Chandigarh

DF-I

CC/1054/2019

Mrs. Sumi Gurmeet Singh - Complainant(s)

Versus

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

Deepan Sidhu

09 Mar 2021

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                    

Consumer Complaint No.	:	CC/1054/2019
Date of Institution	:	06/11/2019
Date of Decision	:	09/03/2021

 

Mrs. Sumi Gurmeet Singh w/o Sh. Gurmeet Singh r/o Kothi No.453, Phase-1, Mohali, Punjab.

… Complainant

V E R S U S

1. Life Insurance Corporation of India, through its Divisional Manager, LIC of India, Divisional Office, Jeevan Prakash Building, Sector 17-B, Chandigarh.
2. Life Insurance Corporation of India, through its Branch Manager, SCO No.7A, Sector 7-C, Chandigarh.

… Opposite Parties

CORAM :	SHRI RATTAN SINGH THAKUR	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                               

ARGUED BY	:	Sh. Gurmeet Singh, Counsel for complainant
	:	Sh. Rajneesh Malhotra, Counsel for OPs

 

Per Rattan Singh Thakur, President

1.      Briefly stated the allegations are, on 15.10.2003, complainant had purchased a policy No.162426667, Plan No.131 from OP-2 for 15 years. The premium of the policy was ₹4,432/- quarterly and the date of maturity was 15.10.2018. As per terms and conditions of the policy, on the life assured (complainant) surviving the stipulated date of maturity or on his earlier death and provided the policy is in full force on the stipulated date of maturity or on the date of death, the policyholder may be eligible for payment of loyalty addition at such rate ending such terms as may be declared by the Corporation (OPs).  Complainant’s case is, the maturity amount of the policy was ₹4,10,000/- which was given to her, but, the loyalty addition was not given. The complainant obtained information under the RTI Act in which OPs replied they had not declared any loyalty addition, therefore, no loyalty addition was paid on the policy to the complainant as well as any other persons. In a similarly situated case, the Hon'ble National Commission had allowed the consumer complaint and directed the OPs to pay ₹30/- per ₹1,000/- of the sum assured which in the present case comes out to ₹1,90,000/-. Alleged, non-payment of the loyalty addition tantamounts to deficiency in service and unfair trade practice on the part of the OPs. Hence, the present consumer complaint for directing the OPs to pay the loyalty addition of ₹1,90,000/-, compensation of ₹30,000/- and ₹20,000/- as litigation expenses. 
2.     OPs contested the consumer complaint and filed their joint written reply. Claimed the date of last payment of the policy was 15.7.2018 and the date of maturity was 15.10.2018.  Their case is, parties are bound by the terms and conditions of the policy. Though the OPs admitted there was a loyalty addition clause, but, they have not declared the rate ending such terms, therefore, this amount was not paid to the complainant or any other persons. Reference was made to various precedents to show parties are bound by the terms and conditions of the document.  On these lines, the cause is sought to be defended.
3.     Rejoinder was filed by the complainant and averments made in the consumer complaint were reiterated.
4.     Parties led evidence by way of affidavits and documents.
5.     We have heard the learned counsel for the parties and gone through the record of the case, including the written arguments. After appraisal of record, our findings are as under:-
6.     The admitted facts as culled out from the pleadings of the parties are, complainant regularly paid the fixed installments to the OPs and the maturity amount of ₹4,10,000/- was disbursed to her on the date of maturity i.e. 15.10.2018. However, with the maturity amount the loyalty addition was not paid. 
7.     Per averments made in the consumer complaint and reply filed by the OPs, on the life assured surviving the stipulated date of maturity or on his earlier death and provided the policy is in full force on the stipulated date of maturity or on the date of death, the policy may be eligible for payment of loyalty addition at such rate ending such terms as may be declared by the Corporation (OPs). Admittedly, there was such clause in the terms and conditions so agreed between the parties with regard to the policy document. 
8.     The sole ground for not adhering to this clause was that the loyalty addition rate was not declared by the Corporation (OPs), therefore, this benefit was not disbursed to the complainant.
9.     It is not the case of the OPs no profit was produced with the investment made in the policy of the complainant and rather it is the admitted case the complainant regularly paid the installments for 15 years. The terms and conditions shows the complainant was eligible for addition of loyalty addition at such rate ending such terms as may be declared by the Corporation (OPs).
10.     The complainant remained loyal to the OPs and had not made any breach, default or delay in payment of the installments towards the policy in question and, therefore, if the OPs have failed to perform their duties in not declaring such rate taking in view the profit earned by the OPs, then it is entirely their fault for which the consumer (complainant) cannot be allowed to suffer. 
11.     Apparently, it was a gimmick played by the OPs to attract the consumers to invest in the policy that on maturity this loyalty addition would be paid. Why the rate was not declared by the OPs, no such reasons were assigned by them. Definitely it is a deficiency in service and unfair trade practice on the part of the OPs. 
12.     In a similarly situated case, Life Insurance Corporation of India & Anr. Vs. Padmini Rao, R.P.No.1128 of 2017 decided on 4.7.2018 by the Hon'ble National Commission, in paragraph No.12 it was held as under :-

