KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No.190/2016

JUDGEMENT DATED: 27.09.2024

(Against the Order in C.C.No.151/2014 of CDRC, Kottayam)

PRESENT:

APPELLANT:

(by Adv. G.S. Kalkura)

Vs.

RESPONDENT:

(by Adv. Ike Mani)

JUDGEMENT

SRI. K.R. RADHAKRISHNAN :  MEMBER

This is an appeal filed by the opposite party in C.C.No.151/2014 on the file of the District Consumer Disputes Redressal Commission, Kottayam (the ‘District Commission’ for short). As per the order dated 31.12.2015, the District Commission allowed the complaint and directed the opposite party to pay Rs.1,00,000/-(Rupees One Lakh only) along with an amount of Rs.3,971/-(Rupees Three Thousand Nine Hundred and Seventy One only), as loyalty addition with
9% interest from the date of maturity of the policy till realization to the complainant.   They were also directed to pay Rs.5,000/- (Rupees Five Thousand only) as costs of litigation.   The opposite party was directed to comply with the order within 30 days from the date of receipt of copy of the order failing which the award amount shall carry interest @15%. Aggrieved by the said order the opposite party has filed this appeal.

2.       The brief details of the complaint are as follows: -

The complainant had taken a life insurance policy named “Jeevan Saral” bearing policy No. 392758770 from the opposite party for a term of 10 years commencing from 20.03.2004.  The complainant had paid a premium of Rs.1,225/-(Rupees One Thousand Two Hundred and Twenty Five only) on quarterly basis   totalling Rs.49,000/-(Rupees Forty Nine Thousand only).  The maturity value of the policy stated in the policy was Rs. 1,00,000.  However, as per the letter dated 04.01.2014 the opposite party insurer informed that the amount payable on maturity on 20.03.2014 is Rs.19,855/-(Rupees Nineteen Thousand Eight Hundred and Fifty Five only).  According to the complainant she is entitled to get the actual maturity value offered in the policy which is Rs.1,00,000/-(Rupees One Lakh only),  with bonus and loyalty addition. As the opposite party was not prepared to pay the amount, she filed the complaint claiming Rs.1,00,000/-(Rupees One Lakh only) with accrued bonus and loyalty addition with interest and costs. 

3.       Opposite party entered appearance and filed their version.  According to them the policy issued to the complainant is for death benefit sum assured of
Rs.1,00,000/- (Rupees One Lakh only) which is not the maturity sum assured as claimed   in the complaint.  This policy was introduced to cover the death benefit irrespective of age at entry and term, but the sum assured on maturity depend on age and terms.  The policy will participate in profits by way of loyalty additions declared by the LIC of India.  According to them, the complainant is eligible for a maturity sum assured of Rs.15,884/- (Rupees Fifteen Thousand Eight Hundred and Eighty Four only) plus loyalty addition of Rs.3,971/-(Rupees Three Thousand Nine Hundred and Seventy One only) totalling Rs.19,855/-only (Rupees Nineteen Thousand Eight Hundred and Fifty Five Only).  This is the amount payable to the complainant as per the terms and conditions of the policy. There is no deficiency in their service and hence they prayed for dismissal of the complaint.

4.       The evidence in the complaint consists of proof affidavits on both sides and Exhibits A1 to A3 were marked on the side of the complainant and Exhibits B1 to B5 were marked on the side of the opposite party.  There was no oral evidence.  On the basis of the evidence adduced the District Commission passed the impugned order.  The opposite party challenges the said order.

5.       Heard both sides.  The learned counsel for the appellant submitted that ‘Jeevan Saral Policy’ is a death benefit policy at low premium irrespective of age at entry.  The policy holder is entitled to get death benefit sum assured and loyalty addition provided the death of the policyholder occurs during the policy period.  The policy holder is entitled to maturity sum assured and loyalty addition on the maturity of the policy.  Amount of Rs.1,00,000/-(Rupees One Lakh only) shown in the policy was death benefit sum insured and not  the maturity sum insured.  There was an inadvertent error in all the lines of the relevant column of the policy.  It was only a typographical error    and the assured is eligible for an amount of Rs.19,885/- (Rupees Nineteen Thousand Eight Hundred and Eighty Five only) only.  The learned counsel also relied on a decision of the State Consumer Disputes Redressal Commission, (SCDRC), in Branch Manager LIC of India Vs Upendra in which it was held that total benefit meant to cover death benefit claim cannot be extended in the case maturity claim.  According to the learned counsel for the appellant, there is no deficiency in service on the part of the appellant/opposite party and hence he prayed to set aside the order of the District Commission. 

