DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Tunk Bahadur r/o H.No.18, Sector 7, Chandigarh.

                                      ---Complainant.

Versus

1.                 Aviva Life Insurance Co. Ltd., SCO No.180-181-182, Sector 9-C, Madhya Marg, Chandigarh160017 through its Manager

2.                 Aviva Life Insurance Co. Ltd., 2^nd Floor, Prakashdeep Building, 7 Tolstoy Marg, New Delhi 110001, through its Director.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Sh. Varun Chawla, Counsel for the complainant

                        Sh. Jaipal Singh, Counsel for the OPs

PER JASWINDER SINGH SIDHU, MEMBER

1.                           In brief, the case of the complainant is that in the month of March, 2007 the executive/agent of the opposite parties allured him to invest his money to get guaranteed benefits of doubt the amount after five years from the date of payment of the first premium as well as life cover for a sum of Rs.3,07,125/-. Accordingly, the said agent collected instrument of Rs.15,000/- and got the blank proposal form signed.  He further told the complainant that he has to deposit the premium for three years regularly and also advised to retain the premium payment receipts.  The complainant paid the three premiums in time as per receipts (C-1 to C-3). 

                   After lapse of five years, the complainant contacted opposite party No.1 in the last week of March 2012 for the promised maturity amount of the policy.  However, after completion of certain formalities, the complainant was asked to submit he original policy bond, which was never received by him.  Finally the complainant was given a cheque of Rs.16,550/- only against the assured double the invested amount i.e. Rs.90,000/-.  The complainant approached the opposite parties on several occasions for obtaining the remaining amount.  However, in the last week of July, 2012 the complainant was refused any payment and he was told that the policy has been terminated.  The complainant also sent a legal notice dated 4.9.2012 (C-4) to the opposite parties, but to no avail.  Hence this complaint. 

2.                           In their joint written reply the opposite parties specifically denied that their representative approached the complainant or assured of any guaranteed/fixed benefit.  It has been averred that the Life Long Unit Linked policy, having premium of Rs.15,000/-, was issued to the complainant on 30.3.2007 in view of the proposal form filled by him.  It has further been averred that the policy was dispatched vide Overnite Courier on 2.4.20007 and the same was delivered on 4.4.2007.  It has been denied that any blank proposal form was got filled from the complainant.  According to the opposite parties after initial deposit of Rs.15,000/-, the complainant paid two installments only though the policy/product was ‘Life Long Policy’.  Hence on account of non payment of the premiums the policy was automatically terminated on 30.3.2012 and a cheque containing the surrender value of Rs.16,550/- was sent to the complainant on 11.4.2012 as per the terms and conditions of the policy.  Pleading that there is no deficiency in service or unfair trade practice on their part, prayer for dismissal of the complaint has been made.

3.                           We have heard the learned counsel for the parties and have gone through the documents on record.

4.                           The complainant has preferred the present complaint against the opposite parties for the reason that having paid three regular premiums towards the insurance policy subscribed by him in the year 2007, under which his life was covered, for a sum of Rs.3,07,125/-, after the lapse of lock-in period of three years, the complainant was entitled for the refund of the amount due towards him after the completion of three years.  However, the complainant having alleged that he had demanded double the amount of premium paid by him, as per the promise of the insurance agent, who had coaxed him to subscribe for the said policy, and the refusal of the opposite parties to honour such a commitment, made by their agent, amounts to unfair trade practice on their part.

5.                           We have gone through the documents tendered by the complainant, but have failed to locate the promise which was made by the agent of the opposite parties to the complainant.  Hence, such an averment of the complainant cannot be believed.

6.                           But, at the same time, when the complainant had already expressed his desire to not to continue with the policy subscribed by him beyond the three years period, the opposite parties should have refunded the amount due towards him.  The complainant having served a legal notice (Annexure C-4) had registered his grievance with the opposite parties and the same deserved to be looked into.  Failure on the part of the opposite parties to redress the just and genuine grievance of the complainant, by not paying any amount towards the said policy, which was lying in a discontinued mode, amounts to deficiency in service on their part.  The opposite parties on 11.4.2012 having paid a sum of Rs.16,550/- to the complainant, that too after a lapse of more than two years, acting against the provisions of Insurance Regulatory Development Authority, is nothing but an act of deficient services. Furthermore, it is almost more than three years since the policy is lying in a discontinued mode and such a long delay only adds insult to the injuries of the complainant for the acts of the opposite parties.  In the given situation, such a long wait by the complainant for his hard earned money is nothing but a pure agony and harassment which deserves to be addressed in a befitting manner. 

7.                           The case of the complainant is squarely covered under clause 7 of the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 which is reproduced as under :-

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

v.                  To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium) do not exceed the limits specified below:-

 AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

Thus, from the perusal of Regulation 7, extracted above, it is crystal clear that the opposite Parties, could have at the most deducted an amount of Rs.1,500/- from this policy and refunded the remaining amount to the complainant at their own.  However, they have miserably failed to do so.  In such circumstances, the act of the opposite parties in not offering this option to the complainant and even while defending this complaint have also not come up with such solution so that this Forum could have been lenient towards them proves that the opposite parties are deficient in rendering proper service to the complainant.  Therefore, in the given situation, the present complaint deserves to succeed and the same is allowed against the opposite parties.

8.                           In view of the above discussion, the present complaint is allowed and the opposite parties are directed as under :-

                                           i.            To pay the amount of Rs.45,000-1500 = Rs.43,500 as per Regulation 7, extracted above, less the amount of Rs.16,550/- already paid ;

                                         ii.            To pay Rs.10,000/- as compensation for mental agony and harassment.

                                      iii.            To pay Rs.5,000/- as cost of litigation;

9.                           This order be complied with by the opposite parties, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.No.(i) &(ii) shall carry interest @18% per annum from the date of this order till actual payment besides payment of litigation costs.

10.                       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

15.5.2013.

(LAKSHMAN SHARMA)

PRESIDENT

 (MADHU MUTNEJA)

MEMBER

(JASWINDER SINGH SIDHU)

MEMBER

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