ORDER

16.04.2024

Ms. Nipur Chandna, Member

1. The present complaint case is remanded back by Hon’ble state Commission vide its order dated 09.02.2017 to decide a fresh thereby holding that the Ld. District Forum has passed a totally non speaking order without giving any reasoning for dismissal of the complaint.

2.  In brief facts of the present case are that complainant had taken the policy in the year 1999 through an agent/OP-2. Complainant has taken the policy for a sum of Rs. 2 Lakh wherein he was informed that after 3 years he can close the policy and he would be entitle to the principal amount along with interest as bonus. However, he could not continue the said policy due to some personal reasons and close the same. It is further stated that on closure of the policy he was returned approximately Rs. 21,000/- whereas he had deposited Rs. 17,000/- as premium. Thereafter, two more policies were taken in the year 2002 one policy for Rs. 2 Lakh and other for Rs. 1 Lakh. It is further stated that at the time of taking the aforesaid policy it was stated that same rules and regulations would be application as were there in the previous policy.

3. It is further alleged by the complainant that due to some personal reasons he closed the policy in the year 2009 and although he had paid a sum of Rs. 1,00,760/- as premium for the aforesaid policy but he was refunded only Rs. 85,540/- as such he was put to loss. He further alleged that the aforesaid amount has not paid to him as per policy terms and conditions as such he is entitle for the refund of the loss suffered by him along with interest, compensation as well as litigation cost, hence, this complaint.

4. Notice of the complaint was sent to OPs. Complaint was opposed by OPs by filing an affidavit in the form of written statement stating therein that as per the order of POIF Rule No.34 dated 18.11.2003, there was a change in the terms and conditions of PLI Policies due to which the surrender factor of the policies were changed. It is further stated that in terms of POIF Rule 34 dated 18.11.2003, correct surrender value of the policies were paid to the complainant, hence, no case of deficiency in service can be made out in favor of the complainant and against OP. It is further prayed that present complaint is without any merit, hence, dismissed with cost.

5. Rejoinder to the written statement of OP filed thereby challenging the calculation of the surrender value against the policies in question. Complainant filed his evidence by way of affidavit thereby reiterating the contents of this complaint. Asstt. Divisional Manager filed its evidence by way of affidavit.

6. Both the parties have filed their respect written arguments. We have  heard the arguments advance at the bar by Ld. Counsel for complainant Ms. Vishakha Gupta and Sh. Amarnath Mishra on behalf of OP and have perused the record.

7. Complainant has placed on record the copy of RTI filed with post office Meghdoot Bhawan, Delhi, copy of the reply of RTI, copy of the circular dated 18.11.2003, copy of the IRDA circular dated 30.12.2010, copy of the application for surrender value, copy of the policies in support of his contention.

On the contrary OP has placed on record the copy of circular dated 18.11.2023, copy of policy terms and conditions, copy of the welcome letter dated 10.04.2002, copy of surrender calculation sheet, copy of proposal form in support of his contention.

8. The complainant has alleged in his complaint that OP-2 has not informed him about the change in the policy terms and conditions while obtaining the policy in the year 2002. Admittedly, the complainant has obtained two insurance policies from the OP in the year 2002, one policy for a sum insured of Rs. 2 Lakh and other for Rs. 1 Lakh. It is admitted fact that due to some personal reasons the complainant could not continue the policy in question and as such approached OP for surrender of the policy. The complainant has further alleged that at the time of taking the aforesaid policies he was assured that he would be entitled to the principal amount along with interest as bonus. Despite bare version nothing has placed on record by the complainant to establish that at the time of issuance of the policy in the year 2002 he had been assured by OPs in respect to the refund of principal amount along with interest in the form of bonus.

