DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA

CC.No.551 of 13-12-2013

Decided on 20-05-2014

Shunty Jain aged about 32 years D/o Dhan Raj Jain R/o Janta Motor Store, GT Road, Bathinda.

........Complainant

Versus

1.Birla Sun Life Insurance, Registered Office One Indiabulls Centre, Tower 1, 15th and 16th Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai-400013, through its CMD/MD/Chairman/President/GM.

2.Branch Manager/Branch Head, Birla Sun Life Insurance, 1st Floor, The Mall, Bathinda.

.......Opposite parties

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

QUORUM

Smt.Vikramjit Kaur Soni, President.

Smt.Sukhwinder Kaur, Member.

Sh.Jarnail Singh, Member.

Present:-

For the Complainant: Sh.Ashok Gupta, counsel for the complainant.

For Opposite parties: Sh.Varun Gupta, counsel for the opposite parties.

ORDER

VIKRAMJIT KAUR SONI, PRESIDENT:-

1. The instant complaint has been filed by the complainant 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 on the allurement of the agent of the opposite parties, the complainant purchased one insurance policy bearing No.003988211 for 3 years and paid the premium of Rs.50,000/- in two installments. The complainant alleged that the opposite parties never sent her any terms and conditions of the abovesaid policy, rather the premium has been paid on the assurance of the opposite parties that the complainant would be given the refund with bonus immediately but the opposite parties have not fulfilled their commitment. The complainant requested the opposite parties to refund the amount with bonus and interest, but they did not listen to her and told her that they would give the full amount on the surrender of the abovesaid policy. The complainant surrendered the abovesaid policy and requested the opposite parties to make the payment with bonus, but they did not make her the payment. The opposite parties swallowed the amount of Rs.50,000/- of the complainant, whereas at the time of selling of the abovesaid policy they were committed to give her the hefty bonus of Rs.1,25,000/- and promised her that the dummy policy would be issued to her that would be encashed at anytime, but later on they did not pay her anything. Hence the present complaint filed by the complainant to seek the directions of this Forum to the opposite parties to refund the amount of Rs.50,000/- alongwith interest @18% per annum from 23.4.2011 till payment besides cost and compensation or to give her any other additional or alternative relief for which she may be found entitled to.

2. The opposite parties after appearing before this Forum have filed their joint written statement and pleaded that the complainant herself was willing to purchase their Life Insurance plan and for that she approached their adviser and got the entire information about all the insurance plans in vernacular language. Thereafter, after understanding all the terms and conditions and benefits of all the plans, the complainant opted to purchase 'BSLI Platinum Premier Plan Unit Linked Life Insurance Policy' of the opposite parties and filled the proposal form bearing No.A34925739 on 22.3.2010 and opted to pay the annual premium of Rs.25,000/- with Sum Assured of Rs.2,50,000/-, policy term of 10 years and premium paying term of 10 years and premium allocation percentage 100 in maximiser and disclosed the opposite parties her annual income as Rs.2,30,000/- and payment method by direct bill i.e. cash, payment mode annually and paid the amount of Rs.25,000/- to the opposite parties at the time of filling of the proposal form. The complainant has also signed the declaration before filling of the proposal form. After receiving the proposal form and going through the entire contents of the proposal form, the Underwriters of the abovesaid policy, had issued the insurance policy bearing No.003988211 and sent the policy documents alongwith its all terms and conditions to the complainant on the given address that has been received by her and are in her possession. The free look period option has been given to the complainant, in which she had an option to reconsider/cancel her policy within 15 days from the date of receipt of the policy if she was not satisfied with the terms & conditions of the policy, but she did not avail the free look period option, meaning thereby she was fully aware about the terms and conditions of the abovesaid policy. The complainant paid first two years premium against the abovesaid policy and has failed to pay the next due premium on 22.3.2012, so her policy lapsed due to the non-payment of the premium. The opposite parties have referred the Policy Premium; Premium Discontinuance:-a) During the first three policy years, if we do not receive the entire policy premium by the end of the grace period, this policy will be deemed lapsed and all insurance will cease immediately. You will then have two years from the lapse date to revive your policy'. The opposite parties further pleaded that the premium amount cannot be refunded and relied upon various authorities in this regard.

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. Admittedly, the complainant purchased one insurance policy bearing No.003988211 and paid the premium of Rs.50,000/- in two installments on dated 22.3.2010 under the name 'BSLI Platinum Premier Plan Unit Linked Life Insurance Policy'.

6. The complainant submitted that she has been allured by the opposite parties that her amount would be refunded to her immediately on her request with bonus. The complainant requested the opposite parties to refund the amount with bonus and interest, but they did not listen to her request and asked her to surrender the abovesaid policy and accordingly, she surrendered the same and requested them to make the payment with bonus, but they did not make her the payment. At the time of selling of the abovesaid policy they were committed to give her the hefty bonus of Rs.1,25,000/- and promised her that the dummy policy would be issued to her, which can be encashed anytime. Despite her requests, nothing has been refunded to the complainant till date.

