IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM

Present:

Hon’ble Mr. Bose Augustine, President

        Hon’ble Mr. K.N. Radhakrishnan, Member

   Hon’ble Mrs. Renu P. Gopalan, Member

CC No. 298/12

Wednesday the 10^th  day of June, 2015

Petitioner                                  :         Nithin Kuriakose

S/o N.A. Kuriakose,

Naduvathchira House,

Rubber Board PO

Puthupally, Kottayam

Repted by his Power of Attorney

Tijo N Jospeh,

Naduvathchira House, Vadavathoor PO

Kottayam.   

(Adv. Jayakrishnan R)              

                                                 Vs

Opposite parties                       : 1) Aviva Life Insurance Co.India Ltd

                                                      Nagampadom, Kottayam 686001

                                                       Rpted by its Manager

                                                   2) Aviva Life Insurance Co. India Ltd.,

                                                        Aviva Tower, Sector Road, Opp.Golf

                                                           Course, DLF-Phase V Sector-43, Gurgaon-

                                                           122003 Rpted by its General Manager

                                                          (Adv.Zakhier Hussain)

                                                  3)  Indus Ind Bank, Collectorate PO,

                                                        Kottayam represented by its Manager

                                                        (Adv. George Itty.T)            

O R D E R

Hon’ble Mr. Bose Augustine, President

          The case of the complainant filed on 4-10-12 is as follows

          The complainant is an account holder of the 3^rd opposite party.  The executive of the 3^rd opposite party in 2008, informed 2^nd opposite party’s insurance investment plans.  So complainant joined for a unit linked insurance plan with the 1^st opposite party, the branch office of the 2^nd opposite party.  The premium of the policy was paid through the 3^rd opposite party as they are the corporate agents of opposite party 1 & 2.  According to the complainant he joined the policy believing the statements made by the executive of the opposite parties that if the policy holder make payments for three consecutive years he will get insurance coverage for 20 years and after that the amount paid by him together with growth of the same will be returned.  The opposite parties also assured that in any event he will get a growth of 25% per annum on the amount invested.  So the complainant joined the policy and the policy No. is ALS2190048 for a period of 20 years.  The premium amount was Rs.1,00,000/- as annual payments.  The complainant remitted 3 premium of Rs.1,00,000/- each, altogether Rs.3,00,000/.  According to the complainant in the month of August 2012 he had received a cheque drawn by the 2^nd opposite party on AXIS Bank Ltd., Mumbai dated

3-8-12 for an amount of Rs.1,00,000/-.  Then the complainant had approached the 1^st opposite party and they informed that the policy is seen surrendered and the surrender value was issued to him.  After that the complainant got another cheque drawn by the 2^nd opposite party on AXIS Bank Ltd Mumbai dated 17-9-12 for an amount of Rs.115/-.  According to the complainant neither intended to surrender the policy nor informed the opposite parties to surrender his policy.  Eventhough he had remitted an amount of Rs.3,00,000/-, the opposite parties had paid only Rs.1,00,115/- as surrender value.  The opposite parties are not giving any proper explanation to the surrender and how they had arrived the amount.  The complainant is entitled to get back the amount paid by him with 25% from the date of premium.  According to the complainant the above said act of opposite parties amounts to deficiency in service and unfair trade practice.  Hence this complaint for the order directing the opposite parties to refund the balance amount with 25% and compensation and cost.

          First and second opposite parties jointly filed version admitting the issuance of the policy to the complainant.  According to the 1^st & 2^nd opposite party the complainant after duly deliberating and understanding all the terms and condition of ‘Life Saver Plus’ policy and signed the proposal Form.  Based on the declaration made and information provided in the proposal form they issued policy to the complainant.  And the policy documents along with policy schedule, standard terms and conditions of the said policy were dispatched on 7-10-2008 to the mailing address of the complainant through speed post.  According to the 1^st and 2^nd opposite party they never promised that complainant will get a growth of 25% per annum on the amount invested.  The policy it is clearly stated that gross of return 6% and 10%, that means it is not guaranteed.  The complainant’s policy was due on 13-10-11.  The complainant neither submitted the renewal premium nor surrendered the policy till the date of policy went into in force notice period.  During the reinstatement period the surrendered value of units attributable to regular premium become equivalent to one year’s regular premium and as per the policy terms and condition, the policy shall automatically terminate and they sent a notice of termination and pay the surrender value calculated in accordance of Article 5(a).  And Article 5(b) of terms and conditions, status of the policy was changed to ‘Auto-Fore-Closure” on 25-7-12 and Rs.1,00,000/- the fore closure amount was given through cheque to the complainant on 13-8-12.  Further interest cheque of Rs.115/- was sent for delay in sending the auto foreclosure amount.  The both cheques were accepted by the complainant.  According to the 2^nd and 3^rd opposite party, as per the terms and conditions of the said policy, the Auto foreclosure cheque sent to the complainant is the final payment against the complainant’s policy and thereby nothing is due to the complainant.  And there is no unfair trade practice on the part of opposite party 1 & 2.

