THE CONSUMER DISPUTES REDRESSAL FORUM, KOZHIKODE.
C.C.257/2014
Dated this the 1st day of January, 2019
(Smt. Rose Jose, B.Sc, LLB. : President)
Sri. Joseph Mathew, M.A., L.L.B. : Member
ORDER
Present: Hon’ble Rose Jose, President:
This petition is filed by the petitioner under Section 12 of Consumer Protection Act, 1986, for an order directing the opposite parties to pay him the balance amount which he had remitted towards the insurance policy as premium amount with interest and cost of the proceedings.
The case of the petitioner is that, he had taken an Insurance Policy of the opposite parties in the year 2008. The policy period was 20 years and yearly premium was Rs.12,000/-. He had remitted the premium consecutively for 3 years but thereafter due to illness he could not continue the remittance. The petitioner stated that while taking the policy the opposite parties told him that he can surrender the policy and withdraw the amount at any time after payment of premium amount consecutively for 3 years. As such he had surrendered the policy on 05/05/2014 but he had received only Rs.24,010.24 as policy amount. Actually he is entitled to get the remitted amount of Rs.36,000/- with interest. The reason stated by the opposite parties for the reduction in the paid amount is the failure of the share market. The said act of the opposite parties is unfair trade practice and also deficiency in service on their part and this caused much mental agony and heavy financial loss to him. Hence this petition seeking reliefs.
The opposite parties in their version contended that this petition is misconceived, misconstrued and contrary to the provisions of policy contract entered between them and the petitioner and therefore untenable in law and so the petition is to be dismissed in-limini.
The opposite parties admitted that the petitioner had a policy with them vide Policy No. 0099824403 and he had remitted a total amount of Rs.36,000/- as premium towards that policy. It is also admitted that they had paid Rs.24,010/- to the petitioner as surrender value. But it is stated that the policy taken by the petitioner is a Unit Linked policy (ULIP) viz. “Bajaj Alliance New Unit Gain”. As per this policy the fund value depends on the conditions in the share market and as per the terms of the policy and provisions in insurance law, risk of investments in the market under this policy is to be borne by the policy holder. Moreover the premium amount is consideration for taking risk of life of the insured and the premium so paid takes risk for the period for which the premium has been paid and company has covered the risk of the petitioner till the date of surrender of the policy. The opposite parties further stated that the policy was issued to the petitioner only after he had agreed and accepted the terms and conditions of the policy. The contract of insurance is concluded only when the policy holder receives the copy of the insurance policy issued by the Insurance Company. They are giving 15 days’ time to every customers as free look period from the date of receipt of policy and its terms and conditions as per the provisions of Section 6(2) of the IRDA Regulation 2002 for their study. If any of the terms and conditions there in the policy is not acceptable to the party, then he can cancel the policy stating the reason within that period and the company will refund the paid amount after deducting the mandatory charges. Here the petitioner is a literate person and he has not applied for cancellation of the policy also. Once the policy is accepted, both the insurer and insured are bound by the terms and conditions of the policy based upon the proposal form given by the policy holder. So the petitioner is barred from raising any grievances about non-awareness or acceptance of policy terms thereafter. They have paid the full fund value to the petitioner at the time of surrender of the policy and they have not retained any amount as alleged. they have acted only as per the terms and conditions of the policy and so there is no unfair trade practice or deficiency in service on their side as alleged and so they are not liable to pay any balance amount or any compensation to the petitioner and the petitioner is not entitled for any amount also. This petition is frivolous, vexatious and filed after suppressing material facts only with the intent to grab some amount illegally from them. No loss or any mental agony has been occurred to the petitioner due to any of their acts and hence prayed to dismiss the petition with cost to them.
The matters for determinations are:
- Whether there is any unfair trade practice or deficiency in service on the part of the opposite parties?
- Reliefs and costs if any?
Evidence consists of the affidavit filed by the petitioner and Ext.s A1 to A6.
Point No. 1: There is no dispute with regard to the policy or regarding the amount of Rs.36,000/- paid towards the policy as premium amount. The opposite parties also admitted that they had paid only Rs.24,036/- to the petitioner as surrender value. According to the petitioner as per the policy terms he is entitled to get the paid amount of Rs.36,000/- plus interest on surrendering the policy after 3 years but the opposite parties had paid only Rs.24,036.86 as against the policy terms and this is unfair trade practice on the part of the opposite parties and so he is entitled to get the balance amount with interest and compensation for his sufferings.
