Punjab

StateCommission

FA/12/1434

HDFC Standard Life Insurance Co. Ltd. - Complainant(s)

Versus

Dhiraj Kaur - Opp.Party(s)

S.C.Thatai

07 Jul 2016

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,  PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

                                     

 (1)                       First Appeal No.1434 of 2012

 

                                                          Date of Institution: 22.10.2012    

                                                          Date of Decision:   07.07.2016

 

1.      HDFC Standard Life Insurance Company Ltd., 5th Floor  Eureka Tower, Mind Space Complex, Link Road, Malad (West)                          Mumbai 400020.

2.      HDFC Standard Life Insurance Company Ltd., Branch Office SCF 6, 2nd Floor, Leela Bhawan Market Opposite State Bank   of               Patiala, Patiala.

 

                                                                                                                                               …..Appellants/Opposite Parties no.1 and 2

 

                                                Versus

 

1.      Dhiraj Kaur wife of Sh. Tarlochan Preet Singh, resident of       House No.101, Mohindra Complex, New Officer's Colony,     Patiala.

 

                                                                                                                                                           Respondent no.1/Complainant

 

2.      Jaswinder Singh, resident of House No.1399/36, Street No.13,        Guru Nanak Nagar, Patiala having agency code No.00032091

 

                                                                                                                                                             ..Respondent no.2/Opposite party no.3

         

First Appeal against order dated 03.09.2012 passed by the District Consumer Disputes Redressal Forum, Patiala

 

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member.

          Shri. J.S. Gill, Member

Present:-

          For appellant                        :  Sh.Nitin Thatai, Advocate  

          For respondent no.1            :  None

          For respondent no.2           :  Sh.Vishwajit Bedi, Advocate ………………………………………………………………………………

 

                                      AND

(2)                    First Appeal No.1435 of 2012

                                                          Date of Institution: 22.10.2012  

                                                          Date of Decision:  07.07.2016

 

1.      HDFC Standard Life Insurance Company Ltd., 5th Floor          Eureka Tower, Mind Space Complex, Link Road, Malad (West)                  Mumbai 400020.

2.      HDFC Standard Life Insurance Company Ltd., Branch Office SCF 6, 2nd Floor, Leela Bhawan Market Opposite State Bank   of                Patiala, Patiala.

 

                                          …..Appellants/Opposite Parties no.1 and 2

 

                                      Versus

 

1.      Sh. Tarlochan Preet Singh son of Sh. Jagjiwan Singh, resident        of House No.101, Mohindra Complex, New Officer's Colony,         Patiala.

 

                                                             Respondent no.1/Complainant

 

2.      Jaswinder Singh, resident of House No.1399/36, Street No.13,        Guru Nanak Nagar, Patiala having agency code No.00032091

 

                                                 ..Respondent no.2/Opposite party no.3

         

First Appeal against order dated 03.09.2012 passed by the District Consumer Disputes Redressal Forum, Patiala

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member.

          Shri. J.S. Gill, Member

         

Present:-

          For appellant                        :  Sh.Nitin Thatai, Advocate  

          For respondent no.1             :  None

          For respondent no.2           :  Sh.Vishwajit Bedi, Advocate      

  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

 

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                                     

          By this common judgment, we intend to dispose of the above- referred two first appeals, as the controversy involved therein is common and can be decided together. The order shall be pronounced by us in main First Appeal no.1434 of 2012 titled as "HDFC Standard LIC and another vs. Dhiraj Kaur and another."

2.      The appellants of First Appeal No.1434 of 2012 titled as HDFC Standard LIC and another Vs. Dhiraj Kaur and another are the opposite parties no.1 and 2 in the complaint and respondent no.1 of this appeal is the complainant in the complaint and respondent no.2 of this appeal is the opposite party no.3 in the complaint before District Forum and they be referred as such, hereinafter for the sake of convenience. Similarly, appellants of First Appeal No.1435 of 2012 are the opposite parties no.1 and 2 in the complaint and respondent no.1 of this appeal is the complainant in the complaint and respondent no.2 of this appeal is opposite party no.3 in the complaint before District Forum and they be referred as such hereinafter for the sake of convenience.

First Appeal No.1434 of 2012 arising out of order passed in Complaint No.10/830 of 21.09.2010.

