DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Rajesh Kumar s/o Kali Ram, House No.18-D, Sector 30-B, Chandigarh.

                                      ---Complainant.

Versus

Bajaj Allianz Life Ins. Co. Ltd. through its Branch Manager, SCO 215-217, Sector 34-A, 4^th Floor, Chandigarh.

---Opposite Party

BEFORE:  SMT. MADHU MUTNEJA, PRESIDING MEMBER

                   SHRI JASWINDER SINGH SIDHU, MEMBER

Argued by:  Sh. Vivek Aggarwal, Counsel for the complainant

                        Sh. Varun Chawla, Counsel for the OP

PER JASWINDER SINGH SIDHU, MEMBER

1.                           In brief, the case of the complainant is that he took three separate insurance policies from the opposite parties having premium of Rs.12,000/- each.  However, he was issued only one policy (No.92196756).  The remaining two policies were never received regarding which the complainant filed a consumer complaint and the same was allowed vide order dated 4.8.2010 (C-1).

According to the complainant, the opposite party did not fully comply with the order (C-1) and returned only the deposited amount in March 2011. Subsequently, the complainant requested the opposite party that he does not want to continue the policy (No.92196756) and requested for refund of the amount paid i.e. Rs.36,000/-.  The complainant sent a legal notice dated 25.3.2011 (C-3) in this regard but the opposite party rejected the request of the complainant vide letter dated 24.5.2012 (C-4).  Hence the present complaint. 

2.                           In its written statement the opposite party averred that vide proposal dated 5.3.2008, the complainant opted for the Unit Linked Regular Premium “New Family Gain” having sum assured of Rs.4,80,000/- and annual premium of Rs.12,000/- payable for 15 years.  It has been admitted that policy No. 92196756 was issued to the complainant.  It has been admitted that the complainant paid three installments towards the said policy but did not pay further premiums due from 20.3.2011. It has been averred that the complainant failed to get the policy revived.  The facts with regard to the filing of a complaint and order (C-1) have been admitted.  However, it has been averred that the said order was fully complied with.  It has been denied that any request with regard to cancellation of the policy in question was received from the side of the complainant.  It has been averred that the complainant even did not submit any request for surrender value under the policy.  It has been pleaded that the complainant is not entitled to refund of the amount under the policy in question in terms of the order dated 4.8.2010 (C-1).  Pleading that there is no deficiency in service on its part, prayer for dismissal of the complaint has been made.

3.                           We have heard the learned counsel for the parties and have gone through the documents on record.

4.                           The main grouse of the complainant is with regard to not entertaining his request for cancellation of the policy bearing No.92196756, which he had continued for a period of three years by paying annual premium of Rs.12,000/- each.  The complainant has mentioned that the other two policies purchased by him, were also under dispute, and an order was passed in his favour.  The complainant while claiming compliance of orders of the Forum in these two policies had given in writing that he did not wish to continue with the policy in question which he had serviced for three years but the opposite party instead of paying any heed to his request, ignored the same. 

5.                           The complainant had also served a legal notice (C-3) which was replied by the opposite party through its communication dated 24.5.2012 (C-4).  The opposite party in its reply has failed to mention any reason as to why the request of the complainant, as mentioned in Annexure C-3, could not be entertained. The complainant having specifically mentioned that he had lost faith in the company (opposite party), and did not want to continue with the policy any further, it was incumbent upon the opposite party to have refunded the amount due under the policy to the complainant immediately as per the policy terms and conditions.  Even as per the admission of the opposite party, the complainant did not pay any premium after the third installment, meaning thereby that the intentions of the complainant in not continuing with the policy are clear not only from his communication to the opposite party but also from his act in not depositing the 4^th premium when it became due.  Even if the opposite party was not inclined to his request of refund of the amount, it was incumbent upon the opposite party to have treated the policy in question as a discontinued one after it had become lapsed on the expiry of its revival period. 

6.                           To our mind, the case of the complainant is squarely covered under clause 7 of the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 which is reproduced as under :-

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

v.                  To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium) do not exceed the limits specified below:-

 AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

Thus, from the perusal of Regulation 7, extracted above, it is crystal clear that the opposite Party, could have at the most deducted an amount of Rs.1,000/- from this policy and refunded the remaining amount to the complainant at its own.  However, the opposite party miserably failed to do so.  The opposite party, even at the time of filing its reply, did not offer to treat the case of the complainant as per these guidelines so as to invite any leniency from our side.   Hence, the opposite party is found deficient in rendering proper service to the complainant.  Therefore, in the given situation, the present complaint deserves to succeed and the same is allowed against the opposite party.

7.                           In view of the above discussion, the present complaint is allowed and the opposite party is  directed as under :-

                                                 i.                  To pay the amount of Rs.36,000-1000 = Rs.35,000/- as per Regulation 7, extracted above;

                                               ii.                  To pay Rs.10,000/- as compensation for mental agony and harassment.

8.                           This order be complied with by the opposite party, within 45 days from the date of receipt of its certified copy, failing which the amounts mentioned in para 7 above shall carry interest @18% per annum from the date of this order till actual payment.

9.                           Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

24.07.2013.

Sd/-

 (MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER

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