IN THE CONSUMER DISPUTES REDRESSAL  FORUM, KOLLAM

Dated this the   25^th    Day of  March  2019

  Present: -  Sri. E.M.Muhammed Ibrahim, B.A, LL.M. President

                   Smt.S.Sandhya Rani, BSc,LL.B, Member

                                                        CC No.63/16

K.B.Anilkumar                                 :         Complainant

Kochutharayil,Sooranad South

Sooranad P.O, Kollam

[By Adv.K.B.Sreekumar]

V/s

1. Director(Operations)               :         Opposite parties

         AVIVA Life Insurance Company India Ltd.

        AVIVA Tower,Sector Road,

       Opposite Golf Course, DLF, Phase V Sector

       Gurgaon, Haryana-122003

2. Branch Manager

        AVIVA Insurance Company India Ltd.

        Krishna Towers, Madanada, Kollam

3. Manager

        AVIVA Life Insurance Company India Ltd.

       3^rd Floor,Rema Plaza,C.S.Kovil Street

       Thambanoor

      [By Adv.Saji Isaac.K.J]

FAIR ORDER

E.M.MUHAMMED IBRAHIM , B.A, LL.M,President

This is a case based on a Consumer  complaint filed Under Section 12 of the Consumer Protection Act. 

          The averments in the complaint in short are as follows:-

The complainant obtained a life insurance policy from the opposite parties vide policy number YST 2600643.  The policy  was issued from the office of the 2^nd opposite party.  The   complainant had   remitted 3 premiums at

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the rate of 15,000/- each and thereby remitted Rs.45,000/- as premium.  While obtaining the policy the opposite parties made the complainant to believe that the policy is having a surrender value, and if the complainant opts to surrender it after the payment of at least three premium amounts the fund value as on  date of termination of the policy will be refunded.  As the fund value was diminishing day by day, the complainant had opted  for surrender  the policy and intimated the  fact to the opposite parties.  Thereupon  the opposite parties intimated that the complainant will get Rs.42,449/- as surrender value being the  fund value as on the date of termination and it will be disbursed soon.  However  on contrary to the aforesaid assurance the opposite parties had  issued   a   draftfor Rs.28,140/- as surrender deducting an amount of Rs.12,735/- unilaterally as surrender penalty.  According to the complainant the opposite parties have no authority to deduct such a huge amount as surrender penalty, unilaterally when there is an option to surrender the policy.  The act of the opposite parties is illegal and against the terms  of   the  policy  and  also against the fundamental principles of  insurance and amounts to unfair trade practice and deficiency in service.  The complainant is entitled to get at least  the fund value as on the date of surrender.  However the complainant had received only Rs.28140/-  on 29.05.2014.  The balance amount  outstanding is Rs.14,309/-.  Opposite parties had again deducted an amount of  Rs.4025/- for which there is no explanation  at all.   The complainant is entitled to get the outstanding amount of Rs.14309/-.  The complainant further pray to direct the opposite parties to pay the said amount with interest @ 12% p.a from 29.05.14 and also direct to pay compensation to the tune of  Rs.5000/- and also costs of the proceedings. 

The opposite parties resisted the complaint by  filing a detailed written version raising the following contentions. The complaint is not maintainable either in  law or on the facts.    The policy of the complainant was closed  in the

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year 2012 and the above complaint filed after a period of 4 years is barred by the law of limitation.  The policy taken by the  complainant is a unit linked policy   and   is   a  speculative  investment and a speculative gain and hence the complainant is not a   consumer  within the meaning of the Consumer Protection Act.  Contract of insurance  is a contract based on the terms and conditions of the policy and the opposite parties are bound to pay the complainant only according to the terms and conditions of  the policy.   However it is admitted that the opposite parties had issued a policy to the complainant on 25.05.09 with annual premium of Rs.15,000/- and  the premium paying term of 10 years.  The said policy is a unit linked policy and the complainant himself  had chosen the  unit linked fund in which the premium was to be invested as 100% growth fund.  It was clearly stated in the proposal form that in unit linked plans the investment risk in the investment portfolio is to be borne by the policy holder.  The complainant having taken a unit linked policy had undertook the risk in the investment portfolio.   It   is   further    admitted  that the complainant had paid 3 premium instalment and thereafter defaulted payment of premium.  As per condition  under Article 2(c)  “ If  we do not receive  the Regular Premium due after the first three consecutive policy years from the commencement date, and provided the policy holder has paid Regular premium due for the first 3 consecutive policy years, then:

i.  We will allow a grace period of 30 days from the due date of first unpaid instalment of  Regular  premium.  During this grace period, the  benefits under Article 3 and the benefits under applicable riders, if any, will continue to apply.  If the regular premium due is not received within the grace period of 30 days from the due date of the first unpaid instalment of regular premium then, the policy will remain in force with all benefits under Article 3 [except the loyalty benefit under Article 3)c)] and  the benefits under applicable riders, if any, for a period of 2 years from the due date of the first unpaid deducted.

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ii. The policy holder may exercise any of the 3 options during the 2 year reinstatement period(1) Reinstate the policy subject to Article 2)d).  The policy may be reinstated with 2 consecutive years  from the due date  of the  first unpaid which the policy shall automatically terminate and we will pay the policy holder within sixty days of the due date of the first unpaid instalment of regular premium. (2) Surrender the policy in accordance with Article 5), upon which the policy shall automatically  terminate and we will pay the policy holder a surrender value; (3) Continue the policy beyond the reinstatement  period without paying further regular premium, provided  we  receive a written notice from the policy holder within 60 days of the due date of the first unpaid instalment of  regular premium, requesting us to continue the policy of we accept the  policyholders  request: (a) we will   continue    the    policy  with all benefits under Article 3) [except loyalty benefits under Article3) c)] being in force and will continue to levy  charges as   specified in the Schedule, subject to Article 5b); (b) Premium Waiver Benefit shall not be applicable on the death of the insured; and (c) All the benefits under applicable Riders, if any, shall cease.

iii.  If  the policy holder fails to exercise any of the options specified in Article 2)c)iii), then the policy with all available benefits as per Article 3) and the benefits under applicable riders, if any, shall automatically terminate at the expiry of the reinstatement period and we shall pay the surrender value(As on the date of termination) to the policy holder.”

The complainant having defaulted  payment of premium due after the third policy year and as he had failed to exercise any of the options, the policy of the complainant was auto terminated and the opposite parties in accordance with the conditions of the policy sent a cheque to the complainant for Rs.28,140/- being the surrender value.

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According to the conditions of the  policy, the opposite parties are liable to pay only the amount payable under the policy.  The allegation that the act of the opposite parties is illegal and against the terms of the policy and fundamental principles of insurance is false and hence denied.  The allegation that the  act  of  the opposite parties are unfair, illegal and amounts to deficiency of service is false and hence denied.  There has been no illegal or unfair acts or deficiency of service on the part of the opposite parties.

In view of the above pleadings the points that arise for consideration are:-

1. Whether there  is any  deficiency in service or unfair trade practice on the side of  the opposite parties?
2. Whether the  complainant is entitled to get the relief sought for?
3. Relief and costs.

Evidence on the side of the complainant consists of the oral evidence of PW1 and got marked Ext.P1 to P6 documents out of which P6 has been marked subject to objection.   However on verification of record it is seen that the postal acknowledgement  card   evidencing   the   receipt of   Ext.P1 notice  is not seen produced and got marked in evidence.  [Original japtha No.3 is the reply notice sent on behalf of the opposite parties but it has been specifically correct as Japtha No.4.]  No oral evidence has been adduced on the side of the opposite parties.  However the opposite parties  have got marked  two documents as Ext.D1&D2 series out of which Ext.D2 series has been marked as subject proof.

