DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA

CC.No.278 of 14-06-2011

Decided on 24-10-2011

Rajesh Kumar, aged about 38 years S/o Mahavir Parshad, R/o Pt. Beli Ram Street, Jaitu, Tehsil Jaitu, Distt. Faridkot.

 .......Complainant

Versus

1. Bajaj Allianz Life Insurance Co. Ltd., First Floor, Near ICICI Bank, GT Road, Bathinda-151001, through Branch

   Manager/authorized person.

    

2. Bajaj Allianz Life Insurance Co. Ltd., GE Plaza, Airport Road, Yerawada, Pune-411006, through Managing

   Director/authorized person.

    

3. Manpreet Singh Virk-STM, STC code 2110000185, concerned agent/ advisor of Bajaj Allianz Life Insurance Co.,

   Near ICICI Bank, GT Road, Bathinda. (Deleted)

......Opposite parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

QUORUM

Smt. Vikramjit Kaur Soni, President

Smt. Sukhwinder Kaur, Member

Present:-

For the Complainant: Sh. Ashwani Kumar, counsel for the complainant.

For Opposite parties: Sh. M.L.Bansal, counsel for opposite party Nos.1&2

Opposite party No.3 deleted

ORDER

Vikramjit Kaur Soni, President:-

1. The present complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended up-to-date (Here-in-after referred to as an 'Act'). The brief facts of the complaint are that under the influence of the agent/advisor of the Insurance Company, the complainant purchased a Policy bearing No.0075474060 dated 20.11.2007 and paid Rs.50,000/- (single premium) as insurance premium. The Company i.e opposite party Nos.1&2 gave 2,50,000/- risk cover on the above said Policy but after paying the premium, the complainant did not receive his policy document for 3 years i.e. he received the policy documents on 18.10.2010. The agent/advisor of the opposite party Nos.1&2 retained the policy documents with himself. The complainant has alleged that at the time of subscription of the above said policy, he was assured that it is a single premium policy which means, the insured has to pay single time premium during the life time of the policy and the return on the funds deposited by him depends upon the share market. In the month of March, 2011, the complainant received calls from the officials of the opposite parties about the premium amount of the Insurance Policy and was told that if the premium is not paid, the entire policy and insurance cover will be lapsed. After 2-3 calls, the complainant inquired the matter at his own level. The complainant was surprised and shocked to see the matter when told by the opposite parties that the subscribed policy is regular policy and not a single premium policy and the complainant is bound to pay the regular premiums. The complainant felt that he was cheated by the Insurance Company as well as by the agent/advisor of the Insurance Company as he misrepresented the true facts to the complainant. The complainant has further alleged that he is not technical and educated person to understand all the complex technicalities of the Insurance Company. The agent is well known to the complainant and all things are done under the good faith by the complainant. The complainant signed many unfilled documents. The opposite party No.3 assured the complainant that he will fill the documents and complete all the formalities on his own. Now, the opposite parties have not converted the policy of the complainant in single premium policy and also not admitted the genuine claim of the complainant. The complainant visited again and again and contacted the officials of the Insurance Company but to no effect. Hence, the complainant has filed the present complaint for seeking directions of this Forum to change the policy of the complainant into single premium policy alongwith cost and compensation.

2. Notice was issued to the opposite parties. The opposite party Nos.1&2 after appearing before this Forum, have filed their joint written statement and pleaded that the present complaint is hopelessly barred by limitation as the policy bearing No.0075474060 was issued with the commencement date of 20.11.2007 and the same was dispatched through registered post No.25 on 22.11.2007 which was duly received by the complainant himself and this fact of having received the policy bond has never been disputed by the complainant till filing of the complainant whereas the complainant has filed the present complaint after expiry of more than 3½ years of date of receipt of policy. The complainant was given 15 days Free Look Cancellation Period from the date of receipt of policy bond to review the terms and conditions of the contract as per the Policy Holders Protections Regulation, 2002 and if he was dissatisfied with the said terms and conditions of the policy, he should have given written notice to the opposite parties to cancel the policy within the period of 15 days but he never approached the opposite parties to cancel the policy and did not return the policy bond seeking refund of premium permissible as per terms and conditions of the policy. The opposite party Nos.1&2 have admitted that the complainant has obtained the policy from the opposite parties and paid first premium of Rs.50,000/-. The policy in question is not a single premium policy rather it is a regular premium. The complainant himself opted to pay annual premium of Rs.50,000/- for the period of 10 years in the Proposal Form dated 19.11.2007 and accordingly, the policy was issued as proposed by the complainant. Thereafter, the complainant knowingly and intentionally did not pay the premium due on 20.11.2008 and onwards. The policy in question is as such lying lapsed w.e.f. 20.11.2008 and the complainant has not made any effort to get his policy revived during the revival period of 4 years which is still available till 19.11.2012. The opposite party Nos.1&2 have further pleaded that they never induced the complainant for purchasing their insurance policy without disclosing the nature and contents of the policy schedule and/or terms & conditions rather the complainant himself approached the opposite parties after fully understanding the features, benefits and terms & conditions of the Regular Premium Unit Linked “Century Plus” Plan and proposed for insurance vide Proposal Form dated 19.11.2007 and out of his free will, opted to pay yearly regular premium of Rs.50,000/- for a period of 10 years. The opposite party Nos.1&2 have further pleaded that the complainant has made all the allegations against the Insurance Agent which are categorically denied. Even otherwise, the role of the agent is mentioned in the policy bond and the insurance agent is only authorized by the Company to arrange completion and submission of the Proposal Form. The Proposal Form of the complainant was accepted as proposed and a policy bearing No.0075474060 was issued to him. The original policy bond including terms and conditions of the insurance contract was dispatched to the complainant through registered post on 22.11.2007 which was duly received by him. This fact of having received the policy bond has never been disputed by the complainant till filing of the complainant which means, the complainant had received the original policy bond and he never lodged any complaint regarding non receipt of policy bond with the opposite parties. The opposite parties have denied that the policy was received by the complainant on 18.10.2010 and the policy bond was retained by the agent. As a goodwill gesture, the officials of the opposite parties used to give telephonic messages to its policy holders to pay the due premium though the opposite parties are under no obligation to issue any notice to the complainant. The complainant was also telephonically informed from time to time to deposit the due premium but he failed to make the payment of due premium.

