DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA (PUNJAB)
CC No. 283 of 01-07-2010 Decided on : 20-12-2010
Divya Preet D/o Sh. Surinder Singh R/o H. Dhillon Colony, Gali No. 13/5, Bathinda. .... Complainant Versus
Bajaj Allianz Life Insurance Co. Ltd., GE Plaza, Airport Road, Yerawada Pune, through its M.D./Chairman Bajaj Allianz Life Insurance Co. Ltd., Branch Office, IInd Floor, Above ICICI Bank Ltd., Opp. Clock Tower, Bibiwala Road, Bathinda, through its Branch Incharge .... Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986.
QUORUM Ms. Vikramjit Kaur Soni, President Dr. Phulinder Preet, Member Sh. Amarjeet Paul, Member
For the Complainant : Sh. Amandeep Singh Sekhon, counsel for the complainant. For the Opposite parties : Sh. M.L. Bansal, counsel for the opposite parties.
O R D E R
VIKRAMJIT KAUR SONI, PRESIDENT
This complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 (Here-in-after referred to as 'Act'). The complainant had purchased a policy on the allurement of the opposite parties and deposited Rs. 2.00 Lacs as first installment and the opposite parties issued Insurance policy No. 0011889378 to the complainant in this regard. The complainant alleged that the opposite parties have obtained signatures of the complainant on various blank papers/documents which were signed by her under bonafide impression. The complainant wanted to continue with the policy but due to dire necessity of money, she was unable to continue the same and requested the opposite parties to refund the amount of Rs. 2.00 Lacs deposited by her with the opposite parties. The complainant was asked to supply the original documents including original policy in question with an assurance to refund the amount and the complainant surrendered the original policy and requested the opposite parties to refund the said amount of the complainant. After requesting many times, the opposite parties agreed to refund only 75% of the amount and the remaining 25% would be deducted by the opposite parties. Such negotiations were never made by the opposite parties during the purchase of the policy. The opposite parties withheld the amount of the complainant without any reason. The complainant had issued a legal notice to the opposite parties. In reply to the legal notice, the opposite parties flatly refused to accede to her request. Hence, the complainant has filed this complaint. The opposite parties filed reply and taken legal objection that complaint is barred by limitation as the policy commenced from 17-10-05 when the first premium was deposited alongwith the proposal form and the policy is in the lapsed condition for non-payment of the premium due on 17-10-2006 and accordingly, the limitation as per the 'Act' was October, 2007 or latest October, 2008, whereas the present complaint has been filed in July, 2010. The opposite parties have submitted that grievances of the complainant are not in accordance with the terms and conditions of the policy. The policy has already been lapsed as per condition No. 6.1(a). The opposite parties have submitted that complainant had himself approached the opposite parties for issuance of Insurance policy which was issued as per details mentioned in the proposal Form. The complainant had nowhere stated that she was not satisfied with the policy as issued and had at any point of time opted for free look cancellation of the policy. The policy documents including the policy schedule, 'Right to Reconsider' notice, copy of the Proposal Form, the standard terms and conditions and the First Premium Receipt alongwith the policy schedule were duly despatched to the complainant. The complainant herself has failed to deposit the next premium and the opposite parties as a good gesture, approached the complainant apprising her about the 2nd premium due but she has failed to deposit the 2nd premium. The opposite parties have pleaded that the complainant has neither approached the opposite parties for the refund of any amount nor she was/is entitled to any refund as per terms and conditions of the policy nor the opposite parties have ever demanded any original documents nor the same were supplied by the complainant to the opposite parties. The complainant never surrendered the policy as alleged nor there is any clause in the terms and conditions of the policy for surrendering the policy without depositing the amount of premium for continuous period of at least three years from the date of commencement of the policy. It has been specifically pleaded that complainant has failed to deposit the first three annual premiums as per terms and conditions of the policy as a result of which the policy has already elapsed and the complainant is not entitled to any surrender value. Parties have led evidence in support