By Smt. C.S. Sulekha Beevi, President,

1. Complainant is aggrieved that Life Insurance Corporation caused delay in making payment of the surrender value of policy.

Facts:-

Complainant is an advocate and had availed an L.I.C. Policy with opposite party. He decided to surrender the policy for the purpose of raising funds for purchasing a house plot of 8 cents at Perintalmanna. He entered into a deal with the developer of the land who offered to give a discount of Rs.5,000/- per cent, upon the total amount of development charges of Rs.90,000/- per cent, on condition that the complainant makes full payment on or before 29-02-2008. He would thus be able to get a total discount of Rs.40,000/- if he was able to make payment to the developer on or before 29-02-2008. It is stated that the developer had also offered to bear the registration charges of Rs.15,000/- if complainant made the payment on or before 29-02-2008. That a Memorandum of Understanding (MOU) was entered between the complainant and developer stipulating these conditions. In order to avail these benefits complainant decided to surrender the L.I.C. Policy. The surrender value as on 20-02-2008 was Rs.5,47,055/-. It is further stated that opposite party has advertised and exhibited a notice on their notice board at their office, that payment of surrender value will be made within 3 days of the date of surrender. Complainant avers that he decided to surrender on the firm belief that he will receive payment within 3 days and that he had stated his purpose and urgency of money in the letter of request for surrender submitted to L.I.C., Perintalmanna branch. He states that he submitted the application for surrender on 20-02-2008 and opposite party ought to have despatched the cheque of surrender value within 3 days. Opposite party failed to do so. Complainant did not receive any reply till 26-02-2008. He went to opposite party office on 26^th, 28th and 29^th for enquiring the matter. On 29-02-2008 opposite party informed that the cheque was ready. Complainant then contacted the Administrative Officer and requested to handover the cheque by hand on producing necessary documents for proof of identity. That he had also given his bank account number. These requests were rejected by opposite party only to harass the complainant and to cause delay in making payment. He avers that opposite party could have despatched the cheque at least by 29-02-2008. But the cheque was despatched only on 04-3-2008. Complainant received it on 05-3-2008 which was a bank holidy. He could encash it only on 06-3-2008. On the same day he paid Rs.5,60,000/- tot he developer who issued receipt for the same. The land was assigned in favour of complainant. It is stated that he did not get the benefits and discounts offered by the developer only because of the willful and unreasonable delay caused by opposite party. That he also lost 12 days interest @ 18% upon the surrender value, amounting to Rs.3,237/-. Complainant had lodged a written complaint to opposite party on 06-3-2008 demanding compensation. Opposite party had not heeded to the request. He alleges deficiency in service on the part of opposite party. Hence this complaint.

2. Opposite party filed version admitting that complainant was a holder of L.I.C. Policy dated, 28-10-2002 with Perintalmanna branch. It is also admitted that the policy was surrendered by him vide his request letter dated, 20-02-2008. Denying the other allegations in the complaint it is submitted by opposite party that after receiving the request letter on 20-02-2008, on the same day, discharge voucher was given to the complainant by hand. Usually it is send by post. It was given by hand as a gesture to help the customer. But complainant had returned the discharge voucher with necessary forms only on 22-02-2008. Opposite party denies that the complainant visited the office of opposite party on 26^th, 28^th and 29^th. That since it is a premature cancellation of policy and the amount involved being high opposite party had to take care in calculating the amount and scrutinizing papers. Normally in cases of surrender, if the documents are correct the cheque will be issued within 3 to 4 working days. That in this case, the cheque was prepared on 29-02-2008 ie., within 3½ working days. That therefore there is no delay or latches on the part of opposite party. Complainant had returned the discharge voucher on 22-02-2008. The next day was Saturday and the working hours of office is 10am to 1.30pm. Only. 24-02-2008 was a Sunday. 25^Th, 26^th and 27^th were working days. On 28^th there was a strike of officers and there was no proper functioning of the office. On 29^th the cheque was ready for being issued to complainant. That the cheque was ready within 3½ working days. subsequent delay was not intentional and that opposite party is not responsible for any postal delay or holidays. It is stated that complainant had not disclosed to opposite party the deal he had with the developer. That opposite party is not party to the deal and is totally unaware of it. That the MOU is a fabricated document, which is created only for grabbing money from opposite party. It is admitted that complainant had lodged written complaint to opposite party. Proper reply was sent. That Life Insurance Corporation renders quality service to customers who are more than 20 crores in number and that Life Insurance Corporation is the most trusted brand name among people. That opposite party is not responsible for the late payment made for purchase of land. That there is no deficiency in service and that opposite party is not liable to compensate the complainant.