It is an admitted  case that the opposite party have issued the insurance policy  in the name of the complainant on submitting a proposal form signed  by

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the complainant.  The said policy and proposal form together are marked as Ext.D1 series.  Page No.3 of Ext.D1 proposal form would indicate that the annual premium is Rs.15000/- and sum assured is Rs.75000/-.  The premium has to be paid yearly that it is  unit linked fund and 100% of the amount has to  invested in growth fund.  Admittedly   3    years    premium    has  been received by the opposite parties @ Rs.15000/- per year.  Ext.P5 is the intimation of termination of policy issued by the opposite parties in the name of the complainant .  It is stated in Ext.P5 that the complainant has defaulted  payment of premium  for 3 years.  According to the opposite parties as per the regulatory provisions attached to policy conditions the opposite parties are constrained to terminate the policy and refund the surrender value.

 It is  also clear from Ext.P5 that the date of expiry of the maximum period allowed (revival period) was 25.05.14.  But the complainant has not got revived the policy and total amount paid till 25.05.12 which is the last date of  payment of premium is Rs.45,000/-.  The fund value as on the date of termination of policy  was 42449/- out of which surrender penalty is Rs.12735/-.  The surrender amount is fund value less surrender penalty which is 42449-12735=29714/-.  As per Article 5 of the standard terms and conditions of the policy the surrender value shall be payable only after the completion of the 1^st 3 years and will be equal to the value of units pertaining regular premium as the date of surrender less surrender   charge   as   maintainable in the schedule + the value of units pertaining  to top of premium  after any of the date of surrender. In view of the above terms and conditions the opposite party has issued Ext.P5 letter to the complainant who received the same.  The complainant has received the amount as per Ext.P5 document after deducting the surrender charge.  The surrender penalty shown  is Rs.12735/-.  In the circumstance the surrender amount calculated after deducting  surrender  penalty    from  the fund value as per  surrender deduction is Rs.28140/-.  In the circumstance  the learned counsel

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for the complainant has argued that Ext.D2 series is not acceptable as it would contain forged documents and the complainant  has not been supplied with copy of the same.  It is true that  Ext.P6  policy certificate produced by the complainant is in one page  only and it would contain the policy certificate  alone   and   not  the  terms and condition of the policy.  Every policy certificate would contain terms and conditions.  While marking Ext.P6 the learned counsel for the opposite parties  has raised  objection that it is an incomplete document without containing the terms and conditions contained in other pages and therefore  it is  not acceptable at all.  We find force in the above objection.  The face page of Ext.P6 would indicate that it is the 5^th page of 30 pages and the reverse side is the  6^th page of 30 pages.  The said endorsement would indicate that  the policy document is prepared in 30 pages out of which 5^th page and its reverse side are the policy certificate.  In short it is clear that  Page No.5 & 6 of the policy document issued to the complainant alone has been produced and got marked in evidence as Ext.P6. It is pertinent to point out that  the complainant  has no case in the complaint as well as in the proof affidavit that he has not been supplied with terms and conditions of the policy and he was unaware of the terms and conditions  while taking  the  insurance policy Ext.D2 series according to the opposite parties are the terms and conditions  of the policy which are sent along with  Ext.P6  policy certificate.  We find force in the above contention.  Admittedly the complainant has surrendered the policy in a premature stage and in such circumstance the insurance company(opposite parties) are entitled to deduct penalty if there is a provision in the terms and conditions of the policy.  The complainant has not produced the policy conditions nor even filed any petition to call for the terms and conditions if any attached to the policy.  In the circumstance the forum is entitled to draw adverse inference against the complainant.

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In view of the materials discussed above it is clear that the opposite parties have acted in terms of the policy conditions which are reiterated in the written version which remains unchallenged.  Therefore there is no deficiency in service or unfair trade practice on the part of the opposite parties.  Hence the complaint is only to be dismissed. 

In the result complaint stands dismissed.   No costs.

Dictated to the  Confidential Assistant  Smt. Deepa.S transcribed and typed by her corrected by me and pronounced in the  Open Forum on this the   25^th   day of  March  2019.         

 E.M.Muhammed Ibrahim:Sd/-

                                                                                     S.Sandhya Rani:Sd/-

                                                                                     Forwarded/by Order

                                                                                    SENIOR SUPERINTENDENT