3.      The complainant Dheeraj Kaur has filed the present complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that OP No.3/ Jaswinder Singh approached the complainant and apprised her about the plan of insurance for the senior citizens stating that in case complainant deposited Rs.1 lac in the first year and Rs.20,000/- each in the 2nd and 3rd year, then she would get 15% committed return along with money invested by her. The maturity period of the said plan would be five years and she would get double the amount deposited by her in the plan. On the allurement of OP no.3, the complainant agreed for the same. The proposal form was filled in by Jaswinder Singh/OP no.3 who got the signatures of the complainant at various places on the form and other relevant papers, which were required for the above-said purpose. The complainant put her signatures believing OP no.3/Jaswinder Singh to be the agent of OPs no.1 and 2. The complainant paid Rs.1 lac towards first premium, vide receipt no.2205299 dated 25.01.2007 and she was allotted client ID No.51663871 and policy no.10877163 was issued to her by OPs no.1 and 2. As per the commitment made by OP no.3, the complainant deposited Rs.20,000/-, vide receipt no.2211063 dated 03.03.2008 and Rs.20,000/- vide receipt A-4803082 dated 27.02.2009. The complainant became astonished, when she received a cheque of Rs.12,394.81 from OPs. After receipt of the above-said cheque, she approached OP no.2, where Manjit Singh Executive of OP No.2 was present. She narrated the entire facts to him, who disclosed that the money deposited by her had been invested in some other plan. On enquiry, it was transpired that the amount of the complainant has been deposited in 'Unit Linked Young Star Plus" instead of in a plan for senior citizens. The complainant was an illiterate lady and she knew how to put her signatures in Punjabi only. She never consented for the investment of the amount in above plan. The OPs and their agent Jaswinder Singh failed to disclose material facts, which were in their knowledge. The complainant made a representation dated 25.03.2010 to OPs, who vide their reply dated 27.04.2010, refused to take any action against their agent Jaswinder Singh and she was rather advised to make representation before Insurance Ombudsman Chandigarh. The complainant made representation before Insurance Ombudsman on 25.06.2010, but of no use. The complainant has suffered physical and mental harassment due to deficient act and conduct of OPs.  The complainant has, thus, filed the complaint against OPs directing them to refund the amounts so deposited by her along with interest @ 15% from the date of deposit till actual realization, besides Rs.20,000/- as compensation for physical and metal harassment.

4.      Upon notice, OPs no.1 and 2 filed their written reply and contested the complaint of the complainant vehemently. It was averred in preliminary objections that the complainant has no locus standi to file the complaint. The complex question of facts and laws are involved in this case, which cannot be adjudicated in summary proceedings by the Consumer Fora. On merits, it was averred that Jaswinder Singh was the insurance consultant having code no.00032091, who has to procure the business on commission basis, for the OPs. He worked as an agent under a licence granted to him by IRDA. The agent works on commission basis and only Jaswinder Singh could file a reply about any such representation. The proposal form was filled up by the complainant along with initial premium of Rs.1 lac, which was received by OPs and on the basis of the same, customer ID No.51663871 and policy titled as 'HDFC Unit Linked Young Star Plus' bearing no.10877163 were issued to the complainant. The proposal form was signed by the complainant after having fully understood the terms and conditions of the plan. It was averred that due to non-payment of the premium, the policy was cancelled and a cheque of Rs.12394.81 was sent to the complainant. It was denied that on receipt of the cheque, the complainant had approached OP no.2, where Manjit Singh Executive disclosed that the money had been invested in the wrong plan. The premium money deposited by the complainant with the OPs was invested after deduction of necessary charges, as stipulated in the proposal form. It was denied that complainant is illiterate or she knew to put her signatures in Punjab only. The complaint is drafted in English and even representation made by the complainant was in English. It was further averred that in case the complainant had any issue with regard to the policy, she could return the same within the Free Look Period of 15 days on receipt of policy, which was never opted by her. OPs no.1 and 2 denied other averments of the complainant and prayed for dismissal of the complaint.