3. Evidence consists of the oral evidence of complainant who was examined as PW1 and Exts.A1 to A12 marked for complainant. Opposite party filed counter affidavit. Exts.B1 and B2 marked for opposite party.

4. Points for consideration:-

(i) Whether opposite party is deficient in service.

(ii) If so, reliefs and costs.

 

5. Point (i):-

The admitted facts of the case are (i) Complainant had availed a L.I.C. Policy with opposite party (ii) He surrendered the policy (iii) The surrender value as on 22-02-2008 is Rs.5,47,055/- (iv) The cheque for this amount was prepared and was ready on 29-02-2008 (v) It was despatched by opposite party only on 04-3-2008.

6. The crux of the problem before us is whether there is any delay on the part of opposite party in making payment of the surrender value and if there is delay, whether such delay was reasonable, excusable and justifiable.

7. Complainant laid thrust upon the advertisement/notice displayed at the notice Board of office of opposite party wherein it is stated that the maximum time limit for making payment of surrender value is 3 days. Opposite party has not disputed this. In fact this has been admitted by opposite party in answers to the interrogatories filed by complainant as per I.A.373/08. The query and answer No.16 in the interrogatory is as follows:

"16. What is the displayed stipulated time 16. 3 days, after getting

to be taken by you for effecting surrender all requirements."

of L.I.C. Policies.

 

8. It is the case of complainant that he first went to opposite party office on 18-02-2008 to make enquiries about the procedures for surrender. He affirms that he again went on 20-02-2008 and handed over necessary documents along with duly discharged voucher. According to him, opposite party ought to have issued the cheque within 23-02-2008. As against this, opposite party contended that though complainant came on 18^th he was handed over the discharge voucher only on 20-02-2008. That the complainant had resubmitted this along with necessary documents only on 22-02-2008. On perusal of documents it is seen that Ext.A9 request letter submitted by complainant requesting for surrender of policy is dated, 20-02-2008. Ext.B1 which is the declaration of surrender and Ext.B2 which is the discharge voucher are both dated, 22-02-2008. In Ext.B2 the surrender value of Rs.5,47,055/- is seen calculated as on 22-02-2008. From these three documents we have to hold that the contention of opposite party that complainant had submitted the request for surrender on 20-02-2008 and had submitted necessary documents along with discharge voucher only on 22-02-2008 to be true and acceptable.

9. Then the question that arises for consideration is whether opposite party has issued the cheque to complainant within 3 days from 22-02-2008. The answer is negative. The cheque admittedly was despatched only on 04-3-2008. The delay of each day from 22-02-2008 onwards as explained by

opposite party is as under:

22-02-2008 - Complainant submitted discharge voucher and necessary documents.

23-02-2008 - Saturday (Half day) working hours of office is from 10am to 1.30pm only.

24-02-2008 - Sunday – Holiday

25-02-2008 - Monday working day.

26-02-2008 - Tuesday working day.

27-02-2008 - Wednesday working day.

28-02-2008 - There was strike of officers and there was no proper functioning of office.

29-02-2008 - Cheque was ready.

01-03-2008 - Saturday – Half working day.

02-03-2008 - Sunday – holiday

03-03-2008 - Monday working day.

04-03-2008 - Cheque dispatched by registered post.

10. Taking a liberal view and excluding 22-02-2008, being the date on which complainant submitted documents and also excluding 24-02-2008 being Sunday, according to us the cheque ought to have been made ready and despatched on 27-02-2008 itself. We are not inclined to accept the contention that 23-02-2008 being Saturday and half working day it has to be exempted while computing three days. Opposite party do not have a case that in the notice displayed by them all Saturdays are exempted. It is further submitted on behalf of opposite party that on 28-02-2008 Class I officers were on strike and that the office did not function properly. Usually a notice has to be issued by employees before a strike. Opposite party has not produced any such notice or any document to substantiate the contention that there was strike of officers on 28-02-2008 and that it disrupted the functioning of the office. Query No.18 and 19 the interrogatories in I.A.373/08 is regarding the said contention of strike raised by opposite party. To the said queries opposite party has affirmed as under:

"18. What is the strength of your officers 18. Four.

