| ORDER | DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA
C.C.No. 51 of 08-02-2013 Decided on 07-06-2013
Nirmal Singh aged about 26 years S/o Late Jagjit Singh S/o Bharpur Singh, Village & Post Jangirana, Tehsil & Distt. Bathinda. ........Complainant Versus
Aviva Life Insurance Company Limited, Aviva Tower, Sector Road, Opp. Golf Course, DLF-Phase V, Sector 43, Gurgaon 122003 (Haryana) The Branch Manager/Head, Aviva Life Insurance Company Ltd., Branch Office at 1st Floor, near Axis Bank, The Mall, Bathinda. .......Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986.
QUORUM Smt. Vikramjit Kaur Soni, President Sh. Amarjeet Paul, Member Smt.Sukhwinder Kaur, Member For the Complainant : Sh. K K Vinocha, counsel for the complainant. For the opposite parties : Sh. Varun Gupta, counsel for the opposite parties.
O R D E R
VIKRAMJIT KAUR SONI, PRESIDENT
The instant complaint has been filed by the complainant under section 12 of the Consumer Protection Act, 1986 as amended upto date (here-in-after referred to as an 'Act'). Briefly stated the case of the complainant is that his father Jagjit Singh (now deceased) in his life time, purchased from the opposite parties an insurance policy No. ELP-2089336, under product name 'Easy Life Plus, Plan Code : ELP; commencement date as 21-7-2008 for a sum assured of Rs. 2,00,000/- ; against half year premium of Rs. 10,000/-; premium payment term 10 years and maturity date as 21-7-2018 with death benefit and 100% growth of investment. The insured Jagjit Singh, father of the complainant appointed him as nominee to receive all benefits. He paid Rs. 60,000/- regularly as premium for three consecutive policy years i.e. 6 half yearly installments of Rs. 10,000/- each. The complainant alleged that the policy in question is neither surrendered nor terminated nor any sum has been paid to insured in his life. The insured Jagjit Singh, all of sudden suffered heart attack and died on 12-12-2012 at village Jangirana, Tehsil & District Bathinda. Since the entire family members of the insured including complainant were in great grief and remained busy in last rites of the insured, after some days, the complainant found the said policy. Accordingly, vide letter dated 21-01-2013, the complainant gave intimation to the opposite parties regarding the death of insured and requested them to pay the sum assured of Rs. 2,00,000/- alongwith other benefits, if any. In response to said letter, the opposite parties vide their letter 14-1-2013 intimated the complainant that the policy in question has been terminated and a cheque No. 259946 amounting to Rs. 20,000/- was despatched by them to the complainant on 13-08-2012, because the policy was lapsed on 21-7-2011 as the premium was not deposited by the deceased life assured neither within the due date nor during grace period which was ended on 21-8-2011. The opposite parties has also mentioned in the said letter that no benefit is payable as the policy was terminated as on date of death of life assured. The complainant alleged that the letter dated 14-1-2013 of the opposite parties is null, void, against law and terms and conditions of the policy. The complainant is entitled to receive the sum assured of Rs. 2,00,000/- with all other benefits alongwith interest because as per policy condition No. 2-C (ii) the policy remains in force with all benefits under Article (3) for a period 2 years from the due date of the first unpaid installment of regular premium and the charges as specified in the schedule will continue to be deducted. The complainant further alleged that neither the policy was terminated nor opposite parties have any right and authority to terminate the same in reinstatement period of two years within which the insured has died. The opposite parties have neither issued any cheque nor the same was received by the complainant. The intention of the opposite parties is malafide just to escape their liability. The complainant further alleged that he requested the opposite parties to make payment of the sum assured, but they refused to do so. Hence, the complainant has filed the present complaint seeking directions to the opposite parties to pay Rs. 2,00,000/- being the death claim against the aforesaid policy, with interest from the date of death of insured till payment besides compensation and cost. The opposite parties filed their joint written statement and admitted that the deceased life assured purchase a life insurance plan of the opposite parties and after understanding all terms and conditions and benefits of all plans, he opted to purchase Easy Life Plus Unit Linked Plan and for this, he filled a proposal form bearing No. NNU12612951 of 14-7-2008 and opted to pay Rs. 20,000/- as annual premium with sum assured of Rs. 2,00,000/-. Jagjit Singh, deceased life assured also opted type of fund as Unit Linked Fund as Growth Fund 100% and term of plan 10 years and premium paying terms 10 years. The deceased life assured before signing the proposal form, made a declaration that he answered the question in the proposal form after being explained by the advisor of the Aviva Life Insurance Company India Pvt. Ltd., and have fully understood the nature of the questions. The opposite parties after receiving the proposal form and going through its entire contents, had issued insurance policy bearing No. ELP2089336 commenced from 21-7-2009 and sent the policy documents alongwith its all terms and conditions to the deceased life assured through speed post vide air way bill No. EH014987836IN on 26-7-2008 on the given address and the same is in the possession of the complainant. The opposite parties