Punjab

Faridkot

CC/15/124

Gamdoor Singh - Complainant(s)

Versus

Branch Manager LIC - Opp.Party(s)

G S Chauhan

16 Feb 2016

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

Complaint No. :     124

Date of Institution: 3.09.2015

Date of Decision :   16.02.2016

 

 

Gamdoor Singh s/o Gurdev Singh r/o  village Sangrahoor, Tehsil and District Faridkot.                                                            .....Complainant

Versus

1. Branch Manager LIC, Bhan Singh Colony, Ferozepur Road, Faridkot 151203.

2. Managing Director, LIC of India, Central Office, “Yogakshema” Jeevan Bima Marg, Mumbai – 400021.....OPs

 

Complaint under Section 12 of the

Consumer Protection Act, 1986.

 

 

Quorum: Sh. Ajit Aggarwal, President,

               Smt Parampal Kaur, Member,

               Sh P Singla, Member.

 

Present: Sh G S Chauhan, Ld Counsel for complainant,

              Sh Lakhwinder Singh, Ld Counsel for OPs.

 

 (Ajit Aggarwal, President)

                                   Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against OPs seeking directions to OPs to make payment of actual surrender value of Rs 94,029/-and for further directing OPs to pay Rs 50,000/- as compensation for deficiency in service and harassment and Rs 5,000/- as litigation expenses.

2                                    Briefly stated, the case of the complainant is that on pursuance of OP-1, complainant purchased an insurance policy bearing no. 133185975 from OP-1 with sum assured of Rs 5,00,000/- on 28.07.2010 with date of maturity 07/2030 and complainant started paying half yearly instalments. Complainant paid Rs 1,34,029/- in the shape of 7 instalments. It is contended that complainant took loan of Rs 40,000/- against his policy in question from OP-1 on 26.08.2013 and delivered the original policy to them as security against loan. It is further contended that after paying the seven instalments, complainant could not pay the insurance premiums from 2014 onwards due to incapacity to pay and he visited the office of OP-1 with request to adjust the loan amount in the surrender value but OP-1 refused to receive his application. On 24.08.2015, complainant served a legal notice to OP-1 to receive his surrender application and to release the actual surrender value with all the bonus benefits. On 26.08.2015, OP-1 deducted huge amount as charges against his loan while releasing the surrender value to the complainant and deposited only Rs 9,968/-in the saving account of complainant whereas the complainant is entitled to Rs 94,029/-as surrender value. Complainant filed surrender application under protest on 25.08.2015 to OP-1, who assessed Rs 9,968/- as actual surrender value after adjusting the loan amount of Rs 40,000/-. It is further pleaded that while computing surrender value, OP-1 did not take into account the bonus amount of Rs 1,00,000/-, which was to be paid by OP-1 to complainant as per rules. It is further contended that there is deficiency on the part of OPs for not disbursing the surrender value of the policy in accordance with the IRDA regulations 2010. Complainant is entitled to surrender value after deducting 7.5% as per regulation no. 8 in Insurance Regulatory Development Authority Regulation 2010, but OPs refused to make payment of surrender value as per regulations of IRDA. All this amounts to deficiency in service and has caused harassment and mental tension to him for which he has prayed for directions the OPs to pay Rs 94,029/- on account of surrender value as per instructions of IRDA alongwith interest and has also prayed for seeking directions to Ops pay Rs 50,000/- as compensation for harassment and mental agony suffered by him besides Rs 5,000/- as litigation expenses incurred by him. Hence, the complaint.

3                                    The counsel for complainant was heard with regard to admission of the complaint and vide order dated 9.09.2015, complaint was admitted and notice was ordered to be issued to the opposite party.

4                                 On receipt of the notice, the opposite parties filed reply taking preliminary objections that complaint filed by complainant is false, wrong and is liable to be dismissed and as per terms and conditions of the policy, complaint is liable to be dismissed. It is averred that there is no deficiency in service on the part of OPs. However, on merits, OPs have denied all the allegations levelled by complainant being wrong and incorrect and asserted that policy in question was issued to complainant by LIC of India with date of commencement 28.07.2010 for Rs 5,00,000/- and all the terms and conditions of policy were duly explained to complainant at the time of acceptance of proposal. It is asserted that complainant surrendered the said policy before its maturity. The amount of surrendered value was Rs 58,590/-. Complainant had taken loan of Rs 40,000/- and amount of loan alongwith interest became Rs 48,622/- and after deducting the said amount of Rs 48,622/-, remaining amount of Rs 9,968/-was paid to complainant by OP-1 against the proper receipt dt 25.08.2015. It is reiterated that, there is no deficiency in service on the part of answering OPs. All the other allegations and allegations with regard to relief sought too were refuted with a prayer to dismiss the complaint with costs.

