Branch Manager (Crm), Life Insurance Corporation of India and Another Vs. Yeggina Satyanarayana Murthy - Court Judgment

SooperKanoon Citationsooperkanoon.com/1107262
CourtAndhra Pradesh State Consumer Disputes Redressal Commission SCDRC Hyderabad
Decided OnAug-05-2013
Case NumberFA 407 of 2012 against CC 15 of 2011 on the file of the District Consumer Forum, West Godavari District at Eluru
JudgeTHE HONOURABLE MR. R. LAKSHMINARASIMHA RAO, MEMBER & THE HONOURABLE MR. T. ASHOK KUMAR, MEMBER
AppellantBranch Manager (Crm), Life Insurance Corporation of India and Another
RespondentYeggina Satyanarayana Murthy
Excerpt:
oral order : (t. ashok kumar , member) 1.this is an appeal preferred by the unsuccessful opposite parties as against the orders dated 19.03.2012 in cc 15/2011 on the file of the district consumer forum, west godavari district at eluru. for convenience sake, the parties as arrayed in the complaint are referred to as under : 2. the brief facts of the complaint are that the complainant is a senior citizen and advocate profession obtained life insurance policy bearing no.s670435736 dt.15-9-1987 from 2nd opposite party under plan 5-19 for rs.30,000/- under salary saving scheme from 21-6-1987 and all premiums were paid upto 21-5-2010. the opposite parties vide their letter dt.13-4-2010 and 13-11-2010 and 29-11-2010 certified that an outstanding amount of rs.78,873/- ( rs. 29,868/- + accrued bonus upto 21.06.2010 ) is lying in the account of the complainant. from 21-6-2010 no bonus or profit or interest is crediting and hence the complainant requested the op on 16-7-2010 to pay the maturity claim amount but there was no response from the ops and hence he got issued legal notice. but the ops repudiated the claim on the grounds that the policy is limited life policy with profits, only on death of the life assured and the sum assured along with bonus accrued will be payable to the life assured on attainment of his age 80 years i.e. 21-6-2028. he took the policy for his own life protection particularly at old age for medicines and to meet financial needs or for protection of his family members welfare in case of premature death. the opposite parties vide letter dt.29-11-2010 offered to give rs.31,865/- as against the balance outstanding amount of rs.78,873/- which amounts to deficiency in service and unfair trade practice and hence the complaint to direct the ops to pay an amount of rs.1,56,169.12ps. towards maturity amount along with interest @ 24% pa from 21-5-2006 and to pay interest on claim amount @24% from the date of filing of this , also to pay compensation for non-payment of claim in time with profits and bonus with effect from 21-5-2006 @ rs.5000/- per year i.e. rs.20,000/- towards mental agony and costs. 3. ops 1 and 2 filed counter opposing the claim of the complainant and denying the allegations made in the complaint and the brief facts of the counter are as under : the complainant life assured obtained policy no.670435736 for rs.30,000/- commencing from 21-6-1987 to 21-6-2006 by paying premium @rs.113.10 per month under salary saving scheme, under plan – term 5-19 with limited payment “whole life policy” and that it does not provide maturity amount to the life assured for providing life assured a security of insurance coverage of sum assured with bonus and the same is payable only to the nominee or to the legal heir in the event specified in the schedule of the policy document i.e. on the death of the life assured. since the sum assured payable after life time of the assured, the policy provided loan facility on the policy bond and getting paid up value by surrendering the policy bond and the whole life policy period was reduced to 80 years of the life assured in the year w.e.f 1-10-1999 as a gift to the senior citizens on the occasion of the year of senior citizens. as per irda regulations the period of policy bond is clearly mentioned on the 1st page of the bond as “the event on the happening of which the sum assured is payable is – on the death of life assured” and the date of last payment is 21-5-2006 and the complainant did not pay the premium of last instalment of may, 2006 as the policy was reduced paid up. due to that the bonus of the policy reduced to paid up will accrue only up to the date of payment of premium of the policy. the bonus additions after premium paying term of whole life policy are added in case the policy is in full paid up only. as per the conditions of the policy under non-forfeiture regulations the bonus for policy resulted in to reduce paid up will accrue only up to the date of payment of premiums. the complainants policy was not in full force and he did not complete the 19 years term, which was opted by the complainant. as such there is no deficiency in service on the part of the opposite party and thus prayed to dismiss the complaint with costs. 