have pleaded that the insured opted a unit Linked Life Insurance Plan and this plan is entirely different from traditional insurance plans and is subject to different risk factors. The opposite parties have admitted that at the time of purchasing the policy by the deceased life assured appointed the complainant as nominee under the policy and he can get benefits of the same as per its terms and conditions. The deceased life assured paid three annual premiums against the policy to the opposite parties. He paid the last renewal premium on 24-5-2011 and thereafter he did not pay any renewal premium. The next renewal premium was due on 21-7-2011, but it was not paid within the grace period and ultimately policy lapsed due to non payment of premium. Next premiums due on 21-01-2012 and 21-7-2012 were also not paid and the status of the policy of the deceased life assured was changed into auto foreclosed due to non payment of renewal premium on 21-7-2012 and auto foreclosure amount of Rs. 20,000/- was sent through cheque on 14-08-2012 to the assured. As per article 5 of the policy, if the surrender value pertaining to regular premiums becomes equivalent to the first policy year, the policy shall automatically terminate. Hence, in the said policy, the deceased life assured paid three policy regular premiums and thereafter stopped paying the same due to which surrender value became equivalent to regular premium paid in the first policy year and thereby the policy was automatically terminated as per the terms and conditions of the policy. The auto-foreclosure intimation was sent to the deceased on 21-11-2011 through ordinary post, but he paid no need to the said letter and not reinstated the said policy. Accordingly, the policy was terminated. The complainant even thereafter not approached the opposite parties for any grievances or asked for reinstatement of the policy. The opposite parties have pleaded that as the policy was terminated before the death of the policy holder, all its benefits were ceased, hence the claim of the complainant for the deceased policy holder who died in the month of December, 2012 is untenable in the eyes of law and as per terms and conditions of the policy. Parties have led their evidence in support of their respective pleadings. Arguments heard. Record alongwith written submissions submitted by the parties perused. These are undisputed facts between the parties that Jagjit Singh, now deceased, father of the complainant purchased insurance policy Ex.C-3 from the opposite parties bearing No. ELP2089336 commencing from 21-07-2008; sum assured Rs. 2,00,000/-; premium frequency – half yearly, policy term – 10 ; premium payment term – 10; date of last payment of regular premium – 21-10-2018 ; maturity date 21-07-2018 and the nominee under the said policy is Nirmal Singh, Complainant. Jagjit Singh paid Rs. 60,000/- regularly as premium for 3 consecutive policy years i.e. 6 half yearly installments of Rs. 10,000/- each commencing from 21-7-2008 to 24-05-2011. The policy holder in his life time neither surrendered policy not got it terminated. The insured Jagjit Singh suffered heart attack and died on 12-11-2012. The complainant gave intimation in this regard to the opposite parties on 21-1-2013, but the opposite parties have repudiated the death claim of the deceased assured. The submission of the learned counsel for the complainant is that the date of commencement of the policy in question is 21-7-2008. The insured Jagjit Singh paid Rs. 60,000/- regularly as premium for 3 consecutive policy years. Jagjit Singh has died on 12-12-2012 due to heart attack. The policy holder in his life time neither surrendered policy nor got it terminated. The plea of the opposite parties is that the policy went into lapsation on 21-7-2011. Neither the policy was terminated nor the opposite parties have any right and authority to terminate the same in reinstatement period of two years within which insured has died, hence there is deficiency in service on the part of the opposite parties in repudiating the claim of the complainant. On the other hand, the submission of the learned counsel for the opposite parties is that the deceased life assured paid three annual premiums against the policy to the opposite parties. He paid the last renewal premium on 24-5-2011 and thereafter he did not pay any renewal premium against the policy. The next renewal premium was due on 21-7-2011 but the deceased life assured has failed to pay the same within the grace period as provided by the opposite parties and ultimately the policy of the deceased life assured lapsed due to non payment of the premium against the policy and further the next renewal premium was due on 21-7-2012 but the deceased life assured did not pay the same to the opposite parties. The status of the policy of the deceased life assured was changed into Auto Foreclosed due to non payment of renewal premium against the policy on 21-7-2012 and the opposite parties paid the auto foreclosure amount of Rs. 20,000/-to the deceased life assured by cheque and sent the same through registered post on 14-8-2012 vide receipt No. EH384214315IN. The learned counsel for the opposite parties further submitted that according to article 5 of the policy, if the surrender value pertaining to regular premium becomes equivalent to the first policy year, the policy shall automatically terminate. The deceased was sent an auto-foreclosure intimation on 21-11-2011 through ordinary post but he had paid no heed to the said letter and not reinstated the said policy. Ex. C-4 is the 'Standard Terms and Conditions' of the policy in question. The