At Perintalmanna Branch including it's

Manager and Assistant Manager.

19. How many of your officers went on 19. Four.

    Strike on 28-02-2008, please mention 1. K.K. Raghavan,

    their name and designation. Branch Manager,

    2. M.M.Ramankutty,

Administrative Officer.

3. K.P.S. Nair,

Asst. Branch Manager.

4. P.K. Suma,

Asst. Administrative Officer."

11. As per I.A. 374/08 complainant had called for the attendance register of the employees maintained in opposite party branch. This is Ext.A11. This register shows the strength of employees as 26. Almost twenty employees have signed attendance on 28-02-2008. A few have availed half day casual leave and a few others have taken full day leave. Interestingly the names of the above four officers mentioned in query No.19 do not find a place in Ext.A11 attendance register at all. On detail perusal it is seen that Ext.A11 attendance register is one that is kept for supervisory and clerical staff and sub staff. If the names of the above four officers do not find a place in Ext.A11 register then definitely there has to be a separate attendance register maintained for marking attendance of employees in officer category. Even after sufficient knowledge of the dispute in the case and the intention of complainant in calling for the production of attendance register, opposite party has suppressed the attendance register maintained for Class I officers. Suppressio veri suggestio falsi. Thus the suppression of the attendance register of the officers suggests the falsity of the contention raised by opposite party. We have to say that opposite party has not specifically pleaded or affirmed in the affidavit that all the four Class I officers of Perintalmanna branch had participated in the strike and were absent from duty on that day and because of this the cheque could not be issued on 28^th. It is simply stated that on 28^th these was a strike of officers. Apart from the answers furnished to the interrogatory there is no reliable documentary evidence to substantiate the contention of opposite party that all the Class I officers of the branch were on strike.

12. Counsel for opposite party attempted to place reliance on the decision rendered by Hon'ble Supreme Court in Consumer Unity and Trust Society Jaipur vs. Chairman and Managing Director, Bank of Baroda, Calcutta in Civil Appeal No.7166 decided on 31-01-1995. It was held therein as "Illegal strike by bank employees – Loss of service due to strike – Whether banking Company is liable to compensate its' customers for loss of service – Held, no – Loss not caused due to negligence of bank – Even if any loss caused to any depositor, but not caused due to negligence of bank then also no claim of damages under Act was Maintainable." In the said case the customers were deprived of the services due to strike of employees of Bank for 54 days. It was observed that the depositors were prevented to avail the services of the bank not because of any deficiency on the part of bank but due to strike resorted to by employees and therefore Bank was not liable to compensate for the loss caused to customers. In our opinion the said decision has no application to the facts of this case for the simple reason that opposite party herein has failed to establish that all the four Class i officers were on strike on 28-02-2008.

13. According to opposite party after the strike the cheque was prepared and made ready on 29-02-2008. Thus it is argued on behalf of opposite party that the cheque was ready within 3½ working days and the delay if at all is only half working day. The issue that then shots up for consideration is whether the display notice only stated that the cheque will be made ready at the office of opposite party within three days or whether the notice represented/communicated to an ordinary consumer that he will receive payment within 3 days of submitting surrender application. The second one stated is definitely the representation made to a consumer by such notice. What benefit will a consumer get if the cheque is prepared and kept ready at the office of opposite party within 3 days without despatching it? Presently the stand taken by opposite party is that the cheque was ready within 3½ days and that there is no delay. If opposite party has advertised and offered to effect surrender of policy within 3 days then the cheque should be despatched to the complainant within 3 days. It can never be twisted to mean that the cheque has to be prepared within 3 days. Opposite party has no case that the notice only stated that the cheque will be prepared within 3 days. The argument put forward by the learned counsel for opposite party was that it takes time for calculation of surrender value and scrutiny of documents. Query No.8 in the interrogatories in I.A.373/08 is regarding the time taken for calculation of surrender value to which opposite party has affirmed as under:

"8. Average time taken for calculating

surrender value of a Life Insurance

Policy if the same is carried out by

a) Manually 8. a) 1 Hrs.

b) By a computer. b) ½ Hrs."