5                            Parties were given proper opportunities to prove their respective case. The complainant tendered in evidence his affidavit Ex.C-1, and documents Ex C-2 to C-7 and then, closed his evidence.

6                              In order to rebut the evidence of the complainant, the opposite party -2 tendered in evidence, affidavit of H S Gupta as Ex OP-1 and documents Ex OP-2 to OP- 11 and then, evidence of OPs was closed by the order of this Forum as he did not adduce any evidence despite availing five opportunities for this purpose.

7                                             The Ld Counsel for complainant argued that on 28.07.20110, he purchased an insurance policy with sum assured of Rs 5 lacs from OPs, which had to be matured on July, 2030. Copy of the status report of the insurance policy is Ex C-2. At the time of selling the insurance policy, OP-1 assured complainant it is very beneficial plan and if complainant is unable to continue this policy, then he can surrender it after 3 years and in that case, he will get sufficient profit. For this Policy, the complainant had to pay half yearly instalments of premiums. He paid seven instalments and paid Rs 1,34,029/-. He took a loan of Rs 40,000/-against this policy from OPs and deposited the original policy as security with them. After paying 7 instalments, complainant was unable to pay the balance instalment of premiums. On 18.08.2015, the complainant approached OP-1 and requested them to surrender his policy and for payment of surrender value after adjusting the loan amount but they refused to receive the surrender application and insisted    that complainant should pay the remaining premiums. Complainant served a legal notice to Ops on 24.08.2015 through his counsel directing them to receive the surrender application and to release the surrender value with all bonuses. Copy of notice is Ex C-3. On 25.08.2015, complainant submitted his surrender application with OPs under protest. The OPs assessed the surrender value of the policy as Rs9968/-after adjusting the loan amount which was never accepted  by the complainant. As surrender value of the Policy is not calculated by Ops as per terms and conditions of the policy and also as per assurance given by them to the complainant. They also did not calculate the surrender value as per IRDA rules. OPs deposited Rs 9968/-as surrender value of the Policy after deducting huge amount in the saving a/c of complainant. The copy of surrender application and statement of a/c show payment of Rs 9968/-are Ex C-4 and C-5 respectively. The OPs illegally and wrongly deducted a huge amount from surrender value of the complainant, which is against the terms and conditions of the Policy and IRDA regulations. The OPs had no right to deduct this amount. All these acts of Ops amount to deficiency in service and trade mal practice. Complainant is entitled to get his surrender value as per terms and conditions of Policy and IRDA regulations alongwith interest. Due to these acts of Ops, complainant has suffered huge monitory loss, mental tension, harassment and financial loss. He has prayed for directing OPs to pay actual surrender value alongwith bonus and other benefits and also interest on delayed payment alongwith compensation and litigation expenses to complainant.

8                            To controvert the arguments of counsel for complainant, ld counsel for OPs argued that complainant has filed the present complaint on false and incorrect grounds. There is no deficiency in service on the part of OPs. They calculated the surrender value of the Policy in dispute as per terms and conditions of the policy. They admitted that complainant purchased an insurance policy from OPs on 28.07.2010 for sum assured of Rs 5 lacs but they denied that  Op-1 gave any assurance regarding the profit or benefits of the Policy at the time of its purchase. All the terms and conditions of the policy have been printed on the back of the policy and these were duly explained to him and after understanding all the terms and conditions, the complainant purchased the said policy. They also admitted that complainant made payment of 7 half yearly premiums and after it, he did not pay the premiums of policy to OPs. The complainant applied for surrender of the policy before its maturity on 25.08.2015 and OPs assessed its surrender value as Rs 58,590/-as per terms and conditions of the policy in question. The complainant took loan of Rs 40,000/-on this policy and interest on this amount comes to Rs 8,622/- and after deducting the amount of Rs 48,622/- i.e loan amount and  interest thereon, the remaining amount of Rs 9,968/-was payable out of surrender value, which is already paid by Ops to complainant against a proper receipt. Copy of Insurance Policy is Ex OP-2.  Application for surrender of Policy is Ex OP-3, receipts for payment of surrender value are Ex OP-4 and 5, surrender value quotation is Ex Op-6, and loan application is Ex OP-9 and 10. He argued that Ops have correctly calculated the surrender value of the Policy in question as per terms and conditions of the Policy and paid this amount to complainant without any delay after deducting the loan amount. He argued that complainant never visited the office of OP-1 to surrender his policy prior to 25.08.2015. However, at that time, he was advised by the OP-1 to pay all his pending premiums and continue the Policy till its maturity to get full maturity benefits of the Policy but on request of complainant, OP-1 received the application for surrender of the Policy and immediately paid the surrender value to complainant in his account. It is wrong that OP-1 refused to accept the request of complainant for surrender of Policy in question. The complainant wrongly sent legal notice to OPs on false and frivolous pleas. It is wrong that Ops paid lesser amount as surrender value of Policy in question to complainant against the terms and conditions of Policy and IRDA regulations. The OPs have correctly calculated the surrender value of the Policy as per terms and conditions of Policy and IRDA regulations. There is no deficiency in service on their part. There is nothing due towards surrender value of policy in question. The complainant is not entitled to any amount more towards the surrender value of the policy in question. The complainant has filed this present complaint on false and frivolous grounds to get undue monitory benefit and to harass the OPs. The present complaint may be dismissed with costs.

