STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                                    U.T., CHANDIGARH 

                                    (Additional Bench)

Aditya Birla Sun Life Insurance Company, SCO No.226-227, Sub City Center, Sector 34-A, Chandigarh

Registered office at One Indiabulls Centre, Tower 1, 16^th Floor, Jupiter Mill Compound,841, Senapati Bapat Marg, Elphinstone Road, Mumbai 400 013.                                                                                                                                                                      ...  Appellant.

                                               Versus

Col.Yogesh K.Sharma (Retd.) son of Dr.M.L.Sharma, aged 70 years, Resident of House No.452/1, Sector 44-A, Chandigarh

                                                                      ..... Respondent

Appeal under  Section 41 the Consumer Protection Act,2019 against order dated 23.01.2024 passed by District Consumer Disputes Redressal Commission-II, U.T. Chandigarh in Consumer Complaint No.777/2022.

Argued by:      Sh.Gaurav Bhardwaj, Advocate  for the appellant.                                          Col.Yogesh K.Sharma(retd), respondent in person. 

__________________________________________________________

 Aditya Birla Sun Life Insurance Company, SCO No.226-227, Sub City Center, Sector 34-A, Chandigarh

Registered office at One Indiabulls Centre, Tower 1, 16^th Floor, Jupiter Mill Compound,841, Senapati Bapat Marg, Elphinstone Road, Mumbai 400 013

                                                                                      ….  Appellant.

                                               Versus

Pooja Sharma daughter of  Col.Yogesh K.Sharma (Retd.)   Resident of House No.484, Sector- 20-A, Chandigarh-160020   

                                                                                  …         Respondent

 Appeal under  Section 41 the Consumer Protection Act,2019 against order dated 23.01.2024 passed by District Consumer Disputes Redressal Commission-II, U.T. Chandigarh in Consumer Complaint No.778/2022

BEFORE:       MRS. PADMA PANDEY, PRESIDING MEMBER

                       Mr.PREETINDER SINGH,MEMBER

Argued by:       Sh.Gaurav Bhardwaj, Advocate  for the appellant.                                          Col.Yogesh K.Sharma(retd), father of the respondent 

  PER PADMA PANDEY, PRESIDING MEMBER

                   This  order will dispose of aforementioned two  appeals bearing Nos. 121 of 2024 titled as Aditya Biral Sun Life Insurance Company Limited Vs Col. Yogesh K.Sharma(Retd) and  appeal No. A/122 of 2024  titled as Aditya Biral Sun Life Insurance Company Limited Vs Pooja Sharma both arising out of one and  the common  order dated 23.1.2024 passed by the District Consumer Disputes Redressal Forum-II, U.T.Chandigarh whereby both the complaints were partly allowed with following directions to the Opposite Party;

1. to refund the balance deducted amount of Rs.1,23,725/- in CC No.777/2022 & Rs.61,858/- in CC No.778/2022 to the respective complainant(s) along with interest @9% from the date of surrendering the policy i.e. 12.1.2021 till the date of its actual payment to the complaint.

b. To pay Rs.10,000/- to each of the complainant(s) as compensation on account of mental agony and physical harassment.

c. To pay Rs.7,000/- as costs of litigation in each complaint

 2.         The facts are culled out  from  appeal No.121 of 2024 titled as  Aditya Biral Sun Life Insurance Company Limited Vs Col. Yogesh K.Sharma(Retd).

                   As per facts of the case,  the complainant purchased Birla Sun Life Insurance (now known as Aditya Birla Sun Life Insurance) Policy bearing  No.004502898 for himself and Policy No.004502779 for her daughter/Pooja Sharma in the year 2010 from the OP company and regularly paid three yearly premium of Rs.One Lakh each.   It is averred that once 36 monthly basic premiums (three installments of yearly premium) are paid, the policy qualifies for guaranteed surrender benefits.  After completion of 10 years period of the policy, the complainant surrendered it with the OP company and sought refund of Guaranteed Surrender Benefit acquired under the policy   but the OP Company instead of paying the total sum of Rs.3,64,473/- being Guaranteed Surrender Amount along with accumulated Bachat  Additions as per the policy, remitted an amount of Rs.2,40,748/- to the complainant which is Rs.1,23,725/- less than the guaranteed surrender amount as on 26.1.2021. The complainant agitated the matter with the OP and requested it to  pay the balance amount under the policy   but it did not pay any heed.   Hence, alleging deficiency in service and unfair trade practice on the part of the opposite Party, a consumer complaint was filed before the Ld. Lower Commission seeking refund of the less amount of Rs.1,23,725/- with interest as well as compensation and litigation cost.