5.      OP no.3 appeared and filed its separate written reply and contested the complaint of the complainant. It was averred in preliminary objections that complainant is not a 'consumer' of OPs She has also availed remedy from the Insurance Ombudsman, vide letter dated 25.06.2010. The complaint is bad for mis joinder and non joinder of the necessary parties. The complainant has obtained the policy of OPs no.1 and 2 after admitting and accepting the terms and conditions of 'Unit Linked Policy'. The complainant never complained to the answering OP regarding issuance of a different policy. The complainant made the payment of the insurance premium and the OPs duly deposited the same with OPs no.1 and 2, who issued the Unit Linked Policy in favour of the complainant. It was denied that complainant had to get 15% committed return along with money invested by her or that the maturity of the policy was for five years and she had to get the double the deposited amount. The husband of the complainant had himself read the proposal form after going through the contents thereof. OP no.3 denied other averments of the complainant and prayed for dismissal of the complaint.

6.      The complainant tendered in evidence her affidavit Ex.C-3, affidavit of Tarlochan Preet Singh husband of the complainant Ex.C-4, along with copies of documents Ex.C-1 to Ex.C-2 and Ex.C-5 (original cheque) to Ex.C-13. As against it; OPs tendered in evidence affidavit of Jaswinder Singh Ex.R-1, affidavit of Harsimran Singh Executive Legal Ex.R-2 along with copies of documents Ex.R-3 to Ex.R-9 and closed the evidence. On conclusion of evidence and arguments, the District Forum Patiala, accepted the complaint of the complainants by directing the OPs to refund the amount of Rs.1,40,000/- to the complainant with interest @ 9% per annum from the date of deposit, besides Rs.5,000/- as cost of litigation. Dissatisfied with the order of the District Forum Patiala dated 03.09.2012, two above-mentioned appeals have been preferred against the same by the OPs no.1 and 2 as appellants in the above cases.

 

First Appeal No.1435 of 2012 arising out of order passed in Complaint No.10/831 of 21.09.2010.

7.      The complainant Tarlochan Preet Singh has filed the present complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that OP no.3/Jaswinder Singh approached the complainant and apprised him of  the plan of insurance for the senior citizens stating that in case complainant deposited Rs.1 lac in the first year and Rs.20,000/- each in the 2nd and 3rd year, then he would get 15% committed return along with money invested by her. The maturity period of the said plan would be five years and he would get double the amount deposited by him in the plan. On the allurement of OP no.3, the complainant agreed for the same. The proposal form was filled in by Jaswinder Singh/OP no.3 who got the signatures of the complainant at various places on the form and other relevant papers, which were required for the above-said purpose by the complainant. The complainant put her signatures believing OP/Jaswinder Singh to be the agent of OPs no.1 and 2. The complainant paid Rs.1 lac towards first premium, vide receipt no.2205297 dated 25.01.2007 and he was allotted client ID No.51663079 and the policy no.10876891 was issued to complainant by OPs no.1 and 2. As per the commitment made by OP no.3, the complainant deposited Rs.20,000/-, vide receipt no.2211062 dated 03.03.2008 and Rs.20,000/- vide receipt A-48030821 dated 27.02.2009. The complainant became astonished, when he received a cheque of Rs.12,394.81 from OPs. After receipt of the above-said cheque, complainant approached OP no.2, where Manjit Singh Executive of OP No.2 was present. He narrated the entire facts to him, who disclosed that the money deposited by him had been rather invested in some other plan. On enquiry, it was transpired that the amount of the complainant has been deposited in 'Unit Linked Young Star Plus" instead of a plan for 'senior citizen'. The complainant was an illiterate person and he knew how to put his signatures in Punjabi only. He never consented for the investment of the amount in above plan. The OPs and their agent Jaswinder Singh failed to disclose material facts, which were in their knowledge. The complainant made a representation dated 25.03.2010 to OPs, who vide their reply dated 27.04.2010, refused to take any action against their agent Jaswinder Singh and he was rather advised to make representation before Insurance Ombudsman Chandigarh. The complainant made representation before Insurance Ombudsman on 25.06.2010, but of no use. The complainant has suffered physical and mental harassment due to deficient act and conduct of OPs.  The complainant has, thus, filed complaint against OPs directing them to refund the amounts so deposited by the complainant along with interest @ 15% from the date of deposit till actual realization, besides Rs.20,000/- as compensation for physical and metal harassment.

