Life Insurance Corporation of India and Ors. vs BIMLA DEVI

LIFE Insurance Corporation was the opposite party before the District Forum, where the respondent/complainant had filed a complaint alleging deficiency in service on its part.

UNDISPUTED facts of the case are that the petitioner issued a brochure in Hindi language, titled Asha Deep -II Policy'', giving ample details about the Policy premium, extra premium as well as, broadly the benefits including exceptions to the benefit(s). Attracted by this brochure Shivanand Roy, the original complainant (since deceased) obtained a policy for Rs. 50,000. Half -yearly premium was paid but he could not pay the premium for 11 months which was got revived after paying due premiums on 23.11.1995. The insured suffered a paralytic attack on 24.12.1995 for which he was admitted in the hospital and when the claim was preferred with the petitioner Insurance Company, it was repudiated on the ground that as per terms of the policy, the complainant''s claim is not entertainable due to the fact that the ailment episode has occurred within one year of the revival date / renewal of the policy. It is in these circumstances a complaint was filed before the District Forum, who after hearing the parties and perusal of material on record and relying upon the judgment of this Commission in the case of New India Insurance Company v. Ramchandra and Co., 2002 Con. PTPJ 296], allowed the complaint and also held that the respondent / complainant was never explained the terms of the policy which was in English, whereas the respondent / complainant always understood the terms of the Policy as brought out in the brochure in Hindi. Aggrieved by this order, an appeal was filed before the State Commission, which was dismissed, hence this revision petition has been filed before us.

WE heard the learned Counsel for the parties at considerable length. The learned Counsel for the petitioner wishes to rely upon term 11(a) and (b) of the Policy which are as under: "If the Policy is in force for full sum assured, one of the two benefits (A) or (B) defined hereinbelow will be provided subject to the conditions mentioned herein. Either of the benefits is payable one once during once during the terms of the policy.

Benefit (A) : The sum assured with vested bonus, if any, is payable in the even of the life assured surviving the stipulated date of maturity or at his death, if earlier. Benefit (B) : If any of the contingencies given in para 11(b), subject however to the condition mentioned in para 11(b) of the "Conditions and Privileges" within referred to occurs during tlie term of the Policy, then the following benefits will be available -

(i) Immediate payment of 50% of the sum assured.

(ii) Payment of balance 50% of the sum assured along with vested bonus, if any in the even of the Life Assured surviving the stipulated date of maturity or at his death, if earlier.

(iii) Payment of an amount equal to 10% of the sum assured, every year, commencing from the Policy anniversary falling on or immediately after the date of eligibility for Benefit (B) and ending with the policy anniversary preceding the stipulated date of maturity or the date of death of the life assured, whichever is earlier.

(iv) Waiver of premiums, if any, (including accident premium) due from the policy anniversary falling on or immediately after the date of eligibility of benefit (B)...

The stipulated date of last payment or until death of the Life Assured : May and November every year.'' The provisions of Clause 11(a) of Conditions and Privileges'' of the Policy bond, furtfier provide as under: Benefit (B) is not applicable if the contingencies mentioned in para 11(b) occurs (i) at any time on or after the date on which the risk under the Policy is commenced but before the expiry of one year from the date of the Policy, or (ii) one year from the date of revival."

It is also his contention that there is no provision requiring them, to explain the terms of the Policy to the insured, for which he relies upon Section 50 of the Insurance Act, 1938, which reads as under : "50. Notice of options available to the assured on the lapsing of a policy - An insurer shall, 2[before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid give notice to the policy -holder informing him of the options available to him 3 [unless these are set forth in the policy]."

IT is his case that since the respondent /complainant claim was within the period of less than one year from the date of revival of the Policy, the repudiation was in order. On the other hand, learned Counsel for the respondent/complainant wishes to rely upon the brochure which was in Hindi, and there is no such term mentioned in this brochure.

