DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA.
CC.No. 200 of 27-04-2012
Decided on 26-09-2012
Usha Bansal wife of S.K Bansal, resident of H.No.641, Aggarwal Colony, Bhatti Road, Bathinda.
........Complainant
Versus
Aviva Life Insurance Company India Limited, Branch Office, The Mall, Bathinda, through its Manager.
Aviva Life Insurance Company India Limited, Registered Office 2nd Floor Prakashdeep Building 7 Tolstoy Marg, New Delhi, through Managing Director & CEO.
Aviva Life Insurance Company India Limited, Aviva Tower, Sector Road, Opp Golf Course, DLF Phase V, Sector 43, Gurgaon through its M.D.
Indusind Bank Ltd., Guru Kashi Marg, Opposite Ahluwalia Complex, G.T Road, Bathinda, through its Branch Manager.
.......Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986.
QUORUM
Smt. Vikramjit Kaur Soni, President.
Smt. Sukhwinder Kaur, Member.
Present:-
For the Complainant: Sh.Vinod Garg, counsel for the complainant.
For Opposite parties: Sh.Jagmohan Syal, counsel for opposite party No.4.
Sh.Sanjay Goyal, counsel for opposite party Nos.1 to 3.
ORDER
VIKRAMJIT KAUR SONI, PRESIDENT:-
1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, 1986 as amended upto date (Here-in-after referred to as an 'Act'). The brief facts of the complaint are that the complainant was having saving account with the opposite party No.4 and Mr. Sanjay Mittal was the Branch Manager in the year 2007. The officials of the opposite party No.4 including said Mr. Sanjay Mittal allured the complainant to purchase of the policy from the opposite party Nos.1 to 3 as they have joint venture/joint business with the opposite party Nos.1 to 3 for the sale of insurance policies and the amount deposited by the complainant will be invested in equity/mutual funds/other saving schemes. The policy is of three years and she will be entitled to get the entire amount any time after three years with interest which shall not be less than 18 to 24% per annum and she will remain assured for a sum of Rs.10 lacs during the period of three years. However, the opposite parties never supplied any policy or terms and conditions to the complainant till date. The complainant has deposited a sum of Rs.1 lac as first premium vide cheque No.002063 dated 29.3.2007 drawn on the opposite party No.4 and two more premiums of Rs.1 lac each on 31.3.2008 and 6.4.2009 respectively. On the completion of three years in March, 2010 the complainant approached the opposite parties to refund the amount of Rs.3 lacs alongwith return/interest as assured by them. The opposite parties expressed their inability to refund the amount and asked the complainant to deposit two more premiums on the assurance that the complainant will get the total amount of 5 lacs with interest @ 18-24% per annum on completion of 5 years. Accordingly, the complainant has deposited two more premiums for a sum of Rs.1 lacs each on 31.3.2010 and 2.5.2011 thus the complainant has deposited total premium of Rs.5 lacs with the opposite parties. In the first week of April, 2012 the complainant again approached the opposite parties for the refund of Rs.5 lacs alongwith interest, but they intimated her that it is life term policy with last date of premium as 31.3.2037 i.e. a policy of 30 years. At the time of taking the policy in the year 2007, the complainant was aged 54 years and no person can be expected to purchase a policy for 30 years extending upto the age of 84 years. The opposite parties handed over the policy account statement which shows that the amount deposited by the complainant has fund value of only Rs.4,45,388/- against the actual amount deposited of Rs.5 lacs. The opposite parties have intimated the complainant that she has to deposit Rs.1 lac immediately and Rs.1 lac per year till the year 2037 failing which the policy will lapse and no amount will be payable thereafter. Hence the complainant has filed the present complaint for seeking the directions to the opposite parties to refund a sum of Rs.5 lacs alongwith interest, cost and compensation.
