BEFORE THE IV ADDL DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, BENGALURU

1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H ROAD, SHANTHINAGAR, BENGALURU – 560 027.

   26^th DAY OF NOVEMBER 2020

O R D E R

SMT.PRATHIBHA. R.K., PRESIDENT

This complaint is filed by the complainant against the Opposite Parties (hereinafter called as OPs) under section 12 of the Consumer Protection Act, 1986.  The complainant prays to direct the OPs to refund the premium amount of Rs.1,54,208.15 with interest @ 18% p.a from February 2015 and to pass such other reliefs

2.      The brief facts of the complaint is as under:

The complainant submitted that, he approached the OP Company with a fond hope of securing his retired life with financial security.  OP advised the complainant to take insurance policy.  Complainant took the insurance policy bearing No.000110037, plan name “BSLI Flexi Cash Flow (Money Back)” and the date of issuance of the said policy was on 07.08.2003.  Complainant opted for quarterly payment of the premium which was fixed at Rs.6,338/- per quarter.  As per the said term of payment, the complainant had paid total amount of Rs.1,54,208.15 from the date of issuance of the above mentioned policy till its surrender in the month February 2015 i.e., 26.02.2015.

The complainant further submitted that subsequently due to some personal and financial problems, he had decided to surrender the said policy.  At that time when the complainant had contacted the officials of the OP Company and as per the oral information and assurance given by the officials of the OP, at least 70% on the premium amount paid shall be refunded.  Accordingly the complainant surrendered the policy on 26.02.2015.  That subsequently when the complainant had contacted the officials of OP Company seeking the official confirmation of surrender of his policy and also regarding the amount of refund.  The officials of OP have denied to disclose any information and also orally told the complainant that “No Amount” will be refunded.  Subsequently shocked by the reply of the officials of the OP Company, the complainant had sought for a letter in writing to that effect.  In fact, the statement furnished by the OP Company has wrongly shown that the complainant had surrendered his policy on 07.11.2014 itself.  This shows the callous and negligence attitude of the OP towards its customers.

The complainant further submitted that he had contacted the officials of OP in this regard.  The officials of OP have acted in a rude, negligent manner and moreover the refusal to pay any amount of refund of premium has not been notified to the complainant in writing inspite of complainant approach and requests.  Complainant felt deficiency in service and negligent attitude on the part of OPs.  Complainant got issued legal notice to OPs on 22.07.2015 calling upon OPs to refund the premium amount of Rs.1,54,208.15 with interest.  OPs denied to refund the premium amount to the complainant.  Hence complainant filed this complaint.

3. In response to the notice issued, OPs.1 & 2 appeared through their advocate and filed their version in brief as under:

The OPs.1 & 2 submitted that this Forum has no jurisdiction to entertain the complaint as the said policy is a Unit Linked Policy (Market linked) and the investment made under Unit Linked Policy is a speculative gain and speculative investment matter does not come under Consumer Protection Act, 1986.    The complainant has approached this Forum with false, malicious and vexatious complaint.  Complainant is highly educated individual and Doctor by profession.  The complaint has been filed merely to harass and gain undue advantage and unjustified monies from OPs and hence the complaint deserves to be dismissed in limine.  The complaint has been filed with ulterior motive and malafide intention.

The OPs.1 & 2 submitted that OP Company have received duly filled and signed proposal form.  The complainant opted for policy named ‘BSLI Flexi Cash Flow (Money Back) plan on 07.08.2003.  Considering the details provided by the complainant in the proposal form OP issued policy bearing No.110037.  The details of policy issued are mentioned below.

The OPs.1 & 2 further submitted that in accordance to clauses 4 (1) & 6 (2) of the Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002 every policy document sent by answering respondents is accompanied with a copy of the proposal form signed by the applicant and a forwarding letter which clearly mentions that in case Policyholder is not satisfied with the features or the terms and conditions of the policy he can withdraw/return the policy within 15 days i.e., under the ‘Free Look Period’.  This provides an opportunity to the proposer to review the answers provided by the proposer in policy form and approach the company for any discrepancy/rectification/ cancellation.  Since no such request was received by the Company, the policy continued as per the terms and conditions.

That after issuance of policy the OP sent the insurance policy and other policy documents and the same were duly received by the complainant, the contract of insurance had concluded between the parties.  Complainant has received the policy documents and was very well aware of the terms and conditions of the policy.  This proves that the present complaint is nothing but an afterthought to take undue advantage from the OP Company.  The complainant now with the intention to wriggle out of his contractual obligation has filed this complaint.

The OPs.1 & 2 further submitted that as per the terms and conditions of the policy the complainant was required to pay quarterly premium of Rs.6,337/- for policy No.110037.  Whereas the answering OPs were in receipt of premium of Rs.1,54,208/- for the said policy.  That the company incurs various expenses to keep the policy in active stage.  That ULIP plan being a Market Linked Plan and is subject to investment risks associated with Capital Markets.  Further the premiums invested are subject to various charges such as administrative charges, mortality charges and service tax.  That on 04.06.2009 the complainant opted for partial withdrawal and his request was processed by Company by paying him Rs.79,600/- through cheque bearing No.026108 under the subject policy.

