DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA

C.C. No. 233 of 29-05-2013

Decided on 30-09-2013

Tarlok Singh, aged about 55 years, S/o Mukand Singh, R/o Village Dan Singh Wala, Tehsil & District Bathinda.

…...Complainant

Versus

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

2. Aviva Life Insurance Company India Limited, Aviva Tower, Sector Road, Opp. Golf Course, DLF-Phase V, Sector 43, Gurgaon 122003, through its General Manager.

3. Aviva Life Insurance Company India Ltd., Branch Office, The Mall, Bathinda, through its General Manager.

4. Jatinder Kumr, Agent, Agent Code PSBT0120, Aviva Life Insurance Company India Ltd., Branch Office, The Mall Bathinda. (Deleted vide order dated 12-7-2013).

.......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. S. S Gill, counsel for the complainant.

For the opposite parties : Sh. Varun Gupta, counsel for opposite party Nos.1 to 3.

Opposite party No. 4 deleted.

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 an 'Act'). Briefly stated the case of the complainant is that under the allurement of opposite party No. 4, he purchased Aviva New Freedom Life Plan vide insurance policy No. AFP2964987 on 21-5-2010 against payment of half yearly premium of Rs. 15,000/-. The complainant was required to pay half yearly premium of Rs. 15,000/- till 21-5-2020. Thereafter the complainant paid premium of Rs. 15,000/- each on 24-11-2010, 3-6-2011 and 14-2-2012. All the requisite documentation and formalities were got completed from the complainant by officials of opposite party No. 1 to 3, but no terms and conditions of the insurance policy were issued to him. The complainant alleged that since he was in need of money, he surrendered his insurance policy for the refund of Rs. 60,000/- alongwith interest and completed all the necessary formalities as required by the opposite parties. The complainant further alleged that he is entitled to the refund of the amount paid by him on account of premium alongwith due interest, but the opposite party Nos. 1 to 3 have arbitrarily offered him to pay Rs. 14,000/- only against surrender of his insurance policy in question. The complainant has approached the opposite party No. 2 in the matter and requested them to pay the amount of premium paid by him with upto date interest, but they refused to entertain him. Hence, the complainant has filed the present complaint seeking directions to the opposite parties to return the amount of premium paid by him alongwith interest besides compensation and cost.

2. The opposite parties filed their joint written statement and pleaded that the complainant got entire information about all the plans of the opposite parties in vernacular language from the advisor and after having understood all the terms and conditions of all the plans, the complainant opted to purchase Aviva New Freedom Life Plan, term of plan as 10 years, premium paying term as 10 years, annul premium Rs. 30,000/-, sum assured Rs. 3,00,000/-, premium frequency half yearly and for this he duly filled proposal form No. NUP13723343 on 12-5-2010. The plan chosen by the complainant is a unit linked life insurance policy and type of fund i.e. United Linked Fund as balance fund 50% and 50% in infrastructure fund. After receiving the duly signed proposal form from the complainant, the opposite parties issued the insurance policy in question bearing No. AFP2964987 to the complainant and sent the policy documents alongwith the entire terms and conditions by speed post to the complainant. The complainant has also signed the benefit illustration. As per the insurance law, the complainant have an option to cancel the policy under the garb of free look period option if the insured is not satisfied with the policy. As per terms and conditions of the policy free look period option i.e. the policy holder have the right to review the policy terms and conditions and cancel the policy within a period of 15 days from the date of receipt of the policy document. In case the policyholder gets his policy cancelled his/her policy, the premium is refunded after adjusting for adverse movement in units prices less charges incurred on account of stamp duty and medical expenses, but in the present case, the complainant did not do so from which it is clearly established that the complainant agreed for the same. The opposite parties have pleaded that it has been specifically mentioned in the policy that in Unit linked plans, the investment risk in investment portfolios is borne by the policy holders. As per terms and conditions of the policy, the actual payment of benefits in this policy will vary, based on the actual performance of investment fund(s) chosen by the policyholder. The unit price of any investment fund may increase or decrease as per the performance of the financial markets. 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 the complainant paid for semi annual premiums of Rs. 15,000/- each against the policy and thereafter he did not pay any amount against the policy. So, the policy of the complainant lapsed due to non payment of renewal premium on 21-06-2012 and the complainant did not pay any premium against the policy to the opposite parties till date. The opposite parties have pleaded that the complainant can surrender his policy with the opposite party and get the amount as per terms and conditions. The terms and conditions regarding surrender are clearly mentioned in Article 5 of the standard terms and conditions. The complainant till date did not surrender his policy with the opposite parties. The opposite parties have given reference of authorities in their written statement

   in support of their pleadings.