2. The notice was issued to the opposite parties. The opposite party Nos. 1 to 3 after appearing before this forum have filed their separate joint written statement and pleaded that this complaint is barred by limitation under section 24 A of the Consumer Protection Act, 1986 as the cause of action arose in March, 2007 when the said policy was issued to the complainant. On the declaration made and information provided in the Proposal Form, the policy bearing No.WLG1530819 was issued to the complainant having date of commencement as 31.3.2007. The said policy documents were dispatched to the mailing address of the complainant through Overnite Courier AWB number-535347184 and the same was received by the complainant on 13.4.2007. The said policy contained a notice on Free-Look whereby the Policyholder has a right to reconsider his decision to purchase the said policy within 15 days of receipt of the policy document in case he does not agree with the terms and conditions of the said policy. The opposite party Nos.1 to 3 further pleaded that the complainant had paid premiums for the year 2007, 2008, 2009, 2010, 2011 but the same were not paid in time. The said policy was due for premium on 2012 as the complainant has failed to deposit the same in time therefore as per the terms and conditions of the policy the said policy lapsed due to non payment. At the date of notification of the death of the insured only Fund Value is payable.
3. The opposite party No.4 after appearing before this forum has filed its separate written statement and admitted that the complainant is having saving account with them and Sh.Sanjay Mittal was Branch Manager in 2007. The opposite party No.4 denied that their officials ever represented the complainant that it has joint venture with the opposite party Nos.1 to 3 and it allured the complainant to purchase the insurance policy from the opposite party Nos.1 to 3. The opposite party No.4 further denied that they ever assured the complainant that she will get the refund of the amount deposited by her with the opposite party Nos.1 to 3 alongwith interest @ 18 to 24% per annum after three years of the policy. The opposite party No.4 pleaded that they had only provided her information regarding the terms of the policy and the complainant who is an educated lady, after carefully understanding the terms of the policy, voluntarily purchased the said insurance policy from the opposite party Nos.1 to 3. The opposite party No.4 had also informed the complainant, if he is not satisfied with the same, it may also be got cancelled within 15 days from the date of purchase. The opposite party No.4 further admitted that the complainant has deposited the amount of Rs.1 lac each in three installments with the opposite party Nos.1 to 3 and denied the fact that they ever allured the complainant to deposit two more premiums for a sum of Rs.1 lac each with the opposite party Nos.1 to 3. The opposite party No.4 has no liability to refund any amount to the complainant nor he ever approached with them as such the complainant is not entitled to any relief against them.
4. The parties have led their evidence in support of their respective pleadings.
5. Arguments heard. The record alongwith written submissions submitted by the parties perused.
6. The learned counsel for the complainant submitted that the opposite parties allured and assured the complainant that after paying 3 premiums for three years she could get the refund of the policy any time with interest @ 18% to 24%. The complainant had an account with the opposite party No.4 and Sh.Sanjay Mittal was Branch Manager at that time i.e. in the year 2007. The complainant was never issued the policy or the terms and conditions of the policy and the same are not binding on her. The opposite parties have placed on file the policy and terms and conditions vide Ex.R8 but the address on the same is given incomplete and the same has not been received by the complainant. Moreover, the opposite parties have never produced any document to prove the delivery of the said policy and terms and conditions. No forwarding letter has been produced and no affidavit on behalf of the said courier is on the file. The learned counsel for the complainant further submitted that the opposite parties issued the policy for 30 years extending upto 84 years age. In the proposal form in the columns terms of the policy and premium paying term have been left blank. The policy has not been supplied and terms and conditions has not communicated as such the same are not binding on the complainant. As per the rules of IRDA every policyholder is given an option to reconsider the purchase of the policy and seek cancellation of the policy and refund within 15 days from the date of receipt of the policy. But the complainant has been deprived of this right and therefore the opposite parties are bound to refund the amount received. The complainant has deposited Rs.5 lacs with the opposite parties by way of 5 annual premiums of Rs.1 lac each. The opposite parties have not even produced the policy before this Forum. So adverse inference needs to be taken against them. The learned counsel for the complainant further submitted that in case of any ambiguity in a contract of insurance provisions, these should be construed in the favour of the consumer. The complainant has given the reference of ample of authorities to support her version on various aspects of the matter. On the assurance of the opposite parties the complainant has deposited a sum of Rs.1 lac as first premium vide cheque No.002063 dated 29.3.2007 drawn on the opposite party No.4 and two more premiums of Rs.1 lac each on 31.3.2008 and 6.4.2009 respectively. On the completion of three years in March, 2010 the complainant approached the opposite parties to refund the amount of Rs.3 lacs alongwith return/interest as assured by them. The opposite parties expressed their inability and allured the complainant to deposit two more premiums and assured that she will get the total amount of 5 lacs with interest @ 18-24% per annum on completion of 5 years. Accordingly, the complainant has deposited two more premiums for a sum of Rs.1 lacs each on 31.3.2010 and 2.5.2011. In this manner the complainant had deposited Rs.5 lacs with the opposite parties. The complainant approached the opposite parties in the first week of April, 2012, they handed over the policy account statement which shows the amount deposited by her has fund value of only Rs.4,45,388/- against the actual amount deposited of Rs.5 lacs. The opposite parties have also informed the complainant that she has to deposit Rs.1 lac immediately and Rs.1 lac per year till the year 2037 failing which the policy will lapse and no amount will be payable thereafter.
7. The learned counsel for the opposite party Nos.1 to 3 submitted that the instant complaint is barred by limitation under section 24 A of the Consumer Protection Act, 1986 as in the present dispute the cause of action arose in March, 2007 when the said policy was issued to the complainant whereas she has filed the present complaint in April 2012, that is much after the period of expiry of two years and further submitted that as required under the IRDA, Regulations 2002, the policy terms and conditions specifically provides for a Free Look Period of 15 days, during which the period the policy owner is entitled to review and requested for its cancellation if dissatisfied with the terms and conditions of the policy. Mrs. Usha Bansal, the complainant filled and signed the Proposal Form bearing No.NUP10747105 dated 29.3.2007 for a proposed premium amounting to Rs.1 lac which has to be paid annually and for which the sum assured was Rs.10 lacs. The key features document of 'Life Long' Policy makes it clear that 'Policy Term' will continue till the policyholder attains the age of 85 years and accordingly, the term of the policy will be determined. Thus based on the declaration made and information provided in the Proposal Form, the policy bearing No.WLG1530819 was issued to the complainant having date of commencement as 31.3.2007. The said policy documents were dispatched to the mailing address of the complainant through Overnite Courier AWB number-535347184 and the same was delivered on 13.4.2007 and also was received by the complainant. In the policy schedule it is clearly mentioned the said policy is a Life Long Unit Linked policy and the date of last premium payment is March, 2037. The said policy contained a notice on Free-Look whereby the policyholder has a right to reconsider his decision to purchase the said policy within 15 days from the receipt of the policy document in case she does not agree to the terms and conditions of the said policy. The complainant had paid five premiums in the said policy for the year 2007, 2008, 2009, 2010, 2011 but the same were not paid in time. The said policy was due for premium on 2012 as the complainant has failed to deposit the same in time therefore as per the terms and conditions of the policy the said policy lapsed due to non payment. The policy was lapsed as the premium was not received within certain timeframe and grace period also expired. In such a state risk cover alongwith rider benefits ceases. At the date of notification of the death of the insured only Fund Value is payable. The policyholder may reinstate the policy within 2 years of the due date of the first unpaid installment of Regular premium.
8. The learned counsel for the opposite party No.4 admitted that the complainant is having saving account with it and Sh.Sanjay Mittal was Branch Manager in 2007. The opposite party No.4 denied that Sh.Sanjay Mittal ever represented the complainant that it has joint venture with the opposite party Nos.1 to 3 and has allured the complainant to purchase the insurance policy from the opposite party Nos.1 to 3. The opposite party No.4 never assured the complainant that she will get the refund of the amount deposited by her with the opposite party Nos.1 to 3 alongwith interest @ 18 to 24% per annum after three years of the policy. The complainant had paid 5 premiums to the opposite party Nos.1 to 3 but the opposite party No.4 never allured the complainant to pay that premiums.
9. The legal objection of the opposite party Nos.1 and 3 is that this complaint is time barred as the complainant has purchased the policy in 2007 and the cause of action for filing the complaint arose in March, 2007. If it is considered that the complainant had paid three premiums in 2007, 2008 and 2009 then again the cause of action has arisen in 2009, thus the complaint is time barred, as the complainant has filed this complaint after the lapse of 2 years whereas under the 'Act' the complainant can file the complaint within 2 years from the accrual of the cause of action.
A perusal of complaint, reply as well as the evidence placed on file shows that the commencement date of the policy is 31.3.2007, the policy was issued upto the year of 2037 i.e. upto the age of 85 years of the age of the complainant. The complainant has to pay Rs.1 lac as premium annually. After paying three premiums, the complainant requested the opposite parties for the refund of the amount deposited by her but on the allurement of the opposite parties, the complainant has deposited two more premiums as she was asked by the opposite parties that after the completion of 5 years, the surrender value will be paid to her. If this was the plea of the opposite parties that the complainant has to pay the premium for 3 years only then why they have accepted the premium of 4th and 5th years and allured her to continue her policy, now the legal objection take by the opposite parties that this complaint is time barred is not tenable. Thus this complaint is within the limitation, firstly the policy term is upto 2037 i.e. upto the age of 85 years of the complainant and secondly she has been paying the regular premiums till 2011. Hence this complaint is duly within the limitation.
10. The complainant has been deposited Rs.1 lac as annual premium since 31st March, 2007 till 2 May, 2011, in total she has deposited five premiums of Rs.5 lacs. The policy account statement Ex.C2 shows the unit account statement as on 11 March, 2012, total fund value is Rs.4,45,388/-. The counsel for the complainant submitted that neither the policy nor its terms and conditions were ever supplied to the complainant. The complainant has not been given the Free Look Period of 15 days from which she could have reconsidered her policy, on the other hand the opposite parties submitted that they have duly sent the policy and its terms and conditions to her. For this the opposite parties have given Overnite Courier AWB number-535347184 that was delivered on 13.4.2007 but it has never been received by the complainant as the address mentioned on Ex.R8 is incomplete. A perusal of Ex.R8 shows that this document has been received by one Jaspal Singh on 13/4 but it has not been specifically mentioned that how this person Jaspal Singh is related to the complainant who has received this document on behalf of Usha Bansal as such the complainant has not received the policy document as well as terms and conditions and there are not binding on the complainant.
The support can be sought by the law laid down by the Hon'ble Supreme Court in AIR 2000 Supreme Court 1014 in case titled M/s Modern Insulators Ltd., Vs. Oriental Insurance Co.Ltd.
Further the reliance can also be put on the precedent laid down by the Hon'ble State Consumer Disputes Redressal Commission, Punjab in case titled the Oriental Insurance Company Ltd., Jalandhar and other Vs. M/s Puneet Pasricha, decided on 5.3.2012, wherein the Hon'ble State Commission held that
“ If the terms and conditions had been explained to insured at the time of issuance of the insurance cover, these could have been given to them at the same time or at least these could have been got signed from them. Therefore, the oral version of the appellants that these terms and conditions were duly explained to the insured cannot be believed.”
The complainant has been deprived of her right which is to be given to her as per rules of IRDA wherein an option to reconsider the purchase of the policy and seek cancellation of the policy and refund within 15 days from the date of receipt of the policy as the Free Look letter and an option has not been sent to the complainant. As the complainant has been deprived of her right and as such the opposite parties are bound to refund the amount received by them.
12. In the complaint, affidavit as well as written arguments, the complainant has specifically mentioned that the officials of the opposite party No.4 including Mr. Sanjay Mittal who was the then Branch Manager approached the complainant for purchase of the policy from opposite party Nos.1 to 3 with representation that they have got joint venture/joint business with the opposite party Nos.1 to 3 for the sale of their insurance policies, they allured the complainant that the amount deposited by her will be invested in the units of the opposite party Nos.1 to 3 and in equity/mutual funds/other saving schemes and the policy is of three years and she will be entitled to get the entire amount any time after three years with interest which shall not be less than 18 to 24% per annum. But the opposite parties denied that they have joint venture with the opposite party No.4 but a perusal of Ex.R4 shows in advise declaration Mr. Sanjay Mittal has duly signed the adviser declaration which clearly shows the involvement of Mr.Sanjay Mittal, the then Branch Manager of the opposite party No.4. The policy account statement placed on file shows that the total fund value on 11.3.2012 was Rs.4,45,388/-. This policy account statement is incomplete as in the columns of unit account statement as on 11.3.2012:-
Unit account statement as on 11 March, 2012
Fund(s) No. of Units Unit Price(Rs.) Policy Fund Value (Rs.)