14.To query No.1 opposite party has affirmed that opposite party branch is a computerised branch. So it is candid that calculation of surrender value does not take more than one hour. Moreover, Ext.B2 discharge voucher proves that the surrender value of Rs.5,47,055/- was already calculated by opposite party on 22-02-2008 and complainant has signed the discharge voucher on the same day. So the further work if any as contended by opposite party is only scrutiny of paper if any left, preparing the cheque and despatching the cheque. So the delay beyond 3 working days has to reasonably explained and substantiated by opposite party with cogent evidence. Admittedly the cheuqe was ready at least on 29-02-2008. Opposite party could have despatched the cheque on the same day which has not been done. The reason offered that the cheque was not despatched on the next day ie., on 01-3-2008 is that it was a Saturday and half working day which we are not inclined to accept at all. There is no explanation for not despatching the cheque even the next working day on 03-3-2008. The cheque was despatched only on 04-3-2008. Reached the hand of complainant on 05-3-2008 which was a bank holiday and encashed by him on 06-3-2008.

15. It is also the case of complainant that he had visited the office of opposite party on 26^th, 28^th and 29^th to make enquiries about the payment of cheque. It is his case that he had informed opposite party the need and urgency of money. Opposite party has denied this and states that neither had the complainant come to their office nor had he informed anything about the need of money and about the deal for purchase of property. In Ext.A9 which is the request for surrender, complainant has stated that he is surrendering the policy to meet urgent commitments. It is highly probable that complainant had visited office of opposite party on various dates to enquire about the payment of money and the denial of this contention by opposite party can be brushed aside as totally untenable. Complainant submitted that when the cheque was ready on 29-02-2008 he requested opposite party to deliver it by hand by producing sufficient identity proof. He also states that he had furnished his bank account number of Canara Bank, Perintalmanna Branch, which fact is admitted by opposite party. The excuse offered by opposite party to this is that complainant had not furnished the detailed address of the Branch of Bank. We can only say that such excuses are too flimsy and put forward only to hide the insensitiveness shown towards a consumer. If opposite party was in need of the detailed address of the Bank the same could have been obtained from the complainant then and there itself. Even after all this painful effort by the complainant opposite party did not care to despatch the cheque the next day after it was prepared or at least on 03-3-2008. This is indeed nothing but callous indifference in performance of functions which tatamounts to negligence.

16. It is proved and established that opposite party has caused delay in effecting payment of the surrender value to the complainant. When opposite party has advertised and displayed by notice that a customer will receive payment of surrender value within three days then it is an undertaking by opposite party that service of issuing payment towards surrender value will be performed in a particular manner. Sec.2(1)(g) defines deficiency as

"deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service."

From the above discussions, evidence and materials placed before us we have no hesitation to conclude that there is unreasonable and unjustifiable delay on the part of opposite party in making payment of surrender value as against the offer made through their notice. As stated earlier opposite party ought to have prepared and despatched the cheque at least by 27-02-2008. There is clear shortcoming in the quality, nature and manner of the service provided to the complainant, which amounts to deficiency in service. We find opposite party deficient in service.

17. Point (ii):-

Next, let us address ourselves to the issue of awarding reliefs to the complainant. According to complainant he decided to surrender the policy because he was in urgent need of money to meet the commitment as per the MOU executed with the developer of 8 cents of land which he intended to purchase. This MOU is Ext.A1. It is his case that as per Ext.A1 he had decided to purchase 8 cents of land from joint owners of the property and he had executed Ext.A1 document, with Sankaranarayanan who is the developer of this land. It is stated in Ext.A1 that complainant has to pay Rs.10,000/- for each cent towards land value and Rs.90,000/- for each cent as development charges to Sankaranarayanan. It is seen recited in Ext.A1 that complainant will get a discount of Rs.25,000/- for each cent towards development charges if he makes the full payment of development charges before 29-02-2008 and a discount of Rs.20,000/- for each cent if payment is made within 15-3-2008. It is also seen stated that if complainant makes payment before 29-02-2008, the said Sankaranarayanan would bear the whole of registration charges to the tune of Rs.15,000/-. Relying upon Ext.A1 the counsel for complainant argued that due to the delay caused by opposite party the cheque could be encashed and payment could be made to developer only on 06-3-2008. That the complainant had incurred monetory loss to the tune of Rs.55,000/- (Rs.40,000/- + Rs.15,000/-). Complainant also claimed Rs.3,237/- as the loss of interest @ 18% upon the surrender value for the delay of 12 days. Complainant also claims compensation of Rs.50,000/- and costs of Rs.5,000/-.

