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Deepak Gupta Vs. Lic of India Through Zonal Manager Jeevan Jyoti and Another - Court Judgment

LegalCrystal Citation
CourtNational Consumer Disputes Redressal Commission NCDRC
Decided On
Case NumberRevision Petition No. 2920 of 2012
Judge
AppellantDeepak Gupta
RespondentLic of India Through Zonal Manager Jeevan Jyoti and Another
Excerpt:
consumer protection act, 1986 - section 12 -.....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?. 8. under these circumstances, the order passed by the state commission is flawless. the matter stands disposed of. there shall be no order as to costs. 9. however, it is hereby ordered that the lic of india will conduct a departmental inquiry as to who had committed the above said error. the concerned zonal general manager of lic of india will.....
Judgment:

J.M. Malik, Presiding Member

1. Shri Deepak Gupta, the complainant took a policy on his life in the year 1981, which was to commence w.e.f. 06.11.1981. It was to remain in force for 25 years. For the first five years, premium was required to be paid @1,550/- per annum. On expiry of first five years period, the policy was to be converted into an Endowment policy for the sum assured, on payment of a sum of Rs.3,345/- per annum, by way of premium for the next 20 years. The complainant was required to exercise an option, in writing, that this policy should be converted into an Endowment policy, if he desired that profits should be paid to him, but the complainant did not give the said option, in writing. The complainant paid the premium regularly for the full term of initial 5 years, and next 20 years. He had been receiving the reminders for paying premium for the full term of initial 5 years and next 20 years. He had been receiving reminders for paying premium and in those reminders, it was being intimated to him that along with the sum assured, certain amount of money had accrued to him on account of bonus.

2. The complainant has placed on record few Annexures mentioned in the order of the State Commission as Annexure C-2A, C-2B and C-2C. These letters pertain to the year 2005 and 2006. The learned counsel for the petitioner has invited our attention towards one of these letters which clearly, specifically and unequivocally mentions :

œRevisionary Bonus Accrued as at 31st March

(For With Profit Plans Only)    Rs.1,32,900.00

The Revival is subject to receipt of arrears of premiums quoted above and Declaration of Good Health (DGH) and other health Requirements “ The DGH is enclosed?.

However, on maturity, the complainant was paid only a sum of Rs.1,00,000/-. The remaining amount in the sum of Rs.1,40,500/- which was due on account of profits, including bonus was not paid. The complainant filed a complaint under Section 12 of the Consumer Protection Act, 1986.

3. The District Forum vide its order dated 28.12.2009 accepted the complaint. The operative portion of the order runs as follows:-

œAs a sequel to above, we allow this complaint and direct the OPs LIC, to defray a sum of Rs.1,46,500/- to the complainant along with interest at the rate of 9% per annum, with effect from the date of filing of the complaint, i.e., 25.09.2008, till actual payment is made. In addition to this, the OPs-LIC, is, also directed to pay a sum of Rs.20,000/- as compensation to the complainant, for causing him pain and sufferings, besides litigation costs of Rs.3,500/- . The OPs-LIC is directed to defray the aforesaid sums to the complainant, within a period of forty-five days, after the date of receipt of a copy of this order, failing which, they shall also be liable to pay a sum of Rs.10,000/- as punitive damages. Hence, the complaint stands disposed of in the above terms. The learned counsel for the parties undertook to collect the certified copy of this order from the office, free of cost, as per rules. The file, after due completion, be consigned to record room.

Announced on this, the 28th day of December, 2009?.

4. Aggrieved by that order, the OP preferred an appeal before the State Commission. The State Commission reversed the order passed by the District Forum and dismissed the complaint.

5. We have heard the learned counsel for the parties. Counsel for the petitioner vehemently argued that the above said Annexures clearly, specifically and unequivocally mention the amount of bonus which gave an impression that the bonus was payable along with the sum assured, on maturity of policy. He, however, admitted that the petitioner could not opt that the policy should be converted into an Endowment Policy with profits. However, he was under the impression that since the Annexures C-2A, C-2B and C-2C themselves mention the payment of bonus, therefore, the complainant did not bother for the same. It was argued that the OP has taken a stand and it is estopped from raising a new plea. It is contended that the plea raised by the petitioner that those documents were sent inadvertently due to the computer error, does not carry any weight. The petitioner should not suffer for the mistakes or errors committed by LIC itself.

6. The argument averred by the counsel for the petitioner carries force in a measure. This is an admitted fact that the petitioner did not opt for conversion of policy into Endowment Policy. The State Commission has quoted the provisions of policy, Exb. Annexure C1, which clearly go to show that it was incumbent upon the complainant to give the option, in writing. The absence of that option, dampens the ardour of his case. To err is human. Such mistakes committed by the OP do not rock the boat to a dangerous extent. Negligence is there, but mens rea is absent. The crux of the matter is, œWhether the petitioner has opted for conversion of the policy, into Endowment Policy or not??. It is an indisputable fact that needful was not done.

7. In Suraj Mal Ram Niwas Oil Mills (P) Ltd., Vs. United India Insurance Co. Ltd. and Anr., 2011 ACJ 418, the Honble Apex was pleased to hold :

œ22. Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity. In General Assurance Society Ltd. Vs. Chandmull Jain, 1966 ACJ 267 (SC), a Constitutional Bench of this court had observed that:

œIn 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?.

23. Similarly, in Harchand Rai Chandan Lals case, 2005 ACJ 570 (SC), this court held that:

œTerms 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?.

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?.

8. Under these circumstances, the order passed by the State Commission is flawless. The matter stands disposed of. There shall be no order as to costs.