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 submission of the learned counsel for the complainant is that he paid four half yearly premiums of Rs. 15,000/- each to the opposite parties against the policy in question. Since he was in need of money, he surrendered his original policy to the opposite parties and requested them to refund his deposited premium, but they offered him only Rs. 14,000/- as against the deposited amount of Rs. 60,000/-.

6. On the other hand, the submission of the opposite parties is that the complainant has duly signed the proposal form and received the original insurance policy in question alongwith terms and conditions which are in his possession. The complainant paid four semi annual premiums of Rs. 15,000/- each against the policy and thereafter he did not pay any amount, so the policy of the complainant lapsed due to non payment of renewal premiums on 21-6-2012. The complainant can surrender his policy with the opposite parties and get the amount as per terms and conditions of the policy. The conditions regarding surrender are clearly mentioned in Article 5 of the standard terms and conditions. The complainant till date did not surrender his policy with the opposite parties.

7. These are undisputed facts between the parties that the complainant purchased insurance policy Ex. OP-1/16 bearing No. AFP2964987; product name Aviva New Freedom Life Plan; date of commencement 21-5-2010; sum assured Rs. 3,00,000/-; regular premium amount - Rs. 15,000/-; premium frequency – half yearly; policy term – 10; premium payment term – 10. The complainant paid four semi annual premiums of Rs. 15,000/- each against the policy and thereafter he did not pay any amount, so his policy was lapsed on 21-6-2012 due to non payment of renewal premium.

8. A perusal of file reveals that the date of commencement of policy is 21-5-2010 and the complainant did not pay the renewal premium on 21-6-2012 meaning thereby that the policy remained continued for two years, but on 20-5-2013 three years have been completed from the date of commence of the policy. The complainant has duly signed the proposal form Ex. OP-1/2 to Ex. OP-1/6 admitting the plan and terms and conditions of the policy. The complainant himself has produced on file Ex. C-2 alongwith policy documents and copy of proposal form have been sent to him. Clause 5 of the insurance policy in question Ex. OP-1/16 reads as under :-

   “5. Surrender Value & Auto-foreclosure

   After completion of first three (3) policy years, this policy may be surrendered by the policyholder and a surrender value shall be payable provided the Regular premium due for at least one (1) policy year has been received by us. The surrender value will be equal to the fund value as on the date of surrender, after deduction of surrender charges specified in the schedule.”

   The schedule has been given at page of OP/1/16 according to which the deduction of surrender charges @ 60% is to be made as the complainant has paid premium for two years and the premium payment terms is 10 years.

9. Thus, keeping in view the facts, circumstances and the evidence placed on file by the parties, this Forum is of the considered opinion that amount of Rs. 36,000/- i.e. 60% on account of surrender charges is to be deducted from the total deposited premium/ fund value of Rs. 60,000/-. Thus, the complainant is entitled to the fund value to the tune of Rs. 24,000/- (Rs. 60,000/- minus Rs. 36,000/-)

10. 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 pay Rs. 24,000/- to the complainant.

11. The compliance of this order be made within 45 days from the date of receipt of copy of this order failing which an amount of Rs. 24,000/- will yield interest @ 9% p.a till realization.

    A copy of this order be sent to the parties concerned, free of costs and the file be consigned to the record.

    Pronounced in open Forum

    30-09-2013 (Vikramjit Kaur Soni)

    President

     

    (Amarjeet Paul)

    Member

     

     

    (Sukhwinder Kaur)

    Member