DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA.
CC.No.384 of 13-08-2012
Decided on 21-12-2012
Ashok Kumar, aged about 48 years s/o Sh.Dev Raj C/o Sh.Gupta Ban Store Sirki Bazar Bathinda.
........Complainant
Versus
Bajaj Allianz Life Insurance company Ltd., through its Manager near Second Floor Bibi Wala Road above ICICI Bank, Bathinda.
.......Opposite party
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.Sanjay Goyal, 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 the insurance policy bearing No.0106828056 and paid Rs.25,000/- each in the year 2008, 2009 and 2010. The sum assured was Rs.1,25,000/-. The complainant was conveyed by the opposite party that he is not required to pay the further premium as insurance amount is to be paid for 3 years only. The complainant approached the opposite party in 2009, he was conveyed by them that as per their new plan he can earn more bonus and he has to purchase policy by payment of Rs.10,000/- only for 3 years and he can get the refund of Rs.30,000/- after 3 years alongwith high bonus and interest @ 12% for which he again agreed and paid Rs.10,000/- each for the year 2009, 2010, 2011 and he was informed that the policy bearing No.0135356493 is issued to him. Neither cover note nor separate terms and conditions nor Free Look Period option were provided in both the policies. In the year 2011 the complainant requested the opposite party to refund Rs.75,000/- of previous policy alongwith interest @ 12% p.a and bonus but they told him that he has to deposit one more installment of Rs.25,000/- which was also deposited by him as such he has deposited 1 lac in total against policy bearing No.0106828056. The complainant again approached the opposite party for the refund of Rs.1,30,000/- alongwith interest @ 12% p.a and bonus for both the policies but the opposite party refused and conveyed him that he cannot be given refund till he deposits the installments for 15 years. Thus alleging deficiency in service on the part of the opposite party, the complainant has filed the present complaint to seek the directions to the opposite party to refund the amount of Rs.1,30,000/- alongwith interest, 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 complaint is premature as till date, the complainant has not even approached them with a request to surrender his policies and to get the surrender value/s thereof, as per terms and conditions. In the case in hand, as regards the first policy bearing No.0106828056, the premium of Rs.25,000/- p.a was stipulated to be paid for the premium paying term of 15 years as proposed by the complainant himself in his proposal for insurance dated 25.8.2008 with sum assured of Rs.1,25,000/-, date of the commencement of the said policy is 27.8.2008, subsequent three premiums were paid on 27.8.2009, 27.8.2010 and 27.8.2011 respectively without raising any objections to the terms and conditions of the policy document received by him and with regard to the second policy bearing No.0135356493, the premium of Rs.10,000/- p.a was stipulated to be paid for the premium paying term of 20 years as opted by the complainant himself in his proposal for insurance dated 22.8.2009 with sum assured of Rs.1,00,000/-, date of the commencement of the said policy is 25.9.2009, subsequent two premiums were deposited on 25.9.2010 and 25.9.2011 respectively. The proposal form dated 25.8.2008 was filled and signed by the complainant regarding taking of Bajaj Allianz Fortune Plus Plan (first policy) and proposal form No.0257137288 dated 22.8.2009 (second policy) was filled and signed by him for taking Bajaj Allianz Family Assure Plan. Both the proposal forms were signed by the complainant, after carefully reading, hearing, understanding the salient features of both the plans and it was specifically declared by him in both the proposal forms to invest his 100% investment in equity fund. As per the terms & conditions of the said policies, the complainant is at liberty to surrender the same and to get the surrender value of the said policies. The complainant has himself purchased a Regular Premium Unit Linked policies knowing that the same would participate only in the investment performance of underlying funds and the performance of funds is subject to market and other risks. No interest or bonus on the investment made is payable under Unit Linked Policies and the insurer is bound to abide by the terms & conditions of the policies duly approved by Regulation i.e. IRDA. The complainant was fully aware that the investment risks under the said policies is to be borne by the policyholder and the value of underlying assets may increase or decrease depending upon the market & other conditions. On the legal side the opposite party pleaded that the present complaint is hopelessly time barred as per section 24A of the 'Act'. The policies in question were issued in August 2008 & September 2009 respectively, strictly in accordance with the proposals dated 25.8.2008 and 22.8.2009 made by the complainant himself and the original policy bond containing terms & conditions of the contracts of the insurance was duly dispatched to him at his given address in proposals for insurance vide speed post No.EE779550964IN dated 29.8.2008 & Overnite Courier POD No.509463388 dated 1.10.2009. The receipt of the policy bonds was never disputed by the complainant for years together and filled the instant complaint after the expiry of 4 years/3 years of issue of the said policies as an afterthought. The free look Clause was specifically mentioned in the proposal form for insurance as a statutory provision to make the complainant aware of the cancellation option available to him if any of the alleged promises made at the time of solicitation of the insurance, were not the part of the policy document received by him and the free look cancellation option was a part of the terms and conditions of the same. However, the complainant neither raised any objection with regard to the terms and conditions of the said policies nor ever disputed the contents of the policy document within the free look cancellation period or thereafter even. The salient features of the policy (first policy) are as below:-
a) Commencement date 27.8.2008
b) Sum assured Rs.1,25,000/-
c) Annual Premium Rs.25,000/-
d) Premium Frequency Annual
The policy documents included the policy Schedule, Free Look Cancellation Notice, copy of Proposal Form, the standard terms and conditions and the First Premium Receipt were sent to the complainant. Again in the year 2009, the complainant himself approached the opposite party for issuance of an insurance policy in the year 2008. The salient features of the policy (first policy) are as below:-
a) Commencement date 25.9.2009
b) Sum assured Rs.1,05,000/-
c) Annual Premium Rs.10,000/-
d) Premium Frequency Annual
The policy documents were dispatched to the complainant including the policy Schedule, Free Look Cancellation Notice, copy of Proposal Form, the standard terms and conditions and the First Premium Receipt. The complainant voluntarily deposited Rs.1 lac in all on account of first four premiums regarding the first policy and Rs.30,000/- in all on account of three premiums regarding the second policy.
