Tamil Nadu

North Chennai

271/2012

Kunnath Ramchandra mohanram, - Complainant(s)

Versus

Life Insurance Of India, rep by Manager, (NB), - Opp.Party(s)

M/s.S.Devika & Ranjani Devi

20 Jan 2017

ORDER

                                                              Complaint presented on:  22.10.2012

                                                                  Order pronounced on: 20.01.2017

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (NORTH)

    2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

PRESENT: THIRU.K.JAYABALAN, B.Sc., B.L.,        PRESIDENT

                    TMT.T.KALAIYARASI, B.A.B.L.,           MEMBER II

 

FRIDAY THE 20^th DAY OF JANUARY 2017

 

C.C.NO.271/2012

 

 

Kunnath Ramachandra Mohanram,

Block – 19/305,

Bollineni Hillside,

Nookampalayam,

Perumbakkam Road,

Sithalapakkam,

Chennai – 600 126.

                                                                                    ….. Complainant

 

..Vs..

1. Life Insurance Corporation of India,

Represented by its Manager (NB)

Division Office – II,

C-47, II-Avenue,

Anna Nagar,

Chennai – 600 040.

 

2. Life Insurance Corporation of India,

Represented by its Senior Branch Manager,

CBO -03, 232, NSC Bose Road,

Chennai – 600 001.

 

.....Opposite Parties

Date of complaint                                 : 21.12.2012

Counsel for Complainant                      : S.Devika & Ranjani Devi

Counsel for Opposite Parties                   : M/s.M.B.Gopalan, N.Vijayaraghavan &

                                                                    M.B.Raghavan

 

O R D E R

 

BY PRESIDENT THIRU. K.JAYABALAN B.Sc., B.L.,

          This complaint is filed by the complainant u/s 12 of the Consumer Protection Act.1986.

1.THE COMPLAINT IN BRIEF:

          The Complainant had taken a policy bearing No.718972618 dated 04.05.2009 for a life cover of Rs.80,00,000/- from the 1^st Opposite Party by paying a proposal deposit of Rs.18,246/- dated 30.04.2009. The Complainant has completed all the formalities required as called upon by the Opposite Parties, including full and complete disclosure of his medical condition, fitness, medical examination etc. On 22.09.09, the Complainant complied with the request for additional medical information and submitted a detailed response to the Opposite Parties questionnaire and a medical report from a qualified practitioner. The Opposite Parties agreed to issue the policy only after being satisfied that the Complainant was eligible for the same, on the terms proposed.  He was assigned policy number 718972618. The agent of the Opposite Parties, Mr.Allan Govias met the Complainant and handed over the first premium receipt dated 04.05.09 and told him that the Opposite Parties had accepted the proposal and the contract of insurance had come into effect. The Complainant has paid five half yearly premium payments of Rs.17,707/- each until now. The Opposite Parties, however, did not send the insurance policy, despite having received the premium amounts. However, on 25.11.2009, the Opposite Parties issued a letter to the Complainant that the half yearly premium for his policy was revised to Rs.24,667/- an increase of Rs.6,960/-. The Complainant was surprised to receive such a letter and he immediately responded vide letter dated 01.12.2009, clarifying that the terms and conditions of the policy cannot be unilaterally revised after the contract has come into effect. The Complainant also requested them to send the policy document immediately. Since then, the Complainant has remitted the following amounts towards the premium and the Opposite Parties have accepted the same and issued receipts as follows:

 

Receipt Nos/Ref. Code	Date	Amount
76865778	08.12.2009	17.707/-
76554818	21.05.2010	17.707/-
76554818	10.11.2010	17.707/-
78423838	12.05.2011	17.707/-

 

