity amount was made by OP3 and OP4. The contents of proposal form Ex. R1 were also not consonance with the policy to be sold. It is specific case of the complainant that OP3 and OP4  have misrepresented him and deceitfully succeeded in getting the policy issued as per their desires and that is why the complainant has impleaded LIC agent and Development Officer as OP3 and OP4 in the present case. Both were served in the present case and did not file any separate written statements or affidavits to refute the allegations of the complaint. Rather on 26.07.2020, both appeared before Predecessor of this Commission and made separate statements that the written reply filed by OP1 and OP2 may be read as part of their reply. OP3 on 01.12.2023 just closed evidence and relied upon evidence produced by OP1 and OP2. However, on 07.02.2024, OP4 also suffered identical statement and closed his evidence. Although OP3 and OP4 have adopted the written version and evidence of OP1 and OP2 but it is not suffice to discharge the onus against them as there were specific allegations of misrepresentation on their part. As such, this Commission is constrained to conclude that OP3 and OP4 have mis-sold the insurance policy to the complainant which amounts to adoption of unfair trade practice on their part.

11.              Now the second point of determination arises whether  the policy in question is an unfair contract and can be declared voidable at the option of the complainant?

12.              It is settled law that the terms of insurance policy have to be strictly construed as per the terms and conditions of the policy document which is a binding contract between the parties and nothing can be added or subtracted by giving a different meaning to the words mentioned therein. In this regard, reference can be made to 2023 LiveLaw (SC) 90 in National Insurance Company Ltd. Vs The Chief Electoral Officer and others. Further the insurance contracts are in nature where exceptions cannot be made on the ground of equity and the Courts ought not to interfere in the terms of the insurance agreement.

                   The Consumer Protection Act, 2019 introduced the concept of “Unfair Contract” as envisaged in Section 2(46) of the Act itself. Section 2(46) of the Consumer Protection Act is reproduced as under:-

“(46) “unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following namely:-

1. requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
2. imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or
3. refusing to accept early repayment of debts on payment of applicable penalty; or
4. entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
5. permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; or
6. imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage.”

 However, Section 47 (1) (ii) and 58 (1) (ii) of the Consumer Protection Act, 2019 confers the original jurisdiction for declaring particular contract to be unfair upon State Commission as well as National Commission. Section 34(1) of the Consumer Protection Act confers the jurisdiction upon District Commission as it starts within the word “Subject to other provisions of Act” which obviously means “Subject to the Section 47 (1) (ii) and 58 (1) (ii) of the Consumer Protection Act”. The Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd. Vs Abhishek Khanna & another (2021) 3 SCC 241 had observed that powers have been conferred on the State Consumer Forum and the National Commission were conferred with the power to declare contractual terms that were as unfair to consumers as null and void. Hence the jurisdiction of District Commission to entertain the complaint against unfair contracts have been excluded and as such, this Commission is not empowered to declare  the policy in question as unfair contract. Under the facts and circumstances of the case, it would be just and appropriate, since OP3 and OP4 have exceeded their authority in mis-selling the insurance policy to the complainant and have adopted unfair trade practice. So they are liable to pay a compensation to the complainant. The composite compensation is assessed to be Rs.1,00,000/-.

13.              As a sequel of above discussion, the complaint is partly allowed with an order that OP3 and OP4 shall jointly and severally pay a composite compensation of Rs.1,00,000/- (Rupees One Lac only) to the complainant within 30 days from the date of receipt of copy of order, failing which OP3 and OP4 shall be liable to pay interest the rate or 8% per annum on the said amount from the date of filing of complaint till its actual payment. However, the complaint as against OP1 and OP2 is hereby dismissed. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

14.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

Announced in Open Commission.

Dated:10.10.2024.

Gobind Ram.