DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA.

CC.No.432 of 04-09-2012

Decided on 14-01-2013

Manoj Kumar aged about 49 years s/o Hari Ram r/o H.No.13738, Suraj Basti, Ganesha Basti, Bathinda.

........Complainant

Versus

Bajaj Allianz Life Insurance Co. Ltd., Branch Office, Bibiwala Road, Near Clock Tower, Bathinda, through its Branch Head/Incharge.

.......Opposite party

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

QUORUM

Smt. Vikramjit Kaur Soni, President.

Sh.Amarjeet Paul, Member.

Smt. Sukhwinder Kaur, Member.

Present:-

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

For Opposite party: Sh.M.L Bansal, counsel for opposite party.

ORDER

VIKRAMJIT KAUR SONI, PRESIDENT:-

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, 1986 as amended upto date (Here-in-after referred to as an 'Act'). The brief facts of the complaint are that the complainant has purchased one life insurance policy of Rs.25,000/- on the allurement of the official of the opposite party. The complainant was allured by the opposite party that the ULIP policy is for a sum of Rs.25,000/- and he has to pay the premium of Rs.25,000/- annually for 2 years. The complainant was also assured by the opposite party that he has to pay only two premiums and thereafter he need not to deposit any further premium amount with them and he can get the refund of his amount alongwith expected income anytime after the completion of 3 years. The officials of the opposite party also assured the complainant that their expected annual return is 25%-30%. On the receipt of the first premium dated 17.5.2007, it came to the knowledge of the complainant that the said policy is an annual premium policy and no maturity date has been mentioned except Cover End date as 17.5.2027 and no policy document alongwith its terms & conditions was issued to him by the opposite party so far. The complainant approached the opposite party and protested against the same but their officials conveyed him that he has a right to reconsider his policy during the free look period of 15 days, which shall start on the receipt of the policy document. On relying upon the opposite party, the complainant has deposited the second installment of Rs.25,000/- in the year 2008, although they have not issued any policy document till date and the receipt of the second premium has been lost from his custody. On the completion of 3 years when the complainant approached the opposite party and opted to get the refund thereof, they have conveyed that as per the new IRDA guidelines, the lock-in period is five years (which was earlier 3 years) and further conveyed that he is entitled to get the refund of the premium alongwith interest only after the completion of 5 years. Hence the complainant has left with no option except to wait till the completion of 5 years. After the completion of 5 years, the complainant approached the opposite party again to get the refund of the amount of Rs.50,000/- alongwith expected income but they conveyed him that due to non payment of the regular premium for a continuous period of the policy term, his policy stands lapsed and the amount so deposited by him stands forfeited. Hence the complainant has filed the present complaint to seek the directions to the opposite party to refund the amount of Rs.50,000/- alongwith expected return/interest and cost and compensation.

2. Notice was sent to the opposite party. The opposite party after appearing before this Forum has filed its written statement and pleaded that the complainant has failed to pay the yearly regular premium due on 17.5.2009. Thus the said policy lapsed w.e.f. 17.5.2009 but the complainant has not revived his policy within the permissible revival period of 2 years from the date of the first unpaid premium which was expired on 16.5.2011. The contract of the policy No.0051504231 stands terminated in accordance with the terms & conditions of the said policy and permissible Surrender Value amounting to Rs.20,093/- are already paid to the complainant vide cheque No.442733 dated 23.11.2011 and nothing more is payable to him. The complaint is hopelessly barred by limitation as per the provision of Section 24-A of the 'Act'. The policy in question was issued in May 2007 in accordance with the proposal dated 15.5.2007 submitted by the complainant duly signed in English language and the original policy bonds containing express terms and conditions of the contract of the insurance was duly received by him. The receipt of the policy document was never disputed by the complainant for more than 5 years and did not lodge any complaint for all these years with regard to the non receipt of the policy bond and further he has paid the second premium in the year 2008 knowing well that he had opted for a regular premium product which clearly indicates that he was fully satisfied with the terms and conditions of the contract and the present complaint is an afterthought to mislead this Forum. The premium paying term in the said policy is 5 years. The complainant has himself opted for a regular premium policy not opted for a single premium policy as alleged in the complaint. The complainant was offered 15 days Free Look Cancellation period from the date of receipt of the said policy bond to review the terms & conditions of the contract of the insurance as per the Policy Holders Protections Regulation, 2002 and the Free Look Clause was specifically mentioned in the proposal for the insurance itself as 'a statutory provision to make the complainant aware of the cancellation option available to him under the policy if any of the alleged promises made at the time of solicitation of insurance was not the part of the policy document received by him or any alleged misrepresentation was done to him'.

3. The parties have led their evidence in support of their respective pleadings.

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

5. The admitted facts of the complaint are that the complainant has purchased the policy bearing No.0051504231 with the commencement date 17.5.2007 with sum assured of Rs.2,50,000/- under Bajaj Allianz Capital Unit Gian plan.

