Life Insurance Corporation of India and Anr. vs Ranjeet Singh

These revision petitions numbers 954 of 2015, 955 of 2015 and 956 of 2015 have been filed against the three similar orders dated 1.1.2015 passed by the State Consumer Disputes Redressal Commission, Odisha, Cuttack, (in short ''the State Commission''). 2. Brief facts are that complainant/respondent-Ranjeet Singh had taken three life insurance policies from the petitioner-Life Insurance Corporation of India as per the following details :

First Policy :

Policy No. : 585539797 Sum assured for main plan (Rs.) 5,00,000 Due Date: 28th Mode of payment :

Date of commencement: 28.3.2005 Term Assurance Sum Assured (Rs.) Qly

Date of commencement of Risk: 28.3.2005 Accident Benefit Sum Assured (Rs.) 5,00,000 Date of Birth:12.8.1972

Date of Maturity: 28.3.2030 Premium for main Plan Age: 33 Whether age admitted : Y

Table & Term : 162 25 (Rs.) 5,825.00 Accident Benefit Premium Date of last payment : 28.12.2020

Premium Paying Term : 16 (Rs. 181.25 Term Assurance Premium (Rs.) 00 Total Premium (Rs.) 6550.00 Proposal No. & Date : 7566-30.3.2005

Nominee under Section 39 of the Insurance Act, 1938 Rajdip Brar Son

Second Policy:

Policy No. : 586351121 Sum assured for main Plan Rs. 15,00,000 Due Date 28th Mode of payment

Date of commencement: 28.7.2006 Term Assurance Sum Assured (Rs.) Qly

Date of commencement of Risk: 15.9.2006 Accident Benefit Sum Assured Rs. 15,00,000 Date of Birth: 12.8.1972

Date of Maturity: 28.7.2031 Premium for main Plan Age: 34 Whether age admitted : Y

Table & Term: 162 25 (Rs.) 75,190.00 Accident Benefit Premium (Rs. 2,175.00) Date of last payment: 28.7.2021

Premium Paying Term : 16 Term Assurance Premium (Rs.) .00 Total Premium (Rs.) 77,365.00 Proposal No. & Date : 1097-28.7.2006

Nominee under Section 39 of that Insurance Act, 1938 Mandip Brar Son

Third Policy:

Policy No. : 589372173 Sum assured for main Plan (Rs.) 9,00,000 Due Date: 28th Mode of payment:

Date of commencement: 28.3.2007 Term Assurance Sum Assured (Rs.) Qly

Date of commencement of Risk:31.3.2007 Accident Benefit Sum Assured (Rs.) 9,00,000 Date of Birth: 12.8.1972

Date of Maturity: 28.3.2032 Premium for main Plan (Rs.) 45,335.00 Age: 33 Whether age admitted : Y

Table & Term: 162 25 Accident Benefit Premium (Rs.) 1305.00 Date of last payment: 28.3.2022

Premium Paying Term: 16 Term Assurance Premium (Rs.) .00 Total Premium (Rs.) 46,640.00 Proposal No. and Date : 14386-23.3.2007