9                                                    We have heard the learned counsel for the parties and have very carefully gone through the affidavits and documents placed on the file.

10                                           The case of the complainant is that he purchased an Insurance Policy from OPs and as per terms and conditions of the policy, he can surrender the policy after three years from the commencement of said policy. He paid seven half yearly instalments of the premiums and he requested to OPs for surrender of Policy in question, but the Ops did not calculate the surrender value of the Policy as per terms and conditions of Policy and as per IRDA regulations and paid very less amount as the surrender value and deducted a huge amount from it. In reply the Ops argued that they have correctly assessed the surrender value of the Policy in question as per terms and conditions of the Policy and correctly paid the surrender value to complainant after deducting the loan amount and interest on it taken by complainant on the said policy and nothing is due towards surrender value of policy in question.

11                                         We have gone through the terms and conditions of the policy printed at the back of the policy produced by OPs as Ex OP-2 at Sr. No. 7 of the terms and conditions. It is regarding the guaranteed surrender value of the policy. Condition no. 7 of the policy is reproduced hereunder as:

Guaranteed Surrender Value: This Policy can be surrendered or enchased after premium have been paid for atleast three years. The minimum surrender value allowable under this policy is equal to       30 % of the total amount of the within mentioned premium excluding the premiums for the first year and all the extra premiums and/or additional premium for Accident Benefit that may have been paid provided that if a portion of the sum assured had become payable or had been paid on the Life Assured surviving to the stipulated date(s) from the date of Commencement, the premiums prior to the date(s) of Such survival shall be excluded for calculating the surrender value. The cash value of any existing Guaranteed Additions will also be allowed.

                        As per this condition, if the Policy is surrendered after a period of 3 years after its commencement, the Policy Holder is entitled to get atleast 30% of total premiums paid by him as the guaranteed surrender value alongwith other benefits. OPs themselves produced surrender value quotation of the Policy in question as Ex Op-6 which shows vested bonus of Rs. 58,500/- and guaranteed surrender value as Rs 46,961/-, which comes to total Rs 1,05,461/-, on the other hand they assessed the surrender value payable as Rs 58,590/-. The Ops failed to prove that how they calculate the payable surrender value as Rs 58,590/- instead of Rs 1,05,461/- i.e vested bonus on the Policy and guaranteed surrender value of the Policy shown by them in the surrender value quotation prepared by themselves.

12                      From the above discussion, we are of the considered opinion that the complainant is entitled to get the surrender value of policy in question as Rs 1,05,461/- i.e the guaranteed surrender value+vested bonus on the policy as Rs.58,500/-, which are assessed by OPs in their surrender value quotation Ex OP-6. However, OPs are entitled to deduct the amount of Rs 48,622/- which is Rs.40,000/- the loan taken by complainant on said policy and Rs 8622/-as interest on the loan amount and the net surrender value after deducting the loan amount and interest comes to Rs 56,839/-payable to complainant but the OPs paid only Rs 9,968/-to complainant as its surrender value which is very less than the amount for the complainant was actually entitled. All these acts of OPs amount to deficiency in service and mal trade practice on their part. Hence, the complaint in hand is hereby allowed. OPs are directed to pay Rs 56,839/-to complainant as his net surrender value after deducting the amount of loan and interest thereon taken by him on the policy in question minus Rs 9,968/-, which are already paid by OPs to complainant as surrender value of policy alongwith interest at rate of 9% per anum from the 26.08.2015 till final realization. Ops are further directed to pay Rs 3,000/-to complainant as litigation expenses. Compliance of this order be made within one month of receipt of copy of order, failing which complainant shall be entitled to initiate proceedings under Section 25                                and 27 of Consumer Protection Act. Copy of order be given to parties free of cost under rules. File be consigned to record room.

Announced in Open Forum

Dated : 16.02.2016

                   Member            Member                  President

(P Singla)          (Parampal Kaur)     (Ajit Aggarwal)