Punjab

Ludhiana

CC/15/512

Joginder Singh - Complainant(s)

Versus

HDFC Standard Life Ins.Co.Ltd - Opp.Party(s)

G.S.Sandhu Adv.

17 Feb 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

 

Consumer Complaint No. 512 of 27.08.2015

Date of Decision          :   17.02.2017

 

Joginder Singh aged 45 years s/o Dhanpat Singh, resident of Plot No.1877, Sector-32-A, Chandigarh Road, Ludhiana.

….. Complainant

Versus 

 

1.HDFC Standard Life Insurance Company Limited,Mumbai.

2.HDFC Standard Life Insurance Company Limited, Dugri Urban Estate, Phase-II, District Ludhiana.

..…Opposite parties

 

 

 (COMPLAINT U/S 12 OF THE CONSUMER PROTECTION ACT, 1986)

 

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.PARAM JIT SINGH BEWLI, MEMBER

 

COUNSEL FOR THE PARTIES:

 

For Complainant                     :         Sh.G.S.Sandhu, Advocate

For OPs                         :         Sh.Nitin Kapila, Advocate

 

PER G.K DHIR, PRESIDENT

 

1.                          Complainant purchased insurance policy No.0B000360793 dated 15.4.2004 from OP2. At that time, the complainant was informed that he has to pay Rs.5000/- per month as premium and date of maturity of the policy will be 15.4.2014. On allurement of Ops, complainant purchased the policy by treating the same as beneficial policy because it was disclosed that death risk is even covered. Complainant paid the premium installments of amount of Rs.1,25,000/- regularly, but due to some unavoidable circumstances, he failed to pay the remaining premium installments after 2007. Complainant expressed inability to pay more premium amount in 2007 and thereafter, he was assured by OP2 as if he need not worry because he will receive back the paid amount on maturity. Thereafter, the complainant visited the office of OP2 on 15.4.2014 for releasing the entire premium amount with interest, but despite repeated requests, he got nothing except excuses. That caused great mental pain, agony and torture to the complainant and as such, by