          Third opposite party filed version contenting that  3^rd opposite party is not a necessary party to the complaint and there is no privity of contract between the complainant and 3^rd opposite party.  Upon the complainant communicating the decision to invest in the insurance plan, 3^rd opposite party had referred the customer to the 1^st opposite party, for the investment by way of execution of the requisite application / agreements.  So it is a contract between insurer and insured, and therefore the 3^rd opposite party is not liable for any dispute/grievance between complainant and 1^st and 2^nd opposite parties.  And the policy is delivered to the complainant carries detailed terms and conditions.  The complainant was also given an option of free look cancellation and hence complainant has not raised any dispute in the said free look period.  According to the 3^rd opposite party there is no deficiency in service or unfair trade practice on the part of 3^rd opposite party. Third opposite party is also prayed for dismissal of the complaint with their cost.

Points for determinations are

1. Whether the complaint is maintainable?
2. Whether there is any deficiency in service or unfair trade practice on the part of opposite parties?
3. Relief and costs?

Evidence in this case consists of the proof affidavit of the complainant and 3^rd opposite party.  And Ext.A1 to A4 documents from the side of complainant.

Point No.1

          According to the opposite party complaint is not maintainable because policy issued to the complainant is a unit linked policy and the same are taken for investment purpose and the policy holder of such policy are not consumers.  Admittedly the policy in dispute will get insurance coverage on an amount of Rs.5 lakhs.  Since the complainant hires the  service of insurance coverage in addition to the investment, we are of the opinion that the complainant is a consumer and the dispute involved is consumer dispute.  Point No.1 is find accordingly.

Point No.2

          The crux of the complainant’s case is that opposite party has surrender the policy without complainant’s instruction and has not given the surrender value as per law.  According to the opposite party the policy is a life saver plus policy and the investment risk is to be borne by the policy holder.  Since the complainant failed to deposit the premium within the due date the policy automatically terminated and surrender value as per norms of IRDA was given to the complainant.  As per Regulation 7 of IRDA (Treatment of discontinued linked insurance policy) Regulation 2010, in case of discontinuing of a policy it is the obligation of the insurer to refund the amount as per the schedule.  Where the policy is discontinued after 3 year if the premium amount is above 25000/- the insurer has the right to deduct 3% of the annual premium or fund value subject to maximum of Rs.4000/-.  Hence the opposite party has only given  an amount of Rs.1,00,115/-.  In our view the complainant is entitled for Rs.2,96,000/-.  Admittedly complainant received Rs.1,00,115/- so he is entitled for the balance amount of Rs.1,95,885/-.  In our view, act of opposite party in not refunding the amount entitled  to the complainant as per IRDA norms amounts to deficiency in service.  Point No.2 is found accordingly.

Point No.3

          In view of the findings in Point No.1 and 2 complaint is allowed.  In the result the following order is passed

1. First and second opposite parties are directed to pay Rs.1,95,885/- to the complainant.
2. No cost and compensation is  ordered

The order shall be complied with within 30 days from the date of receipt of copy of the order.  If not complied as directed the award amount will carry 15% interest from the date of order till realization.

Pronounced in the Open Forum on this the 10^th day of June, 2015

   Hon’ble Mr. Bose Augustine, President          Sd/-

   Hon’ble Mr. K.N. Radhakrishnan, Member   Sd/-

   Hon’ble Mrs. Renu P. Gopalan, Member       Sd/-

Appendix

Documents for the complainant

Ext.A1-Power of attorney dated 24-9-2012

Ext.A2-Copy of Policy account statement

Ext.A3-Copy of the cheque bearing no.257683 drawn on Axis Bank dtd 3/8/12

Ext.A4-Copy of the cheque bearing no.334909 drawn on Axis Bank dtd 17/9/12

By Order,

Senior Superintendent.