Date of Filing 25.07.2023

                                                                                                             Date of Disposal: 24.11.2023

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                         …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL,                                                                                ……MEMBER-I

CC.No.67/2023

THIS FRIDAY, THE 24^th DAY OF NOVEMBER 2023

Mr.N.Thaneswara Rao,

S/o.Mr.N.Hari Narayan,

No.22,Velan Nagar, 4^th Street,

Alwarthirunagar Post, Chennai 600 087.                                           ......Complainant.

                                                                              //Vs//

The Branch Manager,

Life Insurance Corporation of India,

CBO 21, No.101, Arcot Road,

Virugambakkam, Chennai 600 092.                                                  .…..Opposite Party.

Counsel for the complainant                     : Mr.RM.Meenakshi Sundaram, Advocate.

Counsel for the opposite party                 :  Mr.Sushil Kumar, Advocate.

This complaint coming before us on various dates and finally on 14.11.2023 in the presence of Mr.RM.Meenakshi Sundaram, counsel for the complainant and Mr.Sushil Kumar, counsel for the opposite party and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY TMT.Dr.S.M. LATHA MAHESWARI, PRESIDENT

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service in the matter of issuance of the policy along with a prayer to direct the opposite party to pay the balance maturity amount of Rs.80,746/- with interest at the rate of 9% till the date of realization, to pay a sum of Rs.75,000/- towards compensation for the mental agony and hardship caused to the complainant and to pay a sum of Rs.25,000/- towards cost of the proceedings to the complainant.

Summary of facts culminating into complaint:-

2. It was the case of the complainant that he had taken a policy from the opposite party for an assured amount of Rs.1,25,000/- on 11.08.2011 and that the date of maturity was an 18.08.2021.  The policy number was 705359586 and the monthly premium Rs.499.59/- made under various modes as cash, cheque etc.  The commencement date of the policy was 11.08.2011 and the date of maturity was on 18.08.2021.  When the date of maturity was nearing the complainant approached the opposite party Branch Office and in the month of July 2021 and handed over the original policy bond along with identify proof and the same was acknowledged by the opposite party. On 18.08.2021 the amount credited in the complainant’s saving Bank Account was only Rs.44,254/- and not the assured amount of Rs.1,25,000/- as per the policy bond contract. As per the terms under the policy it was clearly stated that the sum assured was Rs.1,25,000/- on maturity in 2021. Having received the entire monthly premium amount till maturity the insurer could not go beyond the terms under the policy.  Maturity sum assured mentioned in the policy could not be changed at the time of maturity by giving different explanations after a lapse of eight years. It was submitted that the complainant by his letter dated 19.07.2021 addressed to the respondent requesting to pay the balance amount of more than Rs.80,746/- together with interest of 9%.  But the opposite party did not proceed with the complainant’s request and sent a reply letter dated 22.07.2021 by changing the term of the contract stating that it was only the death sum assured and accident benefit sum assured Rs.1,25,000/-.  The act of non-payment of balance amount of Rs.80,746/- out of the assured amount of Rs.1,25,000/- is clear in deficiency of service on the part of opposite party.  Thus, aggrieved the present complaint was filed against the opposite party to pay the balance maturity amount of Rs.80,746/- together with interest of 9% till realization and to pay a sum of Rs.75,000/- towards compensation for the mental agony and hardship caused to the complainant along with Rs.25,000/- towards litigation expenses to the complainant.

