State Consumer Disputes Redressal Commission
1.Indian Institute Of Technology ... vs The Manager (P & Gs), Life Insurance ... on 10 October, 2013
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : HONBLE JUSTICE THIRU.R.REGUPATHI PRESIDENT THIRU.A.K.ANNAMALAI JUDICIAL MEMBERC.C.NO.57/2010
DATED THIS THE 10th DAY OF OCTOBER 2013 Date of complaint : 10.05.2010 Date of order : 10.10.2013
1. Indian Institute of Technology Madras Office at Guindy, Chennai 600 036, Represented by its Registrar,
2. Mrs.Sulochana D, W/o.Late V.Damodara Das, E-4, Dhaka Apartments, Shanti Colony, Jeevarathnam Nagar, M/s.Karthick, Mukundan Adyar, Chennai 600 020. Counsel for Complainants
-vs-
The Manager, (P & GS), Life Insurance Corporation of India, Pension and Group Schemes Department, M/s.T.Ravikumar III Floor, No.153, Anna Salai, Counsel for Opposite party Chennai 600 002.
The complainant filed a complaint before this Commission against the opposite party praying for a direction to the opposite party to settle /pay the insurance claim of Rs.20,00,000/- to the 2nd complainant and to pay Rs.5,00,000/- towards compensation for the mental agony and to pay costs. This complaint coming before us for final hearing on 08.08.2013 and heard the arguments on either side, this Commission made the following order:
THIRU.A.K.ANNAMALAI, JUDICIAL MEMBER The complaint under Section 17 of the Consumer Protection Act.
1.
The complainant praying for direction to the opposite party to settle / pay to the 2nd complainant, the insurance claim dated 2.3.2009 for a sum of Rs.20,00,000/- being the amount payable in respect of Prof.V.Damodara Das, an insured member of the Indian Institute of Technology Madras Group Term Insurance Scheme along with interest at 12% and to pay Rs.5,00,000/- towards mental agony for the wrongful rejection of the claim and to pay costs.
1. The case of the complainant is briefly as follows:
The first complainant is one of the Premier educational institutions availed the opposite partys Group Term Insurance Policy vide Master Policy No.EG1/424792 in respect of employees of IIT Madras in the year 2007-2008. Subsequently it was renewed for the year 2008-2009. At the time when the insurance policy was originally issued the retirement age of faculty members was 62 years.
Subsequently the Government of India extended the retirement age of faculties to 65 years. The increase in retirement age for faculties from 62 to 65 was informed to the opposite party on 15.06.2007 through fax & letter with a request to extend the insurance cover to faculties till the date of retirement. There was no reply/protest/demur from the opposite party at all. On 18.03.2008, the opposite party had communicated to the 1st complainant that the opposite partys competent authority had agreed for the extension of the coverage to employees above 62 years till the age of 65 years. Thereafter, under this understanding, the 1st complainant had paid the premium in respect of persons above the age of 62 years also, which was accepted and retained by the opposite party without any demur or protest. While so, the policy term expired on 9.2.2009. While the policy was still in force, Prof.V.Damodar Das, an insured member of the said scheme expired on 7.2.2009 due to massive heart attack. In accordance with the IIT Madras Group Term Insurance Scheme, a claim for Rs.20,00,000/- (Rupees Twenty Lakhs only) was therefore preferred in respect of his death for which the relevant Discharge Form was furnished by the opposite party and the same was duly filled up and returned on 9.4.2009. Despite this the claim has been rejected by the opposite party on 23.4.2009 on the ground that Prof.V.Damodar Das had crossed the normal retirement age of 62 years relying on their letter dated 31.10.2008. The rejection of the claim is totally unjustified.
3. Hence, on 20.11.2009 the first complainant issued a legal notice to the opposite party regarding the claim of insured member and on 11.12.2009 a reply was received and not satisfied with the same the complainant has come forward with this complaint claiming the above relief as stated above.
4. The opposite party filed their version admitted the details of the group insurance and denying the other allegations of the complainant and as per the policy terms and conditions the claim could be entertainable only upto the age of 62 of the insured and even though the proposals for raising the age of 65 in view of the any policy against the members and the complainants institution, the opposite party has not accepted the same since the LIC of India policy rules did not permitted for the same and even though the renewal was revised with only for the age of 62 for which alone a group insurance to the extent of Rs.36,46,363/- was accepted and the balance of Rs.1,60,723/- was refunded to them on 8.6.2009 and the revised proposal with enhanced premium was not accepted by the complainant. Hence the premium for the late Prof.Damodar Das was not collected for the renewal due 10.2.2008 to 9.2.2009. LIC had rejected the claim. The list of persons not covered were sent to the MPH and there is no contention rejection of claim in this regard. The complainant paid advance deposit of Rs.38,07,086/- on 9.2.2008 and a sum of Rs.1,60,723/- was refunded which was returned back to LIC on 11.08.2009 by the complainant for which a fresh cheque was also issued which was also returned and thereby the claim is not sustainable and the complaint is to be dismissed.
5. On enquiry both sides have filed their proof affidavit and marked the documents Ex.A1 to A23 on the side of the complainant and Ex.B1 to B29 on the side of the opposite party and both sides arguments were heard.
6. The points for consideration are :
1. Whether the claim of Rs.20,00,000/-
towards Late Insured member Prof.V.Damodar Das dated 2.3.2009 is entertainable by the opposite party as alleged by the complainant?
2. Whether there is any deficiency or negligence on the part of the opposite party?
3. Whether the complainant is entitled for other claims regarding compensation of Rs.5,00,000/- for mental agony and for costs.
4. If so, to what relief?
7. POINT NO.1: The complainant being the Premier Educational Institution entered into Insurance benefits for the members of the institute under the Master policy No.EG1/424792 in the year 2007-2008 and renewal for the year 2008-2009. As per the insurance policy issued the retired age of faculty members was 62 years at the time of joining the scheme. Subsequently, the age of the retirement was raised to 65 years from 62 by the Central Government to the complainants employees and thereby the complainant was having correspondences with the opposite party to extend the policy benefits to the insured members under the master policy upto the age of 65 years and during the correspondence pending one Prof.Mr.V.Damodar Das as insured member was died on 7.2.2009 due to massive heart attack for which when the claim was made it was rejected by the opposite party stating that the coverage was only upto the age of 62 years and the policy was not renewed for the subsequent years i.e., for 2008-2009 and since the complainant has paid a sum of Rs.36,46,363/- which was collected as an advance policy amount under the Group Insurance policy and the renewal of policy was made only as per terms and conditions for the eligible persons numbering 1032 upto the age of 62 years. Even though the proposal was given for the coverage extending upto the age of 65 years with certain conditions and on payment of enhanced rate of premiums for which the complainants have not agreed. Except the contention that for the enhancement of premium the policy was proposed to be considered to cover upto to the age of 65 years and in other aspects the complaint is not disputed by the opposite party. The complainant contended that the opposite party accepted the proposal for the coverage upto the age of 65 years for all the members and renewed the policy in the year 2008-2009 by receiving a sum of Rs.36,46,363/-, but denying the claim of the deceased Damodar das by alleging that he has crossed the age of 62 at the time of his death and returned the balance amount of Rs.1,60,723/- belatedly after rejecting the claim.
8. We have heard both sides contentions the complainant in their letter under Ex.A2, dated 15.06.2007 by way of fax sent to the opposite party requested them to amend the terms and conditions of the policy, so as to provide benefits upto the age of 65 years to the faculty members of the institute under the Group Insurance Policy details. Ex.A3 regarding the definitions in the policy in Sl.No. 1 (ix) Terminal date is mentioned shall mean in relation to the Member the date on which the member completes the Superannuation age of 60/62 years and in this case it is not in dispute that the date if covered upto 62 years. In the same policy in Sl.No.13 regarding the rates of Premium and conditions of Assurances is mentioned as follows:
The rates of premium and conditions of Assurance under which the Corporation is prepared to arrange the scheme shall be subject to an agreement between the Employer and the Corporation. The conditions of Assurance and the rates of premium may be amended by the Corporation from time to time on any Annual Renewal Date subject to 3 months notice being given to the Employer.
Accordingly for the request of the complainant for the enhancement of insured age 65 under Ex.B15 letter dated 13.10.2008 it was stated as follows:
This has reference to the One Year Renewable Group Insurance Policy you have with us for the Employees of your Institute. This policy commenced on 10.2.2007. For the renewal due 10.2.2008, you had requested that the Retirement age for Faculty members be taken as 65 years instead of 62 years.
Taking this request and the previous policy years claim experience into consideration, we had sent you the revised terms for effecting the renewal. However, we understand that the same is not acceptable to you.
After due consideration, it has been decided to renew the policy for the period 10.2.2008 to 9.2.2009 at the Original Terms under which the Policy was issued on 10.2.2007. We list out the same for your reference.