The OPs.1 & 2 further submitted that the post partial withdrawal the complainant was required to pay the subsequent and unpaid premiums under the policy, however complainant did not pay the subsequent premiums under the subject policy and allowed the policy to lapse.  The complainant being irregular in making payments of premium, his fund value became zero.  The present policy is a Unit Linked Policy and the premiums received under the policy are subject to various administrative deductions and charges.  Further the same is subject to investment risks associated with Capital Markets.  OP has send a letter to complainant on 26.06.2009 as a reminder premium notice-1, in which all the details of due premiums are given.

The OPs.1 & 2 further submitted that whenever the complainant send any written letter the same has been replied.  That the complainant has been informed that the complainant has not paid the outstanding premium as mentioned below:

Net premium payable for the current policy year as on 26.06.2009 was Rs.85,937.57

The OPs.1 & 2 further submitted that the complainant had opted to surrender his policy in February 2015, however the policy was lapsed and same was informed to the complainant vide letter dated 03.03.2015.  In the said letter the OP has clearly stated that since the complainant has failed to pay the subsequent premiums the policy is not in force with effect from 07.01.2014 due to non-remittance of renewal premiums, therefore the surrender value on 27.02.2015 is nil, hence no amount is payable to complainant.  OP has suitably replied to the legal notice of complainant.  Complainant had all the knowledge that the part of the premiums would be allocated towards investments in the stock market and would fetch variable returns under the policy.  That the insurance policy is a contract between the policy holder and the insurer and is strictly governed by the terms and conditions mentioned in the policy document.  OP has acted in accordance with the policy terms and conditions and has not only promptly reverted to all the service requests of the complainant but also has reverted to all his queries.  The services were provided to the complainant while the policy was premium paying and the complainant is now estopped from claiming refund under the policy contract.  There is no deficiency in service on the part of OPs.  Hence OPs prayed for dismissal of the complaint with exemplary costs.

4. In the course of enquiry into the complaint, the complainant and the OPs have filed their affidavit reproducing what they have stated in their respective complaint and objections.  Complainant and OPs have submitted written arguments.  Complainant has produced certain documents.  We have heard the arguments of complainant and OPs and we have gone through the oral and documentary evidence of both parties scrupulously and posted the case for order.

5. Based on the above materials, the following points arise for our consideration;  

1. Whether the complainant has proved that there is deficiency in service on the part of the OPs, if so, whether complainant is entitled for the relief sought for?

2.  What order?

6. Our findings on the above points are as under:

Point No.1:  Negative

Point No.2:  As per the order below

REASONS

7. Point No.1:- On perusal of the pleadings, evidence and documents produced by both the parties, it is an admitted fact that, the complainant obtained “BSLI Flexi Cash Flow (money back) policy bearing No.000110037 from OP dated 07.08.2003/Ex-A1.  It is also admitted fact that the complainant opted for quarterly payment of premium which was fixed at Rs.6,338/-.

8. The contention of the complainant is that, the complainant surrendered the said policy on 26.02.2015 as per Ex-A2.  The OP had orally told that ‘no amount will be refunded’.  The complainant alleged that as per the terms of payment the complainant had paid the total amount of Rs.1,54,208.15 from the date of issuance of the above said mentioned policy till the surrender.  Hence the complainant felt deficiency in service on the part of OPs.

9. Per contra OPs submitted that on 04.06.2009 the complainant opted for partial withdrawal and his request was processed by the OP by paying him Rs.79,600/- through cheque.  Thereafter the complainant did not pay the premium regularly hence his fund value became zero.  The OPs further submitted that the said policy is Unit Linked Policy and subject to investment risks associated with Capital Markets.  Further the premium invested is subject to various administrative deductions and other charges.  The complainant is irregular in making payment of premium amount.  Therefore the fund value became zero, hence no amount is payable to the complainant.  Therefore, there is no deficiency on the part of OPs.

10. On perusal of the documents Ex-A1 it is evident that it is Unit Linked policy.  The premiums received under the policy are subject to various administrative deductions and charges.  As per the policy statement it is clearly evident that on 04^th June 2009 the complainant surrendered the policy and received an amount of Rs.79,600/-.  Thereafter the complainant has paid only three premiums i.e., on 20^th August 2009, 19^th July 2012 and 08^th May 2014.  This shows that the complainant was paying premium irregularly and not paid the premium amount after 08.05.2014.  Due to non-remittance of renewal premium the fund value became zero as on the date of surrender of the policy as per Ex-A1.  The complainant has not paid the premium amount in accordance with the terms and conditions of the policy and has committed in default in paying the premiums.  The OPs have deducted the administrative deductions and other charges as per the policy terms and conditions.  Further the said investment covers the risk of Capital Market.  The non-remittal of premium amount and due to Market risk the fund value became zero.  Hence we do not find any deficiency and negligence on the part of OP.  In view of the discussions made above, we are of the opinion that the complainant is not entitled for any of the reliefs claimed against the OPs.  Hence the complaint is liable to be dismissed.  Accordingly, we answer the point No.1 in negative.

 11. Point No.2:  In the result, for the foregoing reasons, we proceed to pass the following order:          

  O R D E R

The complaint filed by the complainant is dismissed.  Parties to bear their own costs.

Furnish free copy of this order to both parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the open Commission on this 26^th day of November 2020)

Witnesses examined on behalf of the complainant by way of affidavit:

Sri.Rangarajan.

Copies of documents produced on behalf of complainant:

Witnesses examined on behalf of the OPs by way of affidavit:

Shalaj Chaturvedi, Authorized Representative of OP Insurance Company.

Documents produced on behalf of Opposite Party/s - Nil

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