18. Counsel for opposite party vehemently opposed Ext.A1 on two grounds (i) it is fabricated (ii) it is not duly stamped. On perusal Ext.A1 is hand written on plain paper and is unstamped. On behalf of opposite party it is submitted that Ext.A1 is an agreement and being an unstamped instrument it cannot be admitted in evidence and has to be impounded. On this aspect the counsel also relied upon the decision of the Hon'ble High Court of Kerala in Mohanan Vs. M.A.C.T., Moovattupuzha, in 2205 (4) KLT page 273.

19. Against this it was submitted on behalf of complainant that Ext.A1 is not an agreement and it is only a Memorandum of Understanding and that it is not necessary to be stamped. We cannot fully agree with this arguement. It is settled position of law that the nature of a document has to be gathered not from the nomenclature of document but by the intention of the parties as revealed from the document. On perusal of the contents in Ext.A1 it is crystal clear that the intention of parties is to create a contract for sale of immovable property stipulating conditions of payment. Then definitely it has to be stamped. Being unstamped Ext.A1 is not admissible in evidence and we are not inclined to rely upon it. As per Ext.A2 assignment deed the total consideration paid to the assignor for 8 cents of land is only Rs.80,000/-. But as per Ext.A3 receipt it is seen that complainant has paid Rs.5,60,000/- as development charges for 8 cents of land to the developer, Sankaranarayanan. The development charges is thus seen to be several times higher than the land value. Further complainant has neither examined the said Sanakaranarayanan to prove Ext.A3 nor filed his affidavit. For these reasons Ext.A1 and Ext.A3 does not inspire much confidence in us. The submission of opposite party that these documents are fabricated to suit the case of complainant is therefore not without substance. We therefore are not impelled to place any reliance upon Ext.A1 and Ext.A3 documents. Hence the claim of the complainant for liquidated damages of Rs.55,000/- stands unproved. The claim on this head is disallowed.

20. In our opinion complainant is definitely entitled to be compensated for the deficiency meted by him. The compensation awarded in such cases will also serve as a message to service providers to improve their quality of service and also be more consumer sensitive. But it cannot be a bonanza or a source of profit to the complainant. Taking all circumstance into consideration along with the fact that the delay was only a few days we consider that an amount of Rs.7,000/- as compensation along with costs of Rs.1,000/- would be just and equitable relief. All other prayers disallowed.

21. In the result, we partly allow the complaint and order that opposite party shall pay to the complainant compensation of Rs.7,000/-(Rupees Seven thousand only) together with costs of Rs.1,000/- (Rupees one thousand only) within one month from the date of receipt of copy of this order.

Dated this 23^rd day of October, 2009.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER

APPENDIX

Witness examined on the side of the complainant : PW1

PW1 : C. Ravindran, Complainant.

Documents marked on the side of the complainant : Ext.A1 to A12

Ext.A1 : Memorandum of Understanding dated, 15-2-2008 entered

between the complainant and developer.

Ext.A2 : Notary attested copy of the Assignment deed

Ext.A3 : Receipt for Rs.5,60,000/- dated, 06-3-2008 from developer to complainant.

Ext.A4 : Postal cover from opposite party to complainant.

Ext.A5 : Photo copy of the cheque for Rs.5,47,055/- dated, 29-02-2008

from opposite party to complainant.

Ext.A6 : Letter dated, 29-02-2008 from opposite party to complainant.

Ext.A7 : Letter dated, 06-3-2008 from complainant to opposite party.

Ext.A8 : Copy of the reply letter dated, 10-3-2008 from opposite party

to complainant.

Ext.A9 : Photo copy of the request dated, 20-02-2008 from complainant to opposite party.

Ext.A10 : Photo copy of the uninsured registered parcels

Ext.A11 : Photo copy of the attendance register for the month of February, 2008 of the employees maintained in opposite party branch.

Ext.A12 : Attested copy of the reply letter dated, 10-3-2008 from opposite party

to complainant.

Witness examined on the side of the opposite parties : Nil

Documents marked on the side of the opposite parties : Ext.B1 and B2

Ext.B1 : Photo copy of the Declaration regarding Assignment dated, 22-02-2008

submitted by complainant to opposite party.

Ext.B2 : Discharge voucher dated, 22-02-2008 from complainant to opposite party.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER