Chandigarh

DF-I

CC/546/2014

Rajinder Kaur - Complainant(s)

Versus

Bharti AXA Life Insurance Co. Ltd. - Opp.Party(s)

In person

13 Mar 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

========

 

 

                                     

Consumer Complaint No.	:	CC/546/2014
Date of Institution	:	14/08/2014
Date of Decision	:	13/03/2015

 

 

Rajinder Kaur w/o Manvinder Singh Bal, Kothi No.68, Phase-I, Sector-55, SAS Nagar, Mohali.

…..Complainant

V E R S U S

1. Bharti AXA Life Insurance Co. Ltd. Chandigarh Branch, S.C.O. No.208-09, Sector 34-A, Chandigarh through its Branch Manager.
2. Bharti AXA Life Insurance Co. Ltd. Unit No.601 & 602, 6^th Floor Raheja Titanium, Off Western Express Highway, Goregaon (E) Mumbai-400063 through its Chief Executive Officer.

……Opposite Parties

 

 

QUORUM:	P.L.AHUJA	PRESIDENT
	MRS.SURJEET KAUR	MEMBER

                                                       

                       

ARGUED BY	:	Sh. Sukhdev Singh, authorised agent of complainant
		Sh. R.S. Dhull, Counsel for OPs.

                       

                 

PER P.L.AHUJA, PRESIDENT

1.         Sh. Rajinder Kaur, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against Bharti AXA Life Insurance Co. Ltd. and another, Opposite Parties (hereinafter called the OPs), alleging that she purchased life insurance policy No.5001217834 (Ex.C-1) from the OPs on 4.6.2008 for a term of 15 years having annual premium of Rs.18,000/-. 

                According to the complainant, office address of OP-1 at the time of issuance of policy was SCO-2, 1^st Floor Phase-5, Mohali but it shifted its office from there without any intimation to her.  After great efforts, the complainant came to know that office of OP-1 exists at SCO 28-30, Sector 9-D, Chandigarh and she paid the premium there.  However, OP-1 again shifted its office from there without informing the complainant.  After finding out the exact location of branch office of OP-1, the complainant paid the last premium on 6.7.2012 in sector 34-A, Chandigarh.  It has been averred that fed up with the behaviour and negligent service of the OPs, the complainant was left with no other choice than to surrender the policy after completion of its five years. Accordingly, the complainant approached OP-1 regarding the proceeds she would get on surrendering of the policy and she was orally told that she would not get first premium. Upon this, the complainant approached the company’s (OPs) complaint cell at Mumbai as per the address given in the policy bond vide speed post letter dated 10.4.2013 but the same was returned by the post office with the remarks “left without instructions”.   Subsequently, the undelivered speed post letter was handed over to OP-1 and the photocopy of the complaint was received on 13.5.2013 but the OPs did not bother to reply despite reminder dated 19.6.2013 (Ex.C-6) sent by the complainant. The complainant also approached the Ombudsman Chandigarh as well as OP-2 vide complaint dated 31.7.2013. According to the complainant, on 10.10.2013 she received a courier at 1400 hours from OP-2 and on opening it she was surprised to note that the reply of OP-2 was back dated as 14.8.2013. The complainant sent a legal notice dated 4.3.2014 (Ex.C-10) which was replied by the OPs vide letter dated 2.4.2014 (Ex.C-11) but nothing was mentioned in the same whether the complainant would get her first premium of Rs.18,000/-. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint. 