Balance Fund ULIP 6,874.53 38.20 262614
Balance Fund ULIP 1,393.89 30.20 53248
Growth Fund ULIP 3,541.25 30.66 108571
Growth Fund ULIP 683.49 30.66 20955
Total Fund Value**: 445388
Only the number of units of 4 premiums are shown, there is no reference regarding 5th premium, meaning thereby it has not been mentioned anywhere that when on 31.3.2007 when first premium of Rs.1 lac paid then how much units were allotted to the complainant and the number of units shown as 683.49 of year 2011 or of the year 2010. Therefore in the absence of any authentic document regarding the fund value of the insurance policy of the complainant, Ex.C2 cannot be believed. There is ambiguity in the contract of insurance. Therefore the support can be sought by the law laid down by the Hon'ble Supreme Court of India in case titled New India Assurance Company Ltd. Vs. M/s Zuari Industries Ltd. and others, Vol.CL VII-(2010-1), wherein the Hon'ble Supreme Court held:-
“(III) Insurance in case of ambiguity in a contract of insurance-The ambiguity should be resolved in favour of the claimant and against the insurance company-Damage.”
Further, the support can be sought by the law laid down by the Hon'ble Supreme Court of India in case titled Lucknow Development Authority Vs. M.K Gupta, AIR 1994 Supreme Court, wherein the Hon'ble Supreme Court held:-
“(A) Consumer Protection Act (68 of 1986), Pre.-Act is a social benefit oriented legislation- Provisions should therefore be construed in favour of consumer.
Interpretation of Statutes-Social benefit Legislation-Manner of construction.”
13. As discussed above, when no terms and conditions were either supplied or communicated to the complainant, he is not bound by such terms and conditions. The opposite parties cannot garb the hard earned money of the consumer on false pleas/pretexts. In these circumstances, the complainant is entitled to get the refund as per the Insurance Regulatory and Development Authority (IRDA) which are applicable on all the insurance policies. The deduction under the Surrender Charges of IRDA (Insurance Regulatory and Development Authority) (Standardization of terms and conditions of ULIP products and treatment of lapsed policies) Regulations, 2010 can be done as under:-
“10.......The proceeds of the lapsed policies shall invariably be refunded to the policyholder after the expiry of the revival period or at any time after completion of 3 years terms as and when demanded by the policyholder. In case, there is no demand from the policyholder for refund, insurance company shall refund the amount on its own by means of a cheque/demand draft to be delivered to the insured/nominee at his last known address. However, Insurer may deduct charges on account of pre-closure and lapsation which should, in any case, not exceed the charges stated in regulation 8 above.
Regulation No.8 i.e. Surrender Charges of Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies) Regulations, 2010, is reproduced hereunder:-
“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
---------- ----------------------- ---------------------
1st Year 12.50% 15%
2nd year 10.00% 12.50%
3rd year 7.50% 10%
4th year 5.00% 7.50%
5th Year 2.50% 5%
6th year Nil 250%
7 year & onward Nil Nil.”
14. In the present case, the complainant has paid 5 premiums of Rs.1 lac per year since 2007 till 2011. The complainant paid the total amount of Rs.5 lacs and the policy is for 30 years i.e. more than 10 years. Hence the policy is in the 6th year and the deduction to be done on the total amount as per abovementioned IRDA table in regulation No.8 i.e. 2.5% deduction will be made on Rs.5 lacs.
15. Therefore in view of what has been discussed above, this complaint is accepted against the opposite parties with Rs.20,000/- as cost and compensation and the opposite party Nos.1 to 3 are directed to pay the amount of Rs.5 lacs after deducting 2.5%=Rs.4,87,500/-(Rs.5,00,000-12,500/-). The compliance of this order be done within 45 days from the date of receipt of the copy of this order.
In case of non-compliance the interest @ 9% per annum will yield on the amount of Rs.4,87,500/-.
16. A copy of this order be sent to the parties concerned free of cost and file be consigned to the record room.
Pronounced in open Forum:-
26-09-2012
Vikramjit Kaur Soni
President
Sukhwinder Kaur
Member
