BEFORE THE DAKSHINA KANNADA DISTRICT  CONSUMER DISPUTES REDRESSAL FORUM,  ADDITIONAL BENCH, MANGALORE    

Dated this the 21^ST March 2017

PRESENT

SRI. VISHWESHWARA BHAT D         : HON’BLE PRESIDENT

SRI. T.C. RAJASHEKAR                       : HON’BLE MEMBER

ORDER IN

C.C.No.342/2013

(Admitted on 21.12.2013)

Mrs. B. Gowramma,

W/o B.M. Subbanna Bhat,

Age 61 years, Adult, Hindu,

R/at Balike, Jalligudde,

Post Bajal, Mangalore D.K. Dist,

Karnatak State.

                                                                      ….. COMPLAINANT

(Advocate for the Complainant: Sri DS)

VERSUS

1. Authorized Signatory,

M/s Bajaj Allianz Insurance Company,

Pvt. Ltd, 1^st Floor, Thumbay Arcade,

Falnir, Mangalore 575001,

D.K. District, Karnataka.

2. Authorised Signatory,

Bajaj Allianz Insurance Company,

Regd. Head Office, G.E.Plaza,

Airport Road, Yerawada,

Pune 411006, Maharashtra.

                                                                    ….OPPOSITE PARTIES

 (Advocate for the Opposite Party No.1 and 2: Sri. AKK)

ORDER DELIVERED BY HON’BLE MEMBER

T.C. RAJASHEKAR:

I.   1. The above complaint filed under Section 12 of the Consumer Protection Act alleging deficiency in service against claiming, the Opposite Party to pay Rs.3,21,698/ along with interest accrued thereon at the rate of 12% p.a from the date of payment, to pay Rs.50,000/ for mental harassment.

2. In support of the above complaint the complainant Mrs. B. Gowramma, filed affidavit evidence as CW1 and answered the interrogatories served on her and produced documents. On behalf of the opposite parties Pramod Alva,(RW1)  Branch Manager, also filed affidavit evidence and answered the interrogatories served on him and produced documents.

       The brief facts of the case are as under:

     We perused the complaint and the version of the parties. This dispute is related to the insurance policy taken by the complainant got lapsed and the opposite party not paid the  correct surrender value on lapse of policy and not refunding the premium paid on request made. The complainant alleges that she had obtained an insurance policy No 0083023595 from the opposite party for five years period with a yearly premium of 2 lakhs per annum. She had paid only two years premium and the policy was lapsed. The opposite party not obliged in spite of she is ready to revive the policy. The opposite party foreclosed the policy and paid only Rs.78,302/ as surrender value for the sum paid as premium of ₹ 4 lakhs unjustifiably and hence there is deficiency in service on the part of the opposite party. The opposite party version is the complainant had paid only two premium instalments and defaulted. As per policy conditions on non-payment of premium, the policy lapses after grace period.  As per policy condition on lapsed policy surrendered value will be paid after deducting surrender charges and the complainant was entitled for an amount of Rs. 78,302/ as surrender value and the same has been paid. There is no deficiency in service on their part. These are being the facts of dispute in resolving it we consider the following. 

POINTS FOR ADJUDICATION

     We have traversed through the documents produced and the examined the evidence lead by the parties. The admitted facts are, the purchase of the policy and it is lapsed for default on payment of premium. The complainant had paid two years premium of ₹ 4 lakhs and the opposite party paid an amount of Rs.78302/ as surrender value which is received by the complainant on protest. The opposite party denies the deficiency in service in paying the surrender value and also in foreclosing the insurance policy. Admissions and the denials reconciled and considered the following points for adjudication.

1. Whether the complainant is a consumer under the consumer protection Act 1986?
2. Whether deficiency in service is proved by the complainant against the opposite party?
3. Whether the complainant is entitled for the relief prayed for?
4. What order?

We have examined the evidence produced by the complainant and the documents produced are considered. The notes of arguments considered and heard the party submissions and answered the above points as under:

1. In the affirmative.
2. In the affirmative.
3. In the affirmative in part.
4. As per delivered order.

REASON

POINT NO.1: We have referred the insurance policy no 0083023595 commenced from 17.01.2008 where it is issued in the name of the complainant. The opposite party not denied complainant as consumer. Hence we answered the point no 1 in the affirmative.  