8.      Upon notice, OPs no.1 and 2 filed written reply and contested the complaint of the complainant vehemently. It was averred in preliminary objections that the complainant has no locus standi to file the complaint. The complex question of facts and laws are involved in this case, which cannot be adjudicated in summary proceedings by the Consumer Fora. On merits, it was averred that Jaswinder Singh is the insurance consultant having code no.00032091, who procured the business on commission basis, for the OPs. He worked as an agent under a licence granted by him by IRDA. The agents work on commission basis and only Jaswinder Singh could file a reply about any representation. The proposal form was filled up by the complainant along with initial premium of Rs.1 lac, which was received by OPs and on the basis of the same, customer ID No.51663079 and policy titled as HDFC Unit Linked Young Star Plus bearing no.10876891 were issued to the complainant. The proposal form was signed by the complainant after having fully understood the terms and conditions of the plan. It was averred that due to non-payment of the premium, the policy was cancelled and a cheque of Rs.12394.81 was sent to the complainant. It was denied that on receipt of the cheque, the complainant had approached OP no.2 where Manjit Singh Executive disclosed that the money had been invested in the wrong plan. The premium money deposited by the complainant with the OPs was invested after deduction of necessary charges, as stipulated in the proposal form. It was denied that complainant is illiterate or he knew to put her signatures in Punjabi language only. The complaint is drafted in English and even representation made by the complainant was in English language. It was further averred that in case the complainant had any issue with regard to the policy, she could return the same within the Free Look Period of 15 days on receipt of policy, which was never opted. OPs no.1 and 2 denied other averments of the complainant and prayed for dismissal of the complaint.

9.      OP no.3 appeared and filed its separate written reply and contested the complaint of the complainant. It was averred in preliminary objections that complainant is not a 'consumer' of OPs he has also availed remedy from the Insurance Ombudsman, vide letter dated 25.06.2010. The complaint is bad for mis joinder and non joinder of the necessary parties. The complainant has obtained the policy of OPs no.1 and 2 after admitting and accepting the terms and conditions of Unit Linked Policy. The complainant never complained to the answering OP regarding issuance of a different policy. The complainant made the payment of the insurance premium and the OP duly deposited the same with OPs no.1 and 2, who issued the Unit Linked Policy in favour of the complainant. It was denied that complainant had to get 15% committed return along with money invested by her or that the maturity of the policy was for five years and she had to get the double the deposited amount. The complainant had himself read the proposal form after going through the contents thereof. OP no.3 denied other averments of the complainant and prayed for dismissal of the complaint.

10.    The complainant tendered in evidence copies of documents Ex.C-1 to Ex.C-2, affidavit of Tarlochan Singh Ex.C-3, affidavit of Dhiram Kaur Ex.C-4 along with copies of documents Ex.C-5 to Ex.C-12. As against it; OPs tendered in evidence affidavit of Jaswinder Singh Ex.R-1, affidavit of Harsimran Singh Executive Legal Ex.R-2, along with copies of documents Ex.R-3 to Ex.R-9. On conclusion of evidence and arguments, the District Forum Patiala, accepted the complaint of the complainants by directing the OPs to refund the amount of Rs.1,40,000/- to the complainant with interest @ 9% per annum from the date of deposit, besides Rs.5,000/- as cost of litigation. Dissatisfied with the order of the District Forum Patiala dated 03.09.2012, two above-mentioned appeals have been preferred against the same by the OPs no.1 and 2 as appellants in the above cases.

