This C.C. is coming on before us for final hearing in the presence of Sri.K. Raghunadha Rao, complainant; and of Sri.A. Sarath Chander, Advocate for opposite parties 1&2 and of Sri. Vijay Jeremiah, Advocate for Opposite party No.3; upon perusing the material papers on record and upon hearing and having stood over for consideration, this Forum passed the following order;

O R D E R

(Per Sri R.Kiran Kumar, Member)

          This Complaint is filed u/s.12-A of Consumer Protection Act, 1986. 

2.       The averments made in the complaint are that the complainant had taken LIC Jeevan Saral Policy bearing No.687024970 on 28-03-2004 by paying a premium of Rs.12,010/- per year for a period of 10 years.  The complainant submitted that according to the schedule of the policy; the maturity sum assured / death benefit amount sum assured under main plan / accident benefit sum assured / term rider sum assured is one and the same i.e. Rs.2,50,000/-.  The complainant further submitted that in the event of life assured surviving the date of maturity a sum equal to maturity sum in force after partial surrenders, if any, along with the corresponding loyalty addition, if any, shall be payable.  The complainant further submitted that in the conditions and privileges within preferred to overleaf item No.12 says about the loyalty and other silent features of the policy stipulated in the schedule, provisions and privileges, he paid all the premiums as agreed to end of policy term 10 years and surrendered the policy to the branch office for arranging payment of maturity sum assured by the opposite parties corporation.  The complainant further submitted that he received a message from his bank on 28^th March, 2014 stating that an amount of Rs.51,523/- was credited to his account, and he received a message from opposite party corporation stating that maturity claim under policy No.687024970 paid by LIC Rs.51,623/- to bank account.  The complainant further submitted that he rushed to the opposite parties corporation branch office and enquired about short/less payment as against the sum assured mentioned in the schedule, as in the policy schedule the maturity value of the policy is Rs.2,50,000/- out of which they paid Rs.51,623/- towards full and final settlement of policy, which is nearly 1/5 th of the assured amount.  The complainant further submitted that the opposite parties corporation cheated him while making him payment of maturity value which is contributing the contra in between insurer and insured, thus there is breach of contract, which amounts to deficiency in service and the opposite parties deviated the preamble note Jeevan Saral (with Profits), instead they made the complainant to sustain loss of amount and loyalty addition which is against the principles of natural justice as such the complainant filed this present complaint.

3.       On behalf of the complainant, the following documents were filed and marked as Exs.A.1 to A.4. 

Ex.A-1:- Photocopy of Policy.

Ex.A-2:- Photocopy of Renewal Premium Receipts (Nos. 4).

Ex.A-3:- Photocopy of status report of policy No.687024970, dt. 28-03-2014.

Ex.A-4:- Photocopy of Statement of Account issued by ING Vysya Bank,dt.29-04-2014.

4.       On receipt of notice, opposite parties appeared through their counsel and filed counter.  In their counter, opposite parties No.1 & 2 admitted that the complainant obtained the policy from their corporation.  The opposite parties 1 & 2 submitted that the Jeevan Saral Plan circular bearing reference Actl/1934/4/, dt. 12-2-2014 issued by the central office, Mumbai contained special features under para No. 2.  The Opposite parties 1 & 2 also submitted that the averments made under para No.1 of page No.2 by the complainant is false, baseless and the schedule printed on the policy Bond contained 3 coloumns and 4 rows which are independent of one another, the amount of Rs.2,50,000/- is printed against the second row i.e. death benefit sum assured under main plan.  The Opposite parties 1 & 2 also submitted that the maturity value of the policy is not Rs.2,50,000/- as alleged under page No.3, but only Rs.51,623/- are eligible by the complainant and the averments related to alleged cheating on the part of Opposite parties 1 & 2 corporation, while making the payment of maturity value under the above said policy are false and baseless.  The Opposite parties 1 & 2 also further submitted that the life insurance protection is invaluable and it cannot be compared with investment such as bank deposits and the life insurance premium is calculated basing on the actuarial principles and it cannot be compared with other avenues of investment.  The opposite parties 1 & 2 also further submitted that the above policy had already matured and full maturity value is paid to the complainant and the same was acknowledged by the complainant and the averments made in the complainant that the said policy had been surrendered, is false.  The opposite parties 1 & 2 also further submitted that for final payments under a life insurance policy, such as death claim, maturity claim or surrender of the policy, the original policy bond is taken back by the life insurance company, as is done in the instant case by the opposite parties corporation, for cancellation of the policy bond, as a token of total termination of the life insurance contract and as such the averments made by the complainant are false and baseless and since the life insurance contract had already got terminated with his acceptance of the maturity benefit amount as such prayed to dismiss the complaint. 

5.       The opposite party No.3 in their counter submitted that he is not proper party to the above complainant and the complaint is not maintainable against him. The opposite party No.3 submitted that he is a practicing advocate in the District Court of Khammam since 2010 and he is no way associated with LIC of India or to the claim of the complainant, his agency in the LIC of india, Khammam got terminated long back during the year 2005 and since then the respondent No.3 was relived from all works of Agency of LIC of India, Khammam. The opposite party No.3 also submitted that upon the termination of Agency the LIC of India, Khammam, there is no more agent and masters relation exists between the LIC of India, Khammam and opposite party No.3, as such the opposite party No.3 is not the proper party to be sued in the complaint.  The opposite party No.3 further submitted that the complainant was in full knowledge about the termination of agency, with mollified intention to intimidate, harass and to damage the reputation in society with ill intention made the opposite party No.3 as party by misleading the Forum, which unlawful act of the complainant amounts to abuse of law and prayed to dismiss the complaint.