 3.                Pursuant to issuance of notice, the Opposite Party filed reply inter-alia stating therein that the complainant on 10.11.2020 purchased Birla Sun Life Insurance Bachat (Endowment) Plan bearing Policy No.004502898 having term of 20 years with basic premium amount of Rs.8592/- with basic sum assured of Rs.5,15,520/-. It is stated that before acceptance of proposal by the OP, the contents of the proposal along with terms & conditions were read over and explained to the life assured  in the language best known to him by the concerned financial consultant.  The complainant paid premium of Rs.1,00,000/- for three consecutive years amounting to Rs.3,01,017.49 inclusive of taxes but did not pay further premiums and consequently  the policy stood  lapsed and was never revived.    The complainant surrendered the policy in question on 12.1.2021 and the OP remitted the surrender value of Rs.2,40,748/- in favour of the complainant as per terms & conditions of the policy and nothing is due & payable to the complainant against the said policy.  It is further stated  that as per the terms & conditions of the policy, the policy would acquire a Guaranteed Surrender Benefit once the three full years installment premium have been paid.  It is denied that a sum of Rs.1,23,725/- is more payable to the complainant by the OP. Denying other allegations made in the complaint, a prayer was made for dismissal of the complaint.

4.                  On appraisal of the complaint, and the evidence adduced on record by the parties, Ld. Lower Commission  allowed  the complaint of the  Complainant, as noted in the opening para of this order.   

5.                Aggrieved against the  aforesaid order passed by the Ld. Lower Commission, Opposite Party filed two separate  appeals bearing No.121 of 2024  and 122 of 2024.

6.                     We have heard  Counsel for the parties , and have gone through the evidence and record of the case with utmost care and circumspection.

7.                   It is case of the appellant that surrender value as per terms and conditions of the policy contract was remitted to the respondent. As per policy terms and conditions under Policy paid up clause, premium discontinuance clause, the policy holder may choose to stop paying premiums at any time once three full years installment premiums are paid and can continue the policy on a paid up basis.  In case the insurance company does not receive installment premium within 30 days from its due date under the paid up status, the policy will automatically be deemed paid up and Guaranteed Surrender benefit is kept constant and paid to the policy holder as and when the policy is surrendered. According to the appellant, 40% surrender value was correctly calculated and the respondent was rightly paid benefits on the basis of policy paid up and surrender benefit clause. It is further case of the appellant that a policy holder will be eligible for 100% surrender benefit after 10+ policy years in case he continues to pay all premiums. There is no allegation about mis-selling or misrepresentation  on the part of the agent of the appellant at the time of selling policy. The respondent is a literate person and signed the documents after reading and understanding it properly.  He could have very well reviewed the terms and conditions during the freelook period but he did not raise any grievance during the freelook period.  The respondent has failed to make out any case of deficiency in service, thus, the order passed by the Ld. District Commission is liable to be set aside.  On the other hand, the case of the respondent  is that the order passed by the Ld. Lower Commission is quite just, reasonable and does not call for any interference.