6.       Learned counsel for the respondent/complainant submitted that the amount mentioned in the relevant column of the policy is Rs.1,00,000/- (Rupees One Lakh only) as maturity value. He is eligible for the maturity value of
Rs.1,00,000/- (Rupees One Lakh only) plus bonus and loyalty addition. The first communication from the appellant regarding the maturity sum assured is vide their letter dated 04.01.2014 informing the maturity value as Rs.19,855/-(Rupees Nineteen Thousand Eight only).  There was no communication prior to the said date.  The respondent/complainant was under the bonafide belief that he was eligible for the sum insured of Rs.1,00,000/-(Rupees One Lakh only) plus bonus and  loyalty addition.   He also relied on a decision the Apex Court in C.A.No. 1130 of 2007(2016 (4) KLT SN.54 (C.No.60) SC in which it was held that if there is an ambiguity or doubt in the clause in the policy, it should be interpreted in favour of the insured.  Hence the learned counsel prayed for confirming the order of the District Commission.  

7.       We have considered the submissions on both sides and carefully perused the records.  This is a complaint regarding dispute in the amount payable on maturity of the policy.  The policy is admitted by the appellant insurer.  As is evident from the policy (Exhibit A1) the first column of the policy contains policy number, date of commencing of risk, table and term.  The second column contains maturity sum insured, death benefits sum assured under main plan, accident benefits sum assured and term rider sum assured.  The only amount shown under this column is Rs.1,00,000/-(Rupees One Lakh only).  It is only natural that the policy holder believed that the maturity sum assured under the policy is Rs.1,00,000/-(Rupees One Lakh only).  There is no communication from the appellant insurer regarding the error in the policy till 04.01.2014 when a communication (Exhibit A2) was sent by the appellant informing that the maturity value is Rs.19,885/- only (Rupees Nineteen Thousand Eight Hundred and Eighty Five only).  Exhibit A3 is the reminder dated 14.03.2014.  The appellant failed to inform the amount payable under the policy till the Exhibit A2 letter was issued to her.  Even in that letter the appellant did not admit any mistake in the policy.

8.       We observe that the official who signed the policy erred in not noticing such an important omission in the policy. Once the policy is issued, it is a concluded contract. If at all there was a bonafide error in the policy document, it should have been communicated to the policy holder and rectified within a reasonable time with the concurrence of the policyholder. The appellants miserably failed in this regard. The appellants did not send any communication at all to the respondent till they sent Exhibit A2 Letter at the fag end of the policy period.  They did not take any effort to rectify their mistake during the entire period of the policy.  The appellants have not produced any evidence to prove the sum assured under the policy as claimed by them.

9.       Exhibit B1 is the proposal form in which nothing is mentioned about the amount payable on maturity of the policy.  Exhibit B2 is the details of the Jeevan Saral Policy which is an internal circular dated 12.02.2004.  However, the respondent is not aware of the contents of the circular which are used for internal circulation only.  Exhibit B3 series are similar policies issued to other policy holders with all columns duly filled.  However, this information is not known to the policy holder. Hence the documents produced cannot be accepted as evidence to prove the maturity value.

10.     Exhibit B4 is the circular dated 10.10.2013regarding the loyalty addition payable which is also not in the knowledge of the respondent/ complainant.  The only document available with the respondent/complainant   is the policy document where it is mentioned that the amount payable is Rs.1,00,000/-(Rupees One Lakh only). The policy, which is the basis of the contract, is issued in a careless manner for which the innocent policy holder cannot be held responsible.  As and when the error was detected   the appellant   should have   informed about the same to the policy holder.  This was not done and it was communicated only at the time of maturity of the policy which is a grave lapse on the part of the appellant. 

11.     On the basis of the foregoing discussion we do not find any error in the finding of the District Commission that the appellants / opposite parties could not prove their contention about the maturity sum assured and that there is deficiency in service on the part of the appellants/opposite parties. Hence, we concur with their finding.  We observe that the District Commission has ordered interest@15% per annum in case the appellant/opposite party fails to comply with the order within 30 days.   We are of the view that this rate of interest @15% is on the higher side.  Hence, we reduce the same from 15% to 10%.

          12.     In the result the appeal is partly allowed and the order dated 31.12.2015 of the District Commission in C.C.No.151/2014 is modified to the extent that the interest @15% payable on default in payment is reduced to10%.  All other terms in the order of the District Commission remain intact.  No costs.

          The statutory deposit of Rs.25,000/-(Rupees Twenty Five Thousand only) remitted by the appellants shall be released to the respondent/complainant on filing proper application before this Commission.  The appellants are directed to pay to the complainant the balance amount as per the order of the District Commission within one month failing which the respondent/complainant can initiate appropriate proceedings for executing the order. 

SL