6.       On behalf of the opposite parties no documents are filed.

7.       Written arguments of the complainant and Opposite party No.3 filed.

8.       Upon perusing the material papers on record and upon hearing the arguments, now the point that arose for consideration is,

i)        Whether the complainant is entitled for the sum assured amount under the policy?

ii)       To what Relief?

Point No:-1

9.       in this case the complainant had taken LIC Jeevan Saral Policy bearing No.687024790 on 28-03-2004 from opposite party No.1&2 by paying premium of Rs.12,010/- per year for a period of 10 years through opposite party No.3.  According to the complainant as per the terms & conditions of the policy he had paid all the premiums up to 28-03-2013, i.e. end of policy, term of 10 years and after that he surrendered the policy to the branch office for payment of maturity sum assured by the LIC of India along with accrued benefits.  According to the complainant he received a message from his bank on 28-03-2014 stating that an amount of Rs.51,523/- credited to his account, on the same day he received a message from LIC of India stating that maturity claim under policy No.687024970 paid by LIC to bank account No.1288.  according to the complainant as in the policy schedule the maturity value of the policy is Rs.2,50,000/- out of which the opposite parties paid Rs.51,623/- towards full and final settlement of policy which is nearly 1/5^th of the assured amount and thereby the opposite party No.1&2 corporation committed breach of contract which amounts to deficiency in service.  According to the complainant neither the agent nor the LIC of India corporation failed to elucidate in about the maturity value, they paid lesser amount contrary to contract, failed to pay the loyalty addition as per the contract as stated in the preamble, there is breach of contract which amount to deficiency as such the complainant approached the Forum for redressal.

10.     From the documents and material available on record, we observed that, there is no dispute that the complainant had taken life insurance policy from the opposite parties corporation, he paid all the premiums as agreed  up to end of the policy term of 10 years, he surrendered the policy to the branch office and submitted an application for arranging payment of maturity sum assured by the opposite party corporation along with accrued benefits as on the date of payment.  From the written version filed on behalf of opposite party No.2, the Jeevan Saral plan circular bearing ref:Actl/1934/4, dt. 12-02-2014 issued by the central office of Mumbai contained special features under para No.2, which reads as submitted here under “In conventional products, premium rates are given per thousand sum assured for different entry ages and terms.  Under this product death cover will be same irrespective of age at entry and term but the sum payable at maturity will differ for entry ages and terms.” In the written arguments the complainant submitted that the above said circular was not made available / printed in the agreement nor supplied along with the bond dt.06-06-2004, which comes under negligence thereby the opposite party No.1&2 corporation hide the important feature of the product to induce the policy holder to get further premium payments in a view to improve their business keeping the policy holder in darkness.

11.     We carefully examined the documents, terms & conditions submitted by the complainant, we are of the opinion that the opposite party corporation failed to disclose the terms & conditions of the policy to the complainant and also it is the duty of the insurers and their agents to disclose all material facts in their knowledge since the obligation of good faith applies to them equally with the assured and also we observed that the opposite parties failed to produce any evidence to support their contention.   The Hon’ble National Commission, in Rajender Singh Vs. LIC of India II (2014) CPJ 194 NC, United India Insurance Company Vs. Puspalaya printers & another 1997 NCC 479 (NC) and Murali Agro Products Vs. Oriental Insurance company 1 (2005) CPJ 1 (NC) in the above cases the Hon’ble National Commission observed that

“Contract of Insurance is based upon good faith.  It is the duty of insurers and their agents to disclose all material facts in their knowledge since obligation of good faith applies them equally with the assured.

If the contract is vague, benefit should be given to the insured.  The exclusion term of Insurance policy is read down so as to serve the main purpose of policy that is to indemnify the damage caused due to fire.

Finally, it is so to state that the Insurance Company to have terms clearly defined in insurance policy with reasonable clarity and not to continue with the old forms which terms are vague.”      

12.     From the above, we are on the opinion that the opposite parties failed to point out that any such terms & conditions were explained to the complainant it amounts to deficiency in service by the opposite parties as such this point is answered accordingly in favour of the complainant.

13.     In the result the complaint is allowed in part directing the opposite parties to pay the maturity value of Rs.2,50,000/- to the complainant in respect of the above mentioned policy along with profits by deducting the amount of Rs.51,623/.  The opposite parties are also directed to pay, the amount to the complainant within one month from the date of receipt of this order, failing which penal interest @9% P.A. shall be payable by the opposite parties to the complainant from 28-03-2014 to till the date of actual payment.

          Typed to dictation, corrected and pronounced by us in the open forum, on this the  9^th day of February, 2015.

       Member                  FAC President             

District Consumer Forum, Khammam

APPENDIX OF EVIDENCE

WITNESSES EXAMINED:-

For Complainant:-                                                     For Opposite party:-   

       -None-                                                                           -None-

DOCUMENTS MARKED:-

For Complainant:-                                                     For Opposite party:-   

   Member                  FAC President             

District Consumer Forum, Kham