DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA

CC.No.458 of 21-10-2013

Decided on 20-03-2014

Virpal Kaur aged about 34 years D/o Jagdev Singh R/o C/o Karnail Singh Niwas, H.No.22550, Bhagu Road, Street No.18, Near School, Bathinda.

........Complainant

Versus

Aviva Life Insurance Co. Ltd., Branch Office: The Mall, Near Axis Bank, Bathinda, through its Branch Manager/Incharge/Authorized Signatory.

.......Opposite party

Complaint under Section 12 of the Consumer Protection Act, 1986.

QUORUM

Smt.Vikramjit Kaur Soni, President.

Smt.Sukhwinder Kaur, Member.

Sh.Jarnail Singh, Member.

Present:-

For the Complainant: Sh.R.K Mangla, counsel for the complainant.

For Opposite party: Sh.Varun Gupta, counsel for the opposite party.

ORDER

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 on the assurance of the opposite party, the complainant filled the proposal form bearing No.NUP13641877 dated 22.3.2010 and deposited the premium of Rs.20,830/- with the opposite party. At the time of selling of the abovesaid policy the officials of the opposite party assured the complainant that the amount of Rs.20,830/- each shall be invested in the equity/mutual funds/other savings scheme and she would be insured for the amount of Rs.1 lac till its withdrawal by her or return/refund of the amount by the opposite party to her. The officials of the opposite party further assured the complainant that after deposit of 3 regular annual premiums, she can get the refund of the amount so deposited by her anytime alongwith expected return/income from 25% to 30% and she shall get almost double of the deposited amount. There is no maturity date of the abovesaid policy and she can remain investor beyond the period of 3 years to get the higher return by depositing or without depositing any further premium. The opposite party has not supplied the policy terms and conditions to the complainant so far. After the completion of 3 years the complainant approached the opposite party, its officials conveyed her that she is at liberty to withdraw her amount alongwith accrued benefits and also conveyed her that if she is not interested to keep the abovesaid policy, she can avail the Free Look Period option and can get the policy cancelled on the receipt of the policy. The complainant has deposited three more annual premiums of Rs.20,830/- in the year 2011, 2012 and 2013 respectively. As the complainant was in need of money, she approached the opposite party to get the surrender value/fund value alongwith expected return thereof, its officials obtained her signatures on some blank printed forms without disclosing and explaining the contents to her on the pretext that the same are required for processing her request for the payment of the surrender/fund value alongwith expected return/income thereof and conveyed her that the surrender value/fund value shall be paid to her within a week, but despite her repeated requests nothing has been paid to her till date. Hence the present complaint filed by the complainant to seek the directions of this Forum to the opposite party to refund the remaining amount of Rs.83,320/- alongwith accrued profit, interest, cost and compensation.

2. The opposite party after appearing before this Forum has filed its written statement and pleaded that the complainant herself show her willingness to purchase its life insurance plan, for this she approached its adviser and got the entire information about all the insurance plans. After understanding all the terms and conditions and benefits of all the plans, the complainant purchased the plan 'Aviva Dhan Vriddhi' of the opposite party and filled the proposal form bearing No.NUP13641877 on dated 22.3.2010 and opted to pay the annual premium of Rs.20,830/-, term of the plan 11 years, premium paying term 6 years and premium frequency annual with sum assured of Rs.1 lac. The complainant has also signed the proposal form and declaration to this effect. After receiving the duly signed proposal form and going through its contents, the underwriters of the policy issued the policy bearing No.TDV2918924 with commencement date 24.3.2010 and sent the policy documents alongwith its all terms and conditions to the complainant on the given address through Speed Post Bill No.EB169355995IN on dated 29.3.2010, the same has been duly received by her and are in her possession. As per the provisions of the Insurance Act and the policy documents, the policyholder has an option to reconsider the policy, the policyholder has 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 documents. If the policyholder cancel his/her policy, the premium will be refunded to him/her after adjusting for adverse movement in the units prices less charges incurred on account of the stamp duty and medical expenses, but in the present case, the complainant did not do so, meaning thereby she was agreed to the same. The opposite party further pleaded that the complainant has deposited four annual premiums against the abovesaid policy with it and can surrender her policy and get its value as per its terms and conditions.

3. The parties have led their evidence in support of their respective pleadings.

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

5. Admittedly, the complainant has purchased one insurance policy namely 'Aviva Dhan Vriddhi' of the opposite party and filled the proposal form bearing No.NUP13641877 on dated 22.3.2010 with sum assured of Rs.1 lac with annual premium of Rs.20,830/-. The complainant has deposited 4 premiums in the abovesaid policy.

