Haryana

Ambala

CC/133/2012

ROHIT JAIN - Complainant(s)

Versus

AVIVA LIFE INSS. - Opp.Party(s)

NARENDER SINGH

05 May 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMBALA.

 

           Complaint Case No.    :  133 of 2012

Date of Institution       :  27.04.2012

           Date of Decision         :  05.05.2016

Rohit Jain son of Sh. S.K. Jain R/o 80, Model Town, Ambala City.                                                                                               

                                                                                                                                                            ……Complainant.

                                                                                               Versus

Aviva Life Insurance Co. Ltd. Aviva Tower, Sector  Road, Opp. Golf Course, DLF-Phase-V, Sector 43, Gurgaon.

                                                ……Opposite Party.

Complaint Under Section 12 of the Consumer Protection Act

 

CORAM:        SH. A.K. SARDANA, PRESIDENT.

                        SH. PUSHPENDER KUMAR, MEMBER.                                               

Present:          Sh. Vikas Arora Adv. counsel for complainant.

                        Sh. Vivek Vaid, Adv. counsel for Op.

ORDER.

                        Brief facts of the present complaint are that complainant purchased an insurance policy namely ‘Easy Life Plus’ from OP for the sum assured Rs.1,20,000/- on payment of regular premium of Rs.12000/- annually vide policy no. ELP2086521 having UIN:122L044V01 and regularly paid 3 premiums and  never applied for surrender of the policy.  But surprisingly, OP vide letter dated 07.01.2012 intimated the complainant regarding change in his policy status by alleging that since the surrender value of his policy is less than his first year’s premium thus in such a situation as per policy terms & conditions, policy was ‘Auto foreclosed’ and refunded a cheque of Rs.12,000/- to the complainant. Complainant further contended that before foreclosure of the policy, OP never issued mandatory notice of termination of policy to him as required under Article 5 (b) of the policy and therefore, the termination of policy without any notice is illegal & arbitrary one rather the policy cannot be called in question after the expiry of two years from the date of issuance of policy as per provisions contained in Insurance Act, 1938.  So, a legal notice was served upon the OP but they did not bother for the same.  As such, complainant has submitted that there is deficiency in service as well as unfair trade practice on the part of OP and prayed for issuance a direction to OP for refunding an amount of Rs.36,000/- alongwith interest, costs & damages of Rs.50,000/-.

2.                     Upon notice, Op appeared through counsel and filed written statement raising preliminary objections qua non-maintainability of complaint, no deficiency in service on their part. On merits, it has been urged that the policy was due  for premium on 03.06.2010 and OP sent policy reminder notice dated 27.04.2010 to complainant, however, complainant failed to deposit the premium because of which the status of the policy was changed to Inforce Notice Period on 04.07.2011 and same was communicated to the complainant vide letter dated 05.07.2011 and 04.11.2011 and when complainant failed to reinstate the said policy within a prescribed time frame, status of the policy was changed to ‘Auto-Fore Closure’ on 03.01.2012 and a cheque of surrender value of Rs.12,000/- was dispatched on 11.01.2012 to the complainant. Further it has been urged that within the reinstatement period of two years from the date of last unpaid installment, the surrender value of Units attributable to Regular Premium falls below an amount equivalent to one year’s Regular Premium as payable at the commencement date, then the policy shall automatically terminate under Article 5 of terms & conditions  of the policy.  As such, the Op has prayed for dismissal of complaint.

3.                     To prove his contention, counsel for complainant tendered affidavit of complainant as Annexure CX alongwith documents as Annexures C-1  to C-4 and closed the evidence whereas on the other hand, the counsel  for Op tendered in evidence affidavit of Sh. Watan Kumar Bhajanka, Senior Executive Legal as Annexure RX alongwith documents as Annexures R-1 to R-3 and closed the evidence on behalf of Op.