During mid August 2011, the Branch Manager of the 1^st Opposite Party met the Complainant and requested him to accept the enhanced premium. Again on 31.08.2011, the Manager of the 1^st Opposite Party met the Complainant and told him that due to an error in communication between LIC’s Head office and the Branch, the wrong premium amount had been collected from him. He requested the Complainant to accept the revised premium. When the Complainant expressed his inability to do so, he handed over to him a letter that he had brought along with him informing that his policy had been suspended from 24.08.2011.The Opposite Parties then sent a letter to the Complainant dated 30.08.2011 stating that his policy has been suspended. Again, on 09.09.2011, the senior Divisional Manager of the 1^st Opposite Party sent a letter to the Complainant informing him that his policy will be cancelled, if he does not pay the enhanced premium within 7 days. Thereafter, the Complainant received a cheque bearing No.472446 dated 09.11.2011 for Rs.88,535/- being the refund of entire premium amount paid for the above said policy. The Complainant has not encashed this amount, since the   Opposite Parties cannot revoke/cancel the contract of insurance. Hence the Complainant filed this Complaint to issue policy document and revoke the order cancellation of the policy and accept half yearly premium at the rate of Rs.17,707/- from 12.05.2011 till the date of the order without any interest and also to pay compensation for mental agony and unfair trade practice with cost of the Complaint.

2. WRITTEN VERSION OF THE  OPPOSITE PARTIES IN BRIEF

          The Complainant applied for an Amulya Jeevan Policy with a sum Assured of Rs.80,00,000/- for a term of 30 years under proposal No.724 dated 19.04.2009 and paid a Proposal Deposit of Rs.18,246/-. The proposal was submitted to the 1^st Opposite Party/ Branch Office through an Agent. In view of the high sum Assured, the proposal required from the Central Office of the Opposite Parties in Mumbai and accordingly, the proposal with all papers submitted were transmitted to the Central Office for their consideration.  On 02.06.2009 certain requirements were intimated to the Complainant. Besides, based on the health information, especially that the Complainant had undergone treatment for TB, a separate TB Questionnaire was also required to be submitted. The Complainant complied with the requirements on 21.09.2009 which were intimated to the central office by the 1^st Opposite Party. The Opposite Parties corporation at that time had implemented inter office communication through electronic mails. On 30.09.2009, the 1^st Opposite Party had sighted an e-mail approving proposal mentioning the name of the Complainant. However, the said e-mail referred to a wrong plan and term of Sum Assured of Rs.50,00,000/- under plan – 175 and term of 20 years. Whereas the Complainant’s proposal was for a sum assured of Rs.80,00,000/- under plan – 190 for a term of 30 years. The e-mail was clearly an erroneous communication. However, by mistake without noticing the errors in the communication, the 1^st Opposite Party had proceeded to issue a first premium receipt on 01.10.2009 assuming that Complainant’s proposal had been approved on standard terms.  The 1^st Opposite Party received another electronic mail on 26.10.2009 containing correct reference to the Complainant’s proposal, mentioning the correct sum Assured of Rs.80,00,000/- under plan – 190 and the term of 30 years and other details, granting approval for the proposal on Health Extra of Rs.6,960/-. The 1^st Opposite Party called the central office and was informed that the earlier electronic mail dated 01.10.2009 was not issued for the Complainant’s proposal and that the said proposal was approved only as per communication dated 26.10.2009 whereby acceptance was subject to Health Extra in view of the Complainant’s health records. The 1st Opposite Party states that the Complainant is not entitled to take any undue advantage of the first premium receipt issued by mistake. The officials of the 1^st Opposite Party were writing letters and meeting the Complainant in person to persuade him to co - operate in issue of the policy by payment of the Health Extra. The Complainant took wrongful advantage of the facility for payment of premium online and was continuing to do so for four half years, as there was no means to know when the Complainant would make remittance online and block the same. The payments were not received by the 1^st Opposite Party consciously or with any intention to affirm any contract of insurance as per the mistaken First Premium Receipt, but unilaterally made by the Complainant online with malafide and wrongful intention. The 1^st Opposite Party submits that they brought the mistake to the Complainant’s notice and confirmed by a letter dated 25.11.2009 requesting the Complainant to pay Health Extra for acceptance of the contract and issue of the policy. In view of the above, the 1^st Opposite Party had finally no option than to cancel the policy, by letter dated 05.11.2011 and refunded the entire amount of Rs.88,535/- paid by the Complainant under letter dated 09.11.2011. In the above circumstances, the Opposite Parties have not committed any Deficiency in Service and prays to dismiss the Complaint with costs.