The crux of the defence put forth by the opposite party:-

3. The opposite party filed version stated that the complainant availed policy on 11.08.2011 and the date of maturity was on 18.08.2021 but it was denied that the assured maturity amount was left blank.  The opposite party never assured maturity sum amount of Rs.1,25,000/- and that the assured amount of Rs.1,25,000/- was payable only as death sum assured.  Amount was paid as per contract terms i.e., Rs.32,540/- towards maturity sum assured and loyalty addition of Rs.11,714/- totalling Rs.44,254/-.  As per annexure 1, maturity sum assured was not mentioned and it was left blank also never mentioned maturity sum assured as Rs.1,25,000/-.  The complainant had wrongly understood the death sum assured as maturity sum assured.  It was submitted that the maturity sum assured and death benefit sum assured under the policy was different.  It was further submitted that the complainant mentioned the death benefit sum assured at Rs.1,25,000/- and maturity sum assured column was left blank.  LIC Policy covers the risk on the policy holder’s life for the entire term. The complainant monthly premium was Rs.510/- which was equal to 500 x250=Rs.1,25,000/- +Loyalty additional.  Hence the opposite party had fixed the death benefit sum assured for Rs.1,25,000/-.  The opposite party was the insurer for life cover. If the complainant found the blank space in the maturity sum assured and if he had addressed the same during the 15 days free look period, the opposite party would have corrected then itself. Only when the opposite party credited the maturity sum assured complainant came to know about the blank in the maturity sum assured in the policy schedule was denied. It was further submitted that it was also the legal obligation for the complainant to verify the document for which 15 days free look period was given.  Now the complainant was estopped from blaming the opposite party for the wrong committed by him. It is pertinent to note that the subject plan i.e. Jeevan Saral was introduced on 16.02.2004 under ‘File & Use Procedure’ given by the Regulator and the product was approved for sale by the Authority, as the benefits under the plan, pricing i.e. premium charged and other terms and conditions are not against the settled principles of insurance or the public welfare. The product brochures for advertisement of the products were also approved by the IRDAI.  As such the plan features and terms and conditions are approved by the Regulator.  It was submitted that as per said IRDAI circular maturity tables to be used for deciding premium, but should be one prescribed by Institute of Actuaries of India.  Accordingly the maturity table applied by opposite party in LIC in Jeevan Saral plan was also the one which was prescribed by IAI only. Complainant, the proposer had agreed that proposal would automatically vest to the life to be assured on his attaining the date of majority and he has ticked “yes’ to the question No.1 whether the terms and condition of the proposed plan has been explained to you by the Agent.  It was further submitted that the complainant was well aware of all benefits and the terms and conditions and hence he was estopped from contending otherwise against his own admission. The amount of premium paid under the policy was directly linked to the risk coverage i.e. death sum assured under the policy and was not at all linked in any manner with the maturity sum assured. The policy holder had purchased the policy and paid premium to avail two claim benefits i.e. life cover for death sum assured and maturity sum assured and he and taken full benefit on the life cover benefit throughout the term of policy and therefore now the policy holder could not demand full refund of premiums paid. Thus the claim of the complainant for refund of the entire premium was illegal against the provisions of law, beyond the terms and conditions of contract and against the settled principles of insurance and was an afterthought to get benefit from the missing details which was within the knowledge of the complainant only. Thus the opposite party Corporation had not caused breach of any of the terms and conditions under the insurance contract and therefore no cause of action arises to the complainant to file the present proceedings and there was no deficiency in service on the part of opposite party.  Thus he sought for dismissal of the complaint.

4. On the side of complainants proof affidavit was filed and documents marked as Ex.A1 to Ex A3 were submitted. On the side of opposite party proof affidavit was filed but no document was filed on their side.

Points for consideration:-

1)   Whether the complaint allegations as to deficiency in service as alleged against the opposite party by the complainant in the issuance of JEEVAN SARAL POLICY with respect to the maturity sum assured has been successfully proved by the complainant by acceptable evidence?

2) If so to what reliefs the complainant is entitled?

 Point No.1:-

The following documents were filed on the side of complainant in support of their contentions;

1. Policy No.705359586 issued by the opposite party dated 22.08.2021 was marked as Ex.A1;
2. Account Statements was marked as Ex.A2;
3. Letter from the opposite party to the complainant dated 22.07.2021 was marked as Ex.A3;

5. Heard the oral arguments of the learned counsel appearing for the opposite party. The counsel for the complainant endorsed that the written arguments filed by them may be treated as oral arguments and hence the written argument filed by them was considered to decide the case on merits.

6.  The crux of the written arguments by the complainant is that vide policy No. 705359586 he had taken Jeevan Saral Policy in the year 2011 for a period of 10 years for a maturity sum assured of Rs.1,25,000/- and the premium was fixed at Rs.499.59/-. But at the time of date of maturity the opposite party credited only an amount of Rs.44,254/- instead of Rs.1,25,000/-. Hence, the complainant sent a letter requesting them to pay the balance maturity amount on 19.07.2021 for which the opposite party sent a reply dated 22.07.2021 stating that it was only the Death sum assured i.e., Rs.1,25,000/- and that the maturity value under the policy was only 32,540/- and since the policy had run for full 10 years, Loyalty Addition of Rs.11,714/- has accrued as the maturity value. Therefore, an amount of Rs.44,254/- was payable as Maturity sum assured under the policy. Thus, he submitted that after lapse of 10 years and receiving the entire premium as agreed, the opposite party was not entitled to alter the maturity sum assured as per their whims and surmises affecting the interest of policy holders.

7. On the other hand, the learned counsel for the opposite party submitted that the policy document was originally issued with the maturity sum assured column as blank and Rs.1,25,000/- was printed near the maturity sum assured was only the death benefit and the policy terms never indicated that Rs.1,25,000/- would be the maturity sum assured. He further submitted that the complainant had wrongly understood.  He submitted that the complainant did not prove that how he had arrived at the maturity sum assured as Rs.1,25,000/-. Further he submitted that in the free look period of 15 days the complaint would have noted the blank in the maturity sum assured column and hence ought to have approached the opposite party which he did not to do so. It is also submitted that the total maturity amount under the policy as per the terms and conditions was only Rs.44,254/- including loyalty addition accrued.