4. both sides filed evidence affidavit reiterating their respective pleadings and ex. a-1 to a-8 were marked on behalf of the complainant and ex. b -1 were marked for the op. 5. having heard both sides and considering the evidence on record, the district forum allowed the complaint in part directing the opposite parties to pay a amount of rs.29,868/- paid by the complainant along with the bonus i.e.rs.49,005/- totaling a sum of rs.78,873/- (rupees seventy eight thousand eight hundred and seventy three only) with interest @6% p.a. from the date of repudiation of the claim till date of realization and also pay costs of rs.500/- to the complainant within one month. 6. feeling aggrieved with the said order the opposite parties filed this appeal on several grounds and mainly contended that the district forum failed to interpret the terms and conditions of the policy in correct perspective and appreciate in reducing the age to 80 years to senior citizens and erred in directing the ops to pay the amounts before the date of maturity and that failed to see that the judgment in rp. no. 830/1996 has no relevant to the case on hand and that the claim is against the terms and conditions of the policy and thus prayed to allow the appeal and set aside the impugned order. 7. both sides filed written arguments with reference to their respective contentions in detail. 8. now the point for consideration is whether the order of the district forum is sustainable ? 9. there is no dispute that the complainant obtained insurance policy bearing no. no.670435736 for rs.30,000/- commencing from 21-6-1987 to 21-6-2006 by paying premium @rs.113.10 per month under salary saving scheme, under plan – term 5-19 with limited payment “whole life policy” from the opposite parties. 10. the contention of the complainant is that he paid all the premiums up to the month of may, 2006 and that the opposite parties vide their letter dt. 13-4-2010 and 13-11-2010 and 29-11-2010 certified that an outstanding amount of rs.78,873/- ( rs. 29,868/- + accrued bonus up to 21.06.2010 ) is lying in the account of the complainant and from 21-6-2010 no bonus or profit or interest is crediting and despite his request and legal notice the ops failed to pay the maturity claim amount but offered to pay only rs.31,865/-. and that average age of survival in india as per latest census is 65 years and the decision of the corporation in fixing the age of 80 years in maturity in whole life insurance policy is against the law and that the acts of op amounts to deficiency in service and that hence the complaint to direct the op to pay rs.1,56,169.12 ps towards maturity of the amount under the policy. 11. whereas the corporation contended that as per ex. b-1 bond itself the assured amount is payable on the death of the life assured however in the year 1999 the corporation had taken a decision reduced the period of whole life policies to 80 years as a gift to the senior citizens on the occasion of the “year of senior citizens” and that by virtue of the said decision the maturity date of the policy in question is 21.6.2028 and therefore the complainant is not entitled for maturity amount as prayed for and that since he paid premiums up to 18 years 11 months only paid up value of rs.29,868/- and accrued bonus is payable under the policy on the date of maturity. when it is whole life policy, as per the terms of the policy only nominees are entitled for the benefits under it since the corporation had taken a decision in the year 1999 reducing the term to the age of 80 years after attaining such age of 80 years the complainant is entitled for the benefits under the policy. 12. the complainant did not establish with any evidence that he attained the age of 80 years and on the other hand did not specify his age in the cause title of the complaint except referring him as senior citizen in the body of the complaint and as seen from the policy bond his date of birth is 09.06.1948 and thus his age is about 63 years as on the date of complaint. thus his contention that that average age of survival in india as per latest census is 65 years and the decision of the corporation in fixing the age of 80 years in maturity in whole life insurance policy is against to the law is also not helpful for him in this case it is much more so when he did not substantiate his contention with dependable evidence. in ex. a8 dated 29.11.2010, rs.31,865/- is shown as on the date subject to deduction of policy loan and interest if any. there is no contention from the side of the op that the loan was taken by the complainant on the said policy. ex. a-6 surrender value quotation issued by op in favour of the complainant discloses that paid up value is rs.29,868/- and accrued bonus is rs.49,005/-paid up value and surrender value payable is rs.28,292/-. even though, the complainant did not attain 80 years age and the said policy did not mature in view of the said concession extended to senior citizens, in the circumstances of the case we are satisfied to hold that the complainant is entitled for paid up value of rs. 29,868/- so also till then accrued bonus of rs.49,005/- together with interest @ 6% pa from the date of repudiation of the claim till realization so also costs of rs.500/- awarded by the district forum. there are no reasons to set aside or modified the impugned order. 13. in the result, the appeal is dismissed confirming the order of the district forum. there shall be no order as to costs. time for compliance four weeks.
Judgment:

Oral Order : (T. Ashok Kumar , Member)

1.This is an appeal preferred by the unsuccessful opposite parties as against the orders dated 19.03.2012 in CC 15/2011 on the file of the District Consumer Forum, West Godavari District at Eluru. For convenience sake, the parties as arrayed in the complaint are referred to as under :

2. The brief facts of the complaint are that the complainant is a senior citizen and Advocate profession obtained Life insurance Policy bearing No.S670435736 dt.15-9-1987 from 2nd opposite party under plan 5-19 for Rs.30,000/- under salary saving scheme from 21-6-1987 and all premiums were paid upto 21-5-2010. The opposite parties vide their letter dt.13-4-2010 and 13-11-2010 and 29-11-2010 certified that an outstanding amount of Rs.78,873/- ( Rs. 29,868/- + accrued bonus upto 21.06.2010 ) is lying in the Account of the complainant. From 21-6-2010 no bonus or profit or interest is crediting and hence the complainant requested the OP on 16-7-2010 to pay the maturity claim amount but there was no response from the Ops and hence he got issued legal notice. But the Ops repudiated the claim on the grounds that the policy is limited life policy with profits, only on death of the life assured and the sum assured along with bonus accrued will be payable to the life assured on attainment of his age 80 years i.e. 21-6-2028. He took the policy for his own life protection particularly at old age for medicines and to meet financial needs or for protection of his family members welfare in case of premature death. The opposite parties vide letter dt.29-11-2010 offered to give Rs.31,865/- as against the balance outstanding amount of Rs.78,873/- which amounts to deficiency in service and unfair trade practice and hence the complaint to direct the Ops to pay an amount of Rs.1,56,169.12ps. towards maturity amount along with interest @ 24% Pa from 21-5-2006 and to pay interest on claim amount @24% from the date of filing of this , also to pay compensation for non-payment of claim in time with profits and bonus with effect from 21-5-2006 @ Rs.5000/- per year i.e. Rs.20,000/- towards mental agony and costs.

3. Ops 1 and 2 filed counter opposing the claim of the complainant and denying the allegations made in the complaint and the brief facts of the counter are as under :

The complainant Life Assured obtained policy No.670435736 for Rs.30,000/- commencing from 21-6-1987 to 21-6-2006 by paying premium @Rs.113.10 per month under Salary Saving Scheme, under plan – term 5-19 with Limited payment “Whole Life Policy” and that it does not provide maturity amount to the Life Assured for providing Life assured a security of Insurance coverage of sum assured with bonus and the same is payable only to the nominee or to the legal heir in the event specified in the schedule of the policy document i.e. on the death of the Life Assured. Since the sum assured payable after life time of the assured, the policy provided loan facility on the policy bond and getting paid up value by surrendering the policy bond and the Whole Life Policy period was reduced to 80 years of the life assured in the year w.e.f 1-10-1999 as a gift to the senior citizens on the occasion of the year of senior citizens. As per IRDA Regulations the period of policy bond is clearly mentioned on the 1st page of the bond as “the event on the happening of which the sum assured is payable is – on the death of Life Assured” and the date of last payment is 21-5-2006 and the complainant did not pay the premium of last instalment of May, 2006 as the policy was reduced paid up. Due to that the bonus of the policy reduced to paid up will accrue only up to the date of payment of premium of the policy. The bonus additions after premium paying term of whole life policy are added in case the policy is in full paid up only. As per the conditions of the policy under non-forfeiture regulations the bonus for policy resulted in to reduce paid up will accrue only up to the date of payment of premiums. The complainants policy was not in full force and he did not complete the 19 years term, which was opted by the complainant. As such there is no deficiency in service on the part of the opposite party and thus prayed to dismiss the complaint with costs.

4. Both sides filed evidence affidavit reiterating their respective pleadings and Ex. A-1 to A-8 were marked on behalf of the complainant and Ex. B -1 were marked for the OP.