Generally the policies issued by the Insurance Companies are of two types. One is Traditional Policies and the other is Unit Linked Insurance Policies (ULIP). In the traditional policies, there is no risk factor and the return is guaranteed. In such policies the policy holder will get the paid amount plus the accrued bonus after maturity of the policy. But in ULIP policies there is a risk factor. The amount paid as premium is invested in the share market and so the Fund Value (NAV) depend on the market value of shares ie. units acquired for the paid amount. If the value of the shares (units) goes up the fund value will also increase and if the unit value diminishes the Fund Value will also diminish accordingly. This means that there is chances of profit or loss (risk factor) in ULIP policies. Ext. A1 is the copy of letter and policy conditions issued to the petitioner by the opposite parties dated 30/05/2008. As per Ext. A1 document, the product name is “Bajaj Allianz New Unit Gain” which is a unit linked policy. The policy period is 20 years and the sum assured is Rs.4,08,000/-. At the same time it is to be noted that the opposite parties have not mentioned any specific amount as maturity benefit in the policy instead given only Fund Value. This is because in ULIP policies the maturity amount payable depends on the market price of the shares (units) acquired by the policy holders and so the opposite parties cannot guarantee any specific amount as maturity benefit in such policies. The sum assured shown in Ext. A1 document as Rs.4,08,000/- is the minimum death benefit payable to the nominee of the policy holder in case of any unpleasant events happens like death of the policy holder. This is the risk factor shouldered by the company in this policy. The opposite parties are bound to pay the assured amount to the nominee of the policy holder in such occasions even if the insured had paid only one premium instalment. So the premium amount is treated as consideration for taking the risk of life of the insured.
It is true that as per the policy conditions the policy holder can surrender the policy and withdraw the fund value after 3 years of consecutive payment. But nowhere in the policy terms it is stated that on such surrender the company willrefund the paid amount with interest as alleged by the petitioner. In Ext. A1 it is clearly written that “we also offer you a 15 days Free Look Period which commences from the date of receipt of this policy document. During this period, you have the option to peruse the terms and conditions and should you disagree with any of the terms and conditions, you are entitled to a free look refund.” In Ext. A1, the premium allocation rate, the number of units (shares) acquired as on 30/05/2008, and unit price after remitting the 1st premium instalment also is given. So if the petitioner is not satisfied with any of the terms and conditions of the policy, then he can very well cancelled the policy. But he has not done so. This shows that the petitioner is fully satisfied with the terms and conditions of the policy and was willing to continue with the policy. The policy is an agreement between the insurer and the insured and once it is signed and accepted by both the parties, they are bound by its terms and conditions and so any of the parties to that contract is estopped from raising any objections against its terms thereafter. In LIC of India Vs. Sindhu (2006) 5-SCC-258 the Hon’ble Supreme Court held that “The policy is a contract entered into between the LIC and the policy holder and the terms and conditions of the policy would be binding on the parties and the same cannot be re-written in exercise of writ jurisdiction of this court.”
Ext. A5 is the copy of surrender request acknowledgement letter dated 05/05/2014. Wherein the amount payable as surrender value as on 05/05/2014 is clearly shown as Rs.24,010.24. The petitioner had surrendered the policy on 05/05/2014 knowing fully the fund value well in advance. If he was not satisfied with that amount he can wait for some time to see whether the fund value is improving or not instead of withdrawing the amount on that date. Deficiency or unfair trade practice can be attributed on the other party in a contract if there is any violation of terms and conditions of that contract on the part of that party. The petitioner brought to our attention the decision taken by this Forum in a similar case C.C. No.17/2012. It is true that in that case this Forum found deficiency in service on the opposite party Bajaj Allianz Life Insurance Company and ordered the case in favour of the petitioner. But it is to be noted that the facts of the case are quite different in that case and in the instant case. In that case, in their reply to the petitioners surrender request the opposite party given a written statement showing that the (NAV (Fund Value) as on 07/12/2011 is Rs.40,241.28 and after deducting the surrender penalty the amount payable to him is Rs.35,535.62, but the opposite party had deposited only Rs.21,833.22 to the petitioner’s account as against their written statement. The Fora found deficiency in service on the part of the opposite party in this regard. But here in this case as per Ext. A5 the surrender value payable as on 05/05/2014 is shown as Rs.24,010.24 and the said amount was paid to the petitioner also. So the decision taken by this Forum in C.C.17/2016 is not applicable in this case. From the evidence it is found that the opposite parties had acted and paid the amount only as per the terms and conditions of the policy and so we cannot find any unfair trade practice or deficiency in service on the part of the opposite parties as alleged by the petitioner. The petitioner also produced the paper report of a decision taken in favour of the petitioner in a similar case by the Hon’ble District Forum Malappuram. But he has not produced the copy of the said order before us and so we are not aware of the facts of that case and so we cannot consider the finding in that case for taking decision in this case. Point No. 1 found accordingly.
Point No. 2: In view of the finding in Point No. 1 this petition is liable to be dismissed and the petitioner is not entitled to get the reliefs sought for in the petition.
In the result, this petition is dismissed. Parties will bear their costs.
Dated this the 1st day of January, 2019
Date of filing: 15/05/2014
SD/-PRESIDENT SD/-MEMBER
APPENDIX
Documents exhibited for the complainant:
A1. Copy of letter received from the 1st opposite party
A2. Copy of letter received from the 1st opposite party
A3. Copy of receipt
A4. Copy of receipt
A5. Copy of surrender request acknowledgement letter
A6. Copy of newspaper cutting
Documents exhibited for the opposite party:
Nil
Witness examined for the complainant:
None
Witness examined for the opposite party:
None
Sd/-President
//True copy//
(Forwarded/By Order)
SENIOR SUPERINTENDENT