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. Admitted facts of the parties are that the complainant had purchased two policies bearing Nos.0106828056 and 0135356493 respectively. The complainant purchased the policy bearing No. 0106828056 in the year 2008 and paid Rs.25,000/- each in the year 2008, 2009, 2010 and 2011. The commencement date of this policy is 27.8.2008; Sum assured:- Rs.1,25,000/-; Annual Premium:-Rs.25,000/- and Premium Frequency:- annual. Thereafter he has purchased the second policy bearing No.0135356493. The commencement date of this policy is 25.9.2009; Sum assured:-Rs.1,05,000/-; Annual Premium:-Rs.10,000/- and Premium Frequency:-annual.
6. The submissions of the complainant are that he had purchased the first policy on the assurance of the opposite party that he has to pay only 3 premiums and in case he wants to get the refund of the amount he will be given Rs.75,000/- alongwith interest @ 12% p.a and bonus and no charges shall be deducted on the amount and he can claim for the refund amount anytime. The complainant had paid one more premium of Rs.25,000/- in first policy and in total he had paid Rs.1 lac against policy bearing No.0106828056. In the year 2009 the complainant approached the opposite party, he was conveyed by them that as per their new plan he can earn more bonus and he has to purchase the policy by paying Rs.10,000/- for 3 years only and he paid the premium of Rs.30,000/- for the year 2009, 2010, 2011. In the year 2011 the complainant requested the opposite party to refund Rs.75,000/- of the previous policy alongwith interest @ 12% p.a and bonus but they asked him to deposit one more installment of Rs.25,000/- that he has deposited. When the complainant requested the opposite party for the refund of Rs.1,30,000/- alongwith interest @ 12% p.a and bonus for both the policies then they refused to accede to his request. The complainant further submitted that neither cover note nor separate terms and conditions nor Free Look Period Option were provided in both the policies to him by the opposite party.
7. On the other hand the submissions of the opposite party are that
this complaint is premature as till date, the complainant has not even approached them with a request to surrender his policies and to get the surrender value/s thereof, as per terms and conditions. In the first policy bearing No.0106828056, the premium of Rs.25,000/- p.a was stipulated to be paid for the premium paying term of 15 years as proposed by the complainant himself in his proposal for insurance dated 25.8.2008 with sum assured of Rs.1,25,000/-, date of the commencement of the said policy is 27.8.2008, subsequently three premiums were paid on 27.8.2009, 27.8.2010 and 27.8.2011 respectively without raising any objections to the terms and conditions of the policy document received by him and in the second policy bearing No.0135356493, the premium of Rs.10,000/- p.a was stipulated to be paid for the premium paying term of 20 years as opted by the complainant himself in his proposal for insurance dated 22.8.2009 with sum assured of Rs.1,00,000/-, date of the commencement of the said policy is 25.9.2009. In this policy he had deposited two more premiums. The policy documents were duly dispatched to the complainant at his given address in proposals for insurance vide speed post No.EE779550964IN dated 29.8.2008 & Overnite Courier POD No.509463388 dated 1.10.2009. The receipt of the policy bonds was never disputed by the complainant for years together and filed the instant complaint after the expiry of 4 years/3 years of the issuance of the said policies as an afterthought. If the complainant was not satisfied with the said policies he had an option to review his policies within the free look period of 15 days to cancel his policies but he has not availed the Free Look Option Cancellation period. The learned counsel for the opposite party has vehemently argued that till date the complainant has not approached them to surrender his said policies.
8. A perusal of documents shows that there are no documents placed on file by the opposite party to show that the terms and conditions and policy documents were ever dispatched to the complainant on his address as there is no affidavit of the courier person. When the courier is delivered to any person the signatures are taken by the courier person but no such document or any other evidence placed on file to prove that these terms and conditions have actually been supplied to the complainant. The terms and conditions that are not supplied to the complainant are not binding on him if he would have been conveyed the terms and conditions of the policies. The opposite party must have taken the signatures of the complainant on the terms and conditions. The complainant has not received the terms and conditions of the said policies hence 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.”
9. As discussed above, when no terms and conditions were either supplied or communicated to the complainant, he is not bound by such terms and conditions. The opposite parties 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 above.
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
---------- ----------------------- ---------------------
1st 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 250%
7 year & onward Nil Nil.”
10. In the present case, the complainant has paid 4 premiums of Rs.25,000/- per year for first policy bearing No.0106828056 and 3 premiums of Rs.10,000/- per year for the second policy bearing No.0135356493. As such the complainant paid the total amount of Rs.1,30,000/-. As the first policy in question is in the 5th year of its inception and the second policy is in the 4th year of its inception and policies 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.
11. Therefore in view of what has been discussed above, this complaint is accepted with Rs.5000/- as cost and compensation against the opposite parties and it is directed to pay the amount of Rs.1 lac after deducting 5%(Rs.1,00,000-Rs.5000/-) i.e. Rs.95,000/- in the first policy and Rs.30,000/- after deducting 7.5%(Rs.30,000-Rs.2250/-) i.e Rs.27,750/- in the second policy, in total the amount of Rs.1,22,750/-(Rs.95,000/-+Rs.27,750/-), 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.1,22,750/- till realization.
12. 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:-
21-12-2012
Vikramjit Kaur Soni
President
Sukhwinder Kaur
Member
