State Consumer Disputes Redressal Commission
Lic Of India And Others vs Smt Kamlesh Kumari on 8 June, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.398 of 2021
Date of Institution : 17.11.2021
Date of Reserve : 20.05.2022
Date of Decision : 08.06.2022
1. Life Insurance Company of India, Division Office at Ranjit
Avenue, Amritsar through its Principal Officer.
2. Life Insurance Corporation of India, having its branch office at
2nd Floor, R.S.Tower, Hall Bazaar, Amritsar, Punjab.
......Appellants/Opposite Parties
Versus
Smt. Kamlesh Kumari wife of Sh.Om Parkash Aggarwal, aged 70
years, resident of House No.350 UV, Behind Jai Maa Medical
Store, Opposite Flyover, Sama Kalan, Pathankot, Punjab 145025.
.....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 28.09.2021 of the District
Consumer Disputes Redressal Commission,
Amritsar.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mr.Rajinder Kumar Goyal, Member
Mrs.Urvashi Agnihotri, Member Present:-
For the appellants : Sh.Rajneesh Malhotra, Advocate For the respondent : Mrs.Malika Sethi Sobti, Advocate RAJINDER KUMAR GOYAL, MEMBER The appellants/opposite parties have filed the present appeal under Section 41 of the Consumer Protection Act, 2019 (hereinafter to be called as "The Act, 2019"), to challenge the impugned order dated 28.09.2021 passed in C.C No.633 of 2018 First Appeal No 398 of 2021 2 by District Consumer Disputes Redressal Commission, Amritsar (in short "The District Commission").
It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
2. The respondent/complainant filed a complaint under Section 12 of the CP Act, 1986 (as amended upto date) before the District Commission, Amritsar which was allowed and the opposite parties were directed to make payment of the claim amount of Rs.1,00,000/- along with interest @9% p.a. from the date of its maturity till it's realization. The opposite parties were also directed to pay Rs.35,000/- as compensation, out of which Rs.5,000/- was to be deposited in the Consumer Legal Aid Account of the District Commission and balance Rs.30,000/- was to be paid to the complainant and Rs.5,000/- as litigation expenses.
3. As per averments made in the complaint, the complainant purchased LIC's Jiwan Saral Policy bearing No.471670120 on 25.07.2006 from the opposite parties for a period of 12 years with the yearly premium of Rs.4,900/-, as such, the complainant paid Rs.58,800/- for the span of 12 years. The policy was having the maturity sum assured of Rs.1,00,000/-. The complainant was residing at Amritsar at the time of purchasing the said policy. On 04.07.2018 the said policy stood matured, the complainant approached the opposite parties for completing the formalities to get the maturity amount but she came to know that she was to First Appeal No 398 of 2021 3 receive only Rs.19,709/- being the maturity amount of the policy. The complainant again approached the opposite parties and requested them to give the full maturity sum assured of Rs.1,00,000/- but the opposite parties flatly refused to release the amount. After repeated requests, the opposite parties agreed to enhance the amount only to the tune of Rs.27,033/-. This act and conduct of the opposite parties amounts to 'deficiency in service' due to which the complainant suffered mental agony and harassment. The complainant filed the Consumer Complaint before the District Commission with the following reliefs:
i) to pay Rs.50,000/- for causing mental and physical harassment and monetary loss to the complainant;
ii) to release Rs.1,00,000/- as maturity sum assured along with interest @18% per annum; and
iii) to pay Rs.25,000/- as litigation expenses;
4. The opposite parties contested the complaint by filing their joint reply by raising preliminary objections that the complainant has got no locus standi to file the complaint against the opposite parties. It was submitted that as per the terms and conditions of the policy, in question, the policy holder is entitled to the amount of Rs.1,00,000/- in case of eventuality which falls within the ambit of accidental benefit and death benefit under the policy, in question. However, the maturity value has to be calculated as per the table and terms applicable in each policy. In this policy, applicable table and terms are mentioned in the policy bond itself and the sum First Appeal No 398 of 2021 4 assured in the policy comes to the tune of Rs.27,033/- Further submitted that inadvertently due to typographical mistake, the same amount of Rs.1,00,000/- has been mentioned against maturity sum assured as mentioned against death benefit sum assured and accidental benefits sum assured in the policy. Further submitted that when the said mistake came to the knowledge of the opposite party, they issued a circular in this regard and informed accordingly. Mere mentioning of wrong amount of maturity value in the policy, due to typographical mistake would not entitle the policy holder to grab the same from the opposite parties. The maturity amount is booked by the system 3 months earlier to the date of maturity, so there is no question of enhancing the amount to the tune of Rs.27,033/-. The plan purchased by the complainant was Table No.165, which was high risk plan and risk premium at age of 58 years was quite high and as such, the said amount of Rs.27,033/- was the exact maturity amount and the same was to be payable to the complainant on completion of maturity date of policy and the contents of the complaint regarding the maturity value of Rs.1,00,000/- are misleading.