1. Full time Employees are entitled to join the Scheme.
2. Graded cover of 20 lakhs, 10 lakhs, 7 lakhs and 4 lakhs is available to members under the categories A,B,C and D respectively. The premium shall be charged at Rs.2.806 per thousand Sum Assured.
3. The Insurance is only available to the members till the Normal Retirement Age or completion of age 62, whichever is earlier.
From this letter it is stated that for the proposal with revised terms for effecting the renewal extending the benefit upto 65 years that the complainants have not accepted the same and thereby they renewed the policy already existing from 10.2.2008 to 9.2.2009 without any change in terms and conditions. Under Ex.B24, letter dated 11.12.2009 in para-4 it is stated as follows:
Since the condition regarding the increased premium rate was not acceptable to the Master policy holder, we renewed the policy for the period 10.2.2008 to 9.2.2009 on the original terms without any changes. Therefore, the said employee late Prof.V.Damodar Das was not included in the renewal since he was over 62 years of age at the time of renewal i.e., as on 10.02.2008. Hence, death claim is not admissible. Accordingly, the required premium amount was adjusted and the balance refunded to the Master policy holder on 09.06.2009.
The opposite party also requested for the details of coverage list of 1032 employees in June 2009 itself under Ex.B26 for renewal and thereby a list was also enclosed mentioning around 30 members has not entitled since they are all retired at the age of 65 years or 62 as per the terms and conditions of the policy and since the policy renewal was not made for the year 2008-2009 and also he had crossed the age of 62 years and thereby the excess amount collected towards premium of policy amount to the extent of Rs.1,60,723/- was refunded as advance payment of Rs.38,07,086/- was received. Even though the complainant contended that the amount was settled as advance for the Group Insurance to all the coverage of members at the age of 62 years and the opposite party erroneously rejected the claim for the Deceased Damordar Das and crossing the age of 62 yeas and thereby alleging deficiency and the complainant was also not in a position to prove the contention of the opposite party as per the letter Ex.B15 that the repayment of terms and conditions proposal effecting the renewal at the age of 65 years was not accepted by the complainant which is not denied by the complainant except to state that they have already intimated the raising of the age from 62 to 65 under Ex.A2 letter dated 15.06.2007 (Fax) the complainant has failed to prove that they have accepted the revised proposal with revised terms and conditions with enhancement rate of premium payable in order to cover the benefits under the policy upto the age of 65 years as intimated under Ex.B15 and in those circumstances how the complainant is covered under the Master policy under Group Insurance to the Deceased member Damodar Das even after crossing of 62 years was entitled when the original terms and conditions of the policy as per Ex.A2 is not disturbed with the earlier terms and conditions covering only upto the age of 62 years for the insured under the condition No.15 in which it is stated as follows:
This has reference to the One Year Renewable Group Insurance Policy you have with us for the Employees of your Institute. This Policy Commenced on 10.2.2007. For the renewal due 10.2.2008, you had requested that the Retirement Age for Faculty members be taken as 65 years instead of 62 years.
Taking this request and the previous policy years Claim experience into consideration, we had sent you the revised terms for effecting the renewal. However, we understand that the same is not acceptable to you.
After due consideration, it has been decided to renew the Policy for the period 10.2.2008 to 9.2.2009 at the Original Terms under which the Policy was issued on 10.2.2007.
The opposite party relied upon the ruling reported in 2011-1-L.W.496 Supreme Court of India in the case of M/s.Suraj Mal Ram Niwas Oil Mills (P) Ltd vs- United India Insurance Co.Ltd & Anr in which it is held as follows :
Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, it terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.
We are in complete agreement with the National Commission that there was a breach of the special condition in the cover note for the insurance policy on the part of the appellant and, therefore, the repudiation of the claim of the appellant by the respondents was justified.
The opposite party has not altered or changed and agreed to have the same terms and conditions for the coverage upto the age of 65 years and thereby we are of the view that the deceased Damodar Das not entitled for any relief under the policy from the opposite party as he crossed 62 years on the date of his death and we answer this point accordingly.
9. POINT NOS.2 & 3 : In view of the findings in Point No.1 it is clear that the complainant cannot claim any damages or compensation for the alleged deficiency in service against the opposite party which was not at all proved accordingly these points are answered.
10. POINT NO.4: In view of the findings in Point Nos. 1 to 3 the complaint is liable to be dismissed and accordingly.
In the result, the complaint is dismissed. However there will be no order as to costs.
A.K.ANNAMALAI R.REGUPATHI (J) MEMBER PRESIDENT LIST OF DOCUMENTS FILED BY THE COMPLAINANT :
Sl.No .