7. On the other hand the submission of the opposite parties is that the complainant has filled the proposal form bearing No.A34925739 on 22.3.2010 and opted to pay the annual premium of Rs.25,000/- with Sum Assured of Rs.2,50,000/-, policy term of 10 years and premium paying term of 10 years and premium allocation percentage 100 in maximiser and disclosed the opposite parties her annual income as Rs.2,30,000/- and payment method by direct bill i.e. cash, payment mode annually and paid the amount of Rs.25,000/- to the opposite parties at the time of filling of the proposal form and also signed the declaration to that effect. The free look period option was given to the complainant, in which she had an option to reconsider/cancel her policy within 15 days from the date of receipt of the policy if she was not satisfied with the policy terms & conditions, but she did not avail the free look period option, meaning thereby she was fully satisfied with the terms and conditions of the policy. The complainant has paid the first two years premium against the abovesaid policy and has failed to pay the next due premium on 22.3.2012, so her policy lapsed due to the non-payment of the premium. The opposite parties further submitted that the insurance is a contract and its terms and conditions are binding on the parties and have referred to the law laid down by the Hon'ble Supreme Court of India in case titled as Life Insurance Corporation Limited & Others Vs. Smt.S.Sindhu, decided on 4.5.2006 and have also referred to various authorities on other aspects of the matter.

8. The opposite parties have referred to Policy Premium; Premium Discontinuance and Revival; Non-Revival, which are reproduced hereunder:-

“Policy Premium:-Your policy details shows the annual policy premium, the premium paying mode, the installment premium and its due dates. Subject to the Premium Discontinuance provision, we must receive policy premiums when due in order for this contract to be valid and remain in effect. Premiums are payable without any obligation on the company to issue a notice for the same.

Premium Discontinuance:-If you are unable to pay the policy premium by the due date, you will be given a grace period of 30 days during which time all insurance under this policy will continue.

a) During the first three policy years: If we do not receive the entire policy premium by the end of the grace period, this policy will be deemed lapsed and all insurance will cease immediately. You will then have two years from the lapse date to revive your policy'.

Revival.....

Non-Revival:-If the policy is not revived by the end of the two year revival period, we will terminate this contract and pay the Surrender Value as of the lapse date to you at that time or at the end of the third policy year, whichever is later. The Surrender Value as of the lapse date will not vary based on the performance of the investment funds and will remain constant till the time it is paid to you. You cannot make partial withdrawals until the policy is revived or until the end of the third policy year, whichever is later. You may however request to surrender your policy after three completed policy years in which case we will immediately pay you the Surrender Value as of the lapse date.”

As per the version of the opposite parties, the complainant has failed to pay the third due premium on 22.3.2012. As per the clauses mentioned above if the life assured failed to pay the next premium within the grace period of 30 days, the policy will deem to be lapsed and all insurance cover will cease immediately, in that case the insured has two years period from the lapse date to revive his/her policy. In case the policy is not revived by the end of the two years of revival period, the contract will be terminated and Surrender Value will be paid as of the lapse date to the insured at that time or at the end of the third policy year, whichever is later. The Surrender Value as of the lapse date will not vary based on the performance of the investment funds and will remain constant till it will be paid to the insured. The Non-Revival Clause of the policy has already been reproduced in aforementioned Paras. As mentioned in the Non-Revival Clause, the complainant/insured has to surrender her policy after three completed policy years, in that case the surrender value will be paid immediately to her as of the lapse date. Thus relying upon the Clauses mentioned in the written statement of the opposite parties we are of the considered opinion that the complainant has applied for the surrender of the abovesaid policy, but despite her request and after the completion of 3 years, the surrender value has not been paid to her till date. As per the policy terms and conditions, the Surrender Charge can be applied as under:-

“Surrender Charge:-The surrender charge is applied if and when you surrender your policy before completing 5 years. This charge is based on the annual policy premium you select at entry and is guaranteed to never increase.

40% of annual policy premium if less than 3 policy years are completed....”

In the case in hand the complainant has paid the premiums of Rs.25,000/- and Rs.25,000/- each, in this way, she has paid two premiums of Rs.50,000/- only and has failed to pay the third premium due on 22.3.2012, thus her case falls under Clause less than 3 policy years.

9. As discussed above the complainant has withdrawn from the policy contract as she has failed to pay the third premium amount, but as per their own policy terms and conditions, the opposite parties have failed to pay the surrender value on the lapse of the revival period, which amounts to deficiency in service on their part.

10. With utmost regard and humility to the authorities relied upon by the learned counsel of the opposite parties, have distinguishable facts and circumstances.

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. The opposite parties are directed to pay the surrender value to the complainant as per the policy terms and conditions mentioned above. A detail calculation sheet be provided to the complainant alongwith the amount payable to her.

12. The compliance of this order be done within 45 days from the date of receipt of the copy of this order.

13. In case of non-compliance within the stipulated period, the amount that is payable to the complainant as per the policy terms and conditions will carry interest @ 9% per annum till realization.

14. 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:-

20-05-2014

(Vikramjit Kaur Soni)

President

(Sukhwinder Kaur)

Member

(Jarnail Singh) Member