Tripura

Unakoti

CC/2/2023

Animesh Deb - Complainant(s)

Versus

The Divisional Manager, LIC & Other - Opp.Party(s)

C. Bhattacharjee, P. Das, D. Tarafdar, S. Debnath

29 Aug 2024

ORDER

Before the District Consumer Redressal Commission

Unakoti District : Kailashahar

 

                                                                                    C a s e No. C. C. 02 of 2023

 

                                                   Sri Animesh Deb

                                                   S/O – Sri Sushil Chandra Deb

                                                   Of Boulapassa, P.O- Kailashahar

                                                                                       PS & Sub-Divn. - Kailashahar,

                                                   District - Unakoti, Tripura

                                                                                                            …......Complainant  

 

                                                         V E R S U S

                                       

                                                                                       The Divisional Manager,

                                                                                       Life Insurance Corporation of India,

                                                                                       Silchar Division, Silchar, Dist- Cachar,

                                                                                       Assam, PIN- 788015

                                            

                                                                                                      &

 

                                                  The Branch Manager

                                                  Life Insurance Corporation of India,

                                                  Dharmanagar Branch, P.O- Dharmanagar

                                                  Dist.- North Tripura, PIN- 799250

                                                                                                    ……..Opposite parties

                                                       

                                                               P R E S E N T

 

                                                                                           Smt. S. Choudhury

                                                                                                 President

                                                                         District Consumer Redressal Commission

                                                                               Unakoti District :: Kailashahar

 

                                                 A N D

 

                                                                                  Sri S. Sinha, Member                                       

                                                                                Smti. M. Datta, Member

 

                                                               C O U N S E L

 

                                              For the Complainant     : - Mr. C. Bhattacharjee, Ld. Advocate

                                             For the Opposite Parties : - Smti. S. Choudhury, Ld. Advocate                                   

                      

                                                           Original date of institution       : 21-02-2023

                                                           Judgment delivered on            : 29-08-2024   

 

                                                         J u d g m e n t

 

                        This is a complaint preferred by the complainant Sri Animesh Deb under section 35 of the Consumer Protection Act, 2019 for passing necessary order to direct the opposite parties to pay Rs. 3,90,000.00 along with 9% of interest.

           

2.                     The facts leading to the filing of the instant complaint petition are that the complainant entered into a life insurance policy, namely, “JEEVAN SARAL” (with profit) vide policy no. 491999815 for the sum assured of Rs. 2,50,000.00 having a yearly premium of Rs. 12,000.00 commencing from 15-03-2007 to be matured on 15.03.2022. The date of last payment was 15-03-2021 and the complainant paid the last payment on due date. Thereafter, the policy was matured in the month of March, 2022 and the OP paid a sum of Rs. 2,05,021.00 (sum insure Rs. 1, 34, 400.00 + loyalty addition of Rs. 70,581.00) instead of Rs. 2,50,000.00 (Sum assured) loyalty addition on maturity date. The Complainant received the amount with objection vide letter dated 14-03-2022 addressed to the Divisional Manager, LICI, Silchar Division with a copy to the Branch Manager, LICI, Dharmanagar Branch. It is also stated by the complainant that during 15 years he paid total premium of Rs. 1,80,150.00 but the opposite parties paid maturity sum of Rs. 1,34,400.00 + loyalty addition and as such the opposite parties are liable to pay the rest amount without fail. It is also submitted by the complainant if 9% compound interest from the date of inspection of the policy on premium paid is calculated, in that case the maturity amount cannot be less than Rs. 4.20 lakhs. As such, there is deficiency of service from the side of the opposite parties and the complainant claims total Rs. 3,90,000/-, Rs. 2,15,000/- as unpaid amount, Rs. 50,000/- as pleader’s fee, Rs. 1,00,000 /- as mental pain and agony and suffering and Rs. 25,000 /- as litigation cost.

 

3.                     On receipt of the notice opposite parties have appeared and submitted written statement stating that in that life insurance policy necessarily provides coverage against the risk of untimely deaths and a premium amount to be charged is decided based on age of proponent at the start of policy. The basic principle of deciding insurance premium is – “Higher the age at entry, higher is the amount of premium charged. This is because with the rising age of a person, the risk of causing death also increases. Also higher the element of risk cover, higher is expected mortality charges/ cost of risk cover.”

                        It is submitted that as per said IRDAI Circular, the Mortality Tables to be used for deciding premium must be one prescribed by Institute of Actuaries of India (IAI). Accordingly the Mortality Table applied by Respondent LIC in Jeevan Saral Plan is also the one which was prescribed by IAI only. As such there is no violation of any settled principles of insurance by these Respondents.

Jeevan Saral: Benefits under the plan- the Complainant is demanding higher maturity value/ refund of premiums under the present complaint. However, to decide thereon, it is inevitable to understand the policy/ product features and the objectives is serves.

                        Under normal life Insurance, the premium is determined by Mortality rating which is age dependent, that is to say, higher premium is charged for higher age and maturity or death cover benefit is fixed. Also higher is the risk cover, higher is the expected cost of risk cover.

                        Jeevan Saral is a unique plan by itself and is a winner of Golden Peacock Award due to the special features of the Plan.

                        Unlike regular insurance plans wherein higher premium is charged or proponent higher in age, under this plan the premium amount is decided, irrespective of age of proponent, at start of policy and the death Sum Assured is equal is 250 times of monthly premium amount. As such for the proponents higher in age will get same insurance cover in same premium amount as of the proponent lower in age, but, the Maturity value would differ according to the age at entry of the insured. The higher the age at entry of insured, lower will be the Maturity amount and vice-versa.

                        In the present case, the Amount Rs. 250000/- is not the Maturity amount, but it is Death Sum Assured as appeared in policy bond. Calculation as below:

                        Here, yearly premium Rs. 12010/- (Including extra) and the monthly premium is 1000/- (excluding extras).

                        Sum Assured (death) will be 250 times the monthly basic premium excluding term rider, DAB premium and any extra premium le. 1000/- X 250000/-

                        Maturity sum assured =  Maturity SA per Monthly premium Rs. 100/- in respect age at the time taking out policy and term of the policy multiply by [Monthly premium]

                        Here, Maturity SA is Rs. 13444 per monthly premium 100/- from age of entry 50 yr and term 15 yrs.

                        So, Maturity Sum Assured= 13444 X 1000/ 100= 134440/-

Loyalty Addition Calculation = Maturity SA X 525 per 1000 maturity SA (factor as declared on 31-03-2023) = 134440/- X 525/1000=70581/-

Total Maturity Sum Assured amount = 134440/- + 70581/- =205021/-

                        In addition to the above Maturity Value, in cases of policies with term of 10 years and above, the policy holder is also eligible to get the loyalty additions. As such the Maturity value is not a static number, but for policies with longer term, the maturity amount also gets increases every year.

                        As such from above examples, it is very clear that after applying mortality charges, though the Death Sum Assured and premium amount and policy Term is same for all ages, but as the age of insured increases the applicable mortality charges also rises and Maturity benefit under policy gets reduced. 

                        Therefore the respondent LIC has not done anything wrong but-

(1) have given complete freedom to proponent to choose the monthly amount of premium he wants to pay and

(2) have provided the high amount risk coverage as per plan conditions approved by IRDAI, and

(3) also paying the maturity sum along with handsome loyalty additions.

 

                        It is further stated that the policy holder submitted Discharge Voucher duly Signed on revenue stamp and duly witnessed by Tapas Chakraborty, Branch Incharge, United India Insurance Co. Ltd., Dharmanagar Branch with full and final satisfaction of all his claim for this total Maturity claim amount Rs. 205021/-. There is not any complain or objection received with claim form Including discharge voucher.

                        Maturity amount under LIC policy is not calculated on the basis of compound Interest accrued on premiums given unlike any Fixed Deposit or other Investment schemes. There are so many thighs loaded in the premium including risk premium, accident benefit premium, saving portion etc

 

                        It is also stated that the holder paid total premiums Rs. 180150/- in 15 years as per his calculation, but there are so many thing loaded in the premium Including risk premium for death Sum Assured Rs. 250000/- if arises, accident benefit premium for Rs. 200000/- if arises, saving portion for Maturity Sum Assured and others loading in the premium. So, liability of LIC to pay Rs. 180150/- cannot be justifiable and that, in policy schedule, the Maturity Sum Assured is blank but Death Sum Assured is specified i.e. 250000/- is fixed and mentioned in the schedule. So there is no violation of Section- 45 of Insurance Act, 1938.

                        In policy Bond of the Complainant, the field of Maturity Sum Assured in the Schedule of Policy is left blank. It is submitted that non-mentioning of maturity amount in no way changes the policy features and the calculations of the benefits payable that are duly approved by IRDAI. The Respondent LIC of India is a Corporation doing business of life insurance across the country. As such there cannot be any intention to misprint/ non printing of the maturity amount in particular policy decoument involved in these proceeding.

                        It is submitted that the original policy document was given to policy holder immediately after issuance of policy and the column available for Maturity sum assured was blank/ not printed, it was for the policy holder to being the same to the notice of policy issuing office to get the same corrected. The non-printing of Maturity Sum Assured under policy does not entitle the policy holder to claim/ receive the basic death sum assured at the time of maturity as the field itself is blank and not mentioning any amount.

                        It is further submitted that w.r.t. Maturity benefit under the policy, it is provided in the policy document that-

                        “In the event of the Life Assured surviving the date of Maturity a sum equal to Maturity Sum assured in force after partial surrenders. If any, along with corresponding loyalty addition. If any, shall be payable.”            

                        Again, maturity Sum Assured in the policy bond even inadvertently left blank during printing of policy document due to error in computer programme that itself does not entitle the complainant to claim any amount of his choice as maturity value or even refund of entire premiums paid along with interest. As such the prayer of Complainant is bad in law and liable to be rejected..

                        It is submitted that the Death Sum Assured is clearly printed on the policy document and the same was never disputed by the policy holder during policy term and therefore the contract is perfectly valid and binding on parties to the extent of risk coverage and therefore entire policy contract cannot be declared void-ab-initio

 

                        That, as per calculation of Maturity, the maturity Sum assured as claimed by policy holder for not less than 4.20 lakh is not appropriate as per calculation procedure laid down by LIC for this plan.

 

                         That, in the context of reply on above points, LICI no where violated Section 35 and shows any deficiency in service on settlement of maturity sum assured immediately after submission of discharge voucher with claim forms by claimant on the basis of calculation laid down by LICI.

 

                        6. That, we paid the Maturity Amount as per our policy condition reflected in the Schedule of policy bond and policy holder has no complaint or objection at the time of submission of discharge voucher duly witnessed, so the complaint’s claim for Rs. 215000/- (unpaid amount), Rs. 50000/- as pleaders fee, Rs. 100000/- as mental agony and suffering, Rs. 25000/- as litigation cost are not justifiable.

 

                        In fact it is pertinent to note that no document filed on record by the Complainant in support of his claim of Maturity Sum Assured equal to death sum assured or Refund of full premiums along with interest. On the contrary, the acts and performance of contract by the Respondents is perfectly in accordance with the terms and conditions of the policy contract.

 

                        Considering the aforesaid facts and circumstances, the Complainant has not made out any prima facie case in his favour. The Complainant has not made out any case for intervention at the hands of this Hon’ble Authority/ Commission. Balance of convenience is essentially lies in favour of the answering Respondents. Great irreparable loss and serious prejudice would be caused to the answering Respondents in case the prayers, particularly refund of entire amount paid towards premium along with interest would have been granted. On the contrary no loss would have caused to Complainant as the Complainant has already enjoyed the benefit of risk coverage under the policy for the full Death Cover Sum Assured of Rs. 250000/-.

 

                        Since the complainant has received the coverage of insurance under the policy and LIC has provided death cover and for benefits has incurred expenses and hence discharged its obligations under the contract. As such the policy holder is getting lots of benefits in return of the premium he has paid and not suffered with loss of any kind.

 

                        Therefore, from the above facts and circumstances it is abundantly evident that the complainant deliberately and with malafide motive opted not to place any grievance or raise any doubt pertaining to the respective policy bond during the entire tenure of the said policy and . Hence, such approach cannot be accepted to frame the allegation of deficiency in service on the part of the opposite party. On the contrary, the negligence as committed by the complainant resulted into such baseless litigation which are not at all maintainable in the eye of law.

                        Hence, the grievance of the complainant at this juncture at the time of maturity of the aforesaid policy is not acceptable or sustainable.

 

4.                     Heard learned counsels of the contending parties.

 

                             Points for Determination

 

5.                         The points required to be adjudicated in this case are as follows:

                            i  Whether the complaint is a consumer of the OP?

                        ii.  Whether the complainant is entitled to get sum assured  of Rs.                            250000 from the OPs besides compensation for pain and sufferings                                  and cost of litigation etc.?

 

 Now my Decisions and Reasonas Therefore:-

 

6.                     Point No.i :- Whether the complaint is a consumer of the OP?      

                  The complainant took Jeevan Saral Policy from the opposite party in the year 2007 and he paid the premiums till the last payment on 15-03-2021. As such, the complainant is a consumer of the opposite parties.

            Thus, Point No.1 is decided as in favour of the complainant.

 

7.         Point No.ii :-Whether the complainant is entitled to get sum assured  of Rs. 250000 from the OPs besides compensation for pain and sufferings and cost of litigation etc.?

            The complainant has adduced evidence by way of examination-in-chief on affidavit as PW-1 recapitulating the facts as have been stated by his in the complaint petition and as such, for the sake of brevity the evidence is not repeated. However, during re-examination, the complainant has exhibited the following documents: -

• Copy of registered letter dated 14-03-2022 addressed to the Branch Manager, LIC, Silchar Division with copy to the Branch Manager, LIC, Dharmanagar- Marked Exbt. P1 as a whole.
• Postal receipt of the registered letters sent to the Branch Manager, LIC, Silchar Divn., with copy to the Branch Manager, LIC, Dharmanagar, Marked Exbt. P2.
• Reply dated 13-04-2022 to the complainant addressed by the Manager, LIC, Meherpur Branch, Silchar- Marked Exbt. P3.
• Original policy of Life insurance in the name of the complainant- Marked Exbt. P4.
• Copies of renewal or premium receipts and the original lying in the custody of the OP. No 2 – marked Exbt. P5.

 

            During cross examination PW1, the complainant, stated that in his policy it has been clearly mentioned that the sum assured on maturity of his policy will be Rs. 2,50,000. He has been informed about the death assurity by the LIC or loyalty and he received the initial amount given to him with objection. He denied that the amount given to him is as per condition of the policy and that the amount of Rs. 3,90,000 with interest of 9% over the amount is not proper.

           

8.         From the side of the opposite parties Hari Chakraborty, Branch Manager of Kailashahar Branch as adduced evidence as OPW No. 1. In his evidence in chief he has again reflected the facts in the line of his written statement and as such, to avoid repetition, the same is not reproduced.

            During cross examination, OPW No. 1 admitted that in the last premium receipt dt. 10.03.2021 the sum assured has been mentioned as Rs. 250000. He also admits he does not know whether any time limit is prescribed to inform the policy holder in case of any defect or change in the policy and that the policy holder was informed that there is mistake in the policy after 12/13 years of inception of the policy. The policy was for 15 years and he does not remember the date on which the policy holder was informed.

 

            The complainant has claimed an amount of Rs.2,15,000/- from the opposite parties as unpaid amount. From the Exbt. 5, renewal premium receipt issued by the Ops, it is found that sum assured was Rs.2,50,000/- and the yearly premium was Rs.12,010/-. The policy was for 15 years commencing from 15-03-2007 and the complainant also deposited the last premium on 15-03-2021. During these 15 years the complainant paid total amount of Rs.1,80,150/-. The policy got matured on 15-03-2022. In Exbt. P 4 in the schedule issued by the Ops on 28-09-2020 maturity sum assured has been mentioned as Rs.1,34,440/- and in the said schedule it is clearified as follows:-

            “It has come to our notice that in your above policy bearing No. 491999815, there has been a typographical error while printing the schedule in policy document” and the sum assured would be Rs.1,34,440/- instead of Rs.2,50,000/- as mentioned in Exbt. P 5. When the policy got matured besides the sum assured of Rs.1,34,440/- the OPs added the bonus of Rs.70,581/- and paid total amount of Rs.2,05,021/- to the complainant. Even on 10-03-2021 while issuing Exbt. 5, renewal premium receipt, in favour of the complainant, sum assured was mentioned as Rs. 2,50,000/-. The complainant paid the premium from the year 2007 and after a long gap of 13 years the opposite parties chose to rectify the type of mistake, but no fresh policy document was issued. During cross examination the complainant stated that in his policy it has been clearly mentioned that the sum assured on maturity of his policy will be Rs. 2,50,000/- and that he has never been informed about the death assurity by the LIC or loyalty. OPW No. 1 in his cross examination from the side of the complainant admitted that in the renewal premium receipt dated 10.03.2021 (Exbt. 5) the sum assured therein has been mentioned as Rs. 2,50,000/- and he does not know whether any time limit is described to inform the policy holder in case of any defect or change of the policy and that the policy holder was informed that there is a mistake in the policy after 12/13 years of the inspection of the policy and that he does not remember on which the policy holder was informed.

            Section 45 of the Insurance Act, 1938 provides as follows:

            “Policy not to be called in question on ground of mis-statement after two years. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of Life Insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the Policy, was inaccurate or false, unless the insurer shows that such statement 1 [was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made] by the policy holder and that the policy- holder knew at the time of making it that the statement was false 2 [or that it suppressed facts which it was material to disclose] : 2[ provided taht nothing in this section shall prevent the insurer from proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that age of the life insured was incorrectly stated in the proposal.]

            As per the sprit of Section 45 of Insurance Act, 1938 LICI is barred to rectify the policy document, but after a long gap of 13 years it came to the notice of the OPs that there was typographical mistake in the sum assured and ultimately the OPs paid the rectified amount of sum assured Rs. 1,34,440/- and bonus of Rs. 70,581/-.

9.         In fact, maturity amount in a life insurance policy includes the sum assured along with bonus amount. It is the lump sum amount one gets after the maturity of the policy. Therefore, in the case at hand the OPs are restrained from payment of Rs. 1,34,440/- as sum assured, but they are obliged to pay the sum assured of Rs. 2,50,000/- and thus the OPs are under legal obligation to pay the rest amount of Rs. 1,15,560/- as sum assured besides the bonus of Rs. 70,581/- which they already paid to the complainant and received by the complainant with objection.

            The Ops parties are, therefore, proved to be deficient in service towards the complainant and as such, the OPs parties are liable to pay an amount of Rs. 20,000/- to  the complainant for causing deficiency in service.

            Thus, Point No. 2 is also decided in affirmative in favour of the complainant.

O R D E R

                                                

            In the result, it is ordered that OP No 2 the Branch Manager, LICI, Dharmanagar Branch, North Tripura shall make payment of Rs. 1,35,560/- (Rs. 1,15,560 + Rs. 20,000/-) to the complainant within two months from the date of Judgment along with 7% interest P.A, failing which the opposite parties shall pay an additional interest of 9% P.A.

            Furnish copy of this judgment to the complainant free of cost and the OP free of cost.

            Make necessary entry in the TR.

 

                                      ANNOUNCED

 

 

                                                                                                                     (S. Choudhury)

                                                                                                                         President

        

 

            (S. Sinha)                           (M. Datta)

            Member                              Member