Date Description of Document Ex.A1 23.03.2007 Copy of Ministry of Human Resource Development Notification Enhancement of Superannuation Age Ex.A2 30.08.2007 Copy of Letter from Opposite party to First Complainant along with Master policy Ex.A3 Copy of Simple Administrations Scheme of Opposite party for Group insurance Scheme Ex.A4 10.02.2007 Copy of Master Proposal Ex.A5 07.02.2008 Copy of Letter from 1st Complainant to opposite party Ex.A6 09.02.2008 Copy of Deposit Memorandum from opposite party to First complainant Ex.A7 18.03.2008 Copy of Letter from Opposite party to First complainant Ex.A8 29.09.2008 Copy of Legal Notice from First complainants Advocate to opposite party Ex.A9 31.10.2008 Copy of letter from opposite party to First complainant Ex.A10 05.11.2008 Copy of Letter from opposite party to First complainant Ex.A11 10.11.2008 Copy of Letter from First complainant to opposite party Ex.A12 11.11.2008 Copy of Letter from opposite party to First complainant Ex.A13 19.11.2008 Copy of Letter from First complainant to opposite party Ex.A14 26.02.2009 Copy of E-mail from First complainant to opposite party Ex.A15 02.03.2009 Copy of Letter from First complainant to opposite party forwarding claim in respect of Professor V.Damodara Das Ex.A16 09.04.2009 Copy of Letter from First complainant to opposite party forwarding discharging form Ex.A17 09.06.2009 Copy of Letter from opposite party to First complainant refund of alleged excess remittance along with enclosures.
Ex.A18 23.04.2009 Copy of Letter from opposite party to First complainant Ex.A19 02.06.2009 Copy of Letter from First complainant to opposite party Ex.A20 06.06.2009 Copy of Letter from Opposite party to First complainant Ex.A21 20.11.2009 Copy of Legal Notice from First complainants counsel to opposite party Ex.A22 11.12.2009 Copy of Reply from Opposite party to First complainant Ex.A23 10.11.2008 Copy of List of staff members who are deemed to have opted for G.T.I.S 2008 LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTY :
Sl.No .
Date Description of Document Ex.B1 Copy of Proposal & Rules duty signed by the M.P.Holder Ex.B2 Copy of Master Policy 424792 Ex.B3 02.01.2008 Copy of Renewal Notice for the ARD Due 10.02.2008 Ex.B4 10.02.2008 Copy of Cheque covering letter for 1062 members Ex.B5 14.02.2008 Copy of O/N for review of scheme for renewal Ex.B5-A Copy of Mail sent to Central Office Ex.B6 Copy of revised rates approved by Central Office Ex.B7 10.02.2008 Copy of Letter to I.I.T Madras regarding revised rules for Renewal along with the list of 46 Members for whom medical to be done Ex.B8 23.04.2008 Copy of Clarification from I.I.T Regarding revised terms Ex.B9 28.04.2008 Copy of Reply to I.I.T Ex.B10 15.05.2008 Copy of minutes agreeing for Medical Check up Ex.B11 Copy of Letter to C.O for reduction in premium as Requested by I.I.T Ex.B12 27.08.2008 Copy of letter to I.I.T regarding C.O Decision Ex.B13 27.08.2008 Copy of letter for claim settlement Ex.B14 Copy of letter to I.I.T to send details of actual Salary Ex.B15 31.10.2008 Copy of letter regarding terms for renewal Ex.B16 Copy of Regd.Post Ack.due for the same Ex.B17 05.11.2008 Copy of Reply to Advocate Ex.B18 Copy of Regd Post due for the same.
Ex.B19 05.11.2008 Copy of Regd letter regarding termination of Policy Ex.B20 11.11.2008 Copy of letter to I.I.T to send salary particulars Regd. Post ack. Due for the same Ex.B21 10.11.2008 Copy of letter to I.I.T Ex.B22 Copy of letter to I.I.T regarding renewal Ex.B23 10.2.2008to 09.02.2009 Copy of endorsement for renewal Ex.B24 11.12.2008 Copy of reply to legal notice Ex.B25 Copy of Regd Post Ack. Due for the same Ex.B26 10.02.2008 Copy of quotation for renewal covering 1032 members Ex.B27 16.06.2009 Copy of MAI to I.I.T regarding list of members not covered Ex.B28 21.12.2010 Copy of refund of returned cheque Ex.B29 Copy of Return of Cheque by I.I.T A.K.ANNAMALAI R.REGUPATHI (J) MEMBER PRESIDENT INDEX ; YES / NO VL/PJM/D;/ORDERS