Nominee under Section 39 of the Insurance Act, 1938 Mandip Brar Son 3. It is the case of the complainant that while coming from Barbil to Rourkela on Motor Cycle the insured met with an accident on 13.5.2007 and was seriously injured. The complainant was engaged in his treatment and he could not be fully cured. He claimed permanent disability and filed the claim under these policies along with all relevant papers such as claim form along with the disability certificate issued by the CMDO Sundargarh dated 1.11.2008, with the petitioner on 15.2.2011. 4. The petitioner placed the matter before Divisional Medical Referee, who advised the life assured to be examined by Ortho-neuro specialists, with a fresh medical report and the same was communicated by the petitioner corporation to the respondent vide letter dated 12.2.2012. Meanwhile the life assured filed the consumer complaint before the District Consumer Disputes Redressal Forum, Sundargarh-II, Rourkela (in short, ''the District Forum''). The District Forum in consumer complaint No. 154 of 2012 vide its judgement dated 17.7.2013 in respect of policy No. 586351121 for Rs. 15 lakh ordered as follows : "The O.P./LIC of India is directed to pay a sum of Rs. 15,00,000 (Rupees fifteen lakh) only to the complainant towards Accident Benefit Sum Assured, Rs. 20,000 (Rupees twenty thousand) only towards compensation for causing mental agony and harassment to the complainant due to delay in settlement of his claim and Rs. 2,000 as costs of litigation, within 45 days from the receipt of the copy of this order, failing which the awarded amount would carry 9% interest per annum from the date of default till the date of realization." The District Forum in consumer complaint No. 153 of 2012 vide its order dated 17.7.2013 in respect of policy No. 589372173 for Rs. 9 lakh ordered as follows : "The O.P./LIC of India is directed to pay a sum of Rs. 9,00,000 (Rupees nine lakh) only to the complainant towards Accident Benefit Sum Assured, Rs. 20,000 (Rupees twenty thousand) only towards compensation for causing mental agony and harassment to the complainant due to delay in settlement of his claim and Rs. 2,000 as costs of litigation, within 45 days from the receipt of the copy of this order, failing which the awarded amount would carry 9% interest per annum from the date of default till the date of realization." The District Forum in consumer complaint No. 136 of 2012 vide its order dated 17.7.2013 in respect of policy No. 585539797 for Rs. 5 lakh ordered as follows : "The O.P./LIC of India is directed to pay a sum of Rs. 5,00,000 (Rupees five lakh) only to the complainant towards Accident Benefit Sum Assured, Rs. 20,000 (Rupees twenty thousand) only towards compensation for causing mental agony and harassment to the complainant due to delay in settlement of his claim and Rs. 2,000 as costs of litigation, within 45 days from the receipt of the copy of this order, failing which the awarded amount would carry 9% interest per annum from the date of default till the date of realization." 5. Aggrieved with the above orders of the District Forum, the petitioner-LIC of India preferred First Appeals before State Commission which were dismissed vide its order dated 1.1.2015 passed separately in all the three appeals. 6. Hence the present revision petitions. 7. Heard the learned Counsel for both the parties and perused the record. 8. Learned Counsel for the petitioner argued that the Fora below have grossly erred in allowing the complaint which was not maintainable because of limitation as the accident had occurred on 13.5.2007 and the consumer complaints have been filed in the year 2012. Even if we consider the date of issuance of disability certificate, which was issued on 1.11.2008, the complainant could have filed the claim and the complaint immediately after that. The policies in question in all the three revision petitions are New Jeewan Shree Policies of the LIC of India, which have the main plan of life insurance along with accident benefits. There is separate premium for the main plan and added up premium for the accident benefits. In all the three policies, the accident benefit is also for the same amount as the main plan. The Fora below have not appreciated the difference between the allowance of insurance claim for accident benefits in the two conditions, i.e. under death and under permanent disability. In case of death, the full amount of insurance under accident benefits along with the main plan becomes due whereas in the case of permanent disability arising out of the accident, the amount of accident benefit is to be given in monthly instalments spread over 10 years as per Clause 10.2 of the terms and conditions of the policy which are referred to as Conditions and Privileges. The provision of payment in monthly instalments is for the benefit of the insured so as to assist him to lead his life in a sustained manner. Both the Fora below have erred in allowing the full amount of the accident benefit in one go which is against the terms and conditions of the policy. 