9. However, it is hereby ordered that the LIC of India will conduct a Departmental Inquiry as to who had committed the above said error. The concerned Zonal General Manager of LIC of India will conduct the Inquiry. He will take action against the wrong-doer as per law, if necessary, and will send the report to the Registrar of this Commission, within six months from the receipt of this order. Disobedience of this order will proceed to contempt of court proceedings.

1. Shri Deepak Gupta, the complainant took a policy on his life in the year 1981, which was to commence w.e.f. 06.11.1981. It was to remain in force for 25 years. For the first five years, premium was required to be paid @1,550/- per annum. On expiry of first five years period, the policy was to be converted into an Endowment policy for the sum assured, on payment of a sum of Rs.3,345/- per annum, by way of premium for the next 20 years. The complainant was required to exercise an option, in writing, that this policy should be converted into an Endowment policy, if he desired that profits should be paid to him, but the complainant did not give the said option, in writing. The complainant paid the premium regularly for the full term of initial 5 years, and next 20 years. He had been receiving the reminders for paying premium for the full term of initial 5 years and next 20 years. He had been receiving reminders for paying premium and in those reminders, it was being intimated to him that along with the sum assured, certain amount of money had accrued to him on account of bonus.

2. The complainant has placed on record few Annexures mentioned in the order of the State Commission as Annexure C-2A, C-2B and C-2C. These letters pertain to the year 2005 and 2006. The learned counsel for the petitioner has invited our attention towards one of these letters which clearly, specifically and unequivocally mentions :

œRevisionary Bonus Accrued as at 31st March

(For With Profit Plans Only)    Rs.1,32,900.00

The Revival is subject to receipt of arrears of premiums quoted above and Declaration of Good Health (DGH) and other health Requirements “ The DGH is enclosed?.

However, on maturity, the complainant was paid only a sum of Rs.1,00,000/-. The remaining amount in the sum of Rs.1,40,500/- which was due on account of profits, including bonus was not paid. The complainant filed a complaint under Section 12 of the Consumer Protection Act, 1986.

3. The District Forum vide its order dated 28.12.2009 accepted the complaint. The operative portion of the order runs as follows:-

œAs a sequel to above, we allow this complaint and direct the OPs LIC, to defray a sum of Rs.1,46,500/- to the complainant along with interest at the rate of 9% per annum, with effect from the date of filing of the complaint, i.e., 25.09.2008, till actual payment is made. In addition to this, the OPs-LIC, is, also directed to pay a sum of Rs.20,000/- as compensation to the complainant, for causing him pain and sufferings, besides litigation costs of Rs.3,500/- . The OPs-LIC is directed to defray the aforesaid sums to the complainant, within a period of forty-five days, after the date of receipt of a copy of this order, failing which, they shall also be liable to pay a sum of Rs.10,000/- as punitive damages. Hence, the complaint stands disposed of in the above terms. The learned counsel for the parties undertook to collect the certified copy of this order from the office, free of cost, as per rules. The file, after due completion, be consigned to record room.

Announced on this, the 28th day of December, 2009?.

4. Aggrieved by that order, the OP preferred an appeal before the State Commission. The State Commission reversed the order passed by the District Forum and dismissed the complaint.

5. We have heard the learned counsel for the parties. Counsel for the petitioner vehemently argued that the above said Annexures clearly, specifically and unequivocally mention the amount of bonus which gave an impression that the bonus was payable along with the sum assured, on maturity of policy. He, however, admitted that the petitioner could not opt that the policy should be converted into an Endowment Policy with profits. However, he was under the impression that since the Annexures C-2A, C-2B and C-2C themselves mention the payment of bonus, therefore, the complainant did not bother for the same. It was argued that the OP has taken a stand and it is estopped from raising a new plea. It is contended that the plea raised by the petitioner that those documents were sent inadvertently due to the computer error, does not carry any weight. The petitioner should not suffer for the mistakes or errors committed by LIC itself.

6. The argument averred by the counsel for the petitioner carries force in a measure. This is an admitted fact that the petitioner did not opt for conversion of policy into Endowment Policy. The State Commission has quoted the provisions of policy, Exb. Annexure C1, which clearly go to show that it was incumbent upon the complainant to give the option, in writing. The absence of that option, dampens the ardour of his case. To err is human. Such mistakes committed by the OP do not rock the boat to a dangerous extent. Negligence is there, but mens rea is absent. The crux of the matter is, œWhether the petitioner has opted for conversion of the policy, into Endowment Policy or not??. It is an indisputable fact that needful was not done.

7. In Suraj Mal Ram Niwas Oil Mills (P) Ltd., Vs. United India Insurance Co. Ltd. and Anr., 2011 ACJ 418, the Honble Apex was pleased to hold :

œ22. Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity. In General Assurance Society Ltd. Vs. Chandmull Jain, 1966 ACJ 267 (SC), a Constitutional Bench of this court had observed that:

œIn 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?.

23. Similarly, in Harchand Rai Chandan Lals case, 2005 ACJ 570 (SC), this court held that:

œTerms 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?.

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?.

8. Under these circumstances, the order passed by the State Commission is flawless. The matter stands disposed of. There shall be no order as to costs.

9. However, it is hereby ordered that the LIC of India will conduct a Departmental Inquiry as to who had committed the above said error. The concerned Zonal General Manager of LIC of India will conduct the Inquiry. He will take action against the wrong-doer as per law, if necessary, and will send the report to the Registrar of this Commission, within six months from the receipt of this order. Disobedience of this order will proceed to contempt of court proceedings.


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