of their pleadings. Arguments heard and written submissions submitted by the parties perused. The complainant had purchased a policy commencing from 17-10-2005 for sum assured Rs. 10.00 Lacs, Annual Premium Rs. 2.00 Lacs and premium frequency Annual. The complainant has deposited only one premium amounting to Rs. 2,00,000/-. The complainant had submitted that she had requested the opposite parties for the refund of Rs. 2,00,000/- deposited by her with the opposite parties for which the opposite parties asked her to supply the original documents including the original policy in question with an assurance to refund the amount. The complainant had surrendered the policy and requested the opposite parties to refund the amount of Rs. 2.00 Lacs at the earliest possible but this contention of the complainant has been rebutted by the opposite parties by saying that complainant had never applied for the surrender of the policy and she was never asked to surrender the policy documents. The policy of the complainant has lapsed as she has failed to deposit the 2nd due premium as per condition No. 6.1(a) according to which 'in the event of failure to make payment of full Regular premium falling due during the first three policy year and non-payment of complete amount due even within the grace period, the policy shall automatically and immediately lapse for the insurance cover including the cover under all Riders'. A perusal of Ex. C-7 shows that policy commencement date was 17-10-2005, premium - Rs. 2,00,000/-, sum assured - Rs. 10.00 Lacs, frequency of payment annual and due date of premium is 17th October of every year and multiplier was 5. As nothing has been mentioned in the documents placed on file regarding how many premiums would be paid by the complainant in all. No maturity term/date has been mentioned. In the absence of such specifications, this complaint is within limitation as this is continuous cause of action and the money is still lying with the opposite parties. As the complainant has paid only one premium of Rs. 2,00,000/- and due to some problem, she could not continue to deposit the premium. She has not paid the second premium and the policy was lapsed. As per the version of the complainant she has surrendered the original policy with the opposite parties and requested them to refund the fund value but they have refused to refund any amount considering her policy lapsed. The opposite parties cannot garb such a huge and hard earned money of Rs. 2.00 lacs by just saying that the policy had lapsed. If the policy had been lapsed, the complainant is not entitled for any policy benefits i.e. sum insured. But she is entitled for the fund value after deduction of surrender charges. A perusal of the terms and conditions Ex. R-2 shows that these are not signed by any of the parties. Nothing has been mentioned on these terms and conditions that these are of same agreement which has been executed between the complainant and the opposite parties. In such circumstances, the support can be taken from IRDA rules which are applicable on all the Insurance policies. Regulation No. 8 i.e. Surrender Charges of Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies) Regulations, 2010, is reproduced hereunder :-
“It is observed that insurers apply different surrender charges while paying the surrender value to the Insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value ) shall not exceed the limits specified below :- Year Policy period Less than 10 years More than 10 years ------------- ----------------------- ----------------------- Ist year 12.50% 15% 2nd year 10.00% 12.50% 3rd year 7.50% 10% 4th year 5.00% 7.50% 5th year 2.50% 5% 6th year Nil 2.50%
7th year & onward Nil Nil As no policy period has been mentioned in the policy, the policy period less than 10 years is applicable in the present case. The complainant is entitled to get the fund value. She cannot claim any benefit for sum assured as the policy has lapsed due to non-payment of the second premium by the complainant. Hence, this complaint is partly accepted with Rs.10,000/- as cost and compensation. The opposite parties are directed to pay the fund value to the complainant after deducting 10.00% of the amount ( i.e. Rs. 2,00,000 minus Rs. 20,000 = Rs. 1,80,000/-) as per table shown above. The compliance of this order be made within 45 days from the date of receipt of copy of this order. In case of non-compliance, the interest @9% P.A. will yield on fund value i.e. Rs. 1,80,000/- till realisation. A copy of this order be sent to the parties concerned free of cost and the file be consigned.
Pronounced 20-12-2010 (Vikramjit Kaur Soni) President (Dr. Phulinder Preet) Member
(Amarjeet Paul) Member
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