On merits, it was admitted that the complainant purchased LIC Jiwan Saral Policy bearing No.471670120 on 25.07.2006 for a period of 12 years with the premium of Rs.58,800/-. The other contentions were also reiterated in preliminary objections as detailed above. Rest all the averments as averred by the First Appeal No 398 of 2021 5 complainant in his complaint were denied and prayed for dismissal of the complaint with costs.
5. Both the parties produced evidence in support of their respective averments before the District Commission, which after going through the same and on hearing learned counsel appearing on their behalf passed the order whereby the complaint filed by the complainant was allowed against the opposite parties, as already state above.
6. Aggrieved by the impugned order dated 28.09.2021 passed by the District Commission, the appellants/opposite parties have filed the present appeal, by raising various arguments.
7. Learned counsel for the parties argued the case at length. The written arguments were also filed by both the parties.
8. Sh.Rajneesh Malhotra, learned counsel for the appellants/opposite parties submitted that the as per the terms and conditions of the policy, in question, the policy holder is entitled to the amount of Rs.1,00,000/- in case of any eventuality which falls within the ambit of accidental benefit and death benefit under the policy but the policy holder was alive on the date of maturity, the maturity value has been calculated as per the table and term applicable to said policy. In the policy schedule, inadvertently due to typographical mistake, the same amount of Rs.1,00,000/- has been mentioned against maturity sum assured as mentioned against death benefit sum assured and accidental benefits sum assured in the policy. The District Commission has erroneously First Appeal No 398 of 2021 6 allowed the complaint. As per chart given in the circular of Table 165, the correct maturity sum assured was for term 12 years and age 58 years was Rs.4915/- per Rs.100/- monthly premium. Thus, the maturity amount payable under this policy was Rs.19,660/- only. Alongwith loyalty addition of Rs.7373/-, total amount payable was only Rs.27,033/-. The District Commission has failed to take into consideration that the Jeevan Saral Plan is in conformity of IRDAI File & Use instructions- that the Insurance Regulatory & Development Authority (now Insurance Regulatory & Development Authority of India-'IRDAI') is an Insurance Regulator set up through enactment of IRDAI Act, 1999 mainly with the objective to protect the interests of the policy holders and to regulate, promote and to ensure orderly growth of Insurance business. There is no evidence brought on record by the complainant to show that the maturity sum assured is equal to the Death Sum Assured as is claimed by the complainant. The primary objective of endowment life insurance policy is to provide the risk coverage by way of payment of Death Sum Assured on occurrence of death of insured during term of policy. Further argued that the District Commission has failed to take into consideration that it is well settled law that some typing mistakes in the policy cannot give rise to the contractual obligations of LIC to pay the amount and to give benefit of typing mistake. It is submitted that there is no deficiency in service or unfair trade practice committed by the appellants/opposite parties. First Appeal No 398 of 2021 7 Finally, it is prayed that the appeal of the appellants be allowed and the order passed by the District Commission be set aside.
9. Mrs.Malika Sethi Sobti, Advocate, learned counsel for respondent /complainant submitted that during the currency of policy, the insurance company neither pointed out any mistake in the policy, nor sent any corrected policy document. Now, when the policy has matured, the insurance company is claiming the defect in the initial contract. The mistake or typographical error in the contract does not seem to be obvious and even if the mistake is justified on the basis of Table 165 of the LIC/OP, it is seen that this table was not part of the policy and was not supplied along with the policy document and the complainant is not bound by this table. Rather the complainant and the insurance company both are bound by the written contract of insurance as mentioned in the policy document. The order passed by the District Commission is a well reasoned and justified order and requires no interference. Finally, it has been prayed to dismiss the appeal and upheld the order passed by the District Commission.
10. Heard arguments of Ld. Counsel for the parties. We have also carefully perused the impugned order passed by the District Commission, written arguments submitted on behalf of the parties and other documents available on the file.
11. Brief facts as per documents placed in record are that the respondent/complainant purchased a LIC's Jeevan Saral Policy (with profits) with commencement date as on 31.08.2006 and date First Appeal No 398 of 2021 8 of maturity as 25.07.2018, vide Ex.C-1. A premium of Rs.1,220/- was to be paid quarterly. In the Policy Schedule in addition other details, it was provided as under:
Maturity Sum Assured (Rs.) 1,00,000/-
Death Benefit sum Assured (Rs.) 1,00,000/-
12. Also maturity benefit and benefit on death has been defined in the policy itself as under:
"Maturity Benefit : 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 the corresponding loyalty addition, if any, shall be payable.
Benefit on Death: A sum equal to the Death Benefit Sum Assured along with all premiums paid (excluding premiums paid for the first policy year, any extra premium and premiums in respect of Accident Benefit and Term Rider Benefits) shall be payable provided the policy is in full force on the date of death. Loyalty addition, if any, shall also be payable. If the proposer and/or Life Assured had surrendered the policy partially, as per terms of this policy, the benefit shall be reduced in proportion of the reduction in premium for the main plan."First Appeal No 398 of 2021 9
13. As per status report of the above policy dated 04.07.2018, Ex.C-5 the policy stood matured as on date. The respondent/ complainant approached the opposite party-Insurance Company to get the maturity amount and came to know that the maturity amount was only Rs.19,709/- plus liability addition of Rs.7,373/- i.e. Rs.27,033/- instead of Rs.1,00,000/- as mentioned in the policy document.
14. Now the issue to be determined as to whether the respondent/complainant is entitled to maturity amount of Rs.27,033/- or maturity sum assured of Rs.1,00,000/-.
15. Learned counsel for the appellants/opposite parties argued that in the policy document inadvertently due to typographical mistake, the same amount of Rs.1,00,000/- has been mentioned against maturity sum assured as mentioned against death benefits sum assured. The maturity amount has been calculated correctly as per Table 165 for Rs.27,033/-. However, this fact was told to insured at the time of maturity itself which is a deficiency in service on the part of the Insurance Company. There is no evidence on record that any such circular letter was issued to rectify the typographical mistake by the opposite parties-Insurance Company during the policy period. There is also no evidence that Table 165 was issued to the insured with the policy schedule. The insurer could have rectified the typographical error during the currency of the policy. The policy schedule clearly mentions Rs.1,00,000/- as maturity sum assured.
First Appeal No 398 of 2021 10
16. The District Commission has also rightly observed that the respondent/complainant has paid a total premium of Rs.58,800/- within a span of 12 years. How it is justified that after the span of 12 years, the complainant is entitled to Rs.27,033/- only. The appellants/opposite parties cannot back out of their promises which were rather made in writing as proved in the policy schedule Ex.C-1/Ex.C-4 on record.