Whereas the OP company has placed on record the circular dated 18.11.2003 of the Directorate of Postal Life Insurance wherein the guidelines were issued in respect to the calculation of the surrender value in case of the surrender of the Postal Life Insurance Policy the relevant portion of the circular are reproduced as under:-

3.It is has been decided that the surrender factor need not be alter, as alteration of surrender factor may create complications. However, in order to tackle the issue administratively, it has been decided that the surrender cases will be regulated as under:

1. Surrender of a policy will not be allowed unless payment of premium for 36 months continuously has been made as per the rule 34 of POIF Rules.
2. If a policy is in full force and is surrendered before completion of 5 years no bonus will be payable on the paid up value.
3. If a policy is surrendered after 5 years and the policy is in full force till the date of surrender, then proportionate bonus on paid up value will be paid in addition to the paid up value.
4. If a paid up policy is surrender i.e. if the policy is not in full force and has been made paid up/auto paid up only proportionate bonus will be payable on the paid up value after 5 years and no bonus will be paid thereafter.

4.In all the cases mentioned in para 2 above, the existing surrender factor will be applicable. These instructions will take effect from the date of issue. Pending cases will also be settled in accordance with these instruction.

9. The bare perusal of circular dated 18.11.2003 makes it clear that  that the instructions in respect to the calculation of surrender value will be applicable on the pending  cases. Admittedly, the circular dated 18.11.2003 had retrospective effect as per clause 4, hence, the terms of the circular dated 18.11.2003 is applicable on the policies issued to the complainant also.
10. As per clause 3 (ii) if the policy is surrendered before completion of 5 years no bonus will be payable on the paid up value. Admittedly, the complainant had not paid the premium for 5 Year hence his case falls under clause 3 (ii) of the circular dated 18.11.2003, hence, no bonus was paid to him. The OP has acted in the four corners of the circular dated 18.11.2003 issued by Directorate of Postal Life Insurance and release the surrender value to the complainant accordingly.

11. Insurance is a contract between the insured and insurer and both the parties are bound by the terms contained therein. The Hon’ble NCDRC in the matter of National Insurance Co. Ltd. vs. Vinod Puri as reported in I [2014] CPJ 341 (NC) is pleased to hold as under:
    1. Insurance contract has to be construed like any other contract on basis of its terms and conditions and outside aid for construction of insurance policy is impermissible.

12. The Hon’ble Apex Court in the case of Oriental Insurance Co. Ltd. versus Sony Cheryan reported in (1999) 6 SCC 451 is pleased to hold as under:

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.

13. Similarly in the case of General Assurance Society Ltd. vs. Chandumull Jain and Anr., reported in (1996) 3 SCR, 500, the Constitution Bench has observed that the policy document being a contract and it has to be read strictly. It was observed:

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. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover floor, cyclone etc. had come into being.

14. The Hon’ble NCDRC in the matter of Ind Swift Ltd. versus New India Assurance Co. Ltd. reported in IV[2012] CPJ 148 (NC) is pleased to rule as under:

Construction of the policy is to be construed strictly as per the terms and conditions of the policy document which is binding contract between the parties and nothing can be added or subtracted by different meaning.

15. Similarly in LIC versus Banwarilal Yadav reported in IV[2013] CPJ 38 (NC) the Hon’ble NCDRC observed as under:

“Forum has no jurisdiction to go beyond terms and conditions of the Policy.”

16. The NCDRC in yet another matter in the matter of Morien Chemicals Ltd. versus UCO Bank reported in III [2013] CPJ 261 (NC) is pleased to hold as under:

“Insurance Company is not liable to pay damages which are not covered under the policy.”

17. Having regard to the facts and circumstances of the case and  judgment cited above, we are of the considered view that there exists no infirmity in the decision of the OP Company as the surrender value was calculated as per instruction given in circular dated 18.11.2003 issued by Directorate of Postal Life Insurance and courts are not meant to add or delete the terms of contract. 
18. In view of the above discussion, we are inclined to hold that the calculation of the surrender value of the policies  in question  by OP was justified.  The present complaint is devoid of merit, hence, dismissed.

19. Copy of the order be given to the parties free of cost as per order dated 04.04.2022 of Hon’ble State Commission after receiving an application from the parties in the registry. The orders be uploaded on www.confonet.nic.in.

Announced in open Commission on  16.04.2024.

SANJAY KUMAR                       NIPUR CHANDNA                           RAJESH

       PRESIDENT                             MEMBER                                     MEMBER