JOHN MASILAMANI vs Life Insurance Corporation of India

THIS appeal is directed against the order dated the 28th day of October, 1997, in O.P. No. 40/97 on the file of the District Consumer Disputes Redressal Forum, Nagapattinam.

THE appellant is the complainant while the respondents are the opposite parties. The complainant took a 20 years cash and cover policy for Rs. 1,00,000/- from the opposite parties in Policy No. 42856899 on 14.2.1977 nominating his wife Ponrani as nominee. The complainant had paid the premiums regularly without any default and received the four instalments at the rate of Rs. 12,500/- on each survival dates. For the claim made by the complainant for the matured amount, they have not come forward to pay the same despite repeated demands which will amount to deficiency in service on the part of the opposite parties. Hence direction may be issued to the opposite parties to pay to the complainant, the matured amount of Rs. 1,00,000/- together with due bonus and compensation of Rs. 50,000/- and Rs. 2,500/- towards Counsel fee.

The 2nd opposite party filed a counter which was adopted by the 1st opposite party. In sum and substance the objections are as below : The complaint cannot be sustained either on law or on facts. It is a 20 years cash and cover policy. As per the terms of the policy the complainant is entitled to 12.5% p.a. of the sum assured on each survival dates counted at the end of 5th year, 10th year, 15th year and 20th year. The complainant took a policy No. 42856899 for a sum of Rs. 1,00,000/-. The date of proposal is 29.1.1977 and the date of commencement is 14.2.1977. The nominee is his wife Ponrani. On the basis of the above said policy, 12.5% of the sum assured has already been paid to the complainant @ Rs. 12,500/- at each of the survival dates on four occasions within the policy period of 20 years. As per the policy, the assured is entitled to the above said four instalments only during his life or in the whole of his life. The remaining sum assured namely Rs. 50,000/- is payable to the nominee only with the accrued bonus as on the date of the claim. The complainant is not entitled to the remaining sum assured and the same is payable with full extra benefits to the nominees. Therefore the refusal of the claim of the complainant for the matured amount will not amount to deficiency in service on the part of the opposite parties and hence the complainant is not entitled to the reliefs prayed for.

THE Forum below after taking into consideration the relevant materials on record and also after hearing the projection of hues of views by the respective parties through their Counsel ultimately dismissed the complaint without costs, giving rise to the present action by the complainant. Arguments of learned Counsel Mr. R. Srinivasan representing learned Counsel Mr. P.V.S. Giridhar appearing for the appellant and learned Counsel Mr. R. Subbiah appearing for the opposite parties were heard.

THERE is no pale of controversy that the complainant took a 20 years cash and cover policy for Rs. 1,00,000/- from the opposite party. It is also not in dispute that under the policy the complainant is entitled to 12.5% of the sum assured on each survival dates counted at the end of 5th year, 10th year, 15th year, and 20th year. It is also beyond pale of any controversy that the complainant received Rs. 12,500/- on each of the survival dates on 4 occasions namely 17.2.1982, 14.2.1987, 14.2.1992 and 6.2.1997. The complainant applied for maturity amount on 17.1.1997 since the policy taken on 14.2.1977 got matured on that day in the sense of elapse of 20 years right from the date of the commencement of the policy. The opposite parties repudiated the claim of the complainant stating that the sum assured is payable only to the nominee of the assured on his death and not earlier to that. This sort of a contention as taken by the opposite parties the Forum below accepted and consequently negatived the reliefs claimed by the complainant. We perused the terms and conditions of the policy marked as Ex. B1. The policy is attached with the schedule. The policy is captioned as 20 years cash and cover policy with profits. It is an admitted fact that the insured did not die before the maturity date. Once the maturity date is attained, half of the sum assured as per the policy conditions alongwith bonus and other benefits ought to have been paid to the complainant. The eventuality of payment of half of the sum assured under the policy to be given to the nominee will arise for consideration only if the insured complainant dies before the maturity period and not otherwise. Therefore the view taken by the Forum below is altogether untenable on the face of the terms and conditions of the policy. Therefore the order of the Forum below deserves to be set aside and the same is accordingly set aside. The complainant, as we have stated earlier, as per the terms and conditions of the policy is entitled to half of the sum assured namely Rs. 50,000/- with all benefits to be accrued under the policy on and from the date of the maturity of the policy which event happened on 17.1.1997. It is an admitted fact that the opposite party Insurance Company repudiated the claim and did not pay the half of the sum assured namely Rs. 50,000/- with all profits and such other benefits accrued under the policy. In effect the opposite parties are withholding the amount legally due to the complainant on and from 17.1.1997. It is definitely a deficiency in service on their part. The opposite parties are, therefore directed to pay to the complainant the half of the sum assured namely Rs. 50,000/- with profits and other benefits accrued due with interest @ 12% p.a. from 17.1.1997. We also direct that the said sum with interest must have to be paid within one month from the date of receipt of this order by the opposite parties.

IN fine, the order of the Forum below is set aside; the appeal is allowed and the opposite parties are directed to pay to the complainant half of the sum assured namely Rs. 50,000/- with profits and other benefits accrued due with interest @ 12% p.a. on and from 17.1.1997 within one month from the date of receipt of this order. We, however, make no order as to costs on the facts and in the circumstances of the case. Appeal allowed.