21.07. 2015
JAGANNATH BAG, MEMBER
The present appeal is directed against the order dated 31.07.2014, passed by the Ld. District Consumer Disputes Redressal Forum, Kolkata , Unit II , in CC No. 48 of 2014, whereby the complaint was allowed on contest against OPs with cost, compensation, punitive damages etc.
The Complainant’s case , in brief, was as follows:
The Complainant, being approached by the agent of the OP purchased on 28.09.2006 two policies on 28.09.2006 under ‘New fulfilling Life Anticipated Whole Life Plan’ and ‘ING Reassuring Life Endowment Plan’ on payment of requisite premiums . Quarterly premium in respect of policy No. 00505758 was Rs. 5,000/- and that for policy No. 00505763, Rs. 25,000/-. Both the policies were of 16 years term. The Complainant paid regular premium till June 2009 except in case of the second premium which was deposited with late fine and interest. At the time of depositing the premium for the month of September 2009, the OP asked the Complainant to conduct a medical test for continuation of the policy. Accordingly, the Complainant got such medical test done at Sanjibani Health Centre, Salt Lake City and forwarded the report to the OP. Next premium was tendered, but the OPs informed that the policies stood lapsed in the year 2007, though the OPs received premiums. The Complainant wanted to know the reasons from the OP but no reply was sent by the OP Insurance Company. Inspite of repeated contacts with the OPs nothing tangible materialized. On 14.02.2013 the OPs issued two letters to the Complainant with advice to revive the policies with payment of a sum of Rs.3,51,825/- for policy No. 00505763 and Rs.70,371/- for policy No. 00505758. Accordingly, a cheque amounting to Rs. 4,22,196/-drawn on SBI, Barackpore Branch was deposited on 11.03.2013. Inspite of payment of the said amount for revival of the policies , the Complainant was informed by OPs through their letter dated 20.03.2013 that the policies could not be revived due to medical reasons. Such act of the OPs construed as deficiency in service caused huge mental and physical agony with financial loss and harassment. Hence, a complaint was filed before the Ld. Forum below with prayer for direction upon the OP Insurance Company to reinstate the policies or to refund all the premium amounts paid together with interest and a compensation of Rs.4,00,000/- apart from litigation cost.
The complaint has been contested by the OPs by filing W.V wherein all allegations were denied. It has been submitted by the OPs that the OP reviewed the medical report and assessed the risk under the policy where from it revealed that the Complainant was suffering from diabetes and he was a smoker. The information was communicated to the Complainant vide letter dated 24.12.2009 and the excess premium cheque was returned after adjusting the premium due up to 28.06.2009. Subsequently, on 16.01.2010 the Complainant had approached the OP and paid Rs.10,000/- towards policy No. 00505758 due for months of September 2009 and December 2009 which was duly received by the OP. After ascertaining the record it had reversed the amount to the Complainant on 29.01.2010 which was duly communicated vide letter dated 01.02.2010.The Complainant once again approached in the month of March,2013 for reinstating the policies and the same was declined by OP by their letter dated 20.03.2013. The OP declined to reinstate the policies due to medical reasons and they were not liable to pay compensation or any amount claimed in the complaint.
After having heard the Ld. Advocates appearing for both parties and upon perusal of all relevant materials on record , Ld. Forum below observed that the OP Insurance Company received premiums month by month up to 2009 but never reported at any point of time that the policies had lapsed. Such act on the part of the OPs was negligence and deficiency in service. It was also observed by the Ld. Forum below that since the policy stood cancelled , the OP should have refunded the entire amount which was deposited as premium. Accordingly, Ld. Forum below ordered that the OPs should refund the entire amount of premium received in respect of the two policies together with Rs. 35,000/- as compensation for mental pain and agony and Rs. 20,000/- as punitive damages to the fund of the Ld. Forum, apart from payment of Rs. 10,000/- as litigation cost.
Being aggrieved by and dissatisfied with the order of the Ld. Forum below, the Appellant has come up before this Commission for direction to set aside the impugned order dated 31.07.2014.
Ld. Advocate appearing for the Appellant submitted that the Respondent / Complainant failed to pay the renewal premiums for March 2008 and September 2008 in time or within grace period, as a result of which, the policies acquired lapsed status. The OP Insurance Company sent letters dated 17.07.2008 and 06.11.2008 asking the Complainant to undergo medical test. The Complainant took such test on November , 21, 2009 and the report showed that the Complainant was suffering from diabetes and was a smoker for which the policies were declined and information was sent vide letter dated 24.12.2009 . As per clause 5.2.1 of the policy ,if at least 3 full years premium have been paid and if any subsequent premium due has not been received by the company , the policy shall lapse from the due date for payment of the first unpaid premium . The policy of the Complainant/Respondent having lapsed for non payment of premium due which was within the knowledge of the Complainant , he approached the OP and paid Rs.10,000/- towards policy No. 00505758 due for months of September 2009 and December 2009. The Insurance Company reversed the amount to the Complainant on 29.01.2010 . Again the Complainant approached the insurance company for reinstating the policies but the Insurance Company vide their letter dated 20.03.2013 declined the request. The Appellant acted following the terms and conditions of the policy and there was no deficiency in service or unfair trade practice on their part. It was also mentioned that the Complainant never submitted the surrender form along with cancelled cheque and other document for refund of premium, which was the requisite formality for having surrender value of the policies in question. Ld. Forum’s order is completely biased and without any reference to the terms and conditions of the policy. The order deserves to be set aside.
