Date of Filing : 18.08.2022
Date of Disposal: 28.03.2023
DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION
THIRUVALLUR
BEFORE TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law) .…. PRESIDENT
THIRU.P.VINODH KUMAR, B.Sc. B.L., .....MEMBER-I
THIRU.P.MURUGAN,M.Com., ICWA (Inter)., B.L., ....MEMBER-II
CC. No.160/2022
THIS TUESDAY, THE 28th DAY OF MARCH 2023.
Mr. S.Raman, S/o.Mr.Sanjeevi,
New No.2, Old No.15,
18th Street, J.B.Estate,
Avadi, Chennai 600 054.
…Complainant.
//Vs//
The Branch Manager,
Life Insurance Corporation of India,
CBO 21, No.101 Arcot Road,
Virugambakkam, Chennai 92. ..........Opposite party.
Counsel for the complainant : Mr.R.M.Meenakshi Sundaram, Advocate,
Counsel for the opposite party : Mr.S.Sushil Kumar, Advocate.
This complaint is coming before us on various dates and finally on 20.03.2023 in the presence of Mr.R.M.Meenakshi Sundaram counsel for the complainant and Mr.S. 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.
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.92,755/- with 9% interest and to pay a sum of Rs.3,00,000/- towards compensation for the mental agony 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:-
It was submitted that the complainant had taken a policy from the Life Insurance Corporation of India for an assured amount of Rs.1,25,000/- on 11.01.2012 and the policy number was 705747319. The monthly premium was Rs.510/- and the premium payment was made under various modes as cash, Cheque, of every month later on Quarterly. The commencement date of the policy was 23.02.2012 and the date of Maturity was on 23.02.2022. When the date of maturity was nearing, the complainant approached the opposite party Branch Office on 11.02.2022 and handed over the original policy bond along with Identity proof, the same was acknowledged by them. When he asked the concerned about when the assured payment under the policy would be paid, the complainant was informed that the sum assured amount would be transferred on the same month directly in the Saving Bank Account of the complainant as furnished by him. On 23.02.2022 the amount credited in the complainant’s Saving Bank Account was only Rs.32,259/- and not the assured amount of Rs.1,25,000/- as per the policy bond contract. When the complainant approached the opposite party, the explanation given by them was in contrary to the contract terms. Hence the complainant issued a letter to the opposite party requesting them to pay the balance maturity amount within 15 days for which the opposite party sent a reply dated 01.03.2022 by changing the terms of the contract stating that the Death sum assured was only Rs.1,25,000/-. Further it was stated that the maturity value under the policy is only 23,720/- and since the policy has run for full 10 years, Loyalty Addition of Rs.8539/- has accrued to the maturity value. Therefore, an amount of Rs.32259/- was payable as Maturity sum assured under the policy. In this regard it is pertinent to submit that sum assured payable under the policy was Rs.1,25,000/- and not Rs.32,259/- as stated in the letter. On 14.03.2022 complainant received a letter from opposite party explaining the details of maturity payable amount and informed in the letter as "Further, we have also to state that, the corporation on coming to know about the typographical error in printing the maturity value in the policy bond under Jeevan Saral Policies, an Endorsement dated 29.09.2020 had been sent by post clearly mentioning the maturity Benefit and the Death Sum Assured as also other vital fields". But till now the complainant did not receive the letter dated 29.09.2020 sent by the opposite party. The terms of the policy shall govern between the parties, the insured and the insurer and it is a contract. The words used in the insurance contract must be given paramount importance. The reason stated that ‘mere typographical error‘ cannot be valid under law for the recession of the terms of the contract of Life Insurance Policy. The complainant sent a letter for the details of the policy and a letter from the opposite party was received on 14.03.2022 stating that it was typographical error. Thus aggrieved by the act of the opposite party the present complaint was filed to pay the balance maturity amount of Rs.92,755/- with 9% interest till realization and to pay a sum of Rs.3,00,000/- towards compensation for the mental agony caused to the complainant and to pay a sum of Rs.25,000/- towards cost of the proceedings to the complainant.