8.          It is admitted case of the parties that the respondent/complainant purchased Policy No.004502898 for himself and Policy No.004502779 for her daughter/Pooja Sharma in the year 2010 from the appellant Insurance Company. As mentioned in the  column ‘Insurance  Plan details’, the policy term was for 20 years and pay term was also for 20 years. Under the column ‘Premium Provisions’  of the Policy it is clearly provided that premiums are payable without any obligation on the company to issue a notice for the same. If the installment premium is not paid by the due date, a grace period of 30 days is given  and if the premium is not received by the end of the grace period the policy is deemed lapsed and all benefits are ceased immediately. However, under the policy, two years’ time from the lapse date is provided to reinstate the policy. If the installment premium is not received by the Company by the end of the grace period, the policy is deemed paid-up and the policy holder is entitled to get benefits  as per the policy Paid-up provision. The paid-up date is the date the unpaid premium was due.

9.             The respondent regularly paid three yearly premium of Rs.One Lakh each during the period 11.11.2010 to 24.12.2022 amounting to Rs.3,01,017/- inclusive of taxes.  Thereafter, he did not pay any premium in respect of   policy and  after completion of 10 years’ period of the policy, the respondent surrendered the policy on 12.01.2021 with the appellant and sought refund of Guaranteed Surrender Benefit  by applying the surrender factor of 100% i.e. he sought refund of Rs.2,06,208/- (Basic premium of three years Rs.3,09,312/- minus premium paid for first year Rs.1,03,004/-) alongwith Bachat Additions earned amount  of Rs.1,58,265/- as intimated by the appellant company under the policy. Thus, the respondent claimed total amount of Rs.3,64,473/- (Rs.2,06,208/- plus Rs.1,58,265/-), whereas, as per policy conditions, policy will acquire a Guaranteed Surrender Benefit once 3 full years’  installments premiums have been paid. The relevant portion under the heading ‘Policy Benefit Provisions’ of the policy-OP/2 reads as under ;

Surrender Benefit 

Your policy will acquire a Guaranteed Surrender Benefit once 3 full year installments premiums have been paid. At any time thereafter, you may surrender this policy to us and receive Guaranteed Surrender Benefit.

The Guaranteed Surrender Benefit equals the sum of all monthly Base Premiums paid, excluding first year Monthly Base Premiums, multiplied by the surrender factor

     The Total surrender benefit equals;

1. Guaranteed Surrender Benefit ; plus
2. Sum of all Bachat Additions earned, if surrendered after 10^th Policy anniversary ;plus
3. Loyalty Addition, if surrendered after 15^th policy anniversary.

10.             A perusal of the above table shows that the policy in question could be surrendered after 3 years. In case policy is surrendered after paying installments  of complete three years, then Guaranteed Surrender Benefit is given which is  equals to the sum of all monthly Base Premiums paid, excluding first year Monthly Base Premiums, multiplied by the surrender factor. The respondent has surrendered the policy after ten years  but did not pay premiums after three years. As the Policy was surrendered after three years, the insurance company applied the surrender factor of 40%. Bachat Additions earned could be given if the policy is surrendered after 10 policy anniversary after paying premium regularly. It appears that the respondent is claiming the amount by applying the surrender factor of 100% with Bachat Additions earned treating the policy as he had paid all premiums for 10 years.  

On the basis of the above provision, the Insurance company calculated the amount as under  and paid the same to the respondent.

11.                   The term of the policy was for 20 years and premium was to be paid for 20 years to continue the policy.  However, the respondent paid premium only for three years and surrendered the policy after 10 years. As stated above, the appellant company paid the surrendered value as per the terms and conditions of the policy. There is a plethora of Judgments of Hon’ble Supreme Court wherein it is held that in  a contract of insurance, rights and obligations are strictly governed by the terms of the policy and no exception or relaxation can be given on the ground of equity and that construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. Reference in this regard may be made to Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs United India Insurance Co. Ltd. (2010)10 SCC 567. Even otherwise, the insurance policy covered the risk upon the life of the respondent/life assured during the period of the policy.

12.                  In view of the above discussion,   both the appeals are   accepted, and the impugned order of the Ld. Lower Commission is set aside. Resultantly both the complaints are dismissed.

13.                  All the pending applications in both the appeals  also stand disposed off accordingly

14.                 Certified copies of this order be sent to the parties free of charge.

15.                  The file be consigned to Record Room, after completion.