Tamil Nadu

South Chennai

311/2009

S.Sethuraman - Complainant(s)

Versus

Manager LIC OF India,City Branch 2 - Opp.Party(s)

S.Natarajan

09 Oct 2018

ORDER

                                                                        Date of Filing  : 31.03.2009

                                                                          Date of Order : 09.10.2018

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, Frazer Bridge Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

                 TMT. K. AMALA, M.A., L.L.B.                                : MEMBER-I

 

C.C. No.311/2009

DATED THIS TUESDAY THE 09^TH DAY OF OCTOBER 2018

                                 

S. Sethuraman,

S/o. Sri. Subramaniam,

No.11/3, SBI Officer’s Colony,

Jeevarathinam Nagar,

Adayar,

Chennai – 600 020.                                                      .. Complainant.                                                         

 

 ..Versus..

 

The Manager,

LIC of India,

City Branch 2,

No.25, Mamatha  Complex,

Whites Road,

Royapettah,

Chennai – 600 014.                                                    ..  Opposite party.

          

Counsel for complainant         :  M/s. G. Senthil Kumar

Counsel for opposite party     :  M/s. C. Umashankar & another

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 praying to revive the policy No.713495995 without any demur and to pay a sum of rs.10,000/- towards deficiency in service and Rs.10,000- towards compensation for mental agony and pain with cost of Rs.5,000/- to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that he is the holder of the Life Insurance Policy No.713435995 issued by the opposite party commenced from February 2002.  The complainant was paying the premium through the agents nominated by the opposite party.   At the request of the complainant, the quarterly premium was altered into annual premium of Rs.30,704/-.   In the year February 2005, the opposite party’s agent failed to collect the premium resulting that the policy was lapsed.  Thereafter, on hearing from the agent a cheque for Rs.32,075/- dated:10.02.2006 was issued.  The complainant also undergone medical checkup by the opposite party’s panel doctors. Thereafter, the opposite party informed the complainant that a sum of Rs.34  per thousand on the assured amount to be paid as extra premium for revival of policy.  The complainant submits that he has not agreed and accepted the condition for revival dated:13.02.2006 since, the opposite party cannot alter the terms of the contract on subsequent events.   The opposite party also, returned the cheque for Rs.32,075/- issued on 16.02.2006 stating that the consent for extra premium on revival as per the divisional office decision. Hence the complainant issued legal notice dated:03.10.2006 for which, the opposite party sent a reply dated: 12.10.2006. 

2.     The complainant submits that by letter dated:18.10.2006 it was pointed out by the complainant that the so called “prognostic approach” does not form part of the policy conditions and claiming extra premium is contrary to the terms and conditions of the policy.   The complainant submits that once again, the opposite party issued letter calling upon the complainant to revive the policy at the original premium under General Amnesty Scheme.  In that Scheme also, the complainant made a request for revival.  But the opposite party not revived the policy.  The act of the opposite party is tantamount to discrimination, whimsical and arbitrational.  Hence the complaint is filed.

3.      The brief averments in the written version filed by the  opposite party is as follows:

The opposite party specifically denies each and every allegation made in the complaint and puts the complainant to strict proof of the same.   The opposite party state that the agents of the Corporation can collect only 1^st premium from the proposal.   In the collection of renewal premium, they are helping the policy holder and are acting as agents of the policy holders.   It is the responsibility of the policy holders to remit the premium in due date and keep the policy in force.   The opposite party states that as far of Revival of Discontinued policies are concerned, the conditions and the privileges  as printed on the 2^nd page of the policy which clearly states “If the policy.... payment of all the arrears of premium together with interest at such rate as may be fixed by the Corporation from time to time.....”.   Hence, based on the medical and other reports, the opposite party decided to accept the revival subject to the payment of extra premium at the rate of 34/- per thousand of the sum assured.  The opposite party states that they sent a letter dated:13.02.2006 requesting the complainant for the due payment of interest at the rate of 34/- per thousand of the sum assured.   The opposite party states that once the policy is lapsed for non-payment of premium in time, the Corporation has got the right to accept with extra amount or decline the revival of the discontinued policy.  Therefore there is no deficiency in service on the part of the opposite party.  Hence the complaint is liable to be dismissed.

4.    To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A13 are marked.  Proof affidavit of the opposite party is filed and documents Ex.B1 to Ex.B3 are marked on the side of the opposite party.

5.      The points for consideration is:-

1. Whether the complainant is entitled to revive the policy No.713495995 as prayed for?

2. Whether the complainant is entitled to a sum of Rs.20,000/- towards deficiency in service with cost of Rs.5,000/- as prayed for?

6.      On point:-

Both parties filed their respective written arguments.  Heard the Counsels also.  Perused the records namely the complaint, written version, proof affidavits, documents etc.   Admittedly, the complainant is the holder of the Life Insurance Policy No.713435995 issued by the opposite party commenced from February 2002.  The complainant was paying the premium through the agents nominated by the opposite party.   At the request of the complainant, the quarterly premium was altered into annual premium of Rs.30,704/-.   In the year February 2005, the opposite party’s agent failed to collect the premium resulting that the policy was lapsed.  Thereafter, on hearing from the agent a cheque for Rs.32,075/- dated:10.02.2006 was issued.  The complainant also undergone medical checkup by the opposite party’s panel doctors. Thereafter, the opposite party informed the complainant that a sum of Rs.34/-  per thousand on the assured amount as per Ex.A2 to be paid as extra premium for revival of policy.  Further the complainant contended that he has not agreed and accepted the condition for revival dated:13.02.2006 since, the opposite party cannot alter the terms of the contract on subsequent events.   The opposite party also, returned the cheque for Rs.32,075/- issued on 16.02.2006 as per Ex.A1 stating that the consent for extra premium on revival as per the divisional office decision.   On a careful perusal of the Ex.A7 policy terms and conditions clause 3,