Ld. Advocate appearing for the Respondent Complainant submitted that on payment of premium due, the Complainant / Respondent took two policies and continued to deposit premium regularly . It was due to the mistake of the agent of the Insurance Company that the second premium was not deposited in time but the same was deposited with late fine and interest. There was no delay or laches on the part of the Respondent to pay premium till June 2009. The contention of the OP Insurance Company that the policies lapsed in 2007 was never informed to the Respondent as correctly observed by the Ld. Forum below. No receipt in support of the purported delivery of notices to the Complainant / Respondent could be produced by the OPs before the Ld. Forum below. On the contrary they received the premiums and issued receipts . The reason for lapse of policies as claimed by the Insurance Company is said to be on medical ground but prior to taking the Insurance Policies , there was a medical test and being satisfied about the requisite medical fitness of the Respondent / Complainant, the OP issued the policies. Any subsequent test can not render the policies lapsed. It was an unfair trade practice on the part of the Insurance Company that they refused either to reinstate the policy Nos. 00505763 and 00505758 or to refund all paid premium amounts together with interest.
Decision with Reasons
We have gone through the memorandum of appeal together with copies of the impugned order , the petition of complaint , correspondences between the Insurance Company and the Complainant/Respondent , W.V filed by OP Nos. 1 ,2 and 3 proposal form and the policy document among other papers as annexed with the appeal.
There is no dispute that the Respondent / Complainant took two policies from the Appellant/ Insurance Company in the month of September 2006. The policy premium was to be paid on quarterly basis.
As per policy clause , the insured could have cancelled the policy within the Free Look period of 15 days from the receipt of the policy and after the expiry of the said policy of 15 days request for cancellation can not be entertained before maturity date. He was again free to surrender his policy before maturity date and in such case he was entitled to receive his fund value after deduction of surrender charges only at the end of the 3rd policy year.
The point for consideration is whether the impugned order, given the observations made by the Ld. Forum below, suffers from material irregularity or jurisdictional error and whether the same requires any interference.
As per policy terms and conditions the Respondent / Complainant was required to deposit premium on quarterly basis in respect of both the policies. It is claimed by the Appellant Insurance Company that the policy schedules and other papers were sent to the respondent on 13.12.2006 . But, the case of the Complainant as stated in his complaint petition is that “the original policy agreement and other relevant papers and documents relating to the said policy are in the custody of the opposite parties and it was kept by the opposite parties after execution of the same and the same has not been delivered to the petitioner till date in spite of several requests” . It is also the case of the Complainant that at the time of depositing the premium for the month of September 2009 , the O.P/Insurance Company informed the Complainant to conduct a medical test as the policy acquired lapsed status for non-payment of premium in due time.
On the contrary, it is the case of the Appellant that they sent the policy schedules at the address provided by the Complainant in the proposal form on 11.12.2006 through courier service which was duly delivered on 13.12.2006. It has again been contended that the renewal premium for March 2008 and September 2008 were not paid by the Complainant even within the grace period of the policies in question for which the OPs sent letters dated 17.07.2008 and 06.11.2008 asking the Complainant to undergo medical test before reinstatement of the policies.
Ld. Forum below observed that the OPs never reported at any point of time that policies have lapsed . In this connection , the Appellant /OP Insurance Company submitted in their W.V. as well as in the memorandum of appeal , that they had on 17.07.2008 and 06.11.2008 sent notices to the Complainant / Respondent for medical test in order to reinstate the policies. But, the fact is, no receipt in regard to delivery of such notices or in respect of delivery of policy documents through courier service on 13.12.2006 appears to have been annexed with the W.V. or submitted by the OP before the trial Forum. Receipt of the notices by the Respondent/Complainant does not stand substantiated with any proof/evidence. In their cross examination , the Respondent/Complainant denied vide his reply to question No. 4 delivery of the policy schedules along with copies of terms and conditions on 13.12.2006. In fact, the OP Insurance Company did not produce any document in support of receipt of the notices purported to have been issued in the name of the Respondent/Complainant. The same could not be produced before the Ld. Forum below and in that position , Ld. Forum below observed that intimation about the policies being lapsed was not sent to the Respondent / Complainant. Ld. Forum below also questioned the motive of the Insurance Company in receiving the premiums in spite of their knowledge that such premiums were on some occasions not deposited in time. Though , an explanation has been attempted to the given by the Appellant Insurance Company that it was in the best interest of the Complainant that they adjusted the premium of the Complainant till 28.06.2009 in order to provide the benefit of the policy by continuing policy with reduced paid up status without any future bonus and rider coverage as per clause 5.2.2 of the policy schedule , we are constrained to hold that the interest of the policy holder would have been served in a much better way had the Insurance Company arranged to send their notices to the Respondent / Complainant in such manner as would have ensured receipt of those notices by the Complainant/Respondent. Notices might have been sent , but if the receipt of such notices is not there , the sender’s responsibility in communicating the message therein does not end. Liability of such improper service shall lie with the sender . In the present case there is reason to believe that the Insurance Company failed to give proper and expected service in the matter of ensuring the promised benefits to the Respondent/Complainant. Ld. Forum’s order as to the refund of the deposited premiums appears to be reasonable. However, the amount of compensation of Rs.35,000/-, being on higher side, may be reduced to Rs.10,000/- and the punitive damages of Rs.20,000/- in favour of the trial Forum, no sufficient reason being cited there for, may be deleted. In that view of the matter the appeal is decided to be allowed in part with modification of the impugned order. Hence,
Ordered
That the appeal be and the same is allowed in part with modification of the impugned order to the effects that the sum of Rs. 35,000/- as awarded by the Ld. Forum below for compensation shall be reduced to Rs. 10,000/- and the punitive damage shall be deleted from the impugned order. Other part of the impugned order in regard to refund of all received premiums shall remain unchanged. In case of default of payment of the sums as hereby ordered within a period of 40 days, the Appellant/ Insurance Company shall be liable to pay interest @ 9% p.a. on the entire sum till full realization. There shall be no separate order as to costs.