POINT NO. 2: The case of the complainant is she had obtained an insurance policy from the opposite party for 5 years term commencing from 17.01.2008 and the premium is ₹ 2,00,000/ per year, and she had paid the first two premium amounting to Rs. 4,00,000/ and went abroad. She could not able to pay the renewed premium thereafter. On 20.08.2013 she had written a letter to the opposite party requesting them to renew the policy by offering Rs. 6,00,000/ as balance premium. But the opposite party refused to renew by saying the policy got lapsed and it cannot be renewed and paid an amount of Rs.78,302/ as surrender value. The complainant vehemently argued that the opposite party has not served any notice before foreclosing the insurance policy and also the surrender value calculated is not as per the policy conditions enumerated apart from other allegations like the calculation method not correct and the details not furnished, the opportunity for revival is not given, the amount paid is against the natural justice. The opposite party stated that the insurance policy issued after consenting by the complainant after the policy conditions agreed upon, also that, after issue of policy with conditions there is 15 days free look period in which the complainant not opted for cancelling the policy and continued for two years. What has been acted upon in repudiation is as per policy condition only and as such there is no deficiency in service from their part.      

2. The case of the complainant is not that the policy conditions not served to them. We have closely examined the policy conditions. Clause 6 Premium 6.1 (a) regular premium are payable without any obligation on the part of the company to issue a notice for the same. Clause 8 Notices: Any notice, directions, or instructions to be given under this policy shall be in writing and delivered by hand, post, facsimile or Email to...

Sub-clause a) says the company is not responsible for any consequence of not intimating the change of address.

Clause 10 Non payment of regular premium and forfeiture

b) i) says non payment of premium before the expiry of grace period of 30 days the policy immediately lapses.

     ii) The policy holder may revive the policy within a revival period of two years from the due date of first unpaid regular premium subject to sec.33 below, failing which the policy shall be terminated and the fund value as on date of lapse less the surrender charges as per section 31 (c) shall be paid at the end of the third policy year or at the expiry of the revival period whichever is later.

c) If the unpaid regular premium was due after the first three policy years...

 iii) When the fund value in respect of regular premium less surrender charge as per section 25(f) fall below an amount...policy holder will be intimated about this in writing and the policy will be terminated...

Section 25 (f) give details of surrender charges says if first three years regular premium is not paid and the policy lapsed as per section 10 b) surrender value will be 100% of the first annualized allocated premium.

Section 31 (c) surrender value will be will be equal to fund value less surrender charges if any as per Section 25 (f)...

Section 33: This policy may be revived with the consent of the company within two years from the date of the policy has lapsed subject to the receipt of the following...3 conditions given (not applicable)

3. On combined reading of these conditions it is discerned that, the opposite party need not give notice before foreclosure or payment of premium 10 b) i) and clause 6 a) i), the revival should be initiated from the end of insured with the consent of the company(sec.33). It is true as per section 10 c) iii) the opposite party has to inform in writing about the fund value going below surrender charges but it is not applicable in the instant case as it is applicable only in case of policy premium paid for three years and when fund value less surrender charges goes below amount equivalent to one annual premium. So in the instant case the fund value has not gone below the surrender charges an amount equaling to one annual premium. It is also seen from the record that the surrender value paid is as per policy condition. We do not see any prima facie difference in compare to condition of the policy. The vehement argument and the core contention of the complainant is that before foreclosure the opposite party has not intimated the complainant. But the complainant not proved as per policy conditions he must be informed before lapsing or foreclosing the policy.