Revival of Discontinued policies:

“If the Policy has lapsed, it may be revived during the life time of the Life Assured, but Premium and before the date of maturity, on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest at such rate as may be fixed by the Corporation from to time compounding half-yearly.  The Corporation reserves the right to accept or decline the revival of discontinued policy. The same is approved by the Corporation and is specifically communicated to the Proposer / Life Assured”.

proves that the claim of the opposite party is arbitrary. Hence the complainant issued legal notice dated:03.10.2006 as per Ex.A4 for which, the opposite party sent a reply dated: 12.10.2006 as per Ex.A5. 

7.     Further the contention of the complainant is that by letter dated:18.10.2006 as per Ex.A6 it was pointed out by the complainant that the so called “prognostic approach” does not form part of the policy conditions and claiming extra premium is contrary to the terms and conditions of the policy.   Further the contention of the complainant is that as per Ex.A11 once again, the opposite party issued letter calling upon the complainant to revive the policy at the original premium under General Amnesty Scheme.  In that Scheme also, the complainant made a request for revival.  But the opposite party not revived the policy.  The act of the opposite party is tantamount to discrimination, whimsical   and arbitrational establishes the deficiency in service and unfair trade practice.  The complainant is claiming a sum of Rs.20,000/- towards compensation for mental agony and deficiency in service.

8.     The contention of the opposite party is that the agents of the Corporation can collect only 1^st premium from the proposer.  In the collection of renewal premium, they are helping the policy holder and are acting as agents of the policy holders.  It is the responsibility of the policy holders to remit the premium in due date and keep the policy in force.  In this case, the complainant failed to pay the revived premium resulting that the policy lapsed.   Further the contention of the opposite party is that as far of Revival of Discontinued policies are concerned, the conditions and the privileges  as printed on the 2^nd page of the policy which clearly states that If the policy is lapsed it may be revived on  payment of all the arrears of premium together with interest at such rate as may be fixed by the Corporation from time to time.   Hence, based on the medical and other reports, the opposite party decided to accept the revival subject to the payment of extra premium at the rate of 34/- per thousand of the sum assured.  But on a careful perusal of the entire records, the opposite party has not produced any details regarding medical and the alleged other reports.  Equally, the opposite party has not explained how they arrived Rs.34/- per thousand of the sum assured for such revival.  On a careful perusal of the policy condition No.3, it is apparently clear that for revival the opposite party is entitled to collect interest alone. 

9.     Further the contention of the opposite party is that the letter dated:13.02.2006 requesting the complainant for the due payment of interest at the rate of 34/- per thousand of the sum assured; was not accepted.   Further the contention of the opposite party is that once the policy is lapsed for want of non-payment of premium in time, the Corporation has got the right to accept with extra amount or decline the revival of the discontinued policy.  In this case, the complainant’s policy was renewed even during intensive revival campaign conducted during 01.01.2008 to 15.01.2008.  But the opposite party has not stated any reason for such non revival even during intensive revival campaign.   Considering the facts and circumstances of the case, this Forum is of the considered view that the baseless claim of Rs.34/- per thousand of the assured amount amounts to unfair trade practice.  Hence the opposite party shall revive the policy on payment of all lapsed premium amount with interest at the rate of 9% p.a. by the complainant and shall pay a compensation of Rs.10,000/- and cost of Rs.5,000/-.

In the result, this complaint is allowed in part.   The opposite party is directed to revive the Policy bearing No.713495995 on payment of all premium dues with interest at the rate of 9% p.a. by the complainant and the opposite party shall pay a sum of Rs.10,000/- (Rupees Ten thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The aboveamounts shall be payablewithin six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% p.a. to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 09^th day of October 2018. 

 

MEMBER –I                                                                      PRESIDENT

COMPLAINANTS’ SIDE DOCUMENTS:

Ex.A1	16.02.2006	Copy of letter of the opposite party to the complainant
Ex.A2	22.02.2006	Copy of letter of the opposite party to the complainant
Ex.A3	22.04.2006	Copy of the complainant’s letter to the opposite party
Ex.A4	03.10.2006	Copy of legal notice by the complainant’s Counsel to the opposite party
Ex.A5	12.10.2006	Copy of reply by the opposite party to the complainant
Ex.A6	18.10.2006	Copy of rejoinder notice issued by the complainant to the opposite party
Ex.A7	02.11.2006	Copy of letter of the opposite party to the complainant
Ex.A8	08.11.2006	Copy of revival quotation
Ex.A9	30.12.2006	Copy of letter of the opposite party to the complainant
Ex.A10	27.09.2007	Copy of Ombudsman’s letter
Ex.A11	18.12.2007	Copy of letter of the opposite party to the complainant
Ex.A12	27.12.2007	Copy of revival campaign
Ex.A13	10.08.2014	Copy of letter of the opposite party to the complainant

 

OPPOSITE  PARTY SIDE DOCUMENTS:

Ex.B1	11.02.2002	Copy of policy and conditions
Ex.B2	04.01.2006	Copy of covering letter from LIC to Mr. Sethuraman
Ex.B3	13.02.2006	Copy of legal notice of the complainant to LIC

 

 

 

MEMBER –I                                                                      PRESIDENT