11.    We have heard Ld. Counsel for the parties at considerable length and have also examined the record of the case.

12.    The order passed by District Forum in the above-referred appeals containing same controversy has been challenged by the appellants before this Commission. The submission raised by counsel for appellants before us is that District Forum failed to appreciate the point that life assured opted for 'Unit Linked Young Star Plus Policy'. The proposal was accepted on standard rates, based on the information conveyed by the life assured in the respective proposal forms, which was duly signed by the life assured. The above policies were issued in the above cases on the basis of the information conveyed in the proposal form by the complainant to OPs. It was submitted that District Forum overlooked this point that life assured signed declaration in 'Punjabi' stating about understanding all the terms and conditions of the proposal form and insurance contract. Adequate information with regard to product, nature and significance was given to the life assured, besides the sale literature and necessary guidelines was also explained to the life assured. The life assured was given detailed description about the features of the plan including premium amount to be paid and all charges to be levied on the same. It was submitted by counsel for the appellants that life assured signed the proposal form and provided the information therein, on the basis of which, policies were issued to them. It was vehemently maintained by counsel for appellants that life assured opted for 'Unit Linked Young Star Plus Policy' and paid the premium therefor. The life assured chose to opt for Unit Linked Policy with term of 12 years and assured premium of Rs.5 lac by understanding all the terms and conditions of the policy. The life assured was duly supplied with the terms and conditions of the policy and life assured had not opted for the option of cancellation of the policy within 'free look period'. The terms and conditions of the contract of insurance are, thus, binding on the parties in this case. The District Forum has wrongly returned the finding in the order under challenge in this case to the effect that OPs have not maintained any account regarding premium deposited by the complainant and how the same was appropriated. The District Forum observed that OPs have not adhered to the terms and conditions of the policy Ex.R-6.  The OPs have failed to provide the details of unit statement to the life assured. The counsel for the complainant now respondent argued to the contrary by submitting that order of the District Forum is well reasoned and based on appreciation of evidence.

13.    Evidence is required to be examined by us on the record in this case to decide the controversy. Affidavit of the complainant has been examined by us. Ex.C-1 is application dated 25.06.2010 submitted by the complainant to Insurance Ombudsman Chandigarh and she opted for insurance service in senior citizens plan, as represented by the insurance agent Jaswinder Singh. The OPs sent 'Unit Linked Young Star Plus Policy' having a term of five years, then how they sent the full and final payment of such plan. She stated that fraud has been committed on the complainant. Ex.C-2 is application of complainant/life assured Dhiraj Kaur regarding mis-selling of the policy. It is not clear on which date this application has been moved. It is difficult to come to the conclusion when this application came into existence, as no date is put on it. The affidavit of life assured Dhiraj Kaur Ex.C-3 on the record in support of her averments that the agent of OPs deposited the premium in 'Unit Linked Young Star Plus Policy' instead of plan for senior citizens. Affidavit of Tarlochan Singh is Ex.C-4 on the record to this effect that they agreed to purchase senior citizens plan only and not 'Unit Linked Young Star Plus". Ex.C-5 is cheque sent to Dhiraj Kaur/life assured for Rs.12,394.81 by OPs. Ex.C-6 is receipt sought to be executed from life assured regarding discharge of the liability. Ex.C-7 and Ex.C-8 are the renewal premium of Rs.20,000/-. The receipts Ex.C-7 and Ex.C-8 proved that life assured had deposited premium of Rs.20,000/- with OPs by virtue of above receipts on 03.03.2008 and 27.02.2009. The OPs replied to life assured, vide Ex.C-9 that since she has not opted for refund within 15 days from receipt of policy and hence they are unable to refund the process of premium.    Ex.C-10 is Unit Linked Proposal Form filled in by life assured as well as by Tarlochan Singh. Tarlochan Singh has suffered declaration that he explained the contents of the application to life assured in her Punjabi Language. Ex.C-11 is also proposal form on the record. Ex.C-13 is intimation regarding policy paid up.

14.    To refute this evidence, OPs tendered in evidence affidavit of Jaswinder Singh Ex.R-1 wherein Jaswinder Singh stated on oath that complainant is an educated person and he signed and accept the proposal form after admitting the terms and conditions of Unit Linked Policy. He submitted that the proposal form was accepted by the life assured and same was submitted with OPs no.1 and 2 along with premium. The OPs no.1 and 2 issued the Unit Linked Policy in favour of the complainant. The complainant has sufficient time to change over the above plan. He further stated that complainant raised objection only after gap of more than three years in this case. The complainant made payment of insurance premium with OPs no.1 and 2. Ex.R-2 is affidavit of Harsimran Singh Executive Legal of OPs. Ex.R-3 is authority letter executed in favour of Harsimran Singh Executive Legal by the OPs. Ex.R-4 is the proposal form. Ex.R-5 is undertaking in Punjabi. Ex.R-6 is terms and conditions of the policy document. Ex.R-7 is letter addressed to Branch Manger of OPs, which was received on 16.01.2008 containing request of life assured/Dhiraj Kaur to reduce the premium to Rs.20,000/-. This request letter of Dhiraj Kaur was received on 16.01.2008 by the OPs for reducing the premium of policy in this case. This is vital document on the record.  The consent letter dated 28.02.2007 duly signed by Dhiraj Kaur/life assured Ex.R-8 on the record. The details of unit statement is Ex.R-7 on the record.

