Date of filing: 11.12.2013.
Date of disposal: 10.06.2014.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - II:
VIJAYAWADA, KRISHNA DISTRICT
Present: Sri A. M. L. Narasimha Rao, B.Sc., B. L., President
Smt N. Tripura Sundari, B. Com., B. L., Member
Tuesday, the 10th day of June, 2014
C.C.No.192 of 2013
Between:
Gatti Pavan Kumar, S/o late Rambabau, Hindu, Aged about 36 years, Business, R/o.D.No.41-1/17-8A, Siri Tanaya Residency, Ranigari Thota, Krishna Lanka, Vijayawada – 13.
….. Complainant
And
1. Aviva Life Insurance Company India Ltd., Rep: by its Managing Director, Head
Office, Aviva Towers, Sector Road, Opp: Golf Course, DLF Phase – V, Sector – 43,
Gurgaon – 12203, Haryana State.
2. Aviva Life Insurance Company India Ltd., Rep: by its Branch Executive, D.No.59-14-
2A, Santhi Plaza, Opp: Matha Towers, Gayatri Nagar, Vijayawada – 520 008,
Krishna District.
. … Opposite Parties.
This complaint coming on before the Forum for final hearing on 27.5.2014, in the presence of Sri M. Adinarayana, advocate for complainant; Sri Ch. Suresh Kumar, advocate for opposite parties 1 and 2 and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President Sri A. M. L. Narasimha Rao,)
1. This complaint is filed under section 12 of Consumer Protection Act, 1986 for a diction to the opposite parties 1 and 2 to continue the policy bearing No.0068149481 alternatively to pay an amount of Rs.30,000/- with interest thereon @24% p.a., from 30.4.2013, to pay compensation of Rs.25,000/- and to pay costs of Rs.5,000/-.
2. The averments of the complaint in brief are as follows:
The complainant has taken a policy called Easy Life Policy from the opposite parties commencing from 25.9.2007. The policy bearing No. 0068149481 has 10 year term. It is unit linked policy with life insurance benefit. Premium is payable annually at the rate of Rs.10,000/-. The complainant was made to outstand that he has to pay Rs.10,000/- every year for three years and he can claim the amount along with accrued bonus at any time from 4th year. The complainant paid three instalments in three years. Subsequently on 30.4.2013 the complainant received letter from the opposite parties terminating the policy. A sum of Rs.11,503/- was paid to him through cheque. The complainant returned the cheque on 4.7.2013 and asked the opposite parties to continue the policy. The opposite parties again sent the cheque with a letter dated 11.7.2009 asking for total outstanding amount. There is no such condition in the policy. The payment is illegal. The complainant is ready to pay outstanding premium amount to the opposite parties. He did not encash cheque for Rs.11,503/-. The termination of policy is unlawful and there is deficiency in service on the part of the opposite parties. Therefore the present complaint is filed.
3. The opposite parties filed version admitting the issue of policy and denying the allegations made against the opposite parties and further stating as follows:
This complaint is barred by limitation as cause of action arose in the year, 2008. The policy is an unit linked policy involving speculative transactions and therefore the purpose of taking the policy is commercial and the complainant is not a consumer. The complainant paid premium of three years only. He did not pay premium from April, 2011. The opposite parties sent a reminder notice on 14.3.2012. The complainant failed to deposit the premium. The policy was changed to ‘Inforce Revival Period’ on 20.5.2011. It was communicated to the complainant. As per the terms of the policy, if the payment of premium was discontinued after 36 months from the date of coverage, the policy holder has an option to provide advance notice whether he wanted to continue the policy without paying further premium. When the policy is ‘inforce revival period’ the policy holder can get the policy reinstated or he can surrender the policy as per the terms and conditions. As the complainant did not issue advance notice of his intention to continue the policy, it has become terminated after ‘inforce revival period’. Therefore the surrender value was paid to the complainant under auto-fore-closure mode. The opposite parties sent a cheque for Rs.11,503/- to the complainant as per the terms and conditions of the policy. There is no deficiency on the part of the opposite parties. The complaint is not maintainable as the case is not a simple case of deficiency and involves determination of complex questions of fact and law. This complaint is liable to be dismissed.
4. The complainant filed his affidavit as deposition of PW.1. The assistant manager legal of the opposite parties filed affidavit as deposition of DW.1. Exs.A1 to A7 are marked on behalf of the complainant and Exs.B1 to B3 are marked on behalf of the opposite parties.
5. Heard the arguments advanced by the learned counsel for both the parties.
6. The points for determination are:
- Whether there is deficiency in service on the part of the opposite parties with regard to policy taken by the complainant?
- Whether the complainant is entitled to the reliefs asked for?
