RAGHUBIR KAUR vs LIFE INSURANCE CORPORATION OF INDIA

THIS appeal at the behest of the complainant has been filed against the order dated 18.3.2005 of District Forum by which the complaint was partially allowed.

BRIEF facts of the case are that the complainant -Raghubir Kaur took a Jeevan Suraksha Policy (with Terminal Bonus and with Life Cover). Under this policy, after a particular period the insured starts getting a monthly pension or if one opts for the notional cash pension, then he/she gets a certain sum in lump -sum after the maturity of the policy. The policy was taken vide proposal dated 30.3.1997. The Table No. of the policy was 122 and it was to mature after 7 years. The premium was Rs. 4,000/ - per year. When the insurance policy was issued to the complainant, it was mentioned that on maturity, she would be entitled to Rs. 1,045/ - per month as pension and notional cash pension would be Rs. 1,07,181/ -. However, when the policy matured, she was sent 12 post -dated monthly cheques of Rs. 371/ - each for one year representing the pension for the coming 12 months @ Rs. 371/ - per month and the notional pension was mentioned as Rs. 42,872/ -. She did not encash those cheques which were starting from February, 2004 as according to the complainant the amount was short than what was mentioned in the policy. She filed a complaint, inter alia, praying that Insurance Company be directed to pay monthly pension of Rs. 1,045/ - per month, compensation and damages to the tune of Rs. 25,000/ - were also claimed besides costs of Rs. 5,500/ -. On notice having been issued to the Insurance Company, they filed reply and stated that as per the rules and regulation of the Insurance Company, the amount for which the insurance was taken, the period thereof and the annual premium, in fact the complainant was entitled to Rs. 371/ - per month as pension on maturity of the policy and if notional cash pension was to be opted for, then Rs. 42,872/ - was payable in lump sum. Due to clerical error it was wrongly mentioned in the policy that in fact Rs. 1,045/ - was payable as monthly pension after maturity and the total notional pension payable in lump sum was Rs. 1,07,181/ -. The complainant could not have taken advantage of the clerical error in the policy as according to the rules and regulations she was only entitled to the amounts mentioned above. The Insurance Company could not be directed to pay more than what she was legally entitled to under the rules and regulations of the Insurance Company.

IT was argued on behalf of the complainant before the District Forum that there could not be any unilateral change in the terms of a contract and the Insurance Company having changed the contract unilaterally i.e., reducing the monthly pension from Rs. 1,045/ - per month to Rs. 371/ - per month and further reducing the notional cash pension from Rs. 1,07,181/ - to Rs. 42,872/ -, the complainant was not bound to accept this amount because of the unilateral change in the contract.

THE District Forum relying on the observation of National Commission in case Satya Deo Malviya v. Life Insurance Corporation of India Ltd. decided on I (2004) CPJ 96 (NC)19.1.2004 that if there is a clerical error held that the insured cannot take any benefit. Similar was the view expressed by the Apex Court in case reported as Life Insurance Corporation v. G.M. Chanamanbasamma, reported as 1991 (1) SCC 375. The complaint was allowed by the District Forum by giving the following directions : ''Therefore, in view of the above said circumstances the present complaint is allowed to limited extent. Respondent is directed to pay the monthly pension of Rs. 371/ - per month and notional cash pension of Rs. 42,872/ - as the dispute was legal dispute between the parties. The parties to bear their costs. Compliance of the order be made within one month from the receipt of the copy this order. Copy of the order be sent to the parties free of costs under rules. File be consigned to the record room.''

The complainant in this appeal has prayed that in fact she is entitled to Rs. 1,045/ - per month as the pension or in the alternative Rs. 1,07,181/ - as the notional cash pension as the same was mentioned in the insurance policy issued to the complainant. It was further submitted that while allowing the complaint, no compensation had been awarded nor any costs.

AFTER hearing the learned Counsel for the appellant, we are of the view that there is no force in the appeal. If there is a mistake of law in a contract, the paty who is under a mistake of law is not bound by the contract. It was not disputed before us that on the basis of the premium paid, the amount for which the policy is taken, the period for which the policy was taken, in fact the monthly pension payable is Rs. 371/ -. Simply because of some clerical error on the part of Insurance Company, Rs. 1,045/ - mentioned as monthly pension cannot bind the company as it will be against their rules and regulations. Same reasoning would apply so far as the formula of notional cash pension is concerned.

SO far as the question of compensation is concerned, suffice it to mention that immediately on maturity of the policy, 12 post dated cheques representing monthly pension of Rs. 371/ - were sent to the complainant as that was the amount payable as per law and as per premium etc. paid by the complainant. In these circumstances, we do not consider that it was a fit case for the grant of any compensation. The complainant did not suffer anything. There is nothing on the record to show that when the proposal form was filled in any representation was made by the agent of the Insurance Company to the complainant that in fact Rs. 1,045/ - would be the monthly pension on maturity or Rs. 1,07,181/ - would be the notional cash pension. It has also not been suggested anywhere that had the complainant known that only Rs. 371/ - was payable as pension then she would not have taken the insurance policy. As per the insurance policy, for the rest of the life the complainant would be getting Rs. 371/ - per month. She has in all paid Rs. 28,000/ - as premium. After her death, the nominee would be entitled to certain payment under the policy. In these circumstances, no compensation was payable since the complaint was not well merited and what has been directed by the District Forum to be paid to the complainant by the Insurance Company, in fact Insurance Company itself was ready to pay that. As observed above, the Insurance Company had also sent post -dated cheques for one year towards monthly pension of Rs. 371/ -. We do not find any infirmity in the order of the District Forum when it did not award any compensation or costs. Finding no merit in the appeal, the same is hereby dismissed in limine. The order of the District Forum is affirmed.

THE order was reserved on 9.5.2005. The same be communicated to the parties. Appeal dismissed.