15.    From conclusion of above referred evidence on the record, we have to come to the conclusion that it has been proved on record that the terms and conditions of the policy were supplied to the life assured in this case.  The date of commencement of the policy was from 28.02.2007, vide policy document Ex.R-6 on the record. The policy was issued on 28.02.2007 to the life assured. Jaswinder Singh/OP no.3 suffered his affidavit on the record denying the averments of the complainant that the amounts of the life assured were deposited in Unit Linked Plan, instead of Senior Citizens Plan. Ex.R-7 is letter written by Dhiraj Kaur/life assured to reduce the premium amount of the policy. It can be inferred from letter           Ex.R-7 that life assured was supplied the policy document and due to this reason this application was moved to reduce the premium on 16.01.2008 only. The consent letter is Ex.R-8 on the record dated 28.02.2007. The complainant moved application Ex.R-7 on 16.01.2008 after many months from the date of issue of the policy, when free look period was already over then it cannot be said that life assured was not aware of the terms and conditions of the Contract of Insurance. The policy terms and conditions Ex.R-6 were, thus, duly supplied to life assured, otherwise, there was no reason to move application Ex.R-7 after many months to reduce the premium of the policy. No free look period option was exercised by the complainant to come out of the policy. The terms and conditions of the policy document are, thus, binding between the parties. The complainant paid three premiums to OPs, which is reflected on the record, vide receipts Ex.C-6 and Ex.C-7 on the file. Receipt Ex.C-6 was paid on 25.01.2007 and receipt Ex.C-7 was paid on 03.03.2008 of the premium of Rs.20,000/- each to OPs. We negate the contention of the complainants that they opted for senior citizen plan and were instead  issued Unit Linked Plan in its place by the OPs. We do not find any merit in it because life assured opted for cancellation of policy after more than three years period when free look period was already over to opt out of the policy. The parties have entered into contract containing insurance policy Ex.R-6. The terms and conditions of the policy are binding on the parties. The Consumer Forum has been invested with summary jurisdiction only and is strictly bound by the terms and conditions of the 'Contract of Insurance' only.

Clause 5 of the policy Ex.R-6 is reproduced as under :-

5.Surrendered, Cancelled, Lapsed and Paid-up Policies :-

(i) A policy may be surrendered at any time after completion of three years. The amount payable on surrender would be the Unitised Fund Vlaue arrived at after deduction of the Surrender Charge as specified in the Schedule of Charges. Upon payment of this benefit, the policy terminates and no further benefits are payable. A surrendered policy will not be re-instated under any circumstances. The surrender charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the schedule of charges.

(ii) Premium unpaid in the first 3 years of the policy.

a)If any premium remains unpaid as described in Provision 4 during the first 3 years of the policy, the policy will lapse, all benefits other than those described under Provision 5(ii)( c) will be cancelled and policy servicing will cease.

b) A lapsed policy can be revived any time during the period of 2 years from the date of lapse of the policy or till the end of 3 years from inception, whichever is later. Revival will be subject to any terms and conditions which we may specify from time to time. These terms will include underwriting approval, payment of all outstanding premiums, the revival charge and de-allocation of units towards our charges. The revival charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the schedule of charges. On revival, the Unitised Fund Vlaue at the date of lapse and the outstanding premiums will be used to allocate units to the policy in accordance with provision 9 (xiii).

c) If the lapsed policy is not revived, the Unitised Fund Value at the date of lapse less Surrender Charge as specified in the Schedule of Charges would be paid to the policyholder at the end of 2 years from the date of lapse or at the end of 3 years from inception whichever is later. Upon payment of this benefit, the policy terminates and no further benefits are payable. The surrender charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the Schedule of Charges.