relevant article of the policy are reproduced hereunder :- '2. Payment of Regular Premium, Grade Period & Reinstatement and Dealings with the policy : c) If we do not receive the Regular Premium due after the first 3 consecutive policy years from the commencement date, and provided the policyholder has paid regular premium due for the first 3 consecutive policy years then : i) we will allow a 30 days grace period from the due date of first unpaid instalment of regular premium. During this grace period, the benefits under Article 3) will continue to apply. ii) If the regular premium due is not received within the grace period of 30 days from the due date of the first unpaid instalment of regular premium then, the policy will remain in force with all benefits under Article 3) for a period of 2 years from the due date of the first unpaid instalment of regular premium and the charges as specified in the schedule will continue to be deducted. iii) The policyholder may exercise any of the 3 options during the 2 year reinstatement period : (1) Reinstate the policy subject to article 2)d). The policy may be reinstated within 2 consecutive years from the due date of the first unpaid instalment of regular premium. (2) Surrender the policy in accordance with Article 5) upon which the policy shall automatically terminate and we will pay the policyholder a surrender value (3) Continue the policy beyond the reinstatement period without paying further regular premium, provided we receive a written notice from the policyholder within sixty days of the due date of the first unpaid instalment of regular premium requesting us to continue the policy. If we accept the policyholder's request, we will continue the policy with the benefits per Article 3) being in force and will continue to levy charges as specified in the schedule. iv) If the policyholder fails to exercise any of the options specified in Article 2)c)iii), then the policy and all available benefits per Article 3) shall automatically terminate at the expiry of the reinstatement period and we shall pay the surrender value to the policyholder.” The date of commencement of the policy in question is 21-7-2008 and the date of first unpaid premium is 21-7-2011. Hence, the reinstatement period of the policy in question expires on 21-7-2013. The death of life assured took place on 12-12-2012. According to aforesaid article 2)c)ii) if the regular premium is not received within the grace period of 30 days from the due date of the first unpaid instalment of the regular premium, then the policy will remain in force with all benefits under Article 3) for a period of 2 years. Further as per iv) if the policy policyholder fails to exercise any of the aforesaid options, then all available benefits as per Article 3) shall automatically terminate at the expiry of the reinstatement period. Since the death of deceased took place on 12-12-2012 i.e. within the reinstatement period, the benefits are payable as per Article 3, the relevant portion of which reads as under :- “ Benefits a) Death Benefit i) If the insured dies before the maturity date, then subject to 3)a)iii), we will pay the following benefit to the policyholder and if the policyholder is not alive, to the nominee :- (1) In case of the insured's death before the first policy anniversary, the higher of 50% of the sum assured and the value of units pertaining to regular premium as at the date of notification of death. In case of the insured's death on or after the first policy anniversary, the higher of the sum assured and the value of units pertaining to regular premium as at the date of notification of death. (2) We will also pay the value of units pertaining to Top Up Premium as at the date of notification of death. Hence, keeping in view the aforesaid articles of the policy in question of the deceased life assured, the complainant is entitled to the higher of the sum assured and the value of units pertaining to regular premium as at the date of notification of death besides other benefit, if any. The opposite parties vide letter dated 14-1-2013 Ex. C-8 have intimated the complainant that no benefit is payable as the policy was terminated as on date of death of the life assured. In said letter the opposite parties have also mentioned that as per the standard terms and conditions of the policy contract, the policy was terminated on July 24,2012 and cheque number 259946 amounting to Rs. 20,000/- was dispatch on August 13,2012. This version of the opposite parties is belied by their own evidence Ex. OP-3 i.e. Letter dated 4th March, 2013, addressed by the opposite parties to the deceases life assured wherein it has been mentioned :- “....We would also like to mention that your next premium of Rs. 10,000.00 is due on 7/21/2011. Do pay your premiums on time to enjoy the complete policy benefits.” Moreover, no copy of cheque or any record has been placed on file to prove that the cheque in question has actually been sent to the deceased life assured. Further account statement Ex. C-5 dated 15-1-2013 does not reveal that the policy in question has been terminated. With utmost regard and humility to the authorities cited by the learned counsel for the opposite parties, they are distinguishable on facts. In view of what has been discussed above, this complaint is accepted with Rs............ as compensation and cost. The opposite parties are directed to pay (?)..sum assured Rs. 2,00,000/- plus value of units pertaining to regular premium as at the date of notification of death besides other benefit, if any, to the complainant.
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