4.                     We have heard learned counsels for the parties and gone through the record minutely.  The main grievance of the complainant is that  the policy in question issued to him by Op on 03.06.2008 was having premium of Rs.12,000/- annually and he paid  the premium for three years i.e. on 03.06.2008, 06.06.2009 & 03.06.2010 regularly (by cheque) of Rs.12,000/- each and OP wrongly changed the status of his policy as ‘Auto Foreclosed’ without issuing any prior notice though the same was mandatory but the Op’s contention is that  the premium due on 03.06.2010 was not paid by the complainant  despite notice dated 27.04.2010  and that is why, the status of the said policy was changed as Inforce Notice Period on 04.07.2011 and same was communicated to complainant vide letter dated 05.07.2011 and 04.11.2011 respectively but the complainant failed to reinstate the policy within the  prescribed time frame  and then the  policy was changed to ‘Auto Fore-Closure’ on 03.01.2012 and a cheque of Rs.12,000/- as surrender value of the policy was sent to the complainant.

                        At the stage of arguments, counsel for complainant alongwith written arguments produced attested copy of premium paid receipt by complainant to OP through cheque No.100404 dated 03.06.2010 of Rs.12,000/- of Oriental Bank of Commerce, Ambala City  which is taken on record as Annexure C-8.  Further to fortify the fact that the said amount of Rs.12,000/- has been received by OP-company, complainant has placed on record  attested photocopy of his bank account pass book (taken on record as Annexure C-9) which depicts that on 09.06.2010 a sum of  Rs.12,000/- vide cheque no.100404 has been credited to the account of Aviva Life Insurance Co. i.e. OP Insurance Company  from the account of complainant and thus the contention of OP is shaky and not believable. Further in the pleadings as well as by virtue of arguments, the OP is emphasizing that complainant has not paid the third annual premium due on 03.06.2010 and thus violated Article 5(a) of terms & conditions of the policy in question whereas the complainant was having option of free look period of 15 days if he was not agree with terms & conditions of the policy.  But surprising to us, as to how the OP is claiming that complainant has not paid the third annual installment due on 03.06.2010 whereas from documents Annexure C-7 & C-8,, it reveals that on 09.06.2010 an amount of Rs.12,000/- has been credited to their account. We have gone through document Annexure R-3 which is reproduced as under:-

                                    5.         SURRENDER VALUE & AUTO-FORECLOSURE

a)         After completion of the first three             policy years the policy may be surrendered by the policy holder and a surrender value shall be payable provided the Regular Premium due for more than one policy year has been received by us. The Surrender Value will be equal to the Value of units pertaining to Regular Premium less the Surrender Charge on units pertaining to Regular Premium, as mentioned in the Schedule, plus the value of Units pertaining to Top Up premium, if any.

b)        After the Policyholder has paid Regular Premium for at least 3 years, if the Surrender Value of Units pertaining to Regular Premium becomes equivalent to the Regular Premium paid in the first policy  year, then the policy shall automatically terminate and we shall send the policyholder a notice of termination  and pay the Surrender Value calculated in accordance with Article 5 (a).

                        “Significantly, no notice of termination as required under article 5(b) of the terms & conditions of the policy has been served upon the complainant and thus OP itself has violated the terms & conditions of the policy.”

5.                     In view of the facts discussed above, we are of the confirmed view that Op-insurance company is not only deficient in providing proper services to the complainant rather  has committed unfair trade practice with the complainant and thus  we have no option except to allow the present complaint.  Accordingly, the complaint is allowed and the Op is directed to comply with the following directions within thirty days from the communication of this order:-

(i)        To refund a sum of Rs.36000/- to the complainant which they received under the garb of three annual premium installments alongwith simple interest @ 9% per annum from the date of filing of complaint to till date.

 

(ii)       And to pay a sum of Rs.10,000/- as compensation on account of causing mental harassment.

(iii)     Also to pay a sum of Rs.5000/- as costs of litigation.

                        Further the award in question/directions issued above must be complied with by the OP within the stipulated period failing which all the awarded amounts  shall further attract simple interest @ 12% per annum for the period of default. So, the complaint is decided in above terms. Copies of this order be sent to the parties concerned, free of costs.  File be consigned to the record room after due compliance. 

 

Announced: 05.05.2016                                                                     Sd/-

                                                                                                 (A.K. SARDANA)

                                                                                                          PRESIDENT

 

                                                                                                                

                                                                                        Sd/-

                                                                        (PUSHPENDER KUMAR)                                                                                                                                                                                             MEMBER