DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Mrs. Charan Kamal Kaur d/o Jaswant Singh r/o Gurdwara Gur Sagar Sahib Near Sukhna Lake, Opp. Sector-5, Chandigarh presently residing at 34/22, Raj Nagar, (Opp. Harsimran Public School), Near Basti Bawa Khel, Kapurthala Road, Jalandhar -144001.

---Complainant

                 V E R S U S

1]  Aviva Life Insurance Co. India Ltd., Head Office, Aviva Tower, Sector Road, Opp. Gold Course, DLF-Phase V, Sector 43, Gurgaon -122003 through its Managing Director.

2]  Branch Head, Aviva Life Insurance Co. India Ltd., SCO No.181-182, Sector 9, Chandigarh.

3]  Rimmi Bhatti (advisor of OP No.1 and 2) Agent Code Y0560822), Aviva Life Insurance Co. India Ltd., SCO No.181-182, Sector 9, Chandigarh.

4]  Vineet Gulati (Area Manager), Aviva Life Insurance Co. India Ltd., SCO No.181-182, Sector 9, Chandigarh.

                      ……Opposite Parties

CORAM:   SH.P.D.GOEL                  PRESIDENT SH.RAJINDER SINGH GILL       MEMBER

Argued by:Sh.Deepak Aggarwal, counsel for complainant.

Sh.Sandeep Suri, Counsel for OPs No.1, 2 & 4.

OP-3 exparte.

PER RAJINDER SINGH GILL, MEMBER

        The facts of the case are that OP No.2 made a telephonic call to complainant in March/ April, 2006 and apprised her about salient features of the plan namely "Life Long Unit Linked". The OP-2 told the complainant that the policy in question is single premium policy where she was required to pay one time premium only and the lock in period under the policy was 3 years from the date of its commencement. The complainant was also assured that on the commencement of fourth policy year she is entitled to maturity value of the policy. Further also that policy could not be terminated within the lock in period in order to get refund / surrender value. Believing the versions of the OPs, the complainant filled up the proposal form and invested Rs.6 lacs as single premium. The complainant averred that on enquiry, it came to light that the policy had lapsed without any value and she is not entitled to even a single penny. It was further averred by the complainant that in order to bring the terms and conditions of the insurance policy to her knowledge, the representative of OPs took the policy document and torn it apart and after getting the policy document out from the envelop brought the condition No.15 to her knowledge. Left with no alternative, the complainant sent letter dated 15.07.2010 to OPs seeking refund of Rs.6 lacs. The complainant further alleged that as brought to her notice by the OPs, in fact the policy in question was not a single premium policy but a annual frequency and the date of final installment is 16.05.2059. The complainant alleged that no notice regarding any premium was ever sent by the OPs which itself amounts to deficiency in service and unfair trade practice on the part of OPs. The complainant alleged that a lot of correspondence was exchanged between the parties but no to effect. The complainant further averred that as per new guidelines of IRDA, the OPs could put a maximum absolute cap of Rs.6000/- in case a policy is discontinued in the first year and the charges are capped at Rs.2000/- in fourth year, hence, this complaint. 

2]       OPs No.1, 2 & 4 filed their joint written statement. The OPs took some preliminary objections. On merits, all the allegations of the complainant were denied. It has been pleaded that all the terms and conditions of the insurance policy were explained to the complainant and only thereafter the complainant filled up and signed the proposal form for obtaining the insurance policy in question. It has been further pleaded that on the basis of the proposal form filled up and signed by the complainant, the Life Long Unit Linked Insurance policy No.LLG1234753 with date of commencement as 16.05.2006 for sum assured of Rs.60,00,000 lacs with annual premium of Rs.6 lacs was issued to the complainant. It has been pleaded that no such person deposits such a huge amount of Rs.6 lacs without being fully satisfied in respect of the investments made by her/him. It has been pleaded that minimum three installments (yearly) were required to be paid to become eligible to claim any surrender value. It has been pleaded that the complainant could not alleged after 4 years of commencement of the policy that she was not aware about the correct features of the policy. The declaration signed by the complainant clearly shows that she understood the policy. It has been denied that the OPs were required to give any notice of reminder. It has been pleaded that the guidelines are not applicable to the case in hand as the policy is of the year 2006 and the guidelines are of 2010. Denying all other allegations made in the complaint the OPs prayed for dismissal of the complaint. 

3]       OP-3 did not appear despite due service, hence it was proceeded against exparte vide order dated 23.06.2011.

4]       Parties led evidence in support of their contentions.

5]       We have heard the ld.Counsel for the complainant and ld.Counsel for OPs No.1, 2 & 4 and have also perused the record.

6]       The case of the complainant is that she purchased a Life Long Unit Linked policy from OPs and paid Rs.6.00 lacs as one time premium.

7]       The contention of the complainant is that at the time of taking the policy in question, she was told that she would be entitled to maturity value of the policy on the fourth policy year, But when she he approached the OPs to get the value of her insurance plan, she was told that her policy had already lapsed without any value and therefore, she is not entitled to anything. 

8]       The contention of the OPs is correct that the policy purchased by the complainant is a Unit Linked Product, which is a market linked policy and it depends on the market fluctuations. The investment risk is borne by the Policyholder.  The Policyholder may achieve gains and losses on her investment depending upon the performance of the unit linked funds. So, there is no question of repayment of full premium amount to the complainant and the same depends on the market situations. Therefore, we are of the view that the plea of the complainant that she should be refunded complete deposited amount, is not sustainable and the same will be paid as per the market rate.

9]       The ld.Counsel for the OPs No.1,2 & 4 has contended that on the basis of proposal form filled up & singed by complainant, she was issued the policy in question with sum assured of Rs.60.00 lacs with annual premium of Rs.6.00 lacs.  It is also contended that minimum three installments (yearly) were required to be paid to become eligible to claim any surrender value and since no amount was paid after the first premium, the policy got lapsed and therefore, the complainant is not entitled for any amount. 

10]      We do not find any merit in this contention of the Opposite Parties.  If the complainant has not paid the premium after first year of the policy, her policy stands lapsed in respect of her life risk cover, but the units purchased from the amount of her first premium i.e. 23,700 units, as is clear from Annexure C-2, that cannot be forfeited automatically. She is certainly entitled for the fund value of those units, after deducting necessary charges.  This act & conduct of the OPs amounts to gross deficiency in service as well as their indulgence into unfair trade practice.

11]      In view of the above discussion, we are of the opinion that the complaint deserves to be allowed. The same is accordingly allowed. The OPs are directed to pay the full value of the balance units of the complainant, after deducting necessary charges, if any, at the current market price and to supply the details of deductions, if any, made by them, to the complainant.  The OPs are also directed to pay compensation of Rs.50,000/- for the harassment caused to her due to their deficient act, along with litigation cost of Rs.10,000/-.

12]      This order be complied with by the OPs, jointly & severally, within one month, from the date of receipt of its copy, failing which they would be liable to pay the above awarded amount, alongwith interest @ 12% p.a. from the date of filing of the present complaint i.e. 19.5.2011, till the amount is actually paid to the complainant, besides paying the litigation cost of Rs.10,000/-.

         Certified copies of this order be sent to the parties free of charge.  The file be consigned.