Urmila Singh vs Life Insurance Corporation of India

MRS. Urmila Singh has invoked the original jurisdiction of this Commission by filing a complaint under Section 17 of the Consumer Protection Act seeking direction to the opposite parties to pay a sum of Rs. 1 lac as insured amount besides an additional sum equal to the sum insured with interest on account of death of her daughter-Ms. Jyoti Thakur who died in a fire accident and a compensation of Rs. 10 lacs for harassment and mental agony.

THE complainant in the present case is unfortunate mother of deceased-Ms. Jyoti Thakur, who was insured for a sum of Rs. 1 lac with the opposite parties vide policy No. 170889136 effective from 18.5.1995 and the risk covered under the said policy was to the tune of Rs. 1 lac besides an additional sum equal to the sum insured under the said policy. If the life insured had sustained any bodily injury it would have resulted into death. It has been alleged by the complainant that she is the nominee under said policy and premium had regularly been paid and there was no default on account of premium. The complainant''s daughter at the time of taking the insurance policy was studying in the B.D.S. Course in the Dental Medical College at Mansa. During her holidays in the College, she had come to Panchkula and used to do the home work. She was preparing a denture set and was working on the spirit lamp. Ms. Jyoti put off the lamp and poured the spirit from the canny, which was lying in the room and while pouring the spirit, the spirit fell outside of the lamp and also spread at near by place. The spirit lamp fell and the spirit caught fire, which spread rapidly and clothes of Ms. Jyoti Thakur also caught fire. This was noticed by the complainant and her husband Mr. Nirmal Singh. Mr. Nirmal Singh put the blanket on the body of Ms. Jyoti in order to extinguish the fire. Ms. Jyoti was taken to the Civil Hospital, Sector 6, Panchkula. On the advice of the Doctor, Jyoti Thakur was taken to the P.G.I., Chandigarh with serious 80% burn injuries and her dying declaration was recorded on 25.8.1997 by Shri K.C. Garg, Judicial Magistrate, 1st Class, Chandigarh at 8.25 p.m. Ms. Jyoti Thakur narrated the entire incident to the Judicial Magistrate, 1st Class. Unfortunately on 2.9.1997 Ms. Jyoti Thakur died in the P.G.I. due to the burn injuries sustained by her in a fire accident while preparing a denture set. Since, Ms. Jyoti Thakur insured with the opposite parties, the complainant filed a complaint of Rs. 2 lacs under the terms and conditions of the policy, Rs. 10 lacs as compensation towards mental agony and harassment and as such had claimed total sum of Rs. 12 lacs in the case in hand.

Notice of the complaint was issued and in pursuance thereof opposite parties have put in appearance and filed a joint written statement in which preliminary objections were taken to the effect that the claim has been inflated in an imaginary manner just to bring it within the jurisdiction of this Commission and in fact the jurisdiction lies within the District Forum. The opposite parties had offered to refund the premium in accordance with the contract of insurance and there is no deficiency in service and if anything beyond the contract is claimed, the same is the matter of Civil Court for adjudication.

ON merits, the insurance policy was admitted and no dispute has been raised pertaining to the accidental death. The opposite parties in brief, have averred that the complainant is not entitled to any amount and only the premium received under the policy excluding extra premium are refundable as per terms and conditions of the policy and accordingly, only a sum of Rs. 23,538/- is payable to the complainant, which was offered to the complainant vide letter dated 24.7.1998 and there was no deficiency in service on the part of the opposite parties. The parties were afforded opportunities to lead their evidence. The complainant had tendered in evidence her own affidavit and closed the evidence after tendering the affidavits of S. Shri M.S. Malik, I.P.S. and Hari Kishan Dass, Advocate. The opposite parties have also closed their evidence after tendering affidavits of S/Shri C.R. Dang, Administrative Officer and N.P. Bali, Regional Manager, Marketing.

THE Commission has heard the Counsel of both sides and have also perused the entire case file. THE Counsel for the complainant has argued that the complainant is entitled to additional sum equal to the sum assured under the policy which is Rs. one lac. In order to fortify his submissions, he has referred to the affidavit of Shri C.R. Dang, filed on behalf of the opposite party. He has also invited our attention to other documents placed on record alongwith the affidavit of Sh. C.R. Dang. He has further argued that the claim of claimant has been illegally scuttled down by the opposite parties vide letter dated 24.7.1998 which is Annexure R-II, with the said affidavit. THE letter dated 24.7.1998 (Annexure R-II) of Sr. Divisional Manager of the opposite parties reads as under : "With reference to your claim under the policy on the life of your deceased daughter, we have to inform you that the life assured has died due to burns at her house within 3 years from the date of commencement of risk. THErefore, only the premiums received under the policy excluding extra premium are refundable as per terms and conditions of the policy and accordingly an amount of Rs. 23,538/- is payable to you. You are, therefore, requested to please send the enclosed discharge form duly signed across revenue stamp to our Branch Office, Panchkula at your earliest to enable them to release payment of the above amount."

