Tamil Nadu

StateCommission

A/205/2019

J.Prakash, 456, Pantheon Road, 3rd Floor, Egmore, Chennai-600 008. - Complainant(s)

Versus

1.The Manager, Max New York Life Insurance Co. Ltd., Vadapalani Branch Branch, Chennai-600 026.And A - Opp.Party(s)

M/s.Rajendrakumar

31 May 2023

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:Hon’ble Thiru. Justice R.SUBBIAH ... PRESIDENT

             Thiru.R VENKATESAPERUMAL       … MEMBER

 

F.A. No.205 of 2019

 

(Against the Order, dated 22.01.2019, in C.C. No.216 of 2015, on the file of  the DCDRF, Chennai-South)

 

                                                                                                                                                       Orders, dt: 31.05.2023

 

J.Prakash,

456, Pantheon Road,

3^rd Floor, Egmore,

Chennai 600 008.                                                                                                                      ... Appellant/ Complainant.

 

vs.

 

1. The Manager,

Max New York Life Insurance Co. Ltd.,

Vadapalani Branch,

Chennai 600 026.

 

2. The Managing Director,

Max New York Life Insurance Co. Ltd.,

12^th Floor, DLF Square,

Jacaranda Marg.,

DLF Phase II,

Guragaon 122 002.                                                                                                         ... Respondents / Opposite parties.

 

             Appellant                  :  party-in-person.

             For Respondents      :  M/s. V. Samuthiravijayan

This First Appeal came up for final hearing on 28.04.2023 and, after hearing the appellant as well as the counsel appearing for the respondents and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

O R D E R

R.Subbiah, J. – President.   

 

             The unsuccessful complainant has filed the present Appeal being aggrieved by the Order, dated 22.01.2019, passed by the DCDRF, Chennai South, in C.C. No.216 of 2015, dismissing his complaint filed against the present respondents/OPs therein-Insurance Company.

 

             2.   For the sake of convenience, the parties are referred to in the course of this Order as per their respective rankings before the District Forum.

             Since the actual point in issue lies in a very narrow compass, it is unnecessary to burden this order with the narration of entire facts except some excerpts from the pleadings & written version that are useful for our discussion.

             It is the crux of the complaint that, in August – 2003, the complainant took a Life Insurance Policy bearing No.234421329 from the OPs under the Plan Name “Whole Life Participating Insurance” on payment of an annual premium of Rs.72,725/- and the said premium is payable on the due date of 28^th August every year.  Till 2012, the complainant had paid the premiums, however, the next premium which fell due on 28.08.2013 was not paid, whereupon, the Insurance Company had issued a demand letter and, regarding reinstatement of the policy, it was stated that, in case of delay in payment of premium, within 180 days from the due date, the insured shall have to pay an additional sum of Rs.250/- plus 8% p.a. on the delayed premium with Health Declaration Form and Medical Reports.   Consequently, the complainant had paid the premium due on 20.02.2014 along with late charges through a cheque bearing No.611266, however, the OP neglected to clear the cheque in time and thereby caused a delay of 2 days.  As a result of such glaring failure on the part of the OPs, the complainant was rendered a defaulter in remitting the premium within the due date even after permissible payment of premium with interest. On 07.03.2014, by way of a message, the OPs called upon him to pay a sum of Rs.969/- towards further late payment fee along with duly filled up and signed Health Declaration Form and to undergo the medical test as prescribed by them. In spite of the fact that the OPs had already received the premium amount, their conduct in demanding excess amounts and insisting the complainant to comply with other procedures is nothing but a clear harassment. The efforts of the complainant to explain the OPs that he had paid the premium within the prescribed period of 180 days ended in vain.  Even after issuance of a Notice, dated 28.06.2014, the grievance of the complainant was not properly addressed by the OPs and hence, he filed the complaint before the District Forum.

             The crux of the OPs’ version is that though the complainant had paid the premium through the cheque issued on 20.02.2014, the same got clearance only on 25.02.2014, which was on the 182^nd day; as such, since the sum was received in their account obviously after expiry of the 180 day time, as per the terms and conditions of the policy, the complainant had to comply with certain additional requirements which factum was duly conveyed to him.  Further, all along, the complainant has been enjoying the benefits of the policy by means of surrender of PUA as well as availing loan for Rs.3,65,779.78 and Rs.2,92,201.32 respectively in June and July, 2014.  No cause of action arose for the dispute raised by the complainant as there is no single instance of breach of terms & conditions under the policy contract; hence, the complaint is liable to be dismissed.

             Both sides filed their respective proof affidavits as well as supportive documents and while on the side of the complainant, 21 documents were marked as Exs.A1 to A21, the OPs marked 5 documents as Exs.B1 to B5 and the District Forum, by its order, dated 22.01.2019, dismissed the complaint and aggrieved thereby, the complainant has preferred this Appeal.

 

             3. Heard the arguments of the complainant appearing party-in-person and that of the learned counsel for the Opposite Parties.  

