Date of Filing: 22/08/2014
Date of Order: 08/08/2017
ORDER
BY SRI.SYED ANSER KHALEEM, PRESIDENT
1. This is the complaint filed U/S 12 of the Consumer Protection Act 1986 alleging the deficiency in service on the part of the O.Ps and prays for orders to direct the O.Ps to refund the a sum of Rs.4,26,000/- together with interest at the rate of 18% per annum from the date of complaint till the date of repayment and to pay a sum of Rs.5,00,000/- towards compensation for pain, suffering, harassment along with the cost of the proceedings.
2. The brief facts of the complaint are that on 22.09.2006 the complainant based on the representations of Citibank had subscribed to the policy bearing No.000749191 known as ‘Birla Sun Life Flexi Lifeline’. The period of policy is 15 years. It is stated that, as per the policy terms that the complainant was required to pay a monthly premium of Rs.6,000.14/- by way of Electronic Clearing Service (ECS) from his account maintained in the Citibank and after completion of tenure of 15 years, the complainant is entitled to a guaranteed fund of Rs.10,82,000/- and the surrender maturity value for a sum of Rs.17,65,000/-. In the event of untimely demise of complainant prior to the maturity of the policy, the complainant would be entitled to the death benefit throughout the tenure of the policy for a sum of Rs.14,80,000/-. Further stated that complainant has been prompt in effect in payment of monthly premium from time to time and he is also eligible for claiming Income Tax Deduction under the provisions of Income Tax Act. It is stated that complainant used to download the premium paid certificate for the financial year from the website maintained by Birla and when the complainant attempted to download the said certificate for the financial year 2012-13, to the shock and surprise of the complainant, the premium paid certificate commencing for the period from 1.4.2012 and ending on 31.3.2013 reflected payment of premium for a period of four months only against 12 months. Thereafter complainant made correspondence with the O.P No.1 and 2 on 16.2.2013 requesting for clarity about why the certificate reflected only 4 months of payment against the effectively made payment of the amounts for the 12 months. It is stated that complainant received the replies from the O.Ps No.1 and 2 dated 1.3.2013, 7.3.2013 and 26.3.2013 informed that complainant premium for the month of December 2009 was not paid and the other two replies contradicts to earlier replies and contended that two premiums are due and not merely for the month of December 2009. Hence the complainant to ascertain the dues about the premium himself investigated by verification of the bank records and on cross verification of bank records and the records in the custody of the complainant and finally ascertained that the communications dated 1.3.2013, 7.3.2013 and 26.3.2013 are untenable and the contends of the same are incorrect.
3. It is stated that, in the first reply of the O.Ps it was contended that only one premium for December 2009 was due, in the second communications dated 7.3.2013 it was contended that for the periods from June –December 2009, as against the total premium of Rs.36,000/- a premium of Rs.24,000/- alone was received. The said letter states “on account of such shortage, the policy was treated as a discontinuation and which ought to have been rectified within a period of one year”. It was further contended that premium received subsequently has been refunded and therefore the policy was discontinued. It is stated that after due verification that the complainant issued a detailed reply on 29.04.2013 indicating that alleging shortage of Rs.12,000/- of the year 2009 was on account non-submission of ECS for the month August 2009 and also on account of certain wrongful refunds all of which are not attributable to the complainant. The refund was neither claimed by the complainant nor was the refund justified under the terms of the policy and the O.P No.1 and 2 have failed and neglected to rectify the situation. It is alleged that complainant was never informed by the O.Ps about the non-payment of the premium and the O.Ps collected the premiums when the alleged claim of discontinuation of the policy operation. Further when the O.Ps failed to respond to the complainant or to address the issues inspite of his repeated follow-ups and remainders and thereon he approached the Ombudsman and thereafter to the Insurance Regulatory Authority. It is stated that even the Ombudsman failed to respond to the complainant and he has lodged the complaint with the IRDA on 27.6.2013. Further stated that, on 28.6.2013 complainant received a communication from the O.P.No.1 and 2 with the same response as earlier that the two premiums were paid during 2009 and so the policy has lapsed. It is alleged the non-receipt of premiums in 2009 was due to a mistake at the end of Citibank and that the policy would be reinstated provided the complainant pays the outstanding premium dues amounting to a total sum of Rs.84,000/-. It is further alleged that claim of Rs.84,000/- is without any basis and misconceived, the claim of two premiums were not paid which are equallant to Rs.12,000.28 (premium per month being Rs.6,000.14/-) and therefore, the claim of Rs.84,000/- would be equivalent to the premium of 14 months which was never due even as per the O.P.No.1 and 2. The complainant also issued legal notice and the same was replied by the O.P.No.1 to 4 whereas O.P.No. 3 and 4 replied in their notice that the payment towards ECS was effected based on O.P.No.1 and 2 and non-payment was on account of the negligence of O.P.No.1 and 2 and the O.P.No.1 and 2 given the untenable reply. Further alleged that the policy has been terminated on account of negligence of O.P.No.1 to 4 and made the complainant to run from pillar to post. Further stated that, O.P.No.1 and 2 collected for a sum of Rs.4,26,000/- from the complainant towards the policy and have retained the amounts. It is stated that, after the illegal retention and cancellation the O.P.No.1 and 2 are deducting further amounts from the account of the complainant. Hence alleged that O.Ps are liable to pay the sum of Rs.4,26,000/- together with interest thereon and compensation for deficiency of service. Hence this complaint.