3. POINTS FOR CONSIDERATION:

          1. Whether there is deficiency in service on the part of the opposite parties?

          2. Whether the complainant is entitled to any relief? If so to what extent?

4. POINT NO :1 

          The Complainant had taken a policy bearing No.718972618 dated 04.05.2009 for a life cover of Rs.80,00,000/- from the 1^st Opposite Party by paying proposal deposit of Rs.18,246/- on 30.04.2009 under Ex.A1. The Complainant has paid 4 half yearly premium payments of Rs.17,707/- each until filing of the Complaint and the same was received by the Opposite Parties.  The Opposite Parties issued Ex.A3 letter dated 25.11.2009 to the Complainant that the half yearly premium was revised to Rs.24,667/- on an increase of Rs.6960/-. But the Complainant wrote Ex.A4 letter dated 01.12.2009 to the 1^st Opposite Party that the policy cannot be unilaterally revised after the contract has come to effect. Thereafter, several communication in respect of revised premium amount between the Complainant and the Opposite Parties, the Complainant clearly stated that he is not willing to pay the amount and hence the Opposite Parties cancelled the policy with effect from 30.10.2011 by communicating Ex.A11 letter dated 05.11.2011to the Complainant and after that under Ex.A12 letter dated 09.11.2011, the 2^nd Opposite Party refunded the premium amount paid by the  Complainant  to a tune of Rs.88,535/- to the Complainant.

          5. The Complainant contended that the Opposite Parties committed deficiency in service that

1) after accepting premium amount from the Complainant, the insurance policy was not sent to him,

2) the Opposite Parties unilaterally revised the premium amount to   

 Rs.24,667/- an increase of Rs.6,960/- and

3) even after revising the policy amount, the Opposite Parties have accepted four  premiums at the rate of RS. 17,707/- as already agreed by them.

The Opposite Parties contended that the insured amount is a huge amount and therefore, it is in practice that only after getting consent from the head office only they used to  issue policy document and further  after accepting   proposal deposit amount under Ex.A1, the Complainant was asked to furnish  certain medical reports,  he had also filed Ex.B3  ultrasound report, Ex.B5 Additional Questionnaire  and after obtaining those documents they were sent to the head office and thereafter the  premium  amount  was revised  and that is why the delay has happened and in respect of revising the premium amount,  the LIC got the power to revise the same and for the same the counsel relied on judgment of the National Commission reported in (2013) 1 CPR (NC) 406 (LIFE INSURANCE CORPORATION OF INDIA VS. ANIL KUMAR JAIM) held that “Opposite Party has not committed any error in revising term plan” and therefore the Opposite Party has got every right to claim the revised higher premium.

          6. The proposal deposit receipt issued on 30.04.2009. Next within 7 months on 25.11.2009, Ex.A3 letter sent to the Complainant informing him that premium has been enhanced. However, the Complainant replied under Ex.A4 that he is not accepting to pay the enhanced premium. As per the ratio of the National Commission, the Opposite Party has got right to revise the term plan and the premium amount. Since the amount was revised, the delay in sending the policy to the Complainant occurred. Therefore, in respect of delay in sending the policy only due to the reason of revising the premium amount by the Opposite Parties, it is held that they have not committed any deficiency in service.

          7. The Complainant continued to pay old premium amount of Rs.17,712/- even after revising the premium amount. Thus he had totally paid five half yearly premiums till the year 2011. When the Opposite Parties revised the premium amount they ought not to have accepted the old premium paid by the Complainant after 25.11.2009. For this position, the learned counsel appearing for the Opposite Parties replied that, the Complainant paid the amount only through the computer online and therefore the amount of premium of Rs. 17,707/- which was fed in the computer has been automatically accepted in the Complainant’s account and therefore, it cannot be said that Opposite Parties committed mistake in this respect. The Opposite Parties  immediately after revising the premium amount to a higher amount, they ought to have updated the  policy account  of the Complainant in the computer, then the computer ought not to have accepted the old premium of Rs.17,707/-  and then the Complainant would have realized that he should pay the enhanced  premium only. Admittedly the Opposite Parties have not updated the revised premium amount, is fault on their part. Therefore, in this respect we hold that the Opposite Parties  even after revising the premium amount, they allowed the Complainant to pay the old premium for four times is defect on their part   and therefore, it is held that the Opposite Parties 1 & 2 have committed deficiency in service.