             By highlighting his case that, after the delay on his side in paying the annual premium amount which fell due on 28.08.2013, for the purpose of reviving the policy, he had paid the premium amount along with other additional charges well within the 180 day period by way of a cheque on 20.02.2014, the complainant states that, having issued a receipt, dated 20.02.2014, for the same, it is implicit that the OPs had acknowledged the compliance on the part of the complainant for reinstatement of the policy and, that being so, for the time taken by the OPs in getting the cheque cleared which had happened on the 182^nd day, they cannot blame him.  Due to the unfair trade practice on the part of the OPs in not reinstating the policy despite the timely payment through cheque, he could not avail a sum of Rs.6.50 lakh available for disbursal in his favour towards bonus & loan to meet the payment for his daughter’s II Year MBBS Fee and thus he suffered great mental agony apart from financial loss. 

             Per contra, it is the contention of the OPs that mere remittance of a cheque and getting a receipt for the same would not accredit him for reinstatement of the policy since the revival takes place only on the date when the cheque is cleared for encashment, which had occurred on 25.02.2014, that was on the 182^nd day and, as per clause-4 of IRDA (Manner of Receipt of Premium) Regulations, 2002, the insurer shall be on risk only after receipt of the premium.  Learned counsel, by once again reiterating the point that the OPs shall be deemed to have received the premium only on the day the cheque was encashed and not on the date when it was issued/handed over, and also by pointing out that the policy is still active and the complainant is enjoying the benefits there-under by taking/repaying loans and receiving the proceeds towards PUA Surrender since 2014, submits that, as such, he cannot have any grievance at all and the present case is nothing but a vexatious litigation whereby, the complainant tries to derive advantages from his own lapses which cannot be allowed and the Forum below has elaborately dealt with all the crucial aspects and rendered a right decision which does not call for any interference.

 

             4.  In the light of the rival submissions, the short point that needs to be decided is –

                “ whether the case & argument of the complainant that, by the mere reason of giving the cheque for the premium amount and getting an acknowledgement there-for from the OPs on 20.02.2014, which was well within the respite of 180 days, the OPs ought to have automatically reinstated the policy  on the said date itself without waiting for the clearance of the instrument that had occurred admittedly after expiry of the 180-day deadline,  is logical and sustainable.”

It is not in dispute that the complainant had committed default in payment of premium that fell due on 28.08.2013 and, for revival of the policy, he was required to pay the premium within 180 days of the due date/28.08.2013 and, in this regard, admittedly, he was well informed beforehand by the OPs through the Demand Notice, under Ex.A2, dated 27.09.2013.  While so, the complainant chose to pay the premium by giving a cheque almost in the nick of time - on 20.02.2014, which was the 177^th day and it was a Thursday.  It is not known whether he handed over the same during the early hours or at the end of the business hours.  At any rate, after the cheque was presented, with the intervening Saturday & Sunday, it was cleared by the Bank on Tuesday/25.02.2021, by which time, obviously, the respite for revival had already expired.  Logically speaking, cheque is not a legal tender like the cash and the payment made through a cheque is deemed to be complete only upon its clearance for encashment. The date of a cheque is primarily relevant for the purpose of its validity and it cannot be taken as the basis for the actual payment before even it undergoes the clearance process.  When the payee does not know that the drawer of the instrument has sufficient funds in his account and when it is not the certainty that the cheque would not suffer the risk of ‘dishonour’ due to some other reasons, no sensible person would ever deem that payment corresponds to the date written in a cheque that is yet to be presented. Further, Clause-4 of the IRDA (Manner of Receipt of Premium) Regulations 2002 runs to the following effect under the caption “Commencement of Risk” -

     “in all cases of risks covered by the policies issued by an insurer, the attachment of risk to an insurer will be in consonance with the terms of Section 64 VB of the Act and except in the cases where the premium has been paid in cash, in all other cases the insurer shall be on risk only after the receipt of the premium by the insurer.  “

It is the essence of the insurance contracts that risk upon the shoulders of an insurer is saddled only upon actual receipt of the premium amount from the insured. In respect of payment of premium through cheques, what matters is not the instrument’s date but its clearance date when the sum is realized by the Insurance Company. While reacting at the eleventh hour to pay the premium, the complainant could have made payment by way of cash or through a Demand Draft, but, knowing fully well that payment through the cheque has a possible risk of losing the respite if there is any delay in its clearance by the Bank concerned, he consciously resorted to such course and ultimately, faced the consequences as the deadline for revival of the Policy came to an end before the cheque could pass clearance.  While so, for his last minute action that failed him in reinstating the policy, the complainant cannot attribute service deficiency to the OPs, who seemed to have acted  as per the  terms & conditions of the policy as well as the statutory guidelines.  The grievance of the complainant that he lost the prospects of availing the benefits of surrender and loan is also found to be untrue in the light of Exs.B4 and B5 which would go to show that the sum accrued towards PUA Surrender was credited to his account and further, the loan requested by him was also sanctioned.  We find that there is no cause of action at all to file the complaint and that the present instance is a clear example of abuse of process of law and forum.  Although we thought of imposing exemplary costs upon the complainant for launching a vexatious litigation of this nature, by taking a lenient view, we refrain from doing so.

            

             5. In the result, the appeal fails as devoid of any merit and it is dismissed by confirming the order, dated 22.01.2019, passed by the DCDRF, Chennai-South, in C.C. No.216 of 2015.  No costs.

 

            

R VENKATESAPERUMAL                                                                                                        R.SUBBIAH, J.

MEMBER                                                                                                                                     PRESIDENT.

 

ISM/TNSCDRC/Chennai/Orders/MAY/2023.