NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION PETITION No. 2099 OF 2009
(From the Order dated 09.03.2009 in Appeal No. 1372/2008 of
M.P. State Consumer Disputes Redressal Commission, Bhopal)
The Branch Manager Petitioner
Life Insurance Corporation
Civil Lines, Narsinghpur
Gadarwara, Madhya Pradesh
Through its Regional Office
Jeevan Bharati Building
1, Connaught Place
New Delhi-110001
Versus
Sunil Kumar Paliwal Respondent
S/o Late Sh. Chetram Paliwal
Jagdish Ward, Gadarwara
Distt. Narsinghpur
Madhya Pradesh
BEFORE:
HON’BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER
HON’BLE MR. SURESH CHANDRA, MEMBER
For the Petitioner : Mr. Rajat Bhalla, Advocate
For the Respondent : Mr. Vinod K. Shukla, Advocate
Pronounced on : 3rd July, 2012
ORDER
PER SURESH CHANDRA, MEMBER
This revision petition has been filed by the opposite party against the order dated 9.3.2009 passed by the Madhya Pradesh State Consumer Disputes Redressal Commission, Bhopal (‘State Commission’ for short) thereby dismissing the first appeal No.1372 of 2008 filed by the petitioner. The petitioner/opposite party had filed the first appeal before the State Commission against the order dated 20.3.2008 passed by the District Consumer Disputes Redressal Forum, Narsinghpur (‘District Forum’ for short) in complaint No.47 of 2006 whereby the District Forum allowed the complaint of the respondent/complainant directing the petitioner to pay the sum assured as per the conditions of the policy along with compensation of Rs.10,000/- and cost of Rs.1,000/-.
2. The factual matrix of this case are that the respondent / complainant, Sunil Kumar Paliwal, had taken two “Jeevan Kishor” policies for his son and daughter bearing Nos. 3706336541 and 3706336544 for the period from 28.3.1994 to 28.3.2012 and 28.3.1994 to 29.3.2010 respectively. For the above policies, the prescribed annual premium was Rs.1233/- and Rs.2811/- respectively which the respondent was depositing every year and he also got receipts of the same with next date of payment being mentioned on such receipts issued by the petitioner. After about 12 years of issuance of the policies, it was intimated by the petitioner that during an audit conducted in the office of the petitioner Corporation, it was found that the premium on the two policies in question should have been paid half yearly by the respondent but because of a typographical error, the premium payable was inadvertently mentioned as annual because of which, the respondent kept on paying the premium on the two policies annually. This had resulted in short recovery of premium on the two policies and hence the petitioner informed the respondent vide its letter dated 20.5.2006 about the typographical error and requested him to make payment of the 12 year difference of Rs.14,796/- and Rs.33,732/- on account of the premium while the petitioner waived the late fee keeping in view the circumstances of the case. Aggrieved by this action on the part of the petitioner and treating the demand for additional payment of premium as breach of the contract between the two parties, the respondent lodged a complaint with the District Consumer Forum praying for issuing directions to the petitioner Corporation to comply with the terms of contract of the two policies and also declaring that the petitioner has no right to go against the conditions of the contract after 12 years of the issuance of the policies and changing the premium amount from annual to half yearly payments. As stated above, the District Forum vide its order dated 20.3.2008 accepted the complaint in terms of the following order:-
“I. Non applicant will not make any change in insurance policy no.370633541 and insurance policy no.370633544 without the consent of the applicant, not to make pressurize him for escaping himself from the liability of payment and according to insurance policy receive the premium from the applicant on deposit, do not raises any disturbance.
II. The non applicant pay Rs.10,000/- (Rupees ten thousand only) to the applicant for suffering problem in regard to both policies and cost of the application of the applicant is assessed Rs.1,000/- which the non applicant make the payment, bear their expenses themselves.”
3. The aforesaid order of the District Forum was confirmed by the State Commission vide its impugned order while dismissing the appeal of the petitioner against the same.
4. We have heard Mr. Rajat Bhalla, Advocate, counsel for the petitioner and Mr. Vinod K. Shukla, Advocate appearing for the respondent. Supporting the action taken by the petitioner in asking the respondent to deposit the difference in the premium amount and to switch over to depositing the premium annually, the counsel for the petitioner submitted that the proposal in respect of the policies in question mentioned the mode of payment as six monthly and based on this proposal sent by the respondent, the calculation of the premium was disclosed on six monthly basis behind the documents but due to clerical mistake, the mode of payment was mentioned as yearly which resulted in respondent making the payments on annual basis. He further submitted that the petitioner did not lose any time after the mistake was found during the course of 12 yearly audit by the auditors of the Corporation and the demand for payment in question was raised immediately while waiving the delayed payment charges. He, therefore, contended that the mistake being inadvertent and the fresh demand in question being in accordance with the tables laid down for payment of premium on such policies, there was no deficiency on the part of the petitioners and the Fora below erred in ignoring the peculiar facts and circumstances of the case while rejecting the defence of the petitioners. Another limb of argument of the counsel for the petitioner was that as provided in section 64VB, no risk shall be assumed by the insurer unless and until the premium payable is received by him and since in the present case, the premium payable as per rules applicable to the policies in question had not been paid in full, it was essential for the respondent to make payment of the difference in the specified period as demanded by the petitioners and in this view of the matter also, the impugned order cannot be sustained in the eye of law. He summed up his arguments by submitting that the request for payment of the differential amount was merely by way of correction of an error which had crept in inadvertently and the same could neither be regarded as an additional demand of premium nor a deficiency in service on the part of the petitioner.