The Counsel further says that there was no such clause under the insurance policy for repudiating the claim. The complainant is entitled to receive an additional sum equal to the sum assured under Clause 10(b) of the policy, which reads as under : "To pay an additional sum equal to the sum assured under the policy if the life assured shall sustain any bodily injury resulting solely and directly from the accident caused by outward, violent and visible means and such injury shall within 120 days of its occurrence solely, directly and independently of all other causes result in the death of the life assured. However, such additional sum payable in respect of this policy, together with any such additional sums payable under other policies on the life of the life assured shall not exceed Rs. 5,00,000/-."

On the other hand, the Counsel for the opposite parties contends that the claim of the complainant has been rightly calculated to the tune of Rs. 23,538/- as per Clause 4(B) of the policy. The Counsel has also invited this Commission''s attention to Clause 4(B) of the policy, which reads as under : "Notwithstanding anything within mentioned to the contrary, it is hereby declared and agreed that in the event of death of the life assured occurring as a result of intentional self-injury, suicide, or attempted suicide, insanity, accident other than an accident in a public place or murder at any time on or after the date of which the risk under the policy has commenced by but before the expiry of three years from the date of this policy, the Corporation''s liability shall be limited to the sum equal to the total amount of premiums (exclusive of extra premiums, if any) paid under this policy without interest."

IN rebuttal, the Counsel for the complainant further argues that special Clause 4(B) relied upon by the Counsel for the opposite parties was never agreed upon by the deceased and as such the same is not operated upon the complainant. From the affidavit of Shri C.R. Dang it has been proved that deceased-Ms. Jyoti Thakur had never given her consent to Clause 4(B), hence the opposite parties cannot derive any benefit of the said clause by scaling down the claim. The Counsel for the complainant further argues that since Special Clause 4(B) has not been mentioned in the proposal form, the same is not binding upon the complainant.

HAVING considered the submissions of the Counsel of both sides and keeping in view the law of contract, we are of the considered view that under the law of contract, offer containing terms of one party is accepted by the other party, no party can alter or substitute any terms and condition without the written consent of the other party. In the case in hand, the proposal form which was submitted by deceased-Ms. Jyoti Thakur under her signatures and verified/witnessed by Sh. M.S. Kahlon, Development Officer and this fact has not been denied by Shri C.R. Dang, Administrative Officer of the L.I.C. In para 3 of the affidavit it has been admitted that the policy was issued on the basis of the proposal form dated 28.9.1995 (Annexure R-I), which was duly filled and signed by Ms. Jyoti Thakur. There is no mention of Special Clause 4(B) of the policy. The Counsel for the complainant has submitted that the abovesaid Clause 4(B) was never agreed upon by the deceased-Jyoti Thakur and as such the same cannot be made applicable/operative against the complainant. The Counsel has further argued that on the basis of the documents placed on the record, i.e. affidavit of Shri C.R. Dang, it has been amply proved that the deceased-Jyoti Thakur was not a consenting party to Clause 4(B) and the opposite parties cannot take any benefit of the said clause while scaling down the claim of the complainant. It has been further argued that there was no contract between the parties on the said clause whereas the Counsel for the opposite parties reasserted that there is a concluded and binding contract between the parties. The controversy between the parties can be formulated as under : "Whether there is a concluded and binding contract between the parties pertaining to Clause 4(B)."

Under the law of contract a concluded and binding contract comes into operation/existence as soon as offer of one of the parties is accepted by the other party and no party can alter or substitute any term and condition which could be detrimental to the interest of the other party. In the instant case, offer commences with the "proposal for insurance of own life" which was submitted by Ms. Jyoti Thakur under her signatures on 28th September, 1995 and witnessed by one Sh. M.S. Kahlon, Development Officer of the LIC. This fact has not been rebutted, rather has been admitted by Sh. C.R. Dang in para 3 of his affidavit that policy of insurance was issued by the opposite party on the basis of proposal dated 28.9.1995 (Annexure R-1/A) referred above. As on 28.9.1995, when this proposal form was duly filled and signed was submitted by deceased Jyoti Thakur, there was no mention of Clause 4(B) to be incorporated in the insurance policy. During the course of arguments, original insurance policy alongwith proposal form and renewal form was placed on the record by Sh. B.J. Singh, learned Counsel for the opposite parties. A close scanning of the abovesaid form (Annexure R-1/A) shows that some additions in the proposal form were made by some officer/official of the opposite parties on 30.9.1995 and Clause 4-B had been interpolated in a haphazard manner. The insertion of Clause 4-B in the said proposal form was never got confirmed form the deceased-Jyoti Thakur. The renewal proposal form (Annexure R-2) dated 30.9.1995 was filled by the opposite party at their own level without signatures of the insured. This document finds a reference of Clause 4-B but the same has been scored off. No consent of the deceased-Jyoti Thakur was obtained at any time pertaining to applicability of Clause 4-B to the contract of insurance on the basis of proposal form and the renewal proposal form, the insurance policy was issued and a xerox copy of which placed on record (Annexure R-1) with the affidavit of Sh. C.R. Dang against the special provision a word "Koi Nahi" written in vernacular, followed by a slip containing Clause 4-B, was stappled/pasted at page 3 of insurance policy. The Counsel for the complainant has argued that the Clause 4-B was never agreed to by the deceased-Jyoti Thakur nor the same was brought to her notice. The slip containing Clause 4-B was not a part of the policy and a mischief has been played by the opposite parties when the claimant furnished the original policy to them alongwith claim for Rs. two lacs. This has been done by the opposite parties to frustrate the just and legal claim of the complainant.

