DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA

CC.No.82 of 17-01-2014

Decided on 10-06-2014

Rubinder Singh aged about 50 years S/o Ajit Singh R/o Village Udekaran, Tehsil and District Sri Muktsar Sahib.

........Complainant

Versus

1.Birla Sun Life Insurance Company Limited, Regd. One Indiabulls Centre, Tower 1, 15th and 16th Floor, Jupiter Mill Compound, 841, Senapati Bepat Marg, Elphinstone Road, Mumbai-400013, through its Managing Director/Chairman/Authorized Signatory.

2.Birla Sun Life Insurance Company Limited, having its one of the Branch Office situated at Mall Road, Bathinda, through its Branch Manager.

.......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.David Sadiora, 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 adviser of the opposite parties, the complainant has purchased one insurance policy bearing No.004260654 and paid the premium amount of Rs.2,64,195/- on dated 28.7.2010 to the opposite parties as one time premium with the assurance that he would get double of the amount after a period of 5 years or can get it refund after 3 years alongwith 14% interest on the premium amount deposited by him against the abovesaid policy. The complainant further alleged that the opposite parties neither issued him any policy nor its terms and conditions. At the time of selling of the abovesaid policy the agent of the opposite parties obtained the signatures of the complainant on consent form after filling it with the above mentioned terms and conditions of the policy. On 10.5.2013, the complainant approached the opposite party No.2 and requested it to refund him the premium amount alongwith interest @ 14% per annum as assured by the opposite parties, but he came to know that the opposite parties played malafide with him as the plan of the policy in question was not the same as assured by them. On further inquiry, the complainant came to know that the policy form against the policy in question that has been signed by him at the time of payment of premium of the abovesaid policy is not attached in the record of the opposite parties, rather the opposite parties filled a separate form without the knowledge of the complainant and signed the same itself without obtaining his signatures. The complainant many times visited the opposite parties and requested them to refund him the premium amount, but they have not paid any heed to his requests. Hence the present complaint filed by the complainant to seek the directions of this Forum to the opposite parties to refund him the amount of Rs.2,64,195/- alongwith interest, cost and compensation or to give him any other relief for which he 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 himself was willing to purchase their Life Insurance plan and for that he approached their adviser and got the entire information about all the insurance plans. Thereafter, after understanding all the terms and conditions and benefits of all the plans, the complainant opted to purchase 'Dream Endowment Plan' of Unit Linked Life Insurance Policy of the opposite parties and filled the proposal form bearing No.A40200256 on 13.7.2010 and opted to pay annual premium of Rs.2,64,195/- with Sum Assured of Rs.75 lacs, policy term of 30 years and premium paying period of 20 years and payment method direct bill i.e. cash, payment mode annually. The free look period option of 15 days was given to the complainant, in which if he was not satisfied with the terms and conditions of the policy, he had the option to cancel the policy within 15 days from the date of receipt of the policy documents by giving in writing the reason for objection, but the complainant did not do so, which shows that he was agreed to the same. The policy in question is already in the possession of the complainant. The complainant had paid only first premium against the abovesaid policy and thereafter did not pay the renewal premium, so his policy has lapsed due to non-payment of the renewal premium. The opposite parties have mentioned about the charges which are charged in the policy i.e. Investment Guarantee Charge; Premium Allocation Charge; Fund Management Charge; Policy Administration Charge; Mortality Charge and Misc. Charges etc. and further pleaded that there is no deficiency in service or unfair trade practice on their part.

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 has purchased one insurance policy bearing No.004260654 dated 28.7.2010 under the name and style 'Birla Sun Life Insurance Company' and paid the premium of Rs.2,64,195/- to the opposite parties.

6. The disputed facts of the parties are that the opposite parties visited the residence of the complainant at village Udekaran, where the policy in question has been purchased by him and he was assured by agent of the opposite parties that if he would invest the amount one time, the opposite party No.1 would refund him the double of the amount of the premium after a span of 5 years and if he wants to withdraw the policy after 3 years, the insurance company would pay him interest @ 14% per annum on the amount deposited by him with the opposite parties. The agent of the opposite parties obtained the signatures of the complainant on consent form after filling it with the above mentioned terms and conditions of the policy. No policy or its terms and conditions have been issued to the complainant. On 10.5.2013, the complainant approached the opposite party No.2 and requested it to refund him the premium amount alongwith interest @ 14% per annum, but the opposite parties have failed to refund the amount. The complainant submitted that as no policy or its terms and conditions have been issued to him, so he is entitled for the refund of the premium amount under free look period. The opposite parties have not placed on file any receipt regarding sending of the policy to the complainant in their evidence, from which it is evident that they have not issued him any policy. The complainant moved an application to produce his original proposal form/complete policy form and other documents that have been signed by him at the time of issuing of the policy in question, but the opposite parties did not give any reply to the said application.