3. Parties have led their evidence in support of their respective pleadings.

4. Arguments heard. Record alongwith written submissions submitted by the parties perused.

5. The complainant had purchased Policy bearing No.0075474060 dated 20.11.2007 on the assurance of the Advisor/Agent of the Insurance Company. He was told that this policy is a single premium policy and the sum assured was of Rs.2,50,000/-. The complainant had paid the premium of Rs.50,000/- but after paying the premium, the complainant did not receive the policy documents for 3 years, he received the policy documents on 18.10.2010. The agent/advisor of the opposite party Nos.1&2 retained the policy documents with himself. At the time of selling the policy, the complainant was assured that this policy is a single premium policy and the return on the funds deposited by him, depends upon the share market. In the month of March, 2011, the complainant received calls from the opposite parties to pay the second premium and it was also told to the complainant that if he would not pay the premium, the entire policy and insurance cover would be lapsed. On inquiring the mater, the complainant came to know that the policy was of regular premium one, not a single premium policy. The complainant felt himself cheated by the Insurance Company as well as by the agent/advisor of the Insurance Company. The opposite parties have taken the signatures of the complainant on many unfilled documents. The complainant has approached the opposite parties many times, requesting the opposite parties to convert the policy of the complainant in single premium policy but the opposite parties did not pay any heed to his request.

6. The opposite party Nos.1&2 have take many legal objections. The first objection taken by the opposite parties is that the present complaint is barred by limitation as the commencement date of the policy is 20.11.2007. The opposite parties have submitted that the original policy bond containing terms and conditions of the life insurance contract was duly dispatched to the complainant through registered post No.25 on 22.11.2007 which was duly received by him and has not disputed the receipt of the policy bond containing terms and conditions of the insurance contract between the complainant and the opposite party Nos.1&2. The complainant has filed the present complaint challenging the terms and conditions of the policy after expiry of more than 3½ years of the date of receipt of the policy.

The second objection taken by the opposite parties is that the complainant has himself opted the policy with his own free will to pay the regular premium of Rs.50,000/- for the period of 10 years. The Proposal of the complainant was accepted as proposed and a policy bearing No.0075474060 was issued to him. The complainant was given 15 days Free Look Cancellation Period from the date of receipt of policy bond to review the terms and conditions of the contract as per the 'Policy Holders Protections Regulation, 2002'. the complainant should have given written notice to the opposite parties to cancel the policy within the period of 15 days from the date of receipt of the policy bond but he has not reached the opposite parties within 15 days and has not availed the facility of free look cancellation period. The complainant had paid the premium of Rs.50,000/- and the second premium was due on 20.11.2008 onwards. As the complainant has failed to deposit the premium on 20.11.2008, the policy stands lapsed and he has not made any efforts to get his policy revived during the revival period of 4 years which still is available till 19.11.2012.

The third objection taken by the opposite party Nos.1&2 is that the present complaint is pre-mature as in accordance with the terms and conditions of the policy, the life assured can still get his policy revived till 20.11.2012 in accordance with the terms of the revival duly mentioned in the policy bond, failing which the policy will be terminated in accordance with the terms and conditions of the contract or even can surrender the policy in question subject to surrender charges and if he does not want to continue his policy. For this, the opposite parties had relied upon the terms and conditions for non payment of Regular Premium and Forfeiture wherein it has been mentioned:-

“1. The Policy shall immediately lapse for all the insurance cover including the cover under all riders. However, during the period of lapse, the Policy shall continue to participate in the investment performance of the underlying Funds, subject to the deduction of all the Charges as per Section 33 and Section 34 except the Martality Charge and any Rider Premium Charge.