“12. The provisions relating to payment of loyalty addition clearly states that the Corporation shall declare the loyalty addition on the basis of its experience relating to  mortality, interest rate and expenses in  respect of its life insurance business. It is true that based on these aspects, the Corporation was to decide about the loyalty addition and based on the negative results of the plan in question,  the Board decided not to declare any loyalty addition for the plan in question.  It is seen from the Results of Valuation as on 31^st March, 2012 by the Corporation dated 1.9.2012 that the Corporation declared loyalty addition for different plans. However, it is seen from the Table as mentioned above and also from the Results of Valuation as on 31^st March, 2012, that except for Special Policy Plan 135, and Plan 112, in most of the plans declared loyalty addition is not much. In the Plan 129 no loyalty addition has been declared by the Corporation. From the point of view of the policyholder, it is important that if loyalty addition is declared for other similar policies/plans, he would also expect the loyalty addition for his plan, it could have been in the interest of the Corporation and for expansion of their business that they would have declared some loyalty addition for other remaining plans as well. The same has not been done.  A common policy holder may think and interpret “loyalty addition” as some payment for keeping his association with the insurance company for a long time by way of continuing his policy by paying premium regularly. It would be thought by him that he has been associated with the company for 15 years like other policy holders getting the loyalty addition and therefore he is also entitled to loyalty addition. Once the insurance company has made a promise to pay loyalty additions under certain circumstances, declaration of no loyalty addition comes as a breach of the contract to the policy holder. Keeping interest of the consumer in mind, the State Commission has analysed the financial results of the Corporation and has reached to the conclusion that the life insurance business has made profits and  therefore, the loyalty addition was payable. Keeping in view the average loyalty addition declared for different policies, it seems appropriate that in the Plan 129 of the complainant also, loyalty addition @ Rs.30/- per Rs.1,000/- of the sum assured is paid to the complainant.”

 

13.     The relief given in the said case was that the consumer was entitled to loyalty addition @₹30/- per ₹1,000/- of the sum assured. Under Paragraph No.8 of the precedent of the Hon'ble National Commission the rate of loyalty addition for term of 15 years in plan No.113, 124, 135 and 136 were mentioned to be ₹30/-, ₹30, ₹500/- and ₹40 respectively. Though plan No.131 does not find mention therein, however, keeping in view the precedent of the Hon’ble National Commission, the amount calculated by the complainant @ ₹30/- per ₹1,000/- of the sum assured comes to ₹1,90,000/-.  It is not denied by the OPs in their written reply the calculation was wrongly made by the complainant. Hence, the failure of the OPs in releasing the royalty bonus to the complainant amounts to deficiency in service and unfair trade practice on their part.
14.     In view of the above discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. OPs are directed as under :-

1. to pay the royalty bonus of ₹1,90,000/- to the complainant alongwith interest @ 8% per annum from the date of maturity i.e. 15.10.2018 till realization;
2. to pay an amount of ₹20,000/- to the complainant as compensation for causing mental agony and harassment to her;
3. to pay ₹10,000/- to the complainant as costs of litigation.

15.     This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
16.     Certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-	Sd/-
09/03/2021	[Suresh Kumar Sardana]	[Surjeet Kaur]	[Rattan Singh Thakur]
hg	Member	Member	President