Crux of the defence put forth by the opposite party:-
The opposite party admitted that the complainant had availed the policy on 11.01.2012 and the date of maturity was on 23.02.2022 but denied that the maturity sum assured amount was Rs.1,25,000/-. Amount of Rs.1,25,000/- was only death sum assured. Amount paid as per the contractual terms however was Rs.23,720/- towards maturity sum assured and loyalty addition of Rs.8539/- totaling at Rs.32,259/-. These facts were clearly explained to the complainant. The complainant sent a letter and it was duly replied by the opposite party that the death sum assured amount is only Rs.1,25,000/-. The allegation that LIC agent Devarajan assured that the maturity sum assured was Rs.1,25,000/- was false. As per annexure 1, Maturity sum assured was not mentioned and it was left blank. The opposite party never mentioned maturity sum assured as Rs.1,25,000/-. The complainant had wrongly understood the word, date of maturity of sum equal to the death sum assured in force. The maturity sum assured and death benefit sum assured under policy was different. The complainant mentioned the death benefit sum assured at Rs.1,25,000/- and maturity sum assured coloum was left blank. LIC policy covers the risk on the policyholder’s life for the entire term. The brochure as per annexure 2, was for the sum assured for death benefit, at 250 times of monthly basic premium, excluding term rider DAB and any extra plus loyalty addition. Complainant’s monthly premium was Rs.500/- per month which was equal to 500X250 =1,25,000/-) + loyalty additional . Hence the opposite party had fixed the death benefit sum assured for Rs.1,25,000/-. It is the duty of the complainant to verify all the terms and condition of the policy document. If the complainant found the blank space in the maturity sum assured and if he addressed the same during the 15 days free looking period, the opposite party would have corrected then itself. Now the complainant was stopped from blaming the opposite party for the wrong committed by him. Jeevan Saral was introduced on 16.02.2004 under said ‘File & Use Procedure’ given by the Regulator and the product was approved for sale by the Authority/Regulator, 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. It was further submitted that the product brochures for advertisement of the products was also approved by the IRDAI. As such, the plan features and terms and conditions are approved by the Regulator. The basic principle of deciding insurance premium was ‘higher the age at entry, higher was the amount of premium charged’. As per IRDAI Circular the mortality tables to be used for deciding premium, must be prescribed by Institute of Actuaries of India and accordingly, the mortality table applied by opposite party in LIC Jeevan Saral Plan. There is no violation of any settled principles of insurance. The amount of premium paid under 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. It was submitted that the said plan was launched vide circular No.1934 dated 12.02.2004 and the Annexure II of the said circular, the maturity value payable per Rs.100/- monthly premium, was provided in advance for each Age and term of policy. It was submitted that the maturity value payable under the plan was well defined at the inception itself. The complainant has failed to understand the concept of insurance relating to Jeevan Saral Plan. LIC’s Jeevan Saral belongs to the category of high risk plan, wherein the insurance coverage offered was substantially higher, especially at higher ages. The unique feature of the plan was that the installment premium to be paid was determined by the customer and the sum assured payable in the unfortunate event of death, known as death sum assured was then decided on the basis of the premium. In all other conventional insurance plans, the installment premium payable for the same sum assured various according to the age of the customer. However, in this particular plan the premium payable and death sum assured, remains the same, irrespective of age. Upon finding of non-printing of maturity value in policy schedule, it was immediately informed to policy holder through letter. Further, against the premium paid by the complainant, opposite party provided two different benefits under policy i.e. life coverage and the maturity. Thus since inception of policy till now/for full policy terms the complainant has availed the benefit of life cover for death sum assured under the policy. It was submitted that the policy holder has executed its part under the contract by payment of premium and the LIC had already executed its part under the contract by providing risk cover for death sum assured for entire term of the policy. Therefore LIC was well justified in recovering the premium for the death sum assured form the premium amount paid by the policy holder and paying the maturity value as per the plan conditions. 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 arise for the complainant to file the present proceedings and there is no deficiency in service on the part of the opposite party and thus they sought for the complaint to be dismissed.
The complainant has filed proof affidavit and documents Ex.A1 to Ex.A8 were marked. On the side of opposite party proof affidavit was filed but no document was filed on their side.
Points for consideration:
Whether the 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 proved successfully by the complainant by acceptable evidence?
If so to what relief the complainant is entitled?