4. Also it is a fact that the complainant claims that he went abroad after paying the two years premium hence could not able to pay the premium. In the first instance the complaint had delayed in informing that he had went abroad for almost four years. The last premium was paid is of Jan 2009 but the first information given to opposite party on 20.08.2013. There is no acceptable reason for in ordinate delay in informing. The law will not support the dormant litigants is an established principle. The opposite party insurance policy condition clause 8 (a) discharges itself from the consequence of not informing change of address. The complainant not put forth any record to show that he went abroad and while going he has informed the opposite party about change of address.  However as per 10 b) ii) if the policy not revived with in the two years period, the policy shall be terminated and the fund value as on date of lapse less the surrender charges as per section 31 (c) shall be paid at the end of the third policy year or at the expiry of the revival period whichever is later.  It is born by record that the last premium due on Jan 2010. From there two years means for revival lapses on Jan 2012. The policy was foreclosed on 18.07.2012 as per opposite party version but no documents produced to authenticate the date of foreclosure and the amount of fund value as on that date. Also as per above said clause the surrender value would have been returned as on Jan 2012 on lapse of two years. Condition for repay is end of the third policy year or at the expiry of the revival period whichever is later. In this case the opposite party has foreclosed on 18.07.2012 which is not explained and the surrender value amount paid on 28.10.2013. As per condition stated above it is obligatory on the part of the opposite party to pay the surrender value in the month of Jan 2012 but it was paid on 28.10.2013 without any cogent explanation. There is no record produced that the amount of cheque is sent to the address mentioned in the policy to the opposite party immediately on foreclosure.  It is paid only when the complainant requested for revival of the policy. At the time of request for the revival of the policy the amount was still laying with the opposite party. Also it is to be noted that the opposite party not produced any documents to show that the policy was foreclosed before the complainant made a request for revival. In our opinion the opposite party would have considered with generosity the request to revive the policy but not done. Keeping aside the revival of policy, however we see there is deficiency in service on the part of the opposite party as for as the payment of the surrender value is concern.  Hence we answered the point no 2 in the affirmative.

POINT NO 3: We have arrived at the conclusion that even though there is no deficiency in service in foreclosing the policy, but there is deficiency in service in payment of the surrender value. The opposite party has not foreclosed and paid the amount as per policy condition and we hold the opposite party liable for deficiency in service. The complainant is entitled for partial relief. The complainant prayed for the refund of the premium paid ₹ 4 lakhs in which we do not see any justice in allowing, as the opposite party had under took the risk for two years and also given opportunity for reviving the policy for another two years. However the opposite party had delayed foreclosing by about six months and even though the foreclosure is done on 18.07.2012 and the policy matured on 17.01.2013 the amount paid on 28.10.2013. In our opinion the complainant is entitled for interest on the surrender value of Rs. 78,302/ at the rate of 15 % per annum (opposite party used the sum for the commercial earnings) from the date of Feb 2012 (supposed to be foreclosed Jan 2012) till the date of amount paid on 28.10.2013. The opposite party is negligent in paying the surrender value by keeping it with them till 28.10.2013 and hence the complainant is entitled for compensation for mental agony and hardship Rs.20,000/ and litigation cost of Rs. 8,000/ Hence we answered the point no 2 in the partly affirmative.

POINT NO. 4 : In the light of above discussion and adjudication of the above points we deliver the following

ORDER

          The complaint is partly allowed. The opposite parties shall pay the complainant an interest on surrender value amount Rs.78,302/  (Rupees Seventy eight thousand three hundred two only) at the rate of 15% per annum from the month of Feb 2012 till the date of 28.10.2013 and an amount of Rs. 20,000/ (Rupees Twenty thousand only) towards compensation and Rs. 8,000/ (Rupees Eight thousand only) towards cost of the proceedings within 30 days from the date of order copy received.   

     Copy of this order as per statutory requirements, be forward to the parties free of costs and file shall be consigned to record room.

(Page No.1 to 11 directly typed by Member, revised and pronounced in the open court on this the 21^st March 2017)

            MEMBER                                              PRESIDENT

        (T.C. RAJASHEKAR)                        (VISHWESHWARA BHAT D)

  D.K. District Consumer Forum                D.K. District Consumer Forum

Additional Bench, Mangalore                   Additional Bench, Mangalore

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 Mrs. B. Gowramma,

Documents marked on behalf of the Complainant:

Nil

Witnesses examined on behalf of the Opposite Party:

RW1: Pramod Alva,(RW1)  Branch Manager,

Documents marked on behalf of the Opposite Party:

Nil

Dated:  21.03.2017                             MEMBER