7. On the other hand the submission of the opposite parties is that the premium paying term was 20 years and policy term was 30 years and premium was to be paid annually to the tune of Rs.2,64,195/- for sum assured of Rs.75 lacs. The complainant has paid only one premium. All the policy documents have been sent to the complainant alongwith free look period option letter, but he has not availed that option, meaning thereby he was fully satisfied with the policy terms and conditions. The opposite parties have relied upon various authorities on different aspects of the matter.

8. Vide Ex.OP1/5, Terms and Conditions, 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 the insurance cover under your policy will continue. If you do not pay your policy premium within the grace period of 30 days, the following will be applicable:-

During the first three policy years: Your policy will lapse if we do not receive the entire policy premium by the end of the grace period. The insurance under your policy will cease and your fund value will be held in suspense after deduction of surrender charges. This net fund value will be paid out to you only at the end of the third policy year or the end of the two year revival period, whichever is later.

You can revive your policy within two years from the lapse date by paying all outstanding policy premiums and providing us with evidence of insurability satisfactory to us, if the life insured died while the policy is not yet revived, we will pay the fund value as of the lapse date immediately and terminate the contract.

After three completed policy year, you have the right to reduce (Subject to minimum of Rs.5000/-) or stop paying enhanced savings premium by submitting a request to us and the policy premium will be reduced accordingly. If we do not receive the entire policy premium by the end of the grace period, then you will be given a period of two years to pay all outstanding premiums till date. Your policy will continue during these two years as well as all insurance cover and charges. At the end of this two years period, we will give you the choice to either surrender your policy or continue it without the payment of additional policy premiums. Your policy will, however, be deemed as surrendered should your fund value equal one annual policy premium.”

Further Standard Charges are to be paid as mentioned on page No.14 of Ex.OP1/5. As per above mentioned Clause Premium Discontinuance, the complainant has to opt the choice to either surrender his policy or continue it without the payment of additional policy premiums. In the case in hand the complainant has paid only one premium of Rs.2,64,195/- and has not paid the remaining premiums, thus he has the option either to surrender his policy or to continue it and get the fund value. But under no circumstances the opposite parties can garb the hard earned money of the complainant.

9. Thus keeping in view the facts and evidence placed on file we are of the considered opinion that the complainant has paid only one premium against the policy in question. The story put-forth by the complainant has no evidence that he has earlier filled another proposal form and later on his proposal form has been changed. The proposal form placed on file shows that premium paying term is 20 years and policy term is 30 years. Thus to support his contention the complainant has placed no evidence on file. However, the fact remains that the complainant has paid only one premium of Rs.2,64,195/- in the year 2010. The opposite parties cannot garb the hard earned money of the complainant on the hypothetical grounds. There is no evidence placed on file by the opposite parties to show that the policy in question or its terms and conditions have ever been sent to the complainant, as there is no postal receipt or copy of dispatch register has been placed on file by the opposite parties to prove their version, which shows that no free look period option has been provided to the complainant. We cannot accept this plea of the complainant that no terms and conditions have been sent to him as he was well within his right to give the written request for the issuance of the policy or its terms and conditions, but no such written request has been placed on file by him. Moreover every agreement is based on some terms and conditions, although communicated to the complainant in oral. The reference can be sought of Circular Ref. No.IRDA/HLTH/MISC/CIR/216/09/2011 issued by Insurance Regulatory and Development Authority on dated 20-09-2011, wherein it issued special guidelines to the Insurance Companies in this context. The relevant portion of the said circular is reproduced here under :-

“...To All Life Insurers and non-life Insurers

Re : Delay in claim intimation/documents submission with respect to

i) All life insurance contracts and

ii) All Non-life individual and group insurance contracts

....The Insurer's decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policyholders losing confidence in the insurance industry, giving rise to excessive litigation.”

10. Therefore in view of what has been discussed above this complaint is partly accepted with Rs.2000/- as cost and compensation against the opposite parties. The complainant is directed to give his option whether he wants to continue his policy or seek the surrender value under the policy in question. After receiving the written request from the complainant, the opposite parties are directed to consider his case as per Clause mentioned above. And in case the complainant opt for the refund, the premium amount of Rs.2,64,195/- be refunded to him after making requisite deductions, at the same time complete detail year-wise be given to him regarding the deductions made.

11. The compliance of this order be done within 45 days from the date of receipt of the copy of this order. The amount that is to be paid to the complainant will carry interest @ 9% per annum in case the compliance be not done within the stipulated period till its realization.

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

13. 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:-

10-06-2014

(Vikramjit Kaur Soni)

President

(Sukhwinder Kaur)

Member