Point No.1:-
On the side of the complainant the following documents were filed in support of the complaint allegations;
LIC Jeevan Saral Policy document dated 11.01.2012 was marked as Ex.A1;
Account Statement of Account of Canara Bank in the name of complainant from 01.01.2022 to 31.03.2022 was marked as Ex.A2;
Letter sent by complainant to the opposite party dated 24.02.2022 was marked as Ex.A3;
Letter from the opposite party to the complainant dated 01.03.2022 was marked as Ex.A4;
Letter sent by complainant to the opposite party dated 03.03.2022 was marked as Ex.A5;
Letter from the opposite party to the complainant dated 14.03.2022 was marked as Ex.A6;
Letter sent by the complainant to the opposite party dated 28.03.2022 was marked as Ex.A7;
Acknowledgement card for proof of delivery was marked as Ex.A8;
Heard the oral arguments of the learned counsel appearing for the complainant and perused the written arguments filed by the opposite party. The crux of the arguments by the complainant is that vide policy No. 705747319 he had taken Jeevan Saral Policy in the year 2012 for a period of 10 years for a maturity sum assured of Rs.1,25,000/- and the premium was fixed at Rs.510/-. But at the time of date of maturity the opposite party credited only an amount of Rs.32,259/- instead of Rs.1,25,000/-. Hence, the complainant sent a letter to the opposite party (Ex.A3) requesting them to pay the balance maturity amount within 15 days for which the opposite party sent a reply dated 01.03.2022 by changing the terms of the contract stating that it only the Death sum assured was Rs.1,25,000/- and the maturity value under the policy is only 23,720/- and since the policy has run for full 10 years, Loyalty Addition of Rs.8539/- has accrued as the maturity value. Therefore, an amount of Rs.32,259/- was payable as Maturity sum assured under the policy. He also received another letter from the opposite party on 14.03.2022 that explaining the details of maturity payable amount and informed in the letter as "Further, we have also to state that, the corporation on coming to know about the typographical error in printing the maturity value in the policy bond under Jeevan Saral Policies, an Endorsement dated 29.09.2020 had been sent by post clearly mentioning the maturity Benefit and the Death Sum Assured as also other vital fields". But till now the complainant did not receive the letter dated 29.09.2020 sent by the opposite party. Thus, he submitted that after lapse of 10 years and receiving the entire premium as agreed, the opposite parties are not entitled to alter the maturity sum assured as per their whims and surmises affecting the interest of policy holders.
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 actually 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 the word date of maturity of sum equal to the maturity sum assured in force and maturity sum assured and death benefit sum assured under main complaint is different. He submitted that the complainant did not prove 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 submitted that the total maturity amount under the policy as per the terms and conditions was only Rs.32,259/- including loyalty addition accrued.
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 that Maturity Sum Assured was only Rs.1,25,000/- could not be brushed aside. It could not be accepted that the maturity sum assured column was 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 was left blank in a document which was conclusive in all aspects with terms and conditions as per the Insurance contract. Further they have also admitted that there was typographical error in the policy document for which they have sent a letter with correct particulars. 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. Further the contention of the opposite party that only when they were preparing to credit the maturity sum assured they came to know about the blank in the maturity sum assured in the policy schedule and had sent the correct policy schedule with respect to the policy document is highly unacceptable in the facts and circumstances. When complainant denies the receipt of letter dated 29.09.2020, no proof was submitted by opposite party that the same was served on him.
The argument by the complainant that the principal 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 correction letter after 10 years seems unreasonable.
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 judgements 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:
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.92,755/-. Further we also award Rs.25,000/- as compensation for the deficiency in service committed by the opposite parties 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.92,755/- (Rupees ninety two thousand seven hundred fifty five 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 the 28th day of March 2023.
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MEMBER-II MEMBER-I PRESIDENT
List of document filed by the complainant:-
Ex.A1 11.01.2012 Policy No.705747319 issued by the opposite party. Xerox
Ex.A2 01.01.2022 Account Statement of Canara Bank from 01.01.2022 to 31.03.2022. Xerox
Ex.A3 24.02.2022 Letter sent by complainant to the opposite party. Xerox
Ex.A4 01.03.2022 Letter from the opposite party to the complainant. Xerox
Ex.A5 03.03.2022 Letter sent by complainant to the opposite party. Xerox
Ex.A6 14.03.2022 Letter from the opposite party to the complainant. Xerox
Ex.A7 28.03.2022 Letter sent by complainant to the opposite party. Xerox
Ex.A8 04.04.2022 Acknowledgement card for letter sent by complainant to the opposite party. Xerox
List of documents filed by the opposite party:-
-Nil-
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MEMBER-II MEMBER-I PRESIDENT
