A policyholder has the right to know about the guaranteed surrender value, the special surrender value, and bonus accrued to him in respect of his policy. It is the duty of the insurance company to provide this information to the policyholder upon request.

Headnote:
CONSUMER PROTECTION - INSURANCE - DEFICIENCY IN SERVICE - UNILATERAL CHANGE IN PREMIUM AMOUNT - DISCRIMINATION IN BONUS INTIMATION - RUDE BEHAVIOUR OF INSURANCE OFFICIALS - FAILURE TO PROVIDE SURRENDER VALUE AND BONUS INFORMATION - WRONGFUL CALCULATION OF SURRENDER VALUE - REJECTION OF ADDITIONAL LOAN - DISCHARGE VOUCHERS SENT WITHOUT REQUEST - JURISDICTION OF CONSUMER COMMISSION.
Fact of the Case:

Akhil Bharatiya Grahak Panchayat and one Mr. Ilahi Attar filed a complaint against the Life Insurance Corporation of India (LIC) alleging deficiency in service and unfair trade practice. The complainant, Mr. Ilahi, claimed compensation of Rs. 3,67,000/- for suffering due to deficiency in service by LIC. The specific allegations made by Mr. Ilahi included unilateral change in premium amount, discrimination in bonus intimation, rude behaviour of LIC officials, failure to provide surrender value and bonus information, wrongful calculation of surrender value, rejection of additional loan, and sending of discharge vouchers without request.
Finding of the Court:

The court found that there was deficiency in service on the part of LIC. It held that LIC had unilaterally changed the premium amount without the consent of the policyholder, discriminated against the complainant in not sending bonus intimation, failed to provide surrender value and bonus information, and wrongfully calculated the surrender value. The court also found that LIC had sent discharge vouchers to the complainant without any request, which was an attempt to demoralize him.
Issues: 1. Whether there was deficiency in service on the part of LIC? 2. Whether LIC had unilaterally changed the premium amount without the consent of the policyholder? 3. Whether LIC had discriminated against the complainant in not sending bonus intimation? 4. Whether LIC had failed to provide surrender value and bonus information? 5. Whether LIC had wrongfully calculated the surrender value? 6. Whether LIC had sent discharge vouchers to the complainant without any request? 7. Whether the Consumer Commission had jurisdiction to hear the complaint?
Ratio Decidendi: 1. The court held that there was deficiency in service on the part of LIC based on the following findings: - LIC had unilaterally changed the premium amount without the consent of the policyholder. - LIC had discriminated against the complainant in not sending bonus intimation. - LIC had failed to provide surrender value and bonus information. - LIC had wrongfully calculated the surrender value. - LIC had sent discharge vouchers to the complainant without any request. 2. The court held that LIC had unilaterally changed the premium amount without the consent of the policyholder based on the following evidence: - The complainant's testimony that LIC had increased the premium amount without his consent. - The admission by LIC in its written statement that it had increased the premium amount in the case of the complainant. 3. The court held that LIC had discriminated against the complainant in not sending bonus intimation based on the following evidence: - The complainant's testimony that he had not received any bonus intimation from LIC. - The admission by LIC in its written statement that it had not sent bonus intimation to salary savings scheme policyholders, of which the complainant was a member. 4. The court held that LIC had failed to provide surrender value and bonus information based on the following evidence: - The complainant's testimony that he had repeatedly requested LIC to provide him with surrender value and bonus information, but LIC had failed to do so. - The admission by LIC in its written statement that it had not provided the complainant with surrender value and bonus information. 5. The court held that LIC had wrongfully calculated the surrender value based on the following evidence: - The complainant's testimony that LIC had wrongly calculated the surrender value of his policies. - The admission by LIC in its written statement that there were mistakes in the calculation of surrender value. 6. The court held that LIC had sent discharge vouchers to the complainant without any request based on the following evidence: - The complainant's testimony that he had not requested LIC to send him discharge vouchers. - The admission by LIC in its written statement that it had sent discharge vouchers to the complainant without any request. 7. The court held that the Consumer Commission had jurisdiction to hear the complaint based on the following findings: - The value of the claim was more than Rs. 1 lakh, which was within the jurisdiction of the Consumer Commission.
Final Decision: The court allowed the complaint and directed LIC to remove the deficiency in service within two months. The court also ordered LIC to pay compensation of Rs. 20,000/- to the complainant within one month.

