IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 31st day of August, 2021
Present: Sri. Manulal V.S. President
Smt. Bindhu R, Member
Sri. K.M. Anto, Member
C C No. 19/2020 (filed on 29-01-2020)
Petitioner : Anirani Mathew,
Thondil House,
Kanakkary P.O.
Pattithanam, Kottayam.
(Adv. Thomas Joseph)
Vs.
Opposite Parties : 1) Chief Executive Officer,
HDFC Life Insurance Co. Ltd.
Lodha Excelus, 13th Floor,
Appolo Mills compound,
N.M. Joshi Marg, Mahalakshnmi,
Mumbai – 400011.
2) Manager,
HDFC Standard Life,
Ground Floor, Kadavil Buildings,
Opposite Planatation,
Muttambalam P.O.
Kottayam – 686004.
(For op 1 and 2, Adv. Saji Issac K.J.)
O R D E R
Sri. Manulal V.S. President
Case of the complainant is as follows.
The complainant is the policy holder of the opposite parties with policy No.1269035. The date of the commencement of policy is 25-02-2009 and the term of the policy is 10 years. The monthly payment is Rs.10,000/- and the final premium was to be paid on 25-01-2019. The complainant had paid 14 premium instalments without fault and thus an amount of Rs.1,40,000/- was paid towards the premium amount. Thereafter the complainant was unable to pay any amount due to some unavoidable circumstances.
The said policy got matured on 25-01-2019 and thereafter the complainant demanded the opposite party to pay Rs.1,40,000/- with interest. Despite several representation the opposite party failed to pay the said amount raising lame excuses. The act of the opposite parties amounts to deficiency in service and unfair trade practice. Hence this complaint is filed for praying an order to direct the opposite parties to refund an amount of Rs.1,40,000/- with interest and the compensation of Rs.10,000/-.
Upon notice, the opposite parties appeared before the Commission and filed version as follows.
The complaint is an abuse of the process of law and the complainant has not approached this Commission with clean hands. The complainant had submitted an application form for issuance of HDFC Savings Assurance Plan. The opposite parties had issued the HDFC Savings Assurance Plan Policy to the complainant as required by her in the application form. The complainant was given an option to return the policy within 15 days from the date of receipt of the policy. The complainant inspite of obtaining the policy documents and the covering letter did not exercise the option to return the same and hence accepted the policy with terms and conditions.
The policy issued to the complainant had a premium of Rs.10,000/- payable monthly for a term of 10 years with last premium to be paid on 25-01-2019. The policy of the complainant did not acquired maturity and had lapsed due to nonpayment of premiums. It is admitted by the complainant that she had not paid any amount after payment of 14 monthly instalments. The policy of the complainant lapsed due to nonpayment of premium and had not acquired a surrender value. Hence according to the terms and conditions of the policy, the policy availed by the complainant did not attain a surrender value as she had not paid premium in accordance with terms and conditions of the policy and therefore no benefit is payable by the opposite parties. There has no deficiency in service or unfair trade practice on the part of the opposite parties.
The complainant filed proof affidavit in lieu of chief examination and marked Ext.A1.
One Mr.Anoop G., who is the Cluster Manager of the opposite parties filed proof affidavit in lieu of chief examination and Ext.B1 got marked. Counsel for the opposite parties filed argument note.
On evaluation of complaint, version and evidence on record we would like to consider following points.
- Whether the complainant had succeeded to prove any deficiency in service and unfair trade practice from the side 9of the opposite parties?
- Reliefs and costs?
For the sake of convenience, we would like to consider point no.1 and 2 together.
Point No.1 and 2.
It is admitted by the opposite parties that the complainant had availed HDFC Savings Assurance Plan from the opposite parties. There is no dispute on the fact that the date of commencement of policy was 25-02-2009 and the final premium was to be paid on 25-01-2019. Admittedly the complainant had paid Rs.1,40,000/- ie. 14 monthly premiums towards the policy. It is admitted by the complainant that after the 14th monthly premium, she was unable to pay any amount due to some unavoidable circumstances. Ext.A1 is the policy document. Ext.A1 proves that the tenure of the policy has expired on 25-05-2019 and the sum assured was Rs.9,34,509/-. The specific case of the complainant is that after the maturity of the policy when the complainant approached the opposite parties for the refund of the premium paid by her without any benefit, the opposite party evaded from the refund of the premium by raising some excuses. On the other hand the opposite party contented that the policy of the complainant lapsed due to nonpayment of the premium after one year. The opposite party further contented that the policy of the complainant has not acquired any surrender value. Opposite parties relied on clause (3) of the terms and conditions of the policy.
