DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 331 of 13-07-2011

Decided on : 30-09-2011

Jagdeep Singh aged about 38 years S/o Baldev Singh, R/o H. No. 338-C, Model Town Phase-1, Bathinda.

.... Complainant

Versus

1. Aviva Life Insurance Company India Limited, Branch Office, The Mall, Bathinda, through its Manager.

2. Aviva Life Insurance Company India Limited, Registered Office, 2^nd Floor Prakashdeep Building, 7 Tolstoy Marg, New Delhi, through Managing Director & CEO

3. Aviva Life Insurance Company Limited, Aviva Tower, Sector Road, Opp. Golf Couse, DLF Phase V, Sector 43, Gurgaon through its M.D.

    

   ..... 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. Gurpreet Singh, counsel for the complainant

For the Opposite parties : Sh. Sanjay Goyal, counsel for opposite parties.

O R D E R

VIKRAMJIT KAUR SONI, PRESIDENT

1. 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 'Act'). In brief, the case of the complainant is that under the allurement of the opposite parties, the complainant purchased one policy No. WLG1398999 in the year 2006 from the opposite parties through their agent at Bathinda. He paid four regular annual installments to the tune of Rs. 20,000/-each w.e.f. 23-11-2006 to December, 2009. At the time of issuing the policy, neither the opposite parties nor their agent issued any terms and conditions. In the month of December, 2010, the complainant approached the office of the opposite parties at Bathinda and requested them for refund of Rs. 80,000/- alongwith interest and other benefits on the ground that due to financial problem, he is unable to continue the said policy. The complainant alleged that the opposite parties have no right to close the policy of the complainant due to non-payment of 5^th installment. He made repeated requests to the opposite parties to make the refund of Rs. 80,000/- so paid by him, alongwith interest and other benefits. He also got issued legal notice to the opposite parties but they neither replied nor refunded the aforesaid amount. Hence, this complaint has been filed by the complainant.

2. The opposite parties filed their joint written reply and pleaded that policy was issued based on the proposal form which was filled and duly signed by the complainant himself. In the Proposal Form, the 'Life Long Unit Linked' plan vide the Key Feature Document, the complainant filled up and signed the proposal form bearing No. NUP10532098 dated 23-11-2006. Based on the declaration made and information provided in the Proposal Form, the policy bearing No. WLG1398999 was issued to the complainant having date of commencement as 29-12-2006 which was delivered to him on 13-01-2007 vide Overnite Courier bearing No. 527036784. The said policy contained a notice on Free Look whereby the policy holder has a right to reconsider his decision to purchase the policy within 15 days of receipt of the policy documents in case he does not agree to the terms and conditions of the said policy. If the complainant was not satisfied with the terms and conditions under the said policy, he could have got the same cancelled within free look period of 15 days from the date of delivery of the said policy to him. The complainant paid the premiums for the term of 2006, 2007, 2008 and 2009. However, the complainant failed to pay the premium for the terms of 2010 as a result of which the status of the said policy was changed to Inforce Notice Period when the premium payment is not received after 36 months from the date of commencement. Instead of receiving the premiums which were falling due under the said policy, the opposite parties received a legal notice dated 15-06-2011 from the complainant seeking refund of the premium which was duly replied declining his request. The opposite parties have pleaded that complainant having availed a Life Insurance Cover from the opposite parties and enjoyed coverage for more than three years could not be permitted at this belated stage to claim refund of the premiums paid, contrary to the terms and conditions of the policy. The complainant is only entitled to the surrender value under the said policy.

3. Parties have led their evidence in support of their respective pleadings.

4. Arguments heard. Record alongwith written submissions submitted by the parties perused.

5. The complainant purchased Insurance policy No. WLG 1398999 date of commencement 29-12-2006, sum assured Rs. 3,60,000/-, premium frequency was annual and the regular premium amount was Rs. 20,000/-. The complainant submitted that he purchased this policy on the allurement of the officials of the opposite parties that there is no maturity date and if the complainant would pay three installments regularly, he can discontinue his policy at any time and get the refund of the deposited amount alongwith interest and other benefits. The complainant paid four annual installments to the tune of Rs. 20,000/- each and had not paid the 5^th installment. Due to financial problem, he could not pay the 5^th installment and accordingly, he requested the opposite parties to refund the premium already deposited by him.

6. The opposite parties have submitted that as the complainant had failed to pay 5^th installment of premium, his policy was changed to Inforce Notice period on 28-01-2011. Based on the declaration made and information provided in the proposal form, the policy in question was sent to the complainant vide Overnite courier bearing No. 527036784 which was delivered to the complainant on 13-01-2007. The policy contained a notice on Free Look whereby the policy holder has a right to reconsider his decision. As per the 'right to reconsider' notice the complainant had the option to get the policy cancelled within 15 days of receipt of policy document in case he was not satisfied with any of the terms and conditions of the policy but the complainant has not availed the right of reconsideration.

7. The opposite parties have admitted in para 10 (iii) of their written reply the complainant paid the premiums for the term of 2006, 2007, 2008 and 2009. The opposite parties have pleaded that complainant has enjoyed coverage for four years and he is only entitled to the surrender value. The complainant had specifically pleaded that the opposite parties have not issued and cleared any terms and conditions to the complainant. The opposite parties have not placed even a single document on file to prove their version. When no terms and conditions were supplied to the complainant, he is not bound by such terms and conditions. As the policy has elapsed, the complainant is not entitled to any other benefit or interest. As discussed above, the plea of the opposite parties is that the complainant is entitled to the surrender value. Clause 8 of Insurance Regulatory and Development Authroity (Standarization of terms & conditions of ULIP Products and treatment of lapsed policies) Regulations, 2010 reads as under :-

“8. Surrender Charges :

It is observed that Insurers apply different surrender charges while paying the surrender value to the insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value) shall not exceed the limits specified below :-

Year Policy Period

Less than 10 years More than 10 years

1^st year 12.50% 15%

2^nd year 10.00% 12.50%

3^rd year 7.50% 10%

4^th year 5.00% 7.50%...........”

 

8. Neither the complainant nor the opposite parties have mentioned the maturity date of policy and in the absence of it, the period of policy cannot be assessed. Thus, deduction cannot be made according to aforesaid clause 8 of IRDA. Since the opposite parties have not produced on file even a single document to prove that the policy alongwith terms and conditions were sent to the complainant, the version of the complainant seems to be correct that officials of the opposite parties allured him that in case he does not want to continue the policy, he can get the refund of deposited amount and sold the insurance policy by making tall claims. The opposite parties have not sent the terms and conditions to the complainant and kept him in dark. Hence, there is deficiency in service and unfair trade practice on the part of the opposite parties in not refunding the premium amount to the complainant.

9. In view of what has been discussed above, this complaint is accepted with Rs.5,000/- as compensation and cost. The opposite parties are directed to refund an amount of Rs. 80,000/- to the complainant with interest @ 9% P.A. from the date of institution of complaint i.e. 13-07-2011 till realisation. The compliance of this order be made within 45 days from the date of receipt of copy of this order. A copy of this order be sent to the parties concerned free of cost and the file be consigned to record.

Pronounced

30-09-2011 (Vikramjit Kaur Soni)

President

(Amarjeet Paul)

Member

(Sukhwinder Kaur)

Member