5. Per contra, learned counsel for the respondent argued that the respondent is an assistant lecturer and soon after receipt of the approved policy document, he started paying the premium on the two policies in accordance with the terms approved by the petitioner as reflected in the policy documents. He submitted that there is no allegation of any suppression of information against the respondent and even if the proposal mentioned half yearly payments of premium, the respondent had no option but to act according to the terms of the policy documents which are issued after due consideration of all the material aspects pertaining to the insurance contract. He argued that the total period under both the policies ranges from 16 to 18 years out of which the respondent has continued to pay annual premium on each of the two policies without any objection whatsoever from the side of the petitioner. In view of this, at this belated stage, the petitioner cannot unilaterally change the terms of the policy to the disadvantage of the respondent. He submitted that there is no breach of the principle of utmost good faith on the part of the respondent and as such the ratio in the P.C. Chacko’s case cannot be made applicable to the present case. He further submitted that the facts and circumstances of the cases of Satya Deo Malviya Vs. LIC of India [1 (2004) CPJ 96 (NC)], LIC Vs. Smt. S.M. Channabasamma [1991 1 SCC 357] and LIC Vs. Kashi Ram Sahu [IV (2003) CPJ 388] relied upon by learned counsel for the petitioner in his written arguments were different and hence the decision in those cases would not provide any comfort to the petitioner in the present case since the facts and circumstances are different. He further relied on the cases of LIC of India & Ors. Vs. Asha Goel & Anr. [(2001) 2 SCC 160] where the Apex Court has held that the duty of insured to disclose material facts continues up to execution of the contract of insurance. He submitted that in the present case, there is no allegation by the petitioner that there is any misstatement or misrepresentation or concealment on the part of the respondent in getting the policy. In the circumstances, there is no merit in the revision petition and the same is liable for dismissal.
6. Having considered the rival contentions, we find that there is no dispute about the basic facts of the case. Undoubtedly, the contract of insurance is one of utmost good faith but there is no allegation of suppression, misstatement or misrepresentation on the part of the complainant/respondent while submitting his proposal for consideration and approval of the petitioner Corporation. Perusal of the policy documents indicates that there was no ambiguity about the mode of payment of premium under the two policies. In such a situation, even if there was a typographical mistake as claimed by the petitioner Corporation, the same was committed by the employees of the petitioner Corporation and it cannot be used to the disadvantage of the respondent / complainant by unilaterally changing the terms of the contract after a gap of 12 years. Undoubtedly, the petitioner Corporation is likely to suffer some under-recovery but in all fairness, the petitioner Corporation must bear it accepting the responsibility for mistake of its employees. Para 12 of Asha Goel’s case cited by counsel for the respondent reads as under:-
“Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance.”
7. Keeping in view the essence of the ratio laid down by the Apex Court in Asha Goel’s case as also the peculiar facts the circumstances of this case, we do not find any illegality, material irregularity or jurisdictional error in the concurrent orders of the Fora below. The revision petition devoid of any substance stands dismissed with no order as to costs.
………………………………
(V.B. GUPTA, J)
PRESIDING MEMBER
………………………………
(SURESH CHANDRA)
MEMBER
SS/
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION PETITION No. 2099 OF 2009
The Branch Manager Petitioner
Life Insurance Corporation
Civil Lines, Narsinghpur
Gadarwara, Madhya Pradesh
Through its Regional Office
Jeevan Bharati Building
1, Connaught Place
New Delhi-110001
Versus
Sunil Kumar Paliwal Respondent
S/o Late Sh. Chetram Paliwal
Jagdish Ward, Gadarwara
Distt. Narsinghpur
Madhya Pradesh
BEFORE:
HON’BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER
HON’BLE MR. SURESH CHANDRA, MEMBER
Abovementioned order is sent for your kind perusal. If approved, this may be listed for pronouncement.
………………………………
(SURESH CHANDRA)
MEMBER
19.6.2012
HON’BLE MR. JUSTICE V.B. GUPTA,
PRESIDING MEMBER