Clause (3) states that “Payment and cessation of premiums –
- The first premium must be paid along with the submission of your completed application. Subsequent premiums are due in full on the date(s) (called here the “Due Date”) and at the frequency set out in your policy schedule. We will not accept part payment of the premium. Any statutory levy or charges including any indirect tax may be charged to you either now or in future by the Company and such amount so charged shall become due and payable in addition to the premium and such charge shall be subject to the same terms and conditions as applicable to payment of premium.
- If any premium remains unpaid 15 days after the Due Date, we may lapse your policy with effect from the Due Date of the first unpaid premium.
- If premium cease your policy may acquire a surrender value, to be determined by us at our sole discretion.
- If, however, you pay premiums for a continuous period of 3 years, your policy will acquire a guaranteed minimum surrender value, which will be calculated in accordance with Provision 4 of these Provisions”.
Further clause (4) of terms and conditions of the policy speaks about the guaranteed minimum surrender value as follows.
Clause (4) states that “Guaranteed minimum surrender value – If you pay premiums for a continuous period of 3 years, the guaranteed minimum surrender value of your policy, including the value of any attaching bonuses, will be Zero in respect of premiums paid in the first year, and .50% of premiums paid subsequent to the first year in respect of the basic benefit”.
Clause (5) of the terms and conditions of the policy, it is described about the “Lapsed Policies, Paid up policies and Reinstatements –
- Lapsed and paid up policies
In the even that any premium remains unpaid 15 days after the Due Date and your policy has neither, at our discretion, acquired a surrender value, or has acquired a guaranteed minimum surrender value, your policy will be altered to a paid-up Policy, subject to any terms and conditions which we may specify from time to time. These terms will involve a reduction in benefits and you will be informed accordingly.
Once your policy is made paid-up it will cease to participate in profits.
If, however, any premium remains unpaid 15 days after the Due Date and your policy does not have a surrender value, the basic benefit will lapse and no benefit will be payable to you.
- Reinstatement of paid-up policies.
If your Policy has been paid-up, it may be reinstated, subject to our consent and such terms and conditions as we may specify from time to time”.
A mere reading of Clause 4 to 5 of the terms and conditions, we can see that the complainant is not entitled to get any surrender value or any other benefits from the policy. It is lapsed due to nonpayment of the premium.
Section 113 of Insurance Act describes about the acquisition of surrender value by policies. On a careful reading of Section 113 of the Insurance Act, it is appeared to us that unless atleast the premium for 1st 3 years is fully paid, there is no scope to expect refund of deposited sum.
The counsel for the opposite party relied on the decision of Hon’ble Supreme Court in Vikram Greentech (I) Ltd. Vs. New India Assurance Co. Ltd.II (2009) CPJ 34 (SC), in that decision Hon’ble Apex Court held that terms of an insurance policy have to be strictly constructed to determine the extent of liability of and insurer and the court while constructing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties.
The Hon’ble Apex Court has in Export Credit Guarantee Corpn. Of India Ltd. V M/s Grag Sons International, 2013 (1) KHC SN 16 (SC) held that the terms of the insurance policy have to be strictly constructed to determine the extent of the liability of the insurer and it is not permissible for the Court to substitute terms of the contract itself, under the garb of construing terms incorporated in the agreement of insurance. The same must certainly not be extended to the extent of substituting words that were never intended to form a part of the agreement.
In the instant case the complainant herself pleaded that she had deposited a sum of Rs.1,40,000/- towards the premium amount for 14 months. The opposite parties pleaded that though the complainant is entitled to cancel the policy within the free look period, but the complainant did not returned the policy to the opposite party for cancellation of the insurance policy or changing the terms and conditions for payment of premium. It shows that the complainant had admitted that the monthly premium of policy is Rs.10,000/- and the tenure of the policy is for 10 years. Therefore it can be safely presumed that the complainant read and understand the terms and conditions of the policy and accept the same. Therefore the terms and conditions of the insurance policy binding on the complainant.
On a thoughtful evaluation of above discussed evidence and facts, we are of the opinion that the complainant failed to prove his case with cogent evidence and complaint is liable to be dismissed. Hence complaint dismissed.
Dictated to the Confidential Assistant, transcribed and typed by her, corrected by me and pronounced in the Open Commission on this the 31st day of August, 2021.
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R, Member Sd/-
Sri. K.M. Anto, Member Sd/-
Exhibits marked on the side of the complainant
A1 : HDFC Savings Assurance policy No.12690335 dtd.25-02-2009
Exhibits marked on the side of opposite party
B1 – Copy of policy documents
By Order
Senior Superintendent