08. POINT NO:2

          The Opposite Parties have cancelled the Complainant policy under Ex.A11 after giving due time to the Complainant to pay the enhanced premium and since he had not paid the same, the Opposite Parties refunded a sum of Rs.88,535/- towards the premium amount already paid by the Complainant in the above said policy by way of cheque dated 09.11.2011 under Ex.A12 letter dated 09.11.2011 and that was also received by the Complainant. Considering the facts and circumstances of the case and the deficiency committed by the Opposite Parties, it would be appropriate to direct the Opposite Parties to pay 12% interest for the said amount of Rs.88,535/-  to be  refunded to the Complainant from 09.11.2011 to till date. The Opposite Parties are further ordered to pay a sum of Rs.10,000/- towards compensation for mental agony, besides a sum of Rs.5,000/- towards litigation expenses.

          In the result, the complaint is partly allowed. The opposite parties 1&2 jointly or severally are ordered to pay 12% interest from 09.11.2011 to till the date of this order for the amount of Rs.88,535/- already refunded to the Complainant by the Opposite Parties and also to pay a sum of Rs.10,000/- towards compensation for mental agony, besides a sum of Rs.5,000/- towards litigation expenses. The complaint in respect of the other reliefs is dismissed.

          The above amount shall be paid to the complainant within 6 weeks from the date of receipt of the copy of this order failing which the above said amount shall carry 9% interest till the date of payment.

          Dictated to the Steno-Typist transcribed and typed by her corrected and pronounced by us on this 20^th day of January 2017.

MEMBER – II                                                               PRESIDENT

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1 dated 30.04.09		Proposal Deposit Receipt issued by the Opposite Party
Ex.A2 dated 04.05.09		First Premium Receipt issued by the Opposite Party
Ex.A3 dated 25.11.09		Letter from LIC to the Complainant stating half yearly premium on his policy was revised
Ex.A4 dated 01.12.09		Reply from the Complainant to the Opposite Party
Ex.A5 dated 12.02.10		Letter from Opposite Party to the Complainant
Ex.A6 dated 30.08.11		Letter from first Opposite Party to Complainant regarding non receipt of policy bond
Ex.A7 dated 08.09.11		Letter from 2nd Opposite Party to the Complainant to comply with requirements of consent for class II with interest from the date of inception of the policy
Ex.A8 dated 09.09.11		Letter from first Opposite Party to the Complainant regarding non receipt of policy bond
Ex.A9 dated 21.09.11		Representation from Complainant to the ombudsman by personal delivery
Ex.A10 dated 27.10.11		Copy of letter from the ombudsman to the Opposite Party
Ex.A11 dated 05.11.11		Letter from 2nd Opposite Party to the Complainant stating that the policy stands cancelled
Ex.A12 09.11.11		Letter from 2nd Opposite Party to the Complainant sending the refund of premium amount

LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTIES :

Ex.B1 dated 19.04.2009	Proposal
Ex.B2 dated 02.06.2009	Proposal decision
Ex.B3 dated 13.06.2009	Ultrasound Report
Ex.B4 dated 29.06.2009	Proposal decision
Ex.B5 dated 21.09.2009	Additional Questionnaire submitted by Complainant with reports
Ex.B6 dated 01.10.2009	E-mail confirmation of acceptance due to error
Ex.B7 dated 26.10.2009	Correct e-mail confirmation
Ex.B8 dated 25.11.2009	Letter from Branch Office to Complainant
Ex.B9  dated 31.12.2009	E-mail decision declining modification of terms
Ex.B10 dated 26.02.2010	Letter from Branch Office to Complainant Requesting payment of Health Extra
Ex.B11 dated 01.06.2011	Mail from Complainant to Grievance
Ex.B12 dated 30.08.2011	Response of Divisional Office
Ex.B13 dated 09.09.2011	Letter from Divisional Office suspending cover
Ex.B14 dated 10.09.2011	E-mail request for consent
Ex.B15 dated 21.09.2011	Ombudsman Complaint of Complainant

                                               

MEMBER – II                                                               PRESIDENT