2.         In their joint written reply, OPs have admitted that the complainant purchased the policy in question. However, it has been pleaded that the policy was issued based on the declarations made and information provided in the proposal form.  The policy documents were forthwith despatched to the mailing address of the complainant and the same also contained policy schedule which clearly explained the maturity date and terms and conditions of the policy.  It has also been admitted that the office (of OP-1) was shifted but it has been averred that the complainant is an educated person and the letters also contained email ID, contact numbers and even all such information is also available on the internet. It has been averred that the complainant paid five premiums and stopped payment of premium thereafter. It has been admitted that reply was sent to the complainant but it has been averred that there might be any printing mistake by the dealing and it did not make any deficiency in service.  It has been further averred that in response to the legal notice of the complainant, it was specifically replied that first premium shall not be utilized but the same would be adjusted as per the relevant terms and conditions duly supplied and admitted by the complainant herself. It has been contended that the surrender value for the policy till September 2014 was Rs.74,496.58 which can be paid to the complainant subject to the fact that she applies for surrender of the policy. Pleading that there is no deficiency in service or unfair trade practice on their part, prayer for dismissal of the complaint has been made.
3.         In her replication, the complainant has controverted the stand of the OPs and reiterated her own.  It has been averred that the OP also did not inform the local post office regarding the change of its head office location.  It has been contended that the surrender value is arrived at as per day-to-day performance of the company of the market, therefore, mentioning the surrender value of September 2014 and offering payment of the same in December 2014 is absolutely irrelevant and clear violation of the policy bond. 
4.         The parties led evidence in support of their contentions.
5.         We have gone through the entire evidence, written arguments submitted by the OPs and heard the arguments addressed by the authorised agent of the complainant and the learned Counsel for the OPs. 
6.         It is the admitted case of the OPs that the complainant obtained one Aspire Life Plan Policy having sum assured of Rs.1,80,000/- with commencement date as 4.6.2008 (Ex. C-1). The annual regular premium was Rs.18,000/- and it was payable upto the age of 55 years.  It is also admitted that the complainant has paid five installments of premium and thereafter stopped the payment. In fact, the complainant vide letter dated 10.4.2013 (Ex.C-5) surrendered the said policy after 4.6.2013 by completing five years after she was told by Sector 34 Chandigarh that she would not get back first premium of Rs.18,000/-. 
7.         The complainant has raised three issues in respect of deficiency in service i.e. first on account of frequent change of address by the OPs, second non-reply of her letter for surrender of the policy and thirdly she has also submitted that the OPs cannot deduct the first year premium of Rs.18,000/- while making the payment.
8.         Firstly, we take up the issue of change of office address of OP-1 frequently by it. According to the complainant, the office address of OP-1, at the time of issuance of the policy was SCO 2, First Floor, Phase 5, Mohali. This is also proved from the copy of the cheque-cum-receipt Ex.C-2. According to the complainant, OP-1 shifted its office from that place to SCO No.28-30, Sector 9, Chandigarh and she came to know of the said address after great efforts. It was not the end because OP-1 again shifted from Sector 9, Chandigarh and the last premium was paid on 6.7.2012 in Sector 34A, Chandigarh. The authorised agent of the complainant has urged that shifting of business from one place to another, without intimating the complainant, proves deficiency in service on the part of the OPs. 
9.         We have carefully considered the above arguments.  The OPs have rightly pleaded that the company has to take the decision of shifting in the business interest for promoting the business to cater to the demands of customers. Otherwise also, the copy of forwarding letter of the insurance policy at page 18 of the paper book shows that the OPs mentioned their contact details as mentioned below for reference of the complainant :-

“Call : 022-40394444 or Toll free : 1800-102-4444 (for Airtel subscribers)

Or Toll Free: 1800-425-1350 (for MTNL/BSNL subscribers)

SMS : “Service” to 56677

Email :service@bharti-axalife.com”

It is quite evident that the complainant could enquire about the office address of the OPs at Chandigarh or Mohali on toll free number or through email or through SMS.  Hence, if the local address of OP-1 was changed and the office was shifted from Mohali to Chandigarh Sector 9 and then to Sector 34A, without intimating the complainant, we feel that no deficiency in service can be inferred on this count. However, a perusal of the insurance policy Ex.C-1 clause 2.13 clearly shows that under grievances redressal process, the complainant was asked to contact the complaint cell at the following address:-

                “Complaints Cell

                Bharti AXA Life Insurance Company Limited

                61/62 Kalpataru Synergy

                Opposite Grand Hyatt

                Vakola, Santacruz (East)

                Mumbai 400005.

Call : 022-40306347

Toll Free No.: 1800-22-4441 (MTNL/BSNL subscribers)

                   1800-102-4444 (Airtel subscribers)

                E-mail : service@bharti-axalife.com”

 

Pertinently, the complainant sent a letter dated 10.4.2013 (Ex.C-5) through registered post at the above said address but the envelope was received back unserved (Ex.C-4) on account of incomplete address.  Evidently, the OPs did not intimate the correct contact details of complaint cell either to the complainant or to the postal authorities.  At any rate, the complainant, who had surrendered the policy after five years, had enquired from the complaint cell whether she would get back first premium or not?  However, she could not get any reply from the OPs.  We feel that when specifically an address was given in the insurance policy for contacting in case of any complaint, non-communication of fresh address of complaint cell to the complainant amounts to deficiency in service on part of the OPs.