6. The disputed facts of the parties are that the complainant submitted that he was allured by the officials of the opposite party to purchase the 'Unit Linked Insurance Policy' in which he has to pay the annual premium for Rs.25,000/- only twice and the sum assured will be Rs.2,50,000/- and after the completion of 3 years he can get the refund of his amount alongwith expected income anytime. On the receipt of the first premium dated 17.5.2007 the complainant approached the opposite party on seeing that Cover End date as 17.5.2027 and the frequency of the premium is annual but he was asked by them to avail the free look option period to reconsider his policy if he is not satisfied with the same. The Free Look Period option is of 15 days from the date of receipt of the policy but the complainant submitted that till date no policy document or its terms & conditions or free look option period has been provided to him so he has to deposit the second premium of Rs.25,000/-. After the completion of 3 years when the complainant approached the opposite party to get the refund of the said policy, they have conveyed that as per the new IRDA guidelines, he will have to wait for the refund of the amount of his policy for five years and he will be entitled to get the refund of the premium alongwith interest only after the completion of 5 years. Accordingly, the complainant approached the opposite party after the completion of 5 years and he was again conveyed that his policy stands lapsed due to non payment of the regular premium.

7. The complainant has placed on file Ex.C1 the first premium receipt dated 17.5.2007. The complainant Manoj Kumar has deposed in his affidavit Ex.C2 in para No.6 that he has neither received the policy document nor its terms & conditions or the amount of Rs.20,093/- has not been refunded to him. The relevant portion of Para No.6 of his affidavit Ex.C2 is reproduced as under:-

“......The opposite party neither issued the policy nor supplied its terms & conditions as alleged nor has refunded any amount muchless Rs.20,093/- as alleged. The opposite party has taken false defence to grab the hard earned money of the complainant. Since no terms and conditions have been issued nor they provided any free look period, so the alleged terms & conditions are not binding upon the complainant.”

The opposite party has submitted in its reply that it has sent the policy document and its terms and conditions to the complainant but Niraj Kumar Bansal, Additional Divisional Manager of Bajaj Allianz Life Insurance Company Ltd., in his affidavit Ex.R1 has nowhere mentioned that the policy document and its terms & conditions or free look option period was ever sent to the complainant. As no terms & conditions has been supplied to the complainant as such these are not binding on him. As per precedent laid down by the Hon'ble State Commission, Punjab in case titled O.I.C. Vs. M/s Puneet Pasricha, FAO No.1579 of 2004, decided on 05.03.2010

“That the terms and conditions are nowhere signed by the Insured nor it is proved that this was made a part of Insurance Policy. If the terms and conditions had been explained to insured at the time of insurance cover, these could have been given to them at the same time or at least these could have been got signed from them. Therefore, the oral version of the appellants that these terms and conditions were duly explained to the insured cannot be believed.

Further, it has been held that the appellants can not be permitted to frustrate the insurance claim on the technicalities.”

There is no evidence that the amount of Rs.20,093/- has been sent by the opposite party to the complainant. Moreover the complainant has deposed in his affidavit Ex.C2 that he has not received the amount of Rs.20,093/-.

8. As discussed above, when no terms and conditions were either supplied or communicated to the complainant, these are not binding on the complainant. Further the opposite party cannot garb the hard earned money of the consumer on false pleas/pretexts. In these circumstances, the complainant is entitled to get the refund as per the Insurance Regulatory and Development Authority (IRDA) which are applicable on all the insurance policies. The deduction under the Surrender Charges of IRDA (Insurance Regulatory and Development Authority) (Standardization of terms and conditions of ULIP products and treatment of lapsed policies) Regulations, 2010 can be done as under:-

“10.......The proceeds of the lapsed policies shall invariably be refunded to the policyholder after the expiry of the revival period or at any time after completion of 3 years terms as and when demanded by the policyholder. In case, there is no demand from the policyholder for refund, insurance company shall refund the amount on its own by means of a cheque/demand draft to be delivered to the insured/nominee at his last known address. However, Insurer may deduct charges on account of pre-closure and lapsation which should, in any case, not exceed the charges stated in regulation 8.

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

---------- ----------------------- ---------------------

1^st 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 250%

7 year & onward Nil Nil.”

9. In the present case, the complainant has paid 2 premiums of Rs.25,000/- per year for policy bearing No.0051504231. As such the complainant paid the total amount of Rs.50,000/-. As the policy in question is in the 5th year of its inception and policy term is more than 10 years as such the deductions to be done on the total amount as per abovementioned IRDA table in regulation No.8.

10. Therefore in view of what has been discussed above, this complaint is accepted with Rs.5000/- as cost and compensation against the opposite party and it is directed to pay the amount of Rs.50,000/- after deducting 5%(Rs.50,000-Rs.2500/-) i.e. Rs.47,500/- to the complainant. The compliance of this order be done within 45 days from the date of receipt of the copy of this order.

In case of non-compliance the interest @ 9% per annum will yield on the amount of Rs.47,500/- till realization.

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

Pronounced in open Forum:- 14-01-2013 Vikramjit Kaur Soni

President

Amarjeet Paul

Member

Sukhwinder Kaur

Member