9. The learned Counsel also stated that the certificate of permanent disability is to be issued after examining the insured by a Doctor authorised by the Corporation and in this case the matter was referred to the Divisional Medial Referee, who advised the life assured to be examined by Ortho-Neuro specialist with a fresh medical report but the same has not been complied by the complainant. Observance of all the formalities is essential to allow any claim under the insurance policy. Learned Counsel also emphasized that under the policy conditions, the intimation of accident was to be given immediately and claim was to be submitted within 180 days of the accident whereas in this case the intimation as well as the claim have been sent after more than three years. Hence the claim cannot be allowed. 10. On the other hand, the learned Counsel for the respondent/complainant stated that a letter of intimation was sent on 28.5.2007 by the son of the complainant intimating about the accident in writing to the petitioner under registered post and the State Commission has mentioned this fact in its order. Obviously, the first priority was to get the insured treated and the whole family was busy in the treatment. As the disability certificate was issued only on 1.11.2003, the claim could not have been sent within 180 days of the accident. 11. Learned Counsel for the respondent also stated that both the Fora below have given concurrent findings and the powers of the National Commission under the revisional jurisdiction are quite limited. The stand of the petitioner before the Fora below has been that the accident benefit is only payable in the event of death of the insured, whereas, now it has been argued that it is payable in monthly instalments spread over 10 years and not as a lump-sum. 12. In respect of the disability, it has been argued by the learned Counsel that it has been issued by the District Medial Board of District Sundergarh which is authority authorised under the relevant government provisions. Once the disability certificate has been issued by the competent authority, there should be no need by the insurer to press for any other medical examination by a Doctor authorised by the Insurance Company or by any other specialised doctor as was asked in this case. 13. Learned Counsel also mentioned that the complaint is not time barred as the complainant had to wait for the decision of the insurer/petitioner on the claim forms submitted. The compliant is completely within the limitation period. 14. We have carefully considered the arguments advanced by learned Counsel for both the parties and have examined the records. We have gone through the policies and it comes out that the policies are mainly the life insurance policies along with accident benefit for which some very nominal but additional premium has been charged along with main premium for the life insurance. Accident benefit is described in Para No. 10.2 of the terms and conditions of the policy, which is stated as follows : 10.2 Accident Benefit If at any time when the policy is in force for the full sum assured the Life Assured, before the expiry of the policy term or before the policy anniversary on which the age nearer birthday of the Life Assured is 70 years, whichever is earlier, is involved in an accident resulting in either permanent disability as hereinafter defined or death and the same is provided to the satisfaction of the Corporation, the Corporation agrees in the case of : (a) Disability to the Life Assured: (i) to pay in monthly instalments spread over 10 years an additional sum equal to the accident benefit sum assured under this Policy, if the policy becomes a claim before the expiry of the said period of 10 years'', the disability benefit instalments which have not fallen due will be paid along with the claim, (ii) to waive the payment of future premiums. The maximum aggregate limit of assurance under all Policies on the same life to which benefit (i) and (ii) above apply shall not in any event exceed Rs. 25,00,000. If there be more Policies than one and if the total assurance exceeds Rs. 25.00.000 the benefits shall apply to the first Rs. 25,00,000 sum assured, in order of the date of the Policies issued. The waiver of premium shall extinguish all options under this policy and also the benefit covered by para (b) of this condition except as to such assurances if any as exceeds the maximum aggregate limit of Rs.25.00.000 and which have been kept in force by continued payment of premiums. The disability above referred to must be disability which is the result of an accident and must be total and permanent and such that there is neither then nor at any time thereafter any work, occupation or profession that the Life Assured can ever sufficiently do or follow to earn or obtain any wages, compensation or profit Accidental injuries which independently or all other causes and within 180 days from the happening of such accident, result in the irrecoverable loss of the entire sight of both eyes or in the amputation of both hands at or above the wrists, or in the amputation of both feet at or above ankles, or in the amputation of one hand at or above the wrist and one Foot at or above the ankle, shall also be deemed to constitute such disability. Immediately after the happening of the disability, full particulars thereof must be given in writing to the offices of the Corporation where this policy is serviced together with the then address and whereabouts of the Life Assured who has become subject to the disability and within 180 days after the happening of the disability there must be given to the servicing Office of the Corporation in the manner required by it, proof of disability satisfactory to the Corporation and without any expense to the Corporation, and thereafter similar