17. We are fortified with the judgment of the Hon'ble National Commission in the case First Appeal No.1531 of 2018 titled "Life Insurance Corporation of India Vs. Consumer Welfare Association & Others" decided on 11.12.2018, wherein it has as under:
"5. I have given a thoughtful consideration to the arguments advanced by the learned counsel for the appellant and have examined the material on record. First of all, it is seen that the Policy was issued on 28.03.2004 and was valid upto 28.03.2015. It may be true that the policy is issued under table 165 of the LIC, however, it has been admitted that the table was not supplied along with the policy document and therefore the insured may not be having any inkling that he may not get the amount mentioned in the policy. There was no communication made during the policy period by the insurance company mentioning the mistake in the policy document. It is only after the policy has matured and question of payment of maturity amount cropped up, the insurance company has raised the issue of typing error in the policy document. Policy is a contract of utmost good faith and parties are bound by this contract. If any typing error is brought to the notice of the other party by any party before the claim becomes due, it can definitely be considered with the consent of both the parties.
...........The complainant has paid Total premium of Rs.13,65,100/- and therefore it stands to logic that the complainant may get about rupees 25 lacs on maturity. Clearly, this does not stand to logic that after paying Rs.13,65,100/-, one gets only Rs.3,94,900/- as maturity amount along with some loyalty addition which in the present First Appeal No 398 of 2021 11 case is only Rs.1,67,832/-. Moreover, the question is whether the complainant would have gone for the policy, had he known that on maturity he will get only Rs.3,94,900/- after paying regular premium of Rs.1,24,100/- per year . During the currency of the policy, the insurance company did not point out any mistake in the policy, nor sent any corrected policy document. Now that the policy has matured and the claim becomes due on maturity, the insurance company is claiming the defect in the initial contract. The mistake or typographical error in the contract does not seem to be obvious and even if the mistake is justified on the basis of table 165 of the LIC, It is seen that this table was not part of the policy and was not supplied along with the policy document, therefore, the complainant may not be bound by this table, rather, the complainant and the insurance company both are bound by the written contract of the policy as mentioned in the policy document. The policy contact has to be interpreted in the terms as agreed in the contract by the contracting parties."
18. Also in a recent case having Complaint Ref. No.NOI-L- 029-2021-0500 decided on 22.01.2021 titled "Subhash Chander Arora Vs. LIC" it has been observed by the Insurance Ombudsman as under:
"It is observed that the complainant is aggrieved because he felt that he was given less payment of maturity of his policy. The submission made by the Insurance Company, that there was typographical error in the Policy Bond. But it is noticed that this fact was told to the Insured at the time of Maturity, which amounts to deficiency in service, and is not acceptable. Insurer had all the time and resources at its command to rectify typographical error during the currency of the policy. The copy of the policy bond clearly mentions Rs.1,25,000/- as maturity sum assured. The grievance of the insured is genuine. What is committed in writing in the bond has to be honored. National Consumer Disputes Redressal Commission under revision petition No.2835 of 2007 has held that the benefits under the policy are to be disbursed as per schedule given in the policy. Insurer is directed to pay the balance maturity sum assured i.e. Rs.1,09,705/- to the complainant."
19. The District Commission has rightly observed that it is case of deficiency in service on the part of the appellants/opposite First Appeal No 398 of 2021 12 parties but the interest and compensation awarded by the District Commission appears to be on the higher side.
20. In view of the above, the appeal filed by the appellants/opposite parties is partly allowed and the order of the District Commission is modified to the extent that the appellants/opposite parties are directed as under:
i) to make the payment of claim amount of Rs.1,00,000/-
along with interest at the rate of 8% per annum from the date of its maturity till realization of the amount;
ii) to pay Rs.20,000/- as compensation on account of mental agony and harassment as well as litigation expenses.
21. The appellants/opposite parties shall comply with the above said directions within a period of 45 days from the receipt of the certified copy of the order.
22. The appellants had deposited a sum of Rs.84,875/- at the time of filing of the appeal. This sum, along with interest which has accrued thereon, if any, shall be remitted by the Registry of this Commission to the District Commission, after the expiry of 45 days of the sending of certified copy of the order to them. The concerned party may approach the District Commission for the release of the above amount to the extent of his/its entitlement and the District Commission may pass the appropriate order in this regard, in accordance with law.
First Appeal No 398 of 2021 13
23. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (RAJINDER KUMAR GOYAL) MEMBER (URVASHI AGNIHOTRI) MEMBER June 08,2022 parmod