JUDGMENT

Justice G.G. Loney, President — Akhil Bharatiya Grahak Panchayat (All India Consumer Panchayat Sangli, in short, Panchayat, and one Mr. Ilahi Attar jointly filed this complaint against the Opponent Life Insurance Corporation of India, for short, the Corporation, alleging deficiency in service and unfair trade practice under the provisions of sub-Section (a)(g)(o) & (r) of Section 2(1) of the Consumer Protection Act, 1986. The complainant Mr. Ilahi has claimed an amount of Rs. 3,67,000/- as compensation from the Corporation on account of his suffering due to deficiency in service at the instance of the Corporation.

2. The grievances levelled by the Complainant Panchayat against the Corporation are general in nature and are as under:—

(1) Unilateral, abnormal and detrimental changes made in the Surrender Value of the Policies;

(2) incorrect calculations of bonus;

(3) discrimination between two sits of customer in the matter of calculation of bonus and premium etc.

(4) odious attitude and conduct of the Officers of the Corporation in rendering necessary services to the policy holders.

(5) High handedness acquired by the Corporation on account of unfairly advantageous contract of the Corporation.

3. However, the complainant No.2 Ilahi Attar made specific allegations in detail. The case of complainant Ilahi Attar is that he has purchased six policies from the Corporation. On the first four policies he obtained some loan from the Corporation. His last two policies are assigned to the Parshwanath Cooperative Bank at Sangli. He wanted additional loan in the year 1989 to clear his income tax dues. On 13.2.1989, Ilahi Attar applied to the Sangli Branch of the Corporation for grant of additional loan on his first four policies for purposes of payment of income tax dues. Four policies were already with the Corporation in connection with his first loan. He had regularly paid his premiums and was never a defaulter. On 23.2.89, he personally visited Sangli Branch of the Corporation to see further developments as regards his 2nd loan application. At that time one Mr. Mohite, Loan Desk Clerk Sangli Branch was present where as Mr. Tonpi, Loan Desk Officer was not available. Attar asked Mr. Mohite about enhanced loan. Mohite informed that due to change in Surrender Value factor, which is now lesser than the old scale, he may not get the loan. When asked about the rationale for lowering down the Surrender Value scale Mr. Mohite expressed his inability to explain. In the meantime, Mr. Jayade, Administrative Officer of the Corporation at Sangli Branch who was wandering near, came there and asked the complainant to contact the higher authorities and get the Surrender Value factor changed. According to Attar, Jayade shouted at the complainant and was seen in a challenging attitude which was not normal. According to Attar, he found the behaviour of Mr. Jayade rude which caused hurt to his sentiments. Attar felt humiliated and decided to represent this incident to the higher ups of the Corporation. This incident was reported in writing by Attar to the Branch Manager of the Life Insurance Corporation of India at Sangli Branch and copy of which was endorsed to the Chairman, Life Insurance Corporation of India, Divisional Manager, Life Insurance Corporation of India Satara and All India Consumer Panchayat. The complainant sent the complaint by Registered Post with acknowledgement due. A copy of the complaint dated 20.4.1989 is at Annexure-D. The postal acknowledgement from the respective authorities are at Annexure D-1 to D-3. Much correspondence was made by Attar with the Corporation, the copies of which are placed on record at Annexure B, D, E, F, G, H, I, J, K, L, M, N, O. In none of the aforesaid correspondence the Corporation informed the complainant til the date of complaint as to what happened to the complaint regarding the rude behaviour of Jayade. Similarly, a letter addressed by Complainant at Annexure C dt. 7.3.89 was never replied to by t

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