Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No. -130/07.08.2019
Ms. Shashi Jain (since dead)
through LRs
(a) Sh. Sandesh Jain (son) s/o Late Sh. J.P. Jain
r/o 3766, Main Road, Pahari Dhiraj, Delhi-110006
(b) Ms. Poonam Gupta (daughter) w/o Sh. Pradeep
Gupta, r/o H. No. J-14, Gali no. 4, Jain Prakash Nagar,
Ghonda, Delhi
(c) Ms. Shweta Jain (daughter) w/o Sh. Sachin Jain
r/o 460-C, Gali Corporation Wali, Near Delhi Gate,
Najafgarh, Delhi ...Complainant
Versus
Life Insurance Corporation of India- Branch Unit-11K,
12/56, D R Chamber,D B Gupta Road, Karol Bagh,
New Delhi-110005 ...Opposite Party
Date of filing: 07.08.2019
Date of Order: 01.12.2023
Coram:
Shri Inder Jeet Singh, President
Ms. Shahina, Member -Female
ORDER
Inder Jeet Singh , President
1.1. (Introduction to dispute of the parties) - The complainant took life insurance policy bearing no. 123205115 w.e.f. 08.03.2006 against annual premium of Rs. 24,020/- for 13 years and on its date of maturity of 08.03.2019, the sum assured payable was Rs. 5,00,000/-. The complainant regularly paid the premium amount and admittedly total premium amount paid was Rs.3,12,280/- during the span of policy. However, on maturity the OP denied sum assured of Rs.5,00,000/- but paid meager amount of Rs.1,86,124/- despite total premium paid was Rs.3,12,280/-. There is deficiency of services and OP is accountable for it. That is why complaint was filed seeking direction to OP to pay a balance amount of Rs. 3,13,876/-; accrued bonus on the said policy; loyalty additions of Rs. 2,00,000/-, compensation of Rs. 50,000/- in lieu of mental harassment and agony, litigation costs of Rs. 25,000/- besides interest at the rate of 18% pa on the amount of award.
1.2. The OP opposed the complaint on all counts that neither there is any cause of action nor deficiency of services nor any other amount is payable. The OP took shelter of two components that as per terms and conditions of the policy, in case the policy holders expires during the continuous of the policy, then death sum insured would be Rs. 5,00,000/- and it will be payable. However, in case policy holder survives then maturity sum assured is payable, but due to inadvertent typographical error, that maturity sum assured, was not mentioned in the policy bond; it is Rs.1,86,124/- and same has been paid to the complainant.
1.3 It is relevant to mention here that the complaint was filed on 07.08.2019 u/s 12 of the Consumer Protection Act 1986 and during the pending of proceedings, the complainant Ms. Shashi Jain expired on 16.04.2021, then her LRs arrayed were brought on record.
2.1. (Case of complainant) - The complainant, Shashi Jain, a senior citizen, had subscribed a Jeevan Saral Policy bearing no. 123205115 commencement w.e.f. 08.03.2006 having maturity on 08.03.2019 for maturity sum assured of Rs. 5,00,000/- against annual premium of Rs. 24,020/-. As per policy contract, OP was to pay on maturity a sum of Rs. 5,00,000/- along with bonus and loyalty additions to the survived complainant. It shocked the complainant, when OP just paid only a sum of Rs.1,86,124/- on maturity of policy instead of sum assured of Rs.5 lakhs and OP kept balance amount of Rs3,13,876/-. The OP was bound by policy to pay assured sum of Rs. 5,00,000/-. Thus, the complainant wrote letter dated 11.03.2019 and requested the OP to pay lawful and agreed amount. But the OP by its reply dated 13.03.2019 just pleaded that the amount payable was Rs. 1,86,124/- only and OP failed to clarify as to how and why the sum assured amount mentioned in the policy was not being paid to the complainant?
The Complainant had paid a total premium amount of Rs. 3,12,260/- during the entire term of 13 years. There was twin purpose of insurance is firstly to protect the insured from loss arising in the event of death and secondly in case the insured survives, then she would be paid the sum assured along with bonus/ loyalty additions. The concept of bonus/ loyalty additions is to compensate the insured in lieu of investment. But, it is absurdity on the part of OP by paying a meager sum of Rs. 1,86,124/- against sum assured of Rs.5 lakhs, vis-à-vis the complainant had paid total premium of Rs. 3,12,260/- to the OP. The complainant is entitled for balance amount of Rs. 3,13,876/- [which is after adjusting the sum of Rs. 1,86,124/- already paid to the complainant out of sum insured of Rs. 5,00,000/-]. The complainant is also entitled to other agreed bonus and loyalty additions. The acts of OP, by not paying the actual amount due to the complainant, are deficiency in service under the provisions of the Consumer Protection Act. That is why the complaint for reliefs claimed.
2.2. Complaint is supported with policy document provided to complainant (in one page), letter dated 11.03.2019 to the OP, OP’s letter dated 13.03.2019 to the complainant and payment details of Rs. 1,86,124/- paid to the complainant on 23.04.2019.
3.1 (Case of OP)- OP does not deny issue of policy for a period of 13 years to the complainant but allegations and claim of complaint are denied. According to terms and conditions of the policy, in case the policy holder expires during the continuous of the policy, then death sum insured of Rs. 5,00,000/- would be payable, But in case policy holder survives, then maturity sum assured would be payable. OP gives explanation that due to inadvertent typographical error, maturity sum assured payable on survival, was not mentioned on the policy bond. The complainant wrongly claimed amount of Rs. 5,00,000/- since correct claim amount is Rs. 1,86,124/-. Moreover, OP had issued a letter dated 02.02.2016 to the complainant informing her that it was noticed by the OP that due to inadvertent typographical error in the policy the Maturity Sum Assured was left blank and as per terms and conditions of the policy correct Maturity Sum Assured is Rs. 1,20,080/-. Accordingly, in terms of policy, on the maturity of the said policy a sum of Rs. 1,86,124/- was paid to the complainant, which comprises Maturity Sum Assured of Rs.1,20,080 + Loyalty Additions of Rs. 66,044 =Rs. 1,86,124/-.
3.2. OP further explains that the Death Sum Assured and the Maturity Sum Assured are different. Under the subject policy bearing no. 123205115, Death Sum Assured was Rs. 5,00,000/- and the Maturity Sum Assured was Rs. 1,20,080/-, however, due to inadvertent typographical error Maturity Sum Assured was not mentioned in the policy. The complainant’s claim of Maturity Sum Assured Rs. 5,00,000/- is wrong but the correct amount of Maturity Sum Assured is Rs. 1,86,124/- which has already been paid by the OP, therefore, nothing more is payable by the OP. The complainant is not entitled for any relief and the complaint is liable to be dismissed.
4.1 (Replication of complainant) - The complainant has filed rejoinder and she denies the plea of OP. It is submitted that on perusal of the policy, it is clear that there is no typographical error as alleged, rather policy was printed properly with all information/particulars. Further, it is not a matter of typing single policy bond but it would be large number of policies all over India. The OP could not show another similar policy carrying different sum assured or lesser amount than premium paid; it cannot be said that it was a typographical error. It means that there is no denial to the contents mentioned in the policy; which also means that the complainant was under the clear assurances that she would get sum assured with bonus and loyalty additions. It is surprising to be believed that such a big insurance giant would commit such a grave mistake. The same is done with due understanding but now OP has mala-fide of false plea of typing error. Moreover, after the completion of the policy tenure, the return/amount cannot be lesser than the amount paid by the complainant.
4.2. The complainant also denies that any letter dated 02.02.2016 was issued to the complainant. There is no proof of dispatch filed by OP. Moreover, whether the said letter was issued after 10 years, would means that OP was sleeping over the same for such a long period and now wants to cheat the complainant. A sum of Rs. 1,86,124/- was paid by OP on maturity but the complainant had received it under protest. The complainant also denies explanations of OP that the death sum assured and the maturity sum assured are different or under the subject policy the maturity sum assured was Rs. 1,20,080/- or due to inadvertent typographical error the maturity sum assured was not mentioned in the policy or complainant’s claim of Rs. 5,00,000/- was wrong. The complainant reaffirms her complaint.
5.1. (Evidence)- Complainant, Ms. Shashi Jain, has led her evidence by affidavit, with the support of documents filed with complaint.
5.2. OP led evidence by filing affidavit of Sh. Ajay Tyagi, Manager (Legal & HPF), who authored the written statement, the evidence is on the pattern of reply.
6.1 (Final hearing)- Complainant had filed written arguments being blend of pleading & evidence. OP has filed written arguments on the same pattern. The parties were given opportunity to make oral submissions thus, Sh. Gaurav Chauhan, Advocate for complainant/LRs and Ms. Jyoti, Advocate for OP made oral submissions.
6.2.1. In order to fortify the plea of typographical error that it can be rectified as and when it comes to notice and Insurer cannot be compelled to pay the amount, OP refers and relies upon Sr. Branch Manager, Life Insurance Corporation of India vs Sonam Dorjay Sherpa [FA no. A/23/2015, decided by SCDRC, West Bengal]; Satya Dev Malviya vs Life Insurance Corporation of India [1 (2004) C.P.J. 96 NC]; Virupaxappa I. Yaragati vs. Sr. Branch Manager, LIC of India [R.P. No. 3833 of 201] and LIC of India vs Anil Kumar Jain [RP no. 2802 of 2011].
6.2.2. Similarly, the complainant counters the submissions of OP and complainant relies upon Life Insurance Corporation of India vs Consumer Welfare Association & Anr. [FA no. 1531 of 2018, dod 11.12.2018 (NC) Delhi] wherein it was held in para 5 & 6 that:-
“(5). I have given a thoughtful consideration to the arguments advanced by the learned counsel for the appellant and have examined the material on record. First of all, it is seen that the policy was issued on 28.03.2004 and was valid upto 28.03.2015. It may be true that the policy is issued under table 165 of the LIC, however, it has been admitted that the table was not supplied along with the policy document and therefore the insured may not be having any inkling that he may not get the amount mentioned in the policy. There was no communication made during the policy period by the insurance company mentioning the mistake in the policy document. It is only after the policy has matured and question of payment of maturity amount cropped up, the insurance company has raised the issue of typing error in the policy document. 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 considered with the consent of both the parties. The Judgment of this commission in LIC versus Anil Kumar Jain (supra) does not seem to be applicable in the present case as the typographical error in LIC versus Anil Kumar Jain (supra) was in respect of the amount of premium and not in respect of the amount of claim. Similarly, the other judgment relied upon by the appellant in respect of the amount of claim were a ‘0’ was typed beyond the figure of 2,50,000/- to make it 25 lacs also does not seem to help the appellant as in this case, the single premium of Rs. 104975/- was only paid and an amount of rupees 25 lacs was claimed on the basis of the figure quoted in the policy. This Commission accepted the typing mistake and observed that the figure of 2,50,000/- was wrongly typed as 25 lacs. Obviously, a One Time Premium of 104975 cannot yield a payment of rupees 25 lacs and Rs. 2.5 lacs was found to be reasonable. Therefore, the typographical error was accepted in the matter. In the present case, first of all, the typing error is not with respect to any particular figure but the mistake is in respect of two figures which have been allegedly interchanged due to typing mistake. Though the learned counsel for the appellant has tried to justify his assertion on the basis of table 165 of the LIC, however, one has to see the comparative logic for the places of these figures. The complainant has paid total premium of Rs. 13,65,100/- and therefore it stands to logic that the complainant may get about rupees 25 lacs on maturity. Clearly, this does not stand to logic that after paying Rs. 13,65,100/-, one gets only Rs. 3,94,900/- as maturity amount along with some loyalty addition which in the present case is only Rs. 1,67,832/-. Moreover, the question is whether the complainant would have gone for the policy, had he known that on maturity he will get only Rs. 3,94,900/- after paying regular premium of Rs. 1,24,100/- per year. 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 becomes 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 the policy 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. It is important to note the following judgments in this regard:-
(a)In General Assurance Society Ltd. Vs. Chandmull Jain, [1966] 3 SCR 500.
(b) In Oriental Insurance Co. Ltd. Vs. Sony Cherian II (1999) CPJ 13 (SC).
© United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644
(6). Based on the above authoritative judgments of Hon’ble Supreme Court, the terms and conditions of the policy cannot be changed or interpreted differently by any forum and particularly when there is no obvious reason for accepting the alleged typographical error in the policy.
7.1. (Findings)- The rival contentions are considered keeping in view the material on record of pleadings, evidence and other circumstances besides the law. The issues raised are being taken accordingly.
7.2. According to OP, no cause of action of action has arisen in favour of complainant and against OP but complainant has juxtaposition plea.
The answer of this issue is in insurance policy cover note (which is one page only) and proved by the complainant. The policy note no. 123205115 mentions clause Maturity Sum Assured and against it an amount of Rs. 5,00,000/- is written. For column of date of maturity, date mentioned is 08.03.2019 and it was issued in the name of Shashi Jain by mentioning in appropriate box meant for. Policy bond is bi-lingual (Hindi & English) and material dates and figures are written against Hindi version in vertical box/column. There is no dispute that policy was for 13 years and against annual premium of Rs. 24,020/-. It was on maturity of the policy, the complainant written request letter dated 11.03.2019 to OP to pay the valid maturity amount agreed upon. Thereafter, OP by its letter dated 13.03.2019 responded to the complainant that amount of Rs.1,86,124/- was payable, without elaborating other query. The circumstances are speaking themselves that there is cause of action in favour of the complainant and against OP, it is also emerging from OP's own letter dated 13.03.2019. This objection is disposed off against OP.
7.3.1 The OP’s another plea that terms and conditions of policy stipulate that in case the policy holder expires during the continuance of policy, then death sum assured of Rs. 5,00,000/- would be payable but in case the policy holder survives to policy term, then maturity sum assured would be payable. But due to inadvertent typographical error the maturity sum assured [payable at the time policy holder surviving the policy term] was not so mentioned in the policy bond. The complainant opposed it vehemently being an after-thought as well as sum assured is Rs.5 lakhs.
7.3.2. It needs to look at record. There is standard printed policy form and it comprises many boxes, some are vertical and other are horizontal. The boxes contains name of instruction (in bi-lingual Hindi & English) against such instructions, particulars are recorded. This bond clearly reflects that the against each instructions, the particularly are filled in are of policy number, sum assured (Rs. 5,00,000/-), date of commencement of policy & date of maturity, sum assured and other details. If that is so, the stand taken by the OP being typographical error does not sustain. The entries filled in are by computer written and what matter was fed in the system, it was generated. It appears OP pretends to say it to be case of omission, but OP does not plead so, since throughout the proceedings the case of typographical error is stated. Otherwise, in case the relevant column was left blank; OP cannot drive benefit of its own wrong, since policy bond was issued after getting the same duly checked by the authorized/competent officer of the OP and policy was issued long back. In addition, the plea of the OP is it had noticed that there has been inadvertent typographical error would not be acceptable by comparing the policy bond and operating part of letter dated 02.02.2016 (Annexure-B of the OP’s paper-book) which reads “We have noticed that in the policy document issued to you, there has been an inadvertent typographical error in the Maturity Sum Assured, which has been shown as Rs. /-. As per plan condition the correct maturity sum is Rs.1,20,080/-.” Whereas, in the policy bond, there is nothing written or typed as Rs. /- in any box against any instruction. When it is not so written as Rs. /- in the policy, then how OP could say in the letter that it was so mentioned. It is an after-thought plea of OP. Otherwise, the material particulars are duly filled in against instructions. It is unfair plea of OP.
7.3.2. The policy was effective from 08.03.2006 and OP refers letter dated 02.02.2016, which after about 10 years from the effective date of policy. The letter does not depict what was the mode of dispatch if it was sent to complainant nor there is other evidence that it was actually served upon the complainant. The complainant had also asked for amount on maturity but even OP's letter dated 13.03.2019 does not depicts any response to the letter of complainant nor OP's letter dated 02.02.2016 if it was actually sent to the complainant. Therefore, the OP could not prove service of letter dated 02.02.2016 on the complainant and it failed to discharge its burden of proof in this regard.