5. Having heard both sides and considering the evidence on record, the District Forum allowed the complaint in part directing the opposite parties to pay a amount of Rs.29,868/- paid by the complainant along with the bonus i.e.Rs.49,005/- totaling a sum of Rs.78,873/- (Rupees seventy eight thousand eight hundred and seventy three only) with interest @6% p.a. from the date of repudiation of the claim till date of realization and also pay costs of Rs.500/- to the complainant within one month.

6. Feeling aggrieved with the said order the opposite parties filed this appeal on several grounds and mainly contended that the District Forum failed to interpret the terms and conditions of the policy in correct perspective and appreciate in reducing the age to 80 years to Senior citizens and erred in directing the Ops to pay the amounts before the date of maturity and that failed to see that the Judgment in RP. No. 830/1996 has no relevant to the case on hand and that the claim is against the terms and conditions of the policy and thus prayed to allow the appeal and set aside the impugned order.

7. Both sides filed written arguments with reference to their respective contentions in detail.

8. Now the point for consideration is whether the order of the District Forum is sustainable ?

9. There is no dispute that the complainant obtained Insurance Policy bearing No. No.670435736 for Rs.30,000/- commencing from 21-6-1987 to 21-6-2006 by paying premium @Rs.113.10 per month under Salary Saving Scheme, under plan – term 5-19 with Limited payment “Whole Life Policy” from the opposite parties.

10. The contention of the complainant is that he paid all the premiums up to the month of May, 2006 and that the opposite parties vide their letter dt. 13-4-2010 and 13-11-2010 and 29-11-2010 certified that an outstanding amount of Rs.78,873/- ( Rs. 29,868/- + accrued bonus up to 21.06.2010 ) is lying in the Account of the complainant and from 21-6-2010 no bonus or profit or interest is crediting and despite his request and legal notice the OPs failed to pay the maturity claim amount but offered to pay only Rs.31,865/-. and that average age of survival in India as per latest census is 65 years and the decision of the corporation in fixing the age of 80 years in Maturity in whole life insurance policy is against the law and that the acts of OP amounts to deficiency in service and that hence the complaint to direct the OP to pay Rs.1,56,169.12 ps towards maturity of the amount under the policy.

11. Whereas the corporation contended that as per Ex. B-1 bond itself the assured amount is payable on the death of the life assured however in the year 1999 the corporation had taken a decision reduced the period of whole life policies to 80 years as a gift to the senior citizens on the occasion of the “year of Senior Citizens” and that by virtue of the said decision the maturity date of the policy in question is 21.6.2028 and therefore the complainant is not entitled for maturity amount as prayed for and that since he paid premiums up to 18 years 11 months only paid up value of Rs.29,868/- and accrued bonus is payable under the policy on the date of maturity. When it is whole life policy, as per the terms of the policy only nominees are entitled for the benefits under it since the corporation had taken a decision in the year 1999 reducing the term to the age of 80 years after attaining such age of 80 years the complainant is entitled for the benefits under the policy.

12. The complainant did not establish with any evidence that he attained the age of 80 years and on the other hand did not specify his age in the cause title of the complaint except referring him as senior citizen in the body of the complaint and as seen from the policy bond his date of birth is 09.06.1948 and thus his age is about 63 years as on the date of complaint. Thus his contention that that average age of survival in India as per latest census is 65 years and the decision of the corporation in fixing the age of 80 years in Maturity in whole life insurance policy is against to the law is also not helpful for him in this case it is much more so when he did not substantiate his contention with dependable evidence. In Ex. A8 dated 29.11.2010, Rs.31,865/- is shown as on the date subject to deduction of policy loan and interest if any. There is no contention from the side of the OP that the loan was taken by the complainant on the said policy. Ex. A-6 surrender value quotation issued by OP in favour of the complainant discloses that paid up value is Rs.29,868/- and accrued bonus is Rs.49,005/-paid up value and surrender value payable is Rs.28,292/-. Even though, the complainant did not attain 80 years age and the said policy did not mature in view of the said concession extended to senior citizens, in the circumstances of the case we are satisfied to hold that the complainant is entitled for paid up value of Rs. 29,868/- so also till then accrued bonus of Rs.49,005/- together with interest @ 6% PA from the date of repudiation of the claim till realization so also costs of Rs.500/- awarded by the District Forum. There are no reasons to set aside or modified the impugned order.

13. In the result, the appeal is dismissed confirming the order of the District Forum. There shall be no order as to costs. Time for compliance four weeks.