WE find some substance in the arguments of the Counsel for the complainant. WE have compared photo copy of the policy (Annexure R-1) with the original policy and note that the original policy, which was in the custody of the opposite parties words typed in vernacular "Koi Nahi" have been scored off leaving Clause 4-B. This to our mind has been done by the opposite parties to nullify the impact of vernacular typed word "Koi Nahi" against the special provisions in the policy. During the course of arguments the Counsel for the complainant has placed on record a proforma of Clause 4(B) alleging that he had obtained the same from the office of the opposite parties. Proforma of Clause 4(B) was required to be signed by both the parties. The proforma so produced by the Counsel for the complainant was shown to the Counsel for the opposite parties, who admitted the same and did not deny that the same was not required to be signed by both the parties. The proforma produced by the Counsel for the complainant pertaining to Clause 4(B) reads as under : "Notwithstanding anything within mentioned to the contrary, it is hereby declared and agreed that in the event of death of the life assured occurring as a result of intentional self-injury suicide, or attempted suicide, insanity, accident other than an accident in a public place or murder at any time on or after the date of which the risk under the policy has commenced by but before the expiry of three years from the date of this policy, the Corporation''s liability shall be limited to the sum equal to the total amount of premiums (exclusive of extra premium, if any) paid under this policy without interest.''

Branch Manager I agree to the imposition of the above mentioned clause on my above policy resulting from the proposal dated_______ Dated Proposer''s Signature Totality of the circumstances goes to show that there was no mention of Clause 4(B) at the time of submission of proposal form dated 28.9.1995 by deceased-Jyoti Thakur and accordingly in the insurance policy word "Koi Nahi" has been mentioned against the special provisions and as such, the Commission hold that there was no binding contract between the parties pertaining to Clause 4(B) as parties were never at ad-litum at any point of time and accordingly the same was unrelated to interpolated Clause 4(B) against the special provisions in the original policy and thus is not binding upon the nominee of the deceased-Jyoti Thakur. To our mind, the opposite parties have tampered with the original policy which is at variance with the xerox copy placed on the record, which tantamounts to playing a fraud upon the Commission and the complainant by the opposite party to deny the legitimate claim of the complainant. Opposite parties instead of providing relief to the nominee of the deceased have tried to circumvent the legitimate claim by adopting foul means, which is a gross negligence and deficiency in service on the part of the opposite parties. The Counsel for the opposite parties has also argued that the Commission has no jurisdiction to entertain and try the complaint on account of pecuniary jurisdiction and the complaint is to be tried before the District Forum. We are not inclined to accept the submissions of the Counsel for the opposite parties for the reason that for fixing the value of the goods and compensation for the purposes of pecuniary jurisdiction, relief claimed by the complainant is only to be seen. In the present complaint, the complainant has sought relief of Rs. 12 lacs, which falls within the jurisdiction of this Commission for adjudication and what relief is to be granted is again within the domain of the State Commission. We also take note of the arguments of the Counsel for the complainant that the complainant is entitled to compensation to the tune of Rs. 10 lacs. In our opinion, compensation of Rs. 10,000/- for harassment and mental agony would meet the ends of justice.

IN view of the above discussions, we partly allow the complaint by directing the opposite parties to pay a sum of Rs. two lacs as assured amount (one lac assured amount + one lac in terms of Clause 10(b) of the policy) alongwith 12% interest p.a. from the date of filing of the complaint, i.e. 4.5.1998 till the date of its realisation. The opposite parties shall also pay a sum of Rs. 10,000/- as compensation for harassment and mental agony, besides Rs. 5,000/- as costs of litigation. The order is to be implemented within 30 days from the receipt of the copy of the order. The complaint stands allowed accordingly. Complaint partly allowed with costs.