2. The Policyholder may revive the Policy within a revival period of four years from the due date of the first unpaid Regular Premium subject to Section 5(d) and the Company shall recover any due but unrecovered charges as per Section 33 and Section 34 except the Martality Charge and any Rider Premium Charge, since due date of first unpaid Regular Premium, failing which the Policy shall stand terminated and the Surrender Value as on the date of termination per Section 6(c) shall be paid at the expiry of the revival of four years.”

7. The salient features of the policy in question are read as under:-

a) Commencement date 20.11.2007

b) Sum Assured Rs.2,50,000/-

c) Annual Premium Rs.50,000/-

d) Premium Frequency Annual.

8. The opposite party Nos.1&2 have submitted that the policy documents were dispatched to the complainant including the Policy Schedule, the 'Free Look Cancellation Clause', notice, copy of the proposal Form, the standard terms and conditions governing the contract of insurance between the opposite parties and the complainant and the First Premium Receipt alongwith policy schedule. The complainant has not deposited the regular premium and as a goodwill gesture, the opposite parties approached the complainant apprising him about the regular premium due but he has failed to deposit the regular premium despite he was apprised for the same and accordingly, the policy has already been lapsed as per condition No.5(b).

9. The complainant was issued a policy of Rs.2,50,000/- and he has to pay the regular premium of Rs.50,000/- for 10 years.

10. The first and foremost legal objection taken by the opposite parties that the complaint is time barred, is not tenable as the opposite parties have themselves admitted that the policy term is 10 years, the maturity date was 20.11.2017 and the revival period for the policy is 20.11.2012 i.e. within 4 years from the last paid premium. The second objection of the opposite parties that the complainant has not availed the free look facility. According to this clause, the complainant can apply for the cancellation of the policy within free look period of 15 days from the receipt of the policy but he has not received the policy and other documents and the agent/advisor kept the policy alongwith other documents with him and supplied the same to the complainant after lapse of 3½ years. The complainant has specifically alleged that he has not received the policy alongwith terms and conditions so he was not aware of the free look cancellation period of the policy. Hence, this objection is also not tenable. The third objection of the opposite parties that the present complaint is pre-mature as he can revive the policy within a period of 4 years from the date of last premium paid by the complainant, is not tenable as no such terms were supplied and explained to the complainant.

11. The opposite parties have submitted that the complainant was sent the policy alongwith other documents i.e. the Policy Schedule, the 'Free Look Cancellation Clause', notice, copy of the proposal Form, the standard terms and conditions governing the contract of insurance between the opposite parties and the complainant and the First Premium Receipt alongwith policy schedule on 22.11.2007 but no such postal receipt or dispatch register etc has been produced on file by the opposite parties to prove their version that these were actually sent to the complainant. Moreover, the Policy Ex.R-2 placed on file, does not bear the signatures of the complainant as well as of the opposite party Nos.1&2. As per settled law, the terms and conditions, not conveyed or signed by the complainant, are not binding on him.

12. A perusal of Proposal Form Ex.R-3 shows that the clause of free look cancellation of the policy within 15 days from the date of receipt of the policy but the complainant has specifically submitted that the opposite parties have taken the signatures of the complainant on many blank documents. The opposite parties have failed to prove that this Proposal Form has been filled by the complainant with his own hand. Therefore, the contention of the complainant seems to be true that he has been allured by the opposite parties that the policy is of single premium policy whereas later on, he came to know that the policy is for the period of 10 years. Moreover, the terms and conditions are not supplied to the complainant. Thus, the terms and conditions are not binding upon the complainant.

13. 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 IRDA (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%

2^nd year 10.00% 12.50%

3^rd year 7.50% 10%

4^th year 5.00% 7.50%

5^th year 2.50% 5%

6^th year Nil 2.50%

7^th year & onward Nil Nil

The policy was for 10 years, as such the policy period was of 10 years. The complainant has paid only first premium and failed to pay the second premium. The deduction charges applicable to the present case are 12.50% i.e. 6,250/- on the amount of 50,000/-. The complainant is entitled for the payment of Rs.43,750/-. Moreover, the policy documents remained in the custody of the agent/advisor. The master is liable for the acts and conduct of his servant.

14. Therefore, in view of what has been discussed above, this complaint is accepted with Rs.5,000/- as cost and compensation against the opposite party Nos.1&2. The opposite party Nos.1&2 are directed to pay the amount of Rs. 50,000/- to the complainant after deducting 12.50% ( i.e. Rs. 50,000/- minus 6,250/- = Rs.43,750/-) as per table shown above. Compliance of this order be made within 45 days from the date of receipt of copy of this order. In case of non-compliance of the order, the aforesaid amount of Rs.43,750/- will yield interest @ 9% P.A. till realization.

A copy of this order be sent to the parties concerned free of cost and file be consigned for record. '

Pronounced in open Forum

24-10-2011

(Vikramjit Kaur Soni)

President

(Sukhwinder Kaur)

Member