1. This is an appeal under Section 15 of the Consumer Protection Act, 1986 (in short, the “Act”) against order dated 15.05.2013 passed by the Consumer Disputes Redressal Forum (VI), Vikas Bhawan, New Delhi (in short, the “District Forum”) in Complaint Case No.1636/2008 whereby the aforesaid complaint has been allowed and the appellant herein i.e. OP before District Forum has been directed to pay Rs.6,46,055/- i.e. the amount deducted alongwith 9% interest till realisation alongwith Rs.50,000/- as litigation and harassment charges.
2. For the sake of convenience, the parties shall be addressed as were before District Forum.
3. Briefly stated the facts relevant for the disposal of the present appeal are that a complaint under Section 12 of the Act was filed by the complainant before the District Forum stating therein that in the year 2005-2006, she had taken as many as 11 insurance policies after entering into contract with the OP under Pension Plan known as ‘Jeevan Akshay’. It was stated that the total investment was Rs.52,50,000/-. She received the pension on her above investment as per rule which was 7% p.a. on the principal amount. However, life of complainant was not insured under these plans nor any other benefit was assured. It was stated that at the time of obtaining these policies neither it was mentioned in the policy bonds nor the OP informed about the consequences of withdrawing money after surrendering these policies. It was stated that as complainant was in need of money she requested the OP for surrender of her policies, which was accepted by OP and money was refunded in August 2008. However, the complainant was shocked to find that OP had refunded the sum of Rs.46,03,945/- out of Rs.52,50,000/- without giving any reasons for deduction of huge amount of Rs.6,46,055/-. It was stated that request for surrender was accepted by the OP on the assurance of complainant that she would invest money again in LIC after fulfillment of her need and as per her assurance she invested an amount of Rs.22,34,000/- with the OP. It was stated that she also served a legal notice dated 08.10.2008, which was replied by the OP stating that as per terms and conditions of the policy the surrender value was calculated and same is correct. However, there is no such clause in the policy, as such the deduction is illegal and arbitrary. Alleging deficiency on the part of OP, complainant filed the present complaint before District Forum praying direction to OP to refund Rs.6,46,055/- to complainant alongwith interest @18% alongwith compensation and cost of litigation charges of Rs.60,000/-
4. After notice, OP filed its written statement wherein it was admitted that complainant had taken the policies as mentioned in the complaint. It was stated that having accepted the surrender value of the policies, complainant is stopped from challenging the surrender value of the policies and that the surrender value was informed to the complainant and only after obtaining her written consent, she was sent cheques as per calculation in terms of circular dated 31.01.2007, hence complaint is liable to be dismissed.
5. After hearing the parties, Ld. District Forum allowed the complaint in terms as stated above.
6. Being aggrieved by the aforesaid order, OP is before this Commission by way of present appeal.
7. The main issues arising out of the present complaint are whether the challenge of the complainant to the surrender value of the policies is correct and whether OP was justified in calculating the surrender value as per circular dated 31.01.2007.
8. I have heard the counsel for the parties and perused the material on record as well as the record of the District Forum.
9. Since the OP has heavily relied upon the circular dated 13.01.2007 purpose of defending their case, wherein Actuarial Dept. has allowed surrender value under immediate annuity - Jeevan Akshay Plans such as 146, 163, 170, 176, 183 and 189 and deferred annuity plans such as 147, 148, 169, etc. which gets converted to immediate annuity on vesting, with option "Annuity for life with return of purchase price on death as per terms and conditions mentioned therein. It is argued on behalf of the OP that there was no need to serve the copy of circular on the complainant.
10. To my mind, the aforesaid circular ought to have been brought to the knowledge of the Complainant at the earliest stage of her surrender-claim if at all the Opposite Parties was to act in furtherance of the said circular in as much as the Complainant is kept completely in darkness about such circular which has definitely and prejudicially affected the insurable and pecuniary interest of the Complainant in the absence of knowledge of such circular. For otherwise the question will remain as to how the holder of the Policy like the Complainant in the present case will remain in the know-how of the modalities involved in rejection of any valid claim. In the absence of such knowledge, the Policy holders would be prevented from otherwise going for other available options under different kinds of Policy.
11. The aforesaid Circular came into force from 31.01.2017 much after the date of the commencement of the Policy i.e. 2005-2006, categorically proves that the said Circular cannot be made applicable to the case of the Complainant with retrospective effect. The failure on the part of the Opposite Parties to bring to the notice of the Complainant the aforesaid Circular immediately after she raised the claim of surrender, itself is deficiency in service on the part of the Opposite Parties. Further, the OP has also failed to bring on record the written consent of the complainant as has been stated in the written statement.
12. It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the lads which the parties known. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally. In the present case, the OP has failed to bring to the notice of the complainant the aforesaid circular.
13. Ld. District Forum has rightly observed that deduction of surrender value is not there in the policy, as it is categorically mentioned therein that ‘the policy shall not acquire any surrender value’, whereas the OP has refunded the amount to the complainant after deducting surrender value, which is a clear case of deficiency in service on the part of OP. No department circular can modify the contract condition of the policy. It is a settled law that terms publish cannot be changed to the detriment of other party. Reliance is placed on the judgment passed by Hon’ble National Commission in Life Insurance Corporation of India & Ors. V. Bimla Devi repo
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rted as III (2009) CPJ 370 (NC). 14. In conclusion, I find no illegality in the impugned order and hold that the Complainant has substantially proved his allegations in the complaint with convincing documentary evidence entitling him to claim the surrender value of the Policy and further that the aforesaid acts of commission and omission on the part of the Opposite Parties herein clearly constitute 'deficiency in service' as defined under the Consumer Protection Act, 1986. 15. Consequently, the appeal stands dismissed. 16. A copy of this order be sent to the parties free of costs as per rule and also to the concerned District Forum. Record of the District Forum be also sent back forthwith. Thereafter, the file be consigned to Record Room.