Point No.1:
7. The complainant had admittedly taken a unit linked insurance policy from the opposite parties and the said policy called ‘Easy Life Policy’ covers life assurance of Rs.1,00,000/-/. The opposite party filed Ex.B1 copy of brochure with miniature size letters. We cannot read it. However Ex.B3 copy of standard terms of the policy contains the details regarding payment of premium, withdrawal, surrender etc. The complainant admittedly paid annual premium for three years. The term of policy is 15 years and premium payment term is also 15 years as per Ex.A2 schedule filed by the complainant himself. According to the complainant he was told that his policy would continue even if he stopped premium after three years from the commencement of policy and so the complainant had paid the premium for three years and stopped payment of premium. There is no material to show such assurance given by the opposite parties.
8. The term 2 (c) of Ex.B3 discloses the consequences if the premium was paid for three years and stopped thereafter. In such case the policy holder may exercise any of the three options during the 2 year reinstatement period. The options are 1) to seek reinstate subject to writing to the opposite parties at least seven days prior to the end of reinstate period or (2) to surrender the policy and take surrender value or to continue the policy beyond reinstate period without paying further premium provided the opposite parties receive a written notice in that regard from the policy holder within 60 days of the due date of first unpaid instalment of regular premium. In this regard the opposite parties say that the complainant did not communicate with the opposite parties and did not issue written notice seeking continuation of the policy and intention to stop the premium after three weeks. The complainant also does not say that he had given any such written notice when the insurance company and the policy holder entered into a written insurance contract they are bound by the terms. This Forum cannot relax any condition unless such a term is found to be an instance of unfair trade practice. When the opposite parties are carrying on business as insurer and when the policies are unit linked policies the management of units will have to be taken up effectively and for that purpose they must have full knowledge of the policies that remain inforce and policies to lapse or to terminate. When no communication is received from the complainant the opposite party will have to apply sub-clause (4) of clause (c)of term of contract of the policy as per the said clause the policy holder failed to exercise any of the options specified above then the policy and all benefits shall automatically terminate at the expiry of the reinstate period and the company shall pay surrender value to the policy holder. Since evidently the complainant did not exercise any option but simply stopped payment of premium three years after the commencement of the policy the opposite parties have only the option of terminating the policy at the end of reinstatement period. The policy had commenced from 19.4.2008 as per Ex.A2. Three years period had expired by 19.4.2011 and the subsequent two years reinstatement period had expired by 19.4.2013. The opposite parties has stated in their letter Ex.A3 that the date of expiry of revival period is 19.4.2013. Then they calculate the surrender value and after deducting the penalty, they sent the amount of Rs.11,503/- to the complainant. The complainant has not established that the opposite parties made him to understand that the policy benefits would continue even if the complainant stopped to pay annual premium from 4th year of the policy. Therefore the action taken by the opposite parties appears to be proper and we find no deficiency in service on the part of the opposite parties.
Point No.2:
8. In view of the answer on point no.1 the complainant is not entitled to any relief. However the complainant said to have not encashed the cheque sent by the insurance company long ago. So the complainant may be given liberty to return the cheque and the opposite parties would issue a fresh cheque to the complainant for the amount due without further deductions. A relief in that regard may be allowed. The objections taken by the opposite parties as to maintainability of the complaint are not tenable.
9. In the result this complaint is dismissed without costs and the complainant is given the liberty to return the cheque issued by the opposite party for Rs.11,503/- to the opposite parties and thereafter the opposite parties shall issue a fresh cheque for the said amount without further deductions. Both parties do bear their respective costs.
Dictated to steno, N. Hazarathaiah, transcribed by him, corrected by me and pronounced by us in the open Forum, this the 10th day of June, 2014.
PRESIDENT MEMBER
Appendix of evidence
Witnesses examined
For the complainant: For the opposite party:
Gatti Pavan Kumar Assistant Manager Legal of OPs 1 & 2;
(by affidavit) (by affidavit)
Documents marked
On behalf of the complainant:
Ex.A1 19.04.2008 Original copy of first premium receipt.
Ex.A2 Original copy of schedule of OPs.
Ex.A3 30.04.2013 Photocopy of termination of policy.
Ex.A4 25.04.2013 Photocopy of payment advice.
Ex.A5 25.04.2013 Original copy of cheque for Rs.11,503/-.
Ex.A6 04.07.2013 Copy of letter issued by complainant to OPs.
Ex.A7 11.07.2013 Photocopy of letter issued by Op.2 to complainant.
On behalf of the opposite parties:
Ex.B1 Copy of brochure of OPs.
Ex.B2 Photocopy of proposal form.
Ex.B3 Photocopy of standard terms and conditions of policy.
PRESIDENT