iii) Premium unpaid after the first 3 years of the policy

a) if any premium remains unpaid as described in Provision 4 after the first 3 years of the policy, the policy will be made paid up; the unitized funds will continue to the invested, risk cover will continue; all charges including the mortality charges and other risk benefit charges will continue to be deducted and the policyholder will be entitled to all policy servicing. Premiums can be paid into a paid-up policy only during the period of 5 years from the due date of the earliest outstanding premium. Any premiums paid into a paid up policy are used to clear the outstanding premiums in the order of their due dates, the earliest being the first to be cleared. The premiums paid will be used to allocate units to the policy in accordance with provision 9 (ii).

b)  A paid-up policy can be revived any time during the period of 5 years from the due date of the earliest outstanding premium, subject to any terms and conditions, which we may specify from time to time. These terms will include underwriting approval and payment of all outstanding regular premiums and revival charges. On revival, the outstanding premiums will be used to allocate units to the policy in accordance with the provision 9 (xiii).

c)  if the paid-up policy is not revived within the period of 5 years from the due date of the earliest outstanding premium, there is an option to continue the policy in a paid-up state for the remaining term of the policy. The unitised funds will continue to be invested, risk cover will continue; all charges including the mortality charges and other risk benefit charges will continue to be deducted, and the policyholder will be entitled to all policy servicing. However, no further premiums would be accepted into the policy.

If the above option is not exercised, the policy will be cancelled. The amount payable on cancellation would be the unitised fund value arrived at after deduction of the surrender charge as specified in the schedule of charges. Upon payment of this benefit, the policy terminates and no further benefits are payable. A cancelled policy will not be re-instated under any circumstances. The surrender charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the schedule of charges.

d)  If the value of the units in a paid-up policy falls below the minimum fund value as specified in the policy schedule, the policy will be cancelled. The amount payable on cancellation would be the unitized fund value arrived at after deduction of the surrender charge as specified in the schedule of charges. Upon payment of this benefit, the policy terminates and no further benefits are payable. A cancelled policy will not be re-instated under any circumstances. The surrender charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the schedule of charges.

iv)  If any time the value of units in a policy falls to zero, the risk cover ceases immediately. We have the discretion to request for additional premiums or cancel the policy.

16.    It is, thus, clear from perusal of this clause 5 of surrendered, cancelled, lapsed and paid up policies of the policy document that policy may be surrendered at any time after completion of three years. Since three premiums have been paid in this case and policy could be surrendered only to OPs after three years. The complainants are entitled to surrender value of the policy in accordance with Clause 5 of the terms and conditions of the 'Contract of Insurance' Ex.R-6. The District Forum wrongly ordered by overlooking terms and conditions of the 'Contract of Insurance' to direct the refund of the entire amount to complainant. The order of District Forum is, thus, modified in both the above-referred appeals by ordering that the complainants/life assured are entitled to surrender value of the policy terms and conditions, as per Clause 5 of Ex.R-6.

17.    Both the above-referred appeals are, thus, accepted with this modification by directing the OPs no.1 and 2 to provide surrender value of the policy, as per Clause 5 of Ex.R-6 to the complainant. The complainant shall also be entitled to compensation of Rs.15,000/- and costs of litigation of Rs.5,000/- in each of the complaints.

18.    In First Appeal No.1434 of 2012, the appellants had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal. This amount with interest, if any, accrued thereon, be refunded by the registry to the complainant by way of  crossed cheque/demand draft after 45 days from receipt of copy of this order, if not already received by complainant. Remaining amount, if any shall be paid to complainant by the appellants, as per order of District Forum within 45 days from receipt of copy of this order.

19.    In First Appeal No.1435 of 2012, the appellants had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal. This amount with interest, if any, accrued thereon, be refunded by the registry to the complainant by way of  crossed cheque/demand draft after 45 days from receipt of copy of this order, if not already received by complainant. Remaining amount, if any shall be paid to complainant by the appellants, as per order of District Forum within 45 days from receipt of copy of this order.

20.    Arguments in these appeal were heard on 04.07.2016 and the order was reserved. Now the order be communicated to the parties. 21.  The appeal could not be decided within the statutory period due to heavy pendency of court cases.

22.    Copy of this order be placed in FA No.1435 of 2012.

 

                                                                     (J. S. KLAR)

                                                     PRESIDING JUDICIAL MEMBER

 

 

                                                                       (J.S. GILL)

                                                                         MEMBER

                       

July  7,  2016.                                                             

(ravi)