7.4. The complainant provide one page policy bond by OP. The policy reflects insurance is under the table no. 165 of LIC but table 165 or its relevant extract is not supplied with the policy document. Insurance policy contract is of utmost good faith between the Insurer and the Insured. As insured has to disclose all material facts to insurer at the time of taking the policy, so is the obligation of insurer to disclose and explain the material terms and conditions of the policy at the very initial stage; and to supply the copy to the insured containing detailed terms and conditions to be complied by the parties. It is binding on both side. Had there been Maturity Sum Assured of Rs. 1,20,080/- mentioned in policy and explained properly to the complainant; then she would have been for sure, or had exercised option whether or not to purchase the policy, considering the fact that she would get Rs.1,20,080/- only on maturity that too after paying premium amount of Rs. 3,12,280/- in 13 years (i.e. Rs. 24,020/- pa x 13 years = Rs. 3,12,260/-) instead of Rs. 5,00,000/- . The ratio of this case law referred by complainant applies in favour of case of complainant.
7.5 Therefore, by considering totality of the circumstances and material on record it is held that complainant has succeeded in establishing deficiency of services on the part of OP for want of settlement of her valid claim vis a vis OP could not establish that there was typographical error in the policy. The circumstances also establishing unfair trade practice on the part of OP. Moreover, the OP exceeded in letter dated 02.02.2016 by mentioning facts which are beyond the policy bond to project contrary to policy. The complainant had to receive the maturity sum assured of Rs.5,00,000/- besides other benefits, however, she was paid an amount of Rs. 1,86,124/- (Rs. 1,20,080/- + Rs. 66,044/- loyalty additions) but it taken by her under protest. The complainant is held entitled for balance amount of Rs.3,13,876/- (after adjusting Rs. 1,86,124/- out of the maturity amount of Rs. 5,00,000/-).
7.6. The complainant also claims loyalty additions along with suitable interest on balance amount of Rs.3,13,876/-. The OP had computed loyalty bonus as Rs. 66,044/- on amount of Rs. 1,20,080/-, so on the same basis/ratio, the loyalty bonus comes to Rs. 1,72,632/- on the balance maturity amount of Rs. 3,13,876/-.
7.7. The complainant has also sought damages/ compensation of Rs. 50,000/- towards mental agony and harassment and also costs of Rs. 25,000/-. By considering situation and circumstances of case of the both sides, damages are quantified as Rs.15,000/- apart from cost of litigation of Rs. 10,000/- in favour of complainant and against OP.
7.8. The complainant further sought interest at the rate of 18% pa and other appropriate relief. Since complainant was not paid the maturity amount of her insurance policy after paying the premium amount regularly for 13 years; it entitles the complainant for interest on balance unpaid maturity amount of Rs. 3,13,876/- and on loyalty bonus payable amount of Rs.1,72,632/-. Therefore, interest at the rate of 7% pa is allowed in favour of complainant/LRs and against OP, it would also justify both ends. Interest will be computed from the date of filing of complaint till realization of amount against OP.
8. Accordingly, complaint is allowed in favour of complainant/ and against OP to pay balance maturity amount of Rs. 3,13,876/-with loyalty addition of Rs. 1,72,632/- along with simple interest at the rate of 7% pa from the date of complaint till realization of amount; besides to pay damages of Rs. 15,000/- and costs of Rs. 10,000/- to complainant.
OP is further directed to pay the amount within 30 days from the date of receipt of this order. In case amount is not paid within 30 days from the receipt of order, the interest will be at the rate of 8% pa on amount of Rs. 4,86,508/- (i.e. Rs. 3,13,876/- + Rs. 1,72,632/-).
9. Announced on this 1st day of December 2023 [अग्रहायण 10, साका 1945].
10. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances besides upload on the website of this Commission.
[Inder Jeet Singh]
[President]
[Shahina]
[Member (Female)]
