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2008 (3) CPR 124
MAHARASHTRA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MUMBAI
P.N. Kashalkar, Presiding Member and S.P. Lale, Member
LIC of India —Appellant
versus
Gajanan Raghunath Joshi —Respondent
First Appeal No. 1272/04
Decided on 2.4.2008
Counsel for the Parties:
For the Appellant:A.S. Vidyarthi, Advocate.
For the Respondent:U.B. Wavikar, Advocate.
IMPORTANT POINT
Once a policy became matured LIC cannot be heard to say that it had issued wrong policy or that it had made wrong calculation of premium recoverable under the said insurance policy from the complainant.
Headnote:Consumer Protection Act, 1986—Sections 12 and 17—Claim for payment of guaranteed maturity addition and final additional bonus under Jeevan Dhara Policy—Complainant was to get Rs. 2286/- p.m. as annuity from April 02 to March 03 and give amount Rs. 3,43,697/- —Claim resisted on plea that mistake took place in calculation of premium while issuing policy and was sought to be rectified as paid premium of Rs. 10000/- p.a. for 12 years entitled complainant-insured annuity instalment of Rs. 1912/- and give amount of Rs. 2,28,647/- and complainant was given option to pay additional amount Rs. 59,940/- with 9% interest or get revised annuity—Whether appellant was guilty of deficiency in service? Yes—Order allowing claim under complaint suffered no illegality.
Held: The complainant regularly paid yearly premium of Rs. 10,000/- till the policy was in force. He had not committed any default nor LIC found within those 12 years the mistake it had though it had committed in issuing policy 96-12 to the complainant but when time to pay Give amount and annuity amount came after expiry of 12 years, LIC came out with a case that they had committed mistake in issuance of policy Jeevan Dhara to the complainant under plan 96-12 and it should have been 92-15. Therefore, for giving 15 years annual annuity to the complainant, the complainant was required to pay additional premium of Rs. 59,940/- with interest @ 9%. This was not acceptable to the complainant and therefore, LIC cancelled the original policy and offered altogether new policy after expiry of 12 years period. In the course of arguments, Counsel for the appellant Adv. Vidyarthi drew our attention to the fact that policy conditions mentioned condition No. 10, which gave right to terminate insurance policy at will. However, if one wants to terminate the policy at will, the insurance company like LIC is required to terminate the policy at any time before the policy gets matured and liability of LIC starts to pay certain annuity amount to the claimant. Once a policy became matured LIC cannot be heard to say that it had issued wrong policy or that it had made wrong calculation of premium recoverable under the said insurance policy from the complainant. Any contract can be terminated if it is at will. But for invoking this clause of termination of at will, there must be contract subsisting. But here the contract was over since the policy had matured after lapse of 12 years. Complainant had paid annual instalment of Rs. 10,000/- for 12 years in terms of policy and when period of payment of annuity came LIC came out with a plea that they had committed calculation mistake and had issued wrong policy. This cannot be permitted to be done by public sector Company like LIC. LIC is bound to pay annual annuity to the complainant as per Jeevan Dhara policy issued to the complainant on 24/03/90 under plan 96-12 and they have to pay the yearly annuity of Rs. 2,872.70 with effect from 01/04/02 and Give amount Rs. 3,43,697/-. On that basis complainant was paying annual instalment of Rs. 10,000/- to the LIC. In the circumstances, the Forum below rightly held that LIC was deficient in service by offering new policy and in cancellation of old existing one. We further hold that LIC is guilty of unfair trade practice within meaning of Section 2(1)(r) of Consumer Protection Act, 1986 and such a public sector undertaking having good reputation cannot be permitted to act in a high handed manner at the end of policy period and to issue altogether a new policy to the complainant in place of old one thereby reducing Give amount as well as annual annuity earlier they had promised to pay to the complainant. Hence, we are finding to substance in appeal. (Para 6)
Result: Appeal dismissed.
P.N. Kashalkar, Presiding Member—This appeal directed by L.I.C. branch Dombivali, District Thane against the order passed by District Consumer Forum, Thane, whereby the Forum below has been pleased to direct the opp. party to pay guaranteed maturity addition and final additional bonus under Jeevan Dhahra policy issued to the complainant amounting to Rs. 8,249/- by deducting amounts already paid. It further directed to pay to the complainant yearly annuity amount of Rs. 2,872.70 and compensation of Rs. 10,000/- and cost of Rs. 1,000/-.
2. Facts to extent material may be stated as under:
The opp. party issued a policy known as Jeevn Dhara bearing number 920160808 to the complainant on 24/03/90 under the plan 96-12 with yearly annuity Rs. 2,872.70. Annuity commenced with effect from 01/04/02. Give amount was Rs. 3,43,697.00. Complainant was required to pay yearly installments of Rs. 10,000/-in its office at Dombivali. Under the policy opp. party agreed to pay Rs. 8,249/- towards guaranteed maturity amount to the complainant. Somewhere in Feb-March-2002 complainant received discharge voucher for the payment of guaranteed maturity and other additional bonus under Jeevan Dhara policy and he was to get Rs. 2,286/- per month as annuity from April-02 to March-03. It was the grievance of the complainant in the complaint filed in the Forum below that the said amount did not tally with what was mentioned by LIC in its Jeevan Dhara policy issued to him on 24/03/90. The complainant made enquiry with the opp. party by sending letters but no satisfactory answer was given. However, on 20/04/02 LIC sent him letter and directed the complainant to pay additional amount of Rs. 59,940/- along with interest @ 9% p.a. on account of difference in premium. The complainant sent two letters and personally visited in office of LIC at Dombivali. He met officials from Mumbai office also. On 05/10/02 and 09/10/02 the complainant received letters from LIC and was informed that his policy was cancelled and he had been issued new policy for different terms and conditions, which was not acceptable to the complainant. According to the complainant he had paid annual premium of Rs. 10,000/- under policy plan No. 96-12 from 24/03/90 and he was entitled to get annual instalments of Rs. 2,872.70. under table 96 and term 12 years. But opp. party did not perform its part of contract and failed to give agreed annuity instalment and therefore, he claimed Rs. 72,941/- from LIC in addition to that he claimed pension of Rs. 2,872.70 as per Jeeven Dhara policy issued to him way back in 1990.
3. Opp. party filed written statement and pleaded that on 14/12/01 the complainant was intimated payment of guaranteed maturity addition of Rs. 8,249/- and sent the same to Jeevan Akshay Cell, Yogakshema. Opp. Party by letter dated 07/01/02 informed the correct amounts. Life Insurance Corporation, Thane division declared their decision on 10/04/02 that original Give amount and annuity was arrived at taking term as 15 years instead of 12 years through oversight. So, the policy holders were directed to pay revised premium of Rs. 1,912/- or to pay difference of premium Rs. 59,940/- with 9% interest on 01/11/02. LIC delivered fresh policy documents with revised terms and conditions, which would be a new contract between complainant and LIC in place of original one and they had cancelled original policy documents dated 24/03/90.
4. LIC therefore pleaded that the mistake they committed was sought to be rectified by cancellation of original policy issued to him and by offering him new policy with revised benefits payable under new policy. The complainant had not given accent to the new policy and knocked the doors of consumer Forum without any basis. They pleaded that complaint should be dismissed with cost. On going through affidavits and documents placed on record by rival parties and after hearing their counsels, Ld. District Forum held LIC guilty of deficiency in service and unfair
