National Consumer Disputes Redressal
Anil Kumar Sud vs Life Insurance Corporation Of India on 28 September, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2725 OF 2015 (Against the Order dated 02/09/2015 in Appeal No. 120/2015 of the State Commission Himachal Pradesh) 1. ANIL KUMAR SUD H.NO.7, BALLUN BAZAR DALHOUSIE CANTT. DISTRICT CHAMBA HIMACHAL PRADESH ...........Petitioner(s) Versus 1. LIFE INSURANCE CORPORATION OF INDIA JULLAKHARI MOHALLA CHAMBA-176310 HIMACHAL PRADESH ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER HON'BLE MR. C. VISWANATH,MEMBER For the Petitioner : Mr.Joel, Advocate For the Respondent : Mr. Rajat Bhalla, Advocate Dated : 28 Sep 2020 ORDER This revision petition has been filed by the petitioner Anil Kumar Sud challenging the order dated 02.09.2015 passed by the State Consumer Disputes Redressal Commission, Himachal Pradesh (in short 'the State Commission') in First Appeal No.120 of 2015.
2. Brief facts of the case are that the petitioner filled a proposal form for a life insurance policy namely, Jeevan Suraksha policy on 16.01.2001. The policy was for sum insured of Rs.1,00,000/-. The complainant got the commencement date back dated to 09.05.2000 to get advantage of age and consequent less premium. Thus, the date of vesting was 09.05.2011. Before the date of vesting, the petitioner/complainant received a letter dated 27.10.2010 informing the petitioner about Notional Cash Option (NCO) as Rs.1,87,975/- and the amount of monthly annuity as Rs.1,631/- per month. The complainant gave the option 'F' for monthly annuity on the basis of the figures provided in this letter. After getting the monthly pension of Rs.1,631/- till 01.07.2012, monthly pension was reduced to Rs.1,352/- per month and the excess amount paid was also ordered to be recovered by the Insurance Company. Aggrieved by this reduction in the monthly pension, the complainant filed a consumer complaint being CC No.25/2014 before the District Forum, Chamba (HP). The complaint was resisted by the opposite party Insurance Company by stating that due to fault in the system, the NCO was wrongly calculated and the pension was also wrongly calculated. The District Forum accepted the version of the opposite party and dismissed the complaint vide its order dated 06.06.2015. Aggrieved with the order of the District Forum, the complainant then preferred appeal before the State Commission being FA No.120/2015 and the State Commission also dismissed the appeal vide its order dated 02.09.2015.
3. Hence the present revision petition.
4. Heard the learned counsel for the parties and perused the record. Learned counsel for the petitioner stated that when the Insurance Company communicated various options giving exact details of the NCO and the monthly pension vide letter dated 27.10.2010, it becomes a contract between the parties and after lapse of about one year, the Insurance Company cannot go against this contract. First of all, the calculation as given by the Insurance Company is not correct and secondly, the Insurance Company cannot go against their letter dated 27.10.2010. The learned counsel for the petitioner/complainant has pointed out that the difference in the NCO is appearing because the Insurance Company is not adding loyalty addition as per Special Condition nos.4 & 5 of the policy. The learned counsel further stated that the Insurance Company has wrongly taken the tabular annuity of 83.60 though it should be 104.10 as per circular dated 12.06.1998. Learned counsel for the petitioner mentioned that the correct calculation has been submitted in the written submission filed by the petitioner. Comparison of two calculations has been submitted by the learned counsel for the petitioner in the written submission as follows:-
Impugned Calculation Proposed Calculation Remarks Intimated NCO to policy Holder = 187975 which was wrong hence was annuity 1631 per month The NCO was correctly tabulated in the letter dated 27.10.2010 (Giving Option F and the annuity was also correctly calculated Actual Calculation is as under:-
Actual Calculation is as under:-
GMA =(S.A. * G.A.)/Term =(1,00,000*75/11 =82,500 GMA =(S.A.*G.A.)/Term =(1,00,000*75)/11 =82,500 GMA=Guaranteed Maturity Amount SA=Sum Assured Term = Deferred Period (11 years) NCO =S.A.+ GMA =1,00,000+82,500 =1,82,500 NCO =S.A.+GMA + (Loyalty Additions) =1,00,000 + 82,5000 + 5,475 =1,87,975 NCO= Notional Cash Option (Loyalty Additions) as per clause 4 & 5 of policy not added to NCO in the impugned calculation Yearly Annuity =[(Tabular Annuity+ incentive) *NCO]/1000 =[83.60+5.30)*182500] /1000 =16,624.25 Yearly Annuity =[(Tabular Annuity + Incentive)*NCO]/1000 =[104.10]*1,87,975]/1000 =19,568.1975 The correct Tabular Annuity was 104.10 and not 83.60 as per the impugned calculation (Refer RTI Reply and circular dated 12.06.1998 contained therein) Monthly Annuity =16,624.25/12 =1,352 Monthly Annuity =19,598.1975/12 =1,631 This is the exact figure which occurs in the letter dated 27.10.2010 (Giving Option F)
5. Based on the above calculations, the learned counsel for the petitioner argued that apart from the fact that Insurance Company cannot go back from its earlier commitment to pay pension @ Rs.1,631/- per month, the correct calculation also confirms the pension @ Rs.1,631/- per month. The calculation given by the Insurance Company is not correct. Both the fora below have relied on the wrong calculation given by the Insurance Company and therefore, the orders of the fora below are liable to be set aside.
6. On the other hand, learned counsel for the respondent stated that due to fault in the system, the Insurance Company wrongly communicated the value of NCO and the monthly pension of Rs.1,631/- per month vide their letter dated 27.10.2010. Even the Insurance Company paid the pension @Rs.1,631/- per month, but when it was realised that the system had wrongly calculated the pension, the correct calculation was done and correct pension of Rs.1,352/- was paid to the complainant. Clearly, both the fora below have given concurrent finding by accepting the calculation submitted by the Insurance Company before them. Against the concurrent orders of fora below, the scope under the revision petition is quite limited and facts cannot be reassessed by this Commission in the revision petition. The learned counsel further mentioned that the proposal form was filled on 16.01.2001 and even though this policy was predated as commencing from 09.05.2000, the applicability of circular dated 07.06.2000 to the present case cannot be doubted and the tabular annuity as well as the incentive are to be taken from the tables present in this circular and thus, the calculation of the Insurance Company is as per the provision of the policy, and as per this circular. Clearly options sent by the Insurance Company vide letter dated 27.10.2010 do not form the part of contract and the main contract as per the policy is that annuity would be one of the options. The rate of annuity is decided by the Insurance Company by issuing circular from time to time. Even though the date of commencing has been preponed, but the policy has been actually issued after the applicability of the circular dated 07.06.2000 and therefore, the complainant cannot get any advantage of the earlier circular.
7. We have carefully considered the arguments advanced by both the learned counsel for the parties and have examined the record. From the comparison submitted by the learned counsel for the petitioner as stated above, the difference between the two calculations is mainly on two reasons. The first relates to loyalty addition and it is the argument of the petitioner that loyalty addition would be added to calculate the amount of NCO. Special Condition nos.4 & 5 deal with the loyalty addition. The Insurance Company has not given any clarity as to why the loyalty addition should not be added to calculate NCO. In fact, the Insurance Company also arrived at the figure of Rs.1,87,975/- as NCO in their letter dated 27.10.2010, but they are now insisting on amount of Rs.1,82,500/- as amount of NCO. This difference is on account of loyalty addition. As the Insurance Company has accepted the NCO of Rs.1,87,975/- and has not controverted the addition of loyalty addition, we deem it appropriate to consider the NCO as Rs.1,87,975/-.
8. The major difference in the pension comes from the fact that the Insurance Company is taking the tabular annuity at the age of 60 years (which is the age of the complainant at the time of vesting) to be 83.60 and incentive of 5.30 whereas the complainant has taken the tabular annuity of 104.10 relying on the circular dated 12.06.1998. The proposal for the current policy was filled by the complainant on 16.01.2001 much after the circular dated 07.06.2000 giving the new rates of annuity was issued. This circular provides the following:-
"1. The revised rates will be applicable only for the new business introduced w.e.f.16th June, 2000 and not for the existing policies. The proposals received duly filled and with full premium upto 15th June 2000 may be completed under the existing terms upto 31st July 2000. Thereafter, any such proposals remaining pending may be considered only under the revised terms. In view of this, the proposers may be informed by Registered Post of the requirements, if any under their proposals for consideration and completion by 31st July 2000, beyond which date, it may be made clear that, the revised terms would be applicable."
9. From the above, it is clear that in all the cases beyond 31.07.2000, the new annuity rates are to be made applicable. The policy records date of proposal as 26.02.2001. Thus, clearly the policy must have been issued after this date and therefore, no other annuity rates except those given in the circular dated 07.06.2000 will be applicable. Clearly, the circular dated 12.06.1998 relied upon by the complainant cannot be made applicable in the present case. Hence the tabular annuity of 104.10 cannot be considered for the present policy. Thus, considering the NCO of Rs.1,87,975/- and the tabular annuity of 83.60 as well as incentive of 5.30, we get the monthly annuity as Rs.1,392.58.
10. Based on the above discussion, we are of the view that the petitioner/complainant is entitled to monthly annuity of Rs.1,392.58 per month instead of Rs.1,352/-. Accordingly, the respondent/Insurance Company is directed to give Rs.1,392.58 as monthly annuity to the complainant instead of Rs.1,352/- only. As the petitioner/complainant has suffered mental agony and harassment due to withdrawal of the annuity communicated to him vide letter dated 27.10.2010 of the Insurance Company, he deserves some compensation. We are not ordering any separate compensation for this negligence of the opposite party, however, we are of the view that the amount paid in excess till 01.07.2012 will not be recovered from the complainant. Monthly annuity of Rs.1,352/- has been paid to the complainant, the balance amount as per this order will be paid within a period of 60 days from the date of this order and thereafter monthly annuity of Rs.1,392.58 will be paid. The Revision Petition No.2725 of 2015 is accordingly disposed of.
...................... PREM NARAIN PRESIDING MEMBER ...................... C. VISWANATH MEMBER