8.  To avoid repetition we are discussing only the essential facts that are necessary to determine the real issues. We perused the documents provided by the complainant and the pleadings submitted by him. It could be seen with naked eyes by this Commission that as per Ex.A1, the policy document under the column maturity sum assured Rs.1,25,000/- was printed at first. It is highly unacceptable to believe the contention raised by the opposite party that Rs.1,25,000/- was mentioned only in the Death Benefit Sum Assured. Rs.1,25,000/- was mentioned in such a way below the Maturity Sum Assured and above the Death Sum Assured.  Hence, the complainant’s arguments that he was made to believe by the Agent of the opposite party that the Maturity Sum Assured was only Rs.1,25,000/- could not be considered as an illusion and could not be brushed aside.

9. Also it could not be accepted that the maturity sum assured column could be left blank. When the opposite party had alleged that the maturity sum assured was left blank no convincing reason was given by them as to why the maturity sum assured column was left blank in a document which was conclusive in all aspects with terms and conditions as per the Insurance contract.

10. Thus as rightly pointed out by the complainant when the complainant was made to believe that the maturity sum assured was Rs.1,25,000/- as found in the policy document, the opposite party could not be permitted to go back and alter the maturity sum assured for a lesser amount which is highly prejudicial to the complainant. The argument by the complainant that the principle of free look period of 15 days applies to both parties is also to be accepted. Therefore, the opposite party accepting the blank in Maturity Sum Assured and sending a reply letter after completion of the policy period unreasonable and unacceptable.

11. Further our view is supported by a recent decision rendered by the Hon’ble NCDRC in REVISION PETITION NO. 2282 OF 2018 dated 02.03.2020 in LIFE INSURANCE CORPORATION OF INDIA & ANR. Versus PARVATI BAI MAHADEV MOGRE, an identical case holding LIFE INSURANCE CORPORATION OF INDIA / opposite party liable in its words as follows,

Policy is a contract of utmost good faith and parties are bound by this contract. If any typing error is brought to the notice of the other party by any party before the claim becomes due, it can definitely be corrected. In the present case, the rectification of error has been sought once the question of final maturity amount has come up before the Insurance Company. Moreover, the question is whether the complainant would have gone for the policy, had he known that on maturity he will get only Rs.38,970/- after paying regular premium of Rs.1,225- quarterly for 10 years. During the currency of the policy, the insurance company did not point out any mistake in the policy, nor sent any corrected policy document. Now, that the policy has matured and the claim became due on maturity, the insurance company is claiming the defect in the initial contract. The mistake or typographical error in the contract does not seem to be obvious and even if the mistake is justified on the basis of table 165 of the LIC, it is seen that this table was not part of the policy and was not supplied along with the policy document, therefore, the complainant may not be bound by this table, rather, the complainant and the insurance company both are bound by the written contract of insurance as mentioned in the policy document. The policy contract has to be interpreted in the terms as agreed in the contract by the contracting parties. Hon'ble Supreme Court in General Assurance Society Ltd. Vs.Chandmull Jain, [1966 ] 3 SCR 500, has held as under:-

17." ...In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves.

" 7. In Oriental Insurance Co. Ltd. Vs. Sony Cherian II(1999 )CPJ 13 (SC ), it has been observed as follows:- "16. The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein.

" 8. In United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644, the Hon'ble Apex Court held as follows:-

 "6. ....The terms of the policy have to be construed as it is and we cannot add or subtract something: Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.

 9. ...It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment.

 14. Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.

" 9. Based on the above authoritative judgments of the Hon'ble Supreme Court, it is clear that the contract conditions of the policy cannot be changed or interpreted differently by any forum and therefore, the alleged typographical error cannot be accepted for changing the same after 10 years of the initial agreed contract i.e. after expiry of the contract period.

Under these circumstances we have no other option but to hold that the opposite party had committed clear deficiency in service in the issuance of the policy document making the complainant to believe that the maturity sum assured was Rs.1,25,000/- and to continue the policy with the same terms for about ten years and later modifying the same unilaterally .The point is answered accordingly infavour of complainant and as against the opposite party.

Point No.2:-

12. With regard to the relief to be granted to the complainant as we have held above that the opposite party had committed deficiency in service we direct the opposite party to pay the balance maturity sum assured of Rs.80,746/-. Further we also award Rs.25,000/- as compensation for the deficiency in service committed by the opposite party which caused huge mental agony and hardship to the complainant. We also award Rs.5,000/- towards litigation expenses to the complainant.

 In the result, the complaint is partly allowed against the opposite party directing them;

 To pay the balance maturity amount of Rs.80,746/- (Rupees eighty thousand seven hundred forty six only) within six weeks from the date of receipt of copy of this order;

 b) To pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards compensation for mental agony and hardship caused to the complainant;

 c) To pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant.

d) Amount in clause (a) if not paid within six weeks from the date of receipt of copy of this order, interest at the rate of 6% will be levied on the said amount from the date of complaint till realization.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 24^th day of November 2023.

MEMBER-I                                                                                                           PRESIDENT

List of document filed by the complainant:-

List of documents filed by the opposite party:-

Nil

       Sd/-                                                                                                                     Sd/- 

  MEMBER-I                                                                                                         PRESIDENT