National Consumer Disputes Redressal
Life Insurance Corporation Of India vs Consumer Welfare Association & Anr. on 11 December, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 1531 OF 2018 (Against the Order dated 21/06/2018 in Complaint No. 745/2015 of the State Commission Maharashtra) 1. LIFE INSURANCE CORPORATION OF INDIA CHAIRMAN & MANAGING DIRECTOR, YOGAKSHEMA, JEEVAN BIMA MARG, NARIMAN POINT MUMABI ...........Appellant(s) Versus 1. CONSUMER WELFARE ASSOCIATION & ANR. 402, B-WING, ASHOKA COMPLEX, JUSTICE RANA DE ROAD, DADAR MUMBAI 400 036 2. MR. DEEPAK RAJMAL KOTHARI 6, CUMBALLA HILL ROAD, KEMP'S CORNER OPPOSITE SHALIMAR HOTEL MUMABI 400 036 ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Appellant : Mr. Joy Basu ,Sr. Advocate with
Mr. Ashok Kashyap, Advocate For the Respondent :
Dated : 11 Dec 2018 ORDER
This first appeal has been filed by the appellant Life Insurance Corporation of India against the order dated 21.6.2018 passed in consumer complaint No. 745 of 2015 by the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission').
2. The facts of the present case are that the complainant had taken LIC Jeevan Saral Policy from opposite parties Surat Branch. Coverage provides maturity sum assured Rs.25,00,000/-, Death benefit sum assured Rs.3,94,900/- and Accident Benefit sum assured Rs.15,00,000/-. Policy period was from 28.3.2004 to 28.3.2015. Complainants have paid in aggregate Rs.13,65,100/- as premium amount during the validity period of the policy. On the date of maturity, complainant No.2 lodged his claim for the maturity value being the sum assured of Rs.25 lakhs. Opposite party refused to pay the sum assured and merely wanted to pay the death benefit of Rs.3,94,900/- along with loyalty addition of Rs.1,67,832/-. On 21.05.2015, complainant No.2 sent letter to opposite party and various other authorities. Complainant then filed complaint in the State Commission. The State Commission has passed the following order on 21.06.2018:-
"1. The consumer complaint is partly allowed.
2. Opponent is hereby directed to pay to the complainant total amount of Rs.26,67,832/- under "LIC's Jeevan Saral (with Profits)" vide Policy bearing No.863332999 with interest @9% p.a. from the date of maturity i.e. since 28.03.2015 till actual payment.
3. The opponent do pay an amount of Rs.25,000/- to the complainant towards compensation for mental pain and agony and amount of Rs.25,000/- towards costs of litigation. The opponent is entitled to deduct the amount, if any, paid to the complainant.
4. Copies of the order be furnished to the parties."
3. Hence, the present appeal.
4. Heard the learned counsel for the appellant at the admission stage and perused the record. Counsel for the appellant stated that there is typographical error in the policy, however, the State Commission has not considered this apparent typing error on the face of record. The learned counsel explained that amounts mentioned against the death claim and the maturity value have been interchanged in the policy document. The amount of Rs.25 lacs has been mentioned against the maturity amount, whereas this was intended to be mentioned against the death claim. Similarly, the death claim amount of Rs.3,94,900/- was to be mentioned against the maturity amount but the same has been mentioned against the death claim. Learned counsel mentioned that the policy has been issued in accordance with table 165 of the Life Insurance Corporation of India. A perusal of table 165 will clearly show that the maturity amount will be only Rs.3,94,900/- for the term of the policy in question and the amount of premium involved. Though it is a fact that table 165 is not supplied with the policy document, however, the policy states that the insurance is under the table number 165 of the LIC. Thus, the application of table 165 cannot be disputed. The counsel further argued that otherwise also, the death claim amount should be much more as compared to the maturity amount. Actually, in the policy these amounts have been inadvertently interchanged and the complainant is trying to take the advantage of this typing error. It was requested by the counsel that the order of the State Commission may be set aside and the complaint be dismissed as the insurance company is ready to give the amount of Rs.3,94,900/- as the maturity amount along with the loyalty bonus of Rs.1,67,832/-. To support his argument, the learned counsel relied on the following judgments:-
1. "Satya Deo Malviya Vs. Life Insurance Corporation of India Ltd., OP 178 of 1995, decided on 19.01.2004 (NC). It has been held that:
5. It is true that in the original insurance policy which was produced before us for our perusal the amount which is mentioned is Rs. 25,00,000/-. However, considering the facts stated in the affidavit by the Insurance Company it is apparent that instead of Rs.2,50,000/- it is evident that by apparent mistake Rs. 25,00,000/- is mentioned. One-time premium for the endowment policy for the period of 13 years would be Rs. 16,51,100/-which is admittedly not paid. Therefore, the question is whether mentioning of incorrect figure would be sufficient for grant of the amount as claimed by the complainant. In our view, typographical error of adding one Zero after Rs.2,50,000/- would not entail the complainant to receive the said amount. Parties to the agreement are not entitled to get benefits of apparent mistakes. In a contract of insurance there is a requirement of uberrima fides, i.e. good faith on the part of the assured. Re. Life Insurance Corporation v. Smt. G.M. Channabasamma, (1991) 1 SCC 357. It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. Moreover, in the policy itself, in bold letters, it is mentioned that, "You are requested to examine this policy and if any mistake be found therein, return it immediately for correction."
2. Life Insurance Corporation of India through its Branch Manager, Ajmer Rajasthan & Anr. Vs. Anil Kumar Jain, 2013 SCC On Line NCDRC 140. It has been held that:
"6. The short question which is to be decided in this revision petition is whether OP can rectify typographical mistake and charge more premium, which is payable on term table 79-30. Learned authorised representative of respondent submitted that petitioner cannot change terms and conditions of policy and placed reliance on 2010 (7) Supreme 83 M /s. Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. & Anr. in which Honble Apex Court observed as under:
"24. 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, its 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.
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 judgement of this commission in LIC versus Anil Kumar Jain (supra) does not seem to be applicable in the present case as the typographical error in LIC versus Anil Kumar Jain (Supra) was in respect of the amount of premium and not in respect of the amount of claim. Similarly, the other judgement relied upon by the appellant in respect of the amount of claim where a '0' was typed beyond the figure of 2,50,000/- to make it 25 lacs also does not seem to help the appellant as in this case, the single premium of Rs.104975/- was only Paid and an amount of rupees 25 lacs was claimed on the basis of the figure quoted in the policy. This Commission accepted the typing mistake and observed that the figure of 2,50,000/- was wrongly typed as 25 lacs. Obviously, a One Time Premium of 104975 cannot yield a payment of rupees 25 lacs and Rs.2.5 lacs was found to be reasonable. Therefore, the typographical error was accepted in the matter. In the present case, first of all, the typing error is not with respect to any particular figure but the mistake is in respect of two figures which have been allegedly interchanged due to typing mistake. Though the learned counsel for the appellant has tried to justify his assertion on the basis of table 165 of the LIC, however, one has to see the comparative logic for the places of these figures. 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 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. It is important to note the following judgments in this regard:
(a) In General Assurance Society Ltd. Vs.Chandmull Jain, [1966 ] 3 SCR 500, it was held as under:-
17." ...In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves."
(b) in Oriental Insurance Co. Ltd. Vs. Sony Cherian II(1999 )CPJ 13 (SC ), it has been observed as follows:-
"16. The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein."
(c) United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644, the Hon'ble Apex Court held as follows:-
"6. ....The terms of the policy have to be construed as it is and we cannot add or subtract something: Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.
9. ...It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment.
14. Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous."
6. Based on the above authoritative judgements of the Hon'ble Supreme Court, the terms and conditions of the policy cannot be changed or interpreted differently by any forum and particularly when there is no obvious reason for accepting the alleged typographical error in the policy.
7. Based on the above discussion, I do not find any merit in the appeal filed by the appellant and accordingly the First Appeal No.1531 of 2018 is dismissed at the admission stage.
...................... PREM NARAIN PRESIDING MEMBER