6. The complainant submitted that at the time of selling of the abovesaid policy, the officials of the opposite party assured her that the the amount of Rs.20,830/- each shall be invested in the equity/mutual funds/other savings scheme and after deposit of 3 regular annual premiums, she can get the refund of the amount so deposited by her anytime alongwith expected return/income from 25% to 30% and she shall get almost double of the deposited amount. After the completion of 3 years the complainant deposited one more premium and requested the opposite party for the surrender value/fund value alongwith expected return, for which the opposite party obtained her signatures on some blank printed forms without disclosing and explaining the contents to her, but has not refunded any amount to her till date.

7. On the other hand the submission of the opposite party is that the complainant has opted the plan 'Aviva Dhan Vriddhi' of the opposite party and policy documents alongwith its all terms and conditions have been sent to her on the given address through Speed Post Bill No.EB169355995IN on dated 29.3.2010. If the complainant was not satisfied with her policy, she had the option of Free Look Period, in which she can review the policy terms and conditions and cancel the policy within a period of 15 days from the date of receipt of the policy documents, but she did not avail that option. The complainant has deposited 4 premiums against the abovesaid policy with the opposite party and can surrender her policy and get its value as per its terms and conditions. The opposite party further submitted that it has never received the surrender request from the complainant.

8. The opposite party has taken the legal objection that this complaint is not maintainable and has referred the precedent laid down by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case titled as Ram Lal Aggarwalla Vs. Bajaj Allianz Life Insurance Co. Ltd., 2013 (3) CPJ 203, this objection of the opposite party is not tenable in the light of the precedent laid down by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case titled as Punjab Agricultural University Ludhiana Vs. UTI of India and Anr., I (2012) CPJ 166 (NC), wherein it has been held:-

“i) Consumer Protection Act, 1986-Sections 2(1)(d)(ii), 2(1)(g), 21(a)(i)-Jurisdiction-Investment-Improving 'Livelihood Security' of employees-Complaint Maintainability of-Consumer-Commercial Purpose-Complainant /University invested funds of its employees with OP for their benefits-Some dispute regarding investments arose-Complaint filed-Deficiency in service alleged-Maintainability of complaint challenged on ground that complainant is not consumer as complainant invested money knowingly and investment could not be said to be for 'self-employment' or 'for earning his livelihood'-Reference made to decide that whether the complainant covered under definition of 'consumer' or not-It is clear that what was hired by complainant was 'services' and not goods-Aim of Act is to protect economic interest of consumer as understood in commercial sense as a purchaser of goods and in larger sense of user of services-Explanation following Section 2(1)(d)(ii) of Act would be clarificatory in nature and does not supplant meaning of word 'consumer', vis-a-vis, 'services' as it appears in main section where exclusion clause will come into play if it is for 'commercial' purpose-Having gone through meaning of word 'commercial' defined under various law dictionaries, it is no doubt that words 'commercial purpose' would cover undertaking, objective which is to make a 'profit'-Investment made by University for improving 'livelihood security' of their employees who would be left with better 'financial security', after retirement-Therefore, investment shall not under any circumstances fall under word 'commercial' excluding complainant from definition of 'consumer'-In view of above, no merit in objection raised by OP-Complaint is maintainable.”

Thus as per the precedent laid down by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case titled as Punjab Agricultural University Ludhiana Vs. UTI of India and Anr. (Supra), this complaint is maintainable.

9. A perusal of Premium Quotation and Illustration, Ex.OP1/7, shows that Installment premium:-Rs.20,830/-; Policy term:-11 years; Maturity age of life insured:- 41 years; Premium frequency:-Annually and Premium payment Term:-6 years. The illustration-Benefits of Ex.OP1/7, also shows the Accrued Guaranteed Addition (At year end):-Rs.77,000/-; Guaranteed Death Benefit (During the year):- Rs.1,70,000/-; Guaranteed Survival Benefit (At year end):-Rs.20,000/- and Guaranteed Maturity Benefit (At year end):-Rs.1,37,000/-, in this document the Note has also been given as under:-

“The quotation shown above includes the ADB rider charges also, if opted for, ADB Rider Benefit is payable till the premium payment term only.

This quotation does not include any additional premium payable due to underwriting or effect of any applicable taxes on premium.

All the benefits shown in the above table are guaranteed provided all the due premiums are paid.”

The plan opted by the complainant is not a 'Unit Linked Plan' as it is clear from the Policy Schedule that the name of the plan is 'Aviva Dhan Vriddhi' and Plan Code is TDV. A further perusal of Standard Terms & Conditions of Ex.OP1/8 shows Dhan Vriddhi (Non-participating Plan), which shows that this is a 'Traditional Plan', not a 'Unit Linked Plan'. As per the Conditions No.5 and 6 of the terms and conditions of the policy:-

“5) Surrender Value:-a) At the commencement of policy year 3, the policy will acquire a surrender value if you have paid all premium due for the first 2 policy years.

b) The surrender value will be the higher of the 'Guaranteed Surrender Value' and the 'Special Surrender Value' where;

i) The Guaranteed Surrender Value is 30% of the total premium paid excluding:

1) The premium paid in respect of the first policy year and

2) Any premium payment made for any extra mortality rating, and

3) Any premium payment made for a Rider, if any.

The amount calculated above shall be further reduced by the amount of any Survival Benefit paid.

ii) The Special Surrender Value calculated as follows:

(Paid up Sum Assured + Accrued Guaranteed Additions) Surrender Value Factor.

6) Conditions for Payment: It is a condition precedent to our liability to make payment of any benefit on the occurrence of an insured event that We are:

a) Given written notice immediately and in any event within 90 days of the insured event, and

b) Given such information and/or documentation that we may request in order to establish the fact of, date of, circumstances relating to and cause of the insured event and/or our liability in respect of it, including but not limited to:

1) Our claim form duly completed

2) The policy documentation

3) Evidence of date of birth if we have not admitted age.

4) The original or a legalised copy of the death certificate showing the circumstances of, cause of and the date of death.

c) We receive all co-operation and assistance in any investigation that we may decide to carry out in respect of the insured event.”

10. The complainant never applied for the surrender of the abovesaid policy or disputed about its terms and conditions before filing of this complaint. Sh.Vivek Yadav, Authorized Signatory of Aviva Life Insurance Company Limited has deposed in his affidavit, Ex.OP1/9:-

“.....the policy documents alongwith its all terms and conditions were sent to the complainant on the communication address mentioned on the proposal form through Speed Post Air Way Bill No.EB169355995IN on 29.3.2010 and the same was duly delivered to the complainant. As per the provisions of the Insurance Act and as per the policy documents, there is specifically mentioned that policyholder has an option to reconsider the policy i.e. Free Look Period Option, meaning thereby i.e. the policyholder has 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 documents'.....'The complainant did not exercised the option of right to reconsider available to her from which it is clearly established that the complainant agreed to the terms and conditions and features/details of the policy and chose to continue with the same'.....'The complainant has till date paid four annual premiums totaling to an amount of Rs.83,320/-, which itself shows her acceptance to the terms and conditions and features of the policy. The complainant has never filed a complaint with the company in respect to her policy. The current status of the policy is in force as on 7.2.2014 which is subject to change as per the terms and conditions of the policy. It is further important to mention that the policy is a traditional insurance policy and not a unit linked insurance policy wherein the premium quotation & illustration clearly lists out the guaranteed benefits under the policy'.....'The complainant can surrender the policy as per the terms and conditions

of the policy and can get the value of the policy calculated as per terms and conditions of the policy. However the complainant has voluntarily opted for a policy wherein the premium paying term is 6 years and the policy terms is 11 years and chose to not dispute the same for a unreasonably unexplained long tenure, hence to avail full benefit of insurance should continue the policy for its full tenure. The opposite party has till date not received any surrender request from the complainant.....”

From the above mentioned affidavit, it is clear that the complainant with her own choice has purchased the abovesaid policy with premium paying term of 6 years. The complainant has already paid 4 premiums. As per the Premium Quotations and Illustration, Ex.OP1/7, the complainant is entitled for the Accrued Guaranteed Addition (At year end) to the tune of Rs.77,000/- and Guaranteed Maturity Benefit (At the end) to the tune of Rs.1,37,000/-. The complainant has already paid 4 premiums, thus in case she wants to enjoy the full benefits, she has to deposit the premiums for 2 more years.

11. A perusal of record placed on file by the complainant shows that she has never applied for the surrender of the abovesaid policy. The policy is in force status and 5th premium is due on 3.3.2014.

12. Thus from the facts and evidence placed on file we are of the considered opinion that the policy purchased by the complainant is a traditional plan and she can seek the surrender value as per the Condition No.5 of the terms and conditions of the policy, but if she wants to avail full benefit of the insurance policy, she can continue the policy for its full tenure. The prayer of the complainant is regarding the refund of the remaining amount of Rs.83,320/- alongwith accrued benefits. As this is the traditional plan, all the benefits can be given to the complainant as per the declaration and illustration form.

13. Therefore in view of what has been discussed above this complaint is accepted with Rs.2000/- as cost against the opposite party. The opposite party is directed to give the option to the complainant either to surrender or to continue her policy with it within the period of 15 days from the date of receipt of the copy of this order. In case the complainant gives her request for the surrender, the surrender value be paid as per Clause 5 and in case the complainant wants to continue her policy, the opposite party without any penal charges will get deposit the fifth premium from her.

14. The compliance with regard to cost be done within 45 days from the date of receipt of the copy of this order.

15. 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:-

20-03-2014

(Vikramjit Kaur Soni)

President

(Sukhwinder Kaur)

Member

(Jarnail Singh)

Member