4. Upon issuance of notice to O.Ps, O.P.No.1 to 4 appeared through their counsel and filed their version. In the version O.P.No.1 and 2 it is contended that, complaint is baseless and devoid of merits and this Forum has no jurisdiction to entertain the complaint and the same is filed gross misuse of process of law. Further contended that complainant is not come to the Forum with clean hands. It is contended that the policy in question is a unit linked policy and hence the complaint is not maintainable. The complaint is also filed without any cause of action. Further contended that there is no deficiency in service from their part. It is contended that, complainant filled the proposal form by knowing the terms and conditions of the policy.
5. It is admitted that, complainant had obtained the policy called BSLI Flexi Life Plan 2006, the date of issuance of policy is on 22.9.2006 and the annual premium amount is of Rs.72,002/- and monthly premium amount is Rs.6,000/- per month and the period of policy is 15 years and the benefit period is 67 years. The complainant by knowing the terms and conditions of the policy signed the proposal form.
6. It is contended that the premium amounts were to be paid through an ECS mode and the complainant has instructed his bank in this for direct debit. The renewal premium for August 2009 was not debited by Citibank due to which the policy was lapsed on September 2009. It is contended that O.Ps on various occasions have sent lapsation notices to the complainant as regards the causation of policy on 22.9.2009 vide letters dated 26.9.2009, 9.10.2009 , 26.10.2009, 9.11.2009 and 15.12.2009. It is contended that though policy was later reinstated on 31.12.2009 as the complainant paid Rs.24,000/- but there was shortage of two premiums so the policy was under grace period as the overdue premium for the month of August 2009 and December 2009 remained unpaid. Since the complainant failed to pay the said premium the policy remained lapsed and was moved to the discontinuance premium as on 22.8.2010 and the period of discontinuance ended on 22.8.2012 and the said fact was informed to the complainant vide e-mail dated 7.3.2013. Ultimately it was informed to the complainant that he either could surrender the policy or continue it without the payment of additional policy premium, he was also informed that policy would be deemed as surrender once the fund value becomes equal one annual policy premium. The complainant queries were further addressed vide email dated 28.6.2013 and 29.7.2013 the complainant was also informed that since he had evinced interest regularizing the policy he could do so while remitting the total premium of Rs.84,001.11 along with a certificate of insurability . Further contended that complainant had not come forth to reinstate the policy as such the policy continuous in DOP status as per the terms and conditions. The policy had lapsed for two years and continued in period of discontinuance. For instatement the complainant had to pay the unpaid premiums for regularization. That since the complainant had not paid any further premium the policy continuous in period of discontinuance. It is contended that, complainant’s annual premium of Rs.72,002/- and the complainant had to pay also the premium of Rs.12,000.28/- being the unpaid premium for the period August 2009 and September 2009. Thus the complainant was called upon to pay the said sum of Rs.84,001.11/- for reinstatement of the policy and certificate of insurability. On the above ground O.P No.1 and 2 denied all the allegations made in the complaint and ultimately prays for dismissal of the complaint as it is vexatious and unsustainable in law.
7. In the version of O.P.No.3 and 4, it is contended that, O.P. Bank is a licensed corporate agent for Birla Sun life Insurance Co. Ltd., (BSIL) O.P.No.1 and 2. These offers include benefits. The O.P.No.3 and 4 solicits insurance products of BSIL under the composite license. The policy was sourced, based on the consent of the complainant and complainant had signed the insurance policy application. The disputes between the account holder and the service provider shall be resolve between the complainant and the Birla Sun Life Insurance Company Ltd., and hence the O.P.No.3 and 4 are not responsible for the quality of the offering by the marketing partner. It is contended that, on 20.2.2007 had written a letter to the complainant for standing instructions to the insurance policy. The complainant had registered the standing instruction for monthly premium payment for an amount of Rs.6004.04/-. As per the standing instructions provided by the complainant and upon receipt of the demand advise by the O.P.No.1 and 2 and the said premium amount will be debited in the complainant’s account. As per the records due to discontinuation of the policy on 10.10.2012 the S.I instructions was cancelled. It is submitted that O.P.No.3 and 4 answered the legal notice issued by the complainant by denying the allegations. It is contended that O.P.No.3 and 4 did not receive any demand from the O.P.No.1 and 2 hence the payments were not made. On other grounds O.P.No.3 and 4 prays for dismissal of the complaint.
8. In order to substantiate the case of the parties and both parties have filed their affidavit evidence and also heard the arguments.
9. On the basis of the pleading of the parties, the following points will arise for our consideration is:-
(A) Whether the complainant has proved
deficiency in service on the part of the O.Ps?
(B) Whether the complainant is entitled to
the relief prayed for in the complaint?
(C) What order?
10. Our answers to the above points are:-
POINT (A) & (B): In Negative.
POINT (C): As per the final order
for the following:
REASONS
POINT No. (A) & (B):-
11. On perusal of the pleadings of the parties, it is not in dispute that, the complainant had obtained the policy called BSLI Flexi Life Plan 2006, the date of issue of policy is on 22.9.2006 and the annual premium amount is of Rs.72,002/- and monthly premium amount is Rs.6,000/- per month and the period of policy is 15 years and the benefit period is 67 years. The complainant by knowing the terms and conditions of the policy signed the proposal form.
12. The crux of the matter is to consider whether the O.P.No.3 and 4 are responsible for not paying the premium inspite of the ECS mandate given by the complainant and caused deficiency in service?
13. It is worth to note that, insurance is a contract and it is governed by the terms and conditions of the policy. Further in a catena of decision the Hon’ble Apex Court held that, the terms and conditions of the policy is to be construed accordingly and there is no scope for re-writing the contract. On perusal of Ex.R1 produced by the O.P.No.1 and 2 it discloses that complainant himself filled the proposal form and initial premium amount shown as Rs.72,002/- per annum and the sum assured under the Life Insurance coverage is shown as Rs.14,80,000/- and the premium period is 15 years. The proposal form obviously indicates that the complainant knowing fully well about the terms and conditions of the policy has taken the policy. It is pertinent to note that, it is the duty of the insured to go for periodical verification about the existence of the policy and also renewal of the policy. Furthermore, the O.Ps No.1 and 2 contended that they have issued many notices regarding the renewal of policy but the complainant failed to come forth to renew the policy well in time. However on perusal of the affidavit evidence filed by the complainant, the complainant reiterated all the facts narrated in the complaint but did not place any cogent evidence that the O.Ps negligently not informed the complainant to renew the policy well in time. In the absence of any credible evidence the allegation of the complaint is lame of strength and holds no water.
14. Further the policy in question is unit linked policy and it is subject to the market fluctuation, on the available evidence on record the policy commenced from in the year 2006 and the said policy was not renewed during the year 2009 as saying of the complainant himself and the policy is due for 2 years and hence the O.P. No.1 and 3 rightly demanded to pay of Rs.84,000/- in order to reinstate the policy. Further the non renewal of the policy well in time or non reinstate the policy, these mere allegations of the complainant is not sustainable. The complainant is also failed to prove that the insured did not take reasonable care in the matter of fulfilling the condition of the insurance policy and so also by O.P.No.3 and 4. On the basis of available evidence insurance company abtly proved there is breach on the part of the insured for not renewal the policy well in time. Hence it is not the obligation of the O.P.No.3 and 4 to renew the policy but it is duty of the complainant to take care of the same. Furthermore as per the terms and conditions of the policy under the heading Premium Discountenance it reads thus:
“ (a) Non receipt of policy Premium within first three policy years:
To keep the coverage’s in force, you must contribute, within the grace period of 30 days an amount equal to due unpaid policy premiums. At the end of grace period if the premium is not receiving, then the policy will lapse and all coverage’s will terminate immediately.
If the policy is not revived within two years from the lapse date, the surrender Value as at lapse date will be paid out at the end of the third policy year or at the end of the revival period whichever is later. In case the policy is surrendered during the revival period, then the Surrender value as at lapse date will be paid out at the end of the third policy years or the date of surrender whichever is later. The Surrender value will be calculated by deducting the surrender charges applicable on the lapse date. The Surrender Value will not be affected by the market fluctuations and will remain constant till the time it is paid out. There will be no deduction of the policy charge (as set out in the policy charges section) thereafter, from the Surrender Value.
(b) Non – receipt of policy premium after the first three policy years:
To continue the policy, your must contribute, within the grace period of 30 days, an amount equal to policy premium due but unpaid. At the end of the grace period if the premium is not received, you will be given a period of two years to pay any due but unpaid policy premiums. During these two years all Coverage’s will continue to be in force and all applicable charges will continue to be deducted from the policy Fund Value till the Surrender Value falls to one Annual policy Premium. At this time the policy will be terminated and the Surrender Value will be paid out.
At the end of the two- year’s period we will give you an option to continue the policy. If your do not opt to continue the policy, the policy will be terminated and the Surrender value will be paid out.
If you decide to continue with the policy, the Company will not accept further policy premium under this policy. All Coverage’s will continue to be in force and all applicable charges will continue to be deducted till the Surrender value falls to one Annual policy premium. At this time the policy will be terminated and the Surrender value will be paid out.”
15. Hence viewing from any angle and on the basis of the available evidence of record, we reached to conclusion that complainant failed to prove deficiency in service on the part of the O.Ps and hence complainant is not entitled for the relief as sought in the complaint. Accordingly, we answered these Points in the Negative.
POINT (C):
16. On the basis of answering the Points (A) & (B) in the Negative, we proceed to pass the following:-
ORDER
1. The complaint hereby is dismissed. No order as to cost.
2. Send a copy of this order to both parties free of cost.
(Dictated to the Stenographer, transcribed and computerized by him, corrected and then pronounced by us in the Open Forum on this the 8th Day of August 2017)
MEMBER MEMBER PRESIDENT