10.         Apart from the above deficiency in service, it is also worth noting that the complainant submitted letter dated 10.4.2013 (Ex.C-5) addressed to the complaint cell before the Chandigarh branch on 13.5.2013 but when she again gave a reminder Ex.C-6 on 19.6.2013, the same was not accepted by the local branch on the ground “the request declined in system.” OP-2 vide letter dated 14.8.2013 (Ex.C-9) sent a reply to the complainant that they had not received any communication from  her regarding cancellation/alteration of the policy within the free look period whereby implying that she was in agreement with the terms of the policy. The said letter was received by the complainant on 10.10.2013.  According to the complainant, the OPs adopted an unethical act by back dating the reply.  OPs 1 & 2 in para 10 of the written reply have admitted that there may be a printing mistake by the dealing (hand) and it does not make any deficiency in services.  In other words, it is not specifically denied by the OPs that the letter allegedly sent on 14.8.2013 was received by the complainant on 10.10.2013. It is quite strange that the letter dated 10.4.2013 received by OP-1 on 13.5.2013 was replied by OP-2 only on 10.10.2013 after about five months.  At the same time, in the said letter it was not clarified whether the complainant would get back her first premium or not nor any action was taken on her request to surrender the said policy after 4.6.2013.  Thus, the above said act of OPs clearly points out deficiency in service on their part.
11.         Adverting to the question whether the complainant is entitled to get back the first year premium or not, it has been pleaded by OPs that the surrender value of the present policy till September 2014 is Rs.74,496.58 which can be paid to the complainant subject to the fact that she applies for surrender of the policy. This written reply was filed in December 2014 but the surrender value of December 2014 was not mentioned. Apart from it, when the complainant had made a request for surrendering the policy vide letter dated 10.4.2013 (Ex.C-5), the OPs could have straightway sent the cheque of surrender value to the complainant, but the surrender value has not been paid to the complainant even during the pendency of the complaint.  This omission on the part of the OPs also amounts to deficiency in service. 
12.         The learned counsel for the OPs has drawn our attention to the rulings M/s Suraj Mal Ram Niwas Oil Mills Vs. United India Insurance Co. Ltd. & Anr., Civil Appeal No.1375 of 2003 decided on 8.10.2010 by the Hon’ble Supreme Court and Reliance Life Insurance Co. Ltd. & Anr. Vs. Madhavacharya, Revision Petition No.211 of 2009 decided on 2.2.2010 by the Hon'ble National Commission and has contended that in construing the terms of a contract of insurance, the words used therein must be given paramount importance and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insured. Therefore, the endeavor of the court should always be to interpret the words in which the contract is expressed by the parties. The learned counsel for the OPs has also argued that it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves.  The learned counsel for the OPs has drawn our attention to the various clauses of the insurance policy and has contended that the first regular premium was not to be invested in any of the investment funds and the same was payable as guaranteed special additions at the time of death or maturity and since in this case neither the policy has matured nor death of the insured has occurred, therefore, the first year regular premium cannot be paid to the complainant.
13.         We have carefully considered the above arguments and we find considerable force in the same.  Clause 3.5 of the insurance policy reads as under :-

“3.5 Full Withdrawal of Units (Policy Surrender)

You have the option to apply for Surrender of the Policy.  Surrender of the Policy shall terminate the Policy and extinguish all your rights, benefits and interests in the Policy.

On seeking surrender of the Policy, the Surrender Value is payable to you which at all times is equal to the Policy Fund Value less the applicable Surrender Charges as mentioned in the section on Policy Charges.

If the Policy is surrendered before the completion of three Policy Years then the surrender value, calculated as at the date of the request of such surrender by the Policyholder shall be frozen and shall become payable after the completion of three Policy Years.”

 

Clause 4.3 of the policy reads as under :-

“4.3  First year Regular Premium will not be invested in any of the investment funds. This will however be payable as Guaranteed Special Additions at the time of death or maturity as per section 3.1 and 3.2. Regular Premium from the second policy year onwards received by the Company (net of the relevant Policy Charges) will be used to create Units in the relevant Investment Funds for allocation to the Policy Fund in accordance with the Fund Allocation Instruction then in effect under the Policy.  The Units will be created on the Valuation Dates of the relevant Investment Fund/s as per the provisions of the section 6 contained herein.

 

Clause 7.5 mentions the surrender charge as under :-

                “7.5 Surrender Charge

                The Surrender charge to be levied may vary based on the duration of the Policy and are levied as a percentage of the Policy Fund Value, at the time of surrender. The Surrender Charges are as follows :

 

Policy Year	Surrender Charge
Year 1	Surrender Not allowed
Year 2	10%
Year 3	5%
Year 4	4%
Year 5	2%
Year 6 onwards	Nil”

 

A bare perusal of the copy of the proposal form Annexure OP-1 shows that it is duly signed by the complainant and she has declared that the contents of the proposal form have been carefully explained and fully understood by her.   The copies of illustration of benefits designed for the complainant at Annexure OP-2 are duly signed by the complainant and it is specifically mentioned therein that first year annual regular premium is guaranteed to be returned as special additions at maturity or death as detailed in the product brochure. Hence, it is evident that the complainant is not entitled to the first year annual regular premium as per terms and conditions of the insurance policy Ex.C-1.  We are of the view that the complainant is entitled to the surrender value of the policy on the date of actual payment of the amount.

14.         For the reasons recorded above, we find merit in the complaint and the same is partly allowed.  The OPs are directed as under :-
    1. To make payment of the surrender value of the policy as existing on the date of payment in favour of the complainant.
    2. To make payment of an amount of Rs.15,000/- to the complainant towards the deficiency in service and physical harassment.
    3. To make payment of an amount of Rs.10,000/- to the complainant towards litigation costs.
15.         This order shall be complied with by OPs within one month from the date of receipt of its certified copy; thereafter OPs shall pay the amounts mentioned at Sr.No.(i) & (ii) above with interest @ 12% per annum from the date of filing of the present complaint, till realization by the complainant, besides payment of litigation costs.
16.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-
13/03/2015	[Surjeet Kaur]	[P. L. Ahuja]
hg	Member	President