IT is not in dispute that the petitioner had issued a brochure which stated "whenever you are in need of expensive treatment, LIC''s Asha Deep -II Policy will help you with big money." We have carefully gone through Part (a) of this Brochure in which it is clearly stated "..Insured shall be eligible on the following terms if the policy is fully paid for and is in currency status." (nearest English translation by us from Hindi wording, as it appears in the Brochure). This is followed by the benefits to the person eligible. It is not in dispute that the original insured was not knowing English language, he knew Hindi only. We are not disputing that in ordinary circumstances, the Policy is a contract between the parties. At the same time, we cannot be oblivious of the ground reality, that if any agency or organisation makes a public pronouncement through a Brochure, to attract the people to join or be a beneficiary of a given scheme, in such a case, the person/ organisation who has floated the advertisement/issued a brochure, cannot unilaterally withdraw from the terms published by him or change the terms as they appear in this Brochure, to the detriment of the other party.

HAD it been a case simplicitor of issuing a Policy on a proposal being filled in under normal circumstances, then the situation would have been different. We have here before us a Brochure'' in a language understood by the person, who got attracted and obtained the said Policy. The least which we could do is to arrive at a harmonious'' construction of what was stated in the brochure and what were the terms of the Policy. After going through the brochure, which was issued to attract the people at large to the particular respondent that he would be a beneficiary as long as the Policy is alive/in currency and the premium had been paid. In the present case, there is no dispute that the respondent/complainant had obtained a Policy which lapsed for non -payment of premium and the Policy was renewed after paying the premium for the lapsed period. Admittedly, the Policy became alive on 23.11.1995. In view of this, if he suffers a paralytic attack on 24.12.1995, then one year of the Policy would start from the date the Policy was issued, i.e., 28.11.1993 in terms of the brochure, i.e., in the language, which was conveyed and understood by the insured.

THE harmonious construction leaves us with no option but to state the petitioner who is a State within the meaning of Article 12 of the Constitution of India, the least that is expected from them is to be fair and transparent while floating the advertisement. It is also not in dispute that the exceptions in respect of ailments context like Cancer, Paralysis, etc. are mentioned along with exception'' thereon but it is important to note that there are no exception(s) mentioned with regard to part (a) of the brochure relating to Benefits of the Scheme''.

WE have carefully gone through Section 50 of Insurance Act (reproduced earlier) and find that this section does not help the case of the petitioner at all for the simple reason. What it states is that after the policy has lapsed, the insurer is expected to issue a notice giving options available to the insured. Very importantly there is no material on record, that any notice was issued, and if ever in whatever manner term of 11(a) and (b) of the policy were highlighted. In our view, provision of Section 50 supports the case of the respondent/complainant as admittedly no notice was issued to revive/review the lapsed Policy by the petitioner/insurer. As already held, the petitioner cannot escape from the responsibility as a State'', having stated something in the brochure in a language, which was understood by the insured and the contract'' which was in another language and not understood by the respondent. In our view, one cannot be read at the exclusion of other in the peculiar facts and circumstances of the case before us.

IN the given facts of the case we would also like to hold the petitioner guilty of unfair trade practice'' under Section 2(1)(r) of the Consumer Protection Act, 1986, adopted by it to promote the sale of its Policies, wherein terms and conditions spelt out to attract the public turned out to be different as contained in the instrument/Policy, issued later. However, we also like to observe here that we are unable to appreciate the finding/observation of the lower Fora that there was obligation on the part of the petitioner to explain the terms for which they relied upon the judgment passed by this Commission (supra). We have gone through this judgment and find that the cited judgment deals with the non -communicating the terms and conditions of the Policy to the complainant''. The context was different in the cited judgment.

IN the aforementioned circumstances, we find that the petitioner Insurance Company, in the light of the material contained/ expounded in the brochure issued by insurer, it cannot escape its liability to pay the insured amount to the insured.

IN view of above, we find no merit in this revision petition except the observation of the lower Fora with regard to explaining the terms of the Policy to each and every individual. The revision petition stands disposed of accordingly. No order as to costs. R.P. disposed of.