proof must be given, as and when required by the Corporation, of the continuance of such disability. Any Medical Examiner nominated by the corporation shall be allowed to examine the person of the Life Assured in respect of any disability claimed, in such manner and at such times before and/or after the disability is accepted by the Corporation as the Corporation may require. In the event of its being discovered at any time that a claim under this clause has been wrongly admitted, all premiums falling due after the Corporation''s intimation to that effect shall be paid on due dates and further all premiums for which waiver was wrongly claimed shall be paid to the Corporation in one lump-sum with interest at such rates as may be prevailing at the time of payment, as if no disability had occurred, failing which (i) the benefits available under the policy shall stand reduced as if the policy has been discontinued as on the date from which premiums have been waived or the payment of the first instalment of the additional sum assured, whichever is earlier and (ii) the instalments of additional sum assured already paid shall be treated as a debt against the said policy and shall be deducted with interest at such rate as may be prevailing at the time of payment from proceeds of the policy." 15. The claim of the accident benefit is based on the disability certificate issued by CDMO, Sundergarh, wherein the following has been certified : "This is to certify that Sri Ranjit Singh Son of Sri Late Lakha Singh age 36 yrs. Of male Registration No. 995 is a case of Compressive Myclopathy C 5/6 & Transnatic Davaplegia L2. He is Locomotors Disabled/Visually Disabled/Speech & 100% (Hundred Percent) permanent (Locomotors impairment to his Right U/L & B/c Lower Limbs)." 16. From the above, it is clear that the certificate has been given by the competent authority and cannot be disputed on the ground that the Doctor of the Insurance Company has not examined the insured. However, as per the terms and conditions of the policy, the insurer is competent to get insured examined to assess the condition of the disability as per the following portion of Clause 10.2 of the terms and conditions : "Any Medical Examiner nominated by the corporation shall be allowed to examine the person of the Life e Assured in respect of any disability claimed, in such manner and at such times before and/or after the disability is accepted by the Corporation as the Corporation may require." 17. On the basis of the above clause of the terms and conditions of the policy, the Insurance Company still has the right to get the insured medically examined to assess the continuity of the disability. 18. As the claim was lodged with the Insurance Company in the year 2011 and the complaint was filed in the year 2012 we find the complaint within limitation period. So far as the question of intimation within 180 days is concerned, both the Fora below have given concurrent findings that the intimation was sent on 28.5.2007 by the son of the insured. We find no reason to disbelieve this finding of the fact. 19. From the orders of the Fora below, it is clear that both the Fora have ordered the payment of insurance amount in lump-sum whereas in case of accident benefit, the sum assured under accident benefit has to be paid in monthly instalments spread over 10 years. We, therefore, find that the orders of the Fora below are erroneous to this extent. 20. Based on the above discussion, the revision petitions are partly allowed with the following directions to the petitioner/Insurance Company : (i) A sum of Rs. 25 lakh which is the maximum allowable insurance amount under the accident benefit be paid to the complainant by the petitioner/Insurance Company in monthly instalments of Rs. 20,833 (Rupees twenty thousand eight hundred and thirty three only) spread over 10 years starting from 1.6.2011. Accordingly, the instalments payable from 1.6.2011 till 30.6.2016 be paid along with interest @ 6% p.a from the date of their becoming due to the complainant within a period of 45 days from the date of this order, failing which an additional interest of 6% shall be payable by the petitioner/insurance Company from the date of this order till realization. (ii) The remaining instalments will also be paid on their due dates. However, those provisions of Clause 10.2 that relate to post acceptance of disability by the Corporation shall be applicable on these instalments. The Corporation will be at liberty, if the Corporation so desires, to proceed as per the following portion of the Clause 10.2. "Any Medical Examiner nominated by the corporation shall be allowed to examine the person of the Life Assured in respect of any disability claimed, in such manner and at such times before and/or after the disability is accepted by the Corporation as the Corporation may require." (iii) If the option of medical examination is exercised, it will be exercised only after the compliance of the aforesaid Direction No. 1 and within one year from the date of payment in compliance of Direction No. 1. In case of discrepancy in medical report, the matter would be resolved by referring to the State Medical Board whose decision shall be final. (iv) The insured will also be entitled to waiver of premiums as per the terms and conditions of the policy. 21. The orders of the Fora below stand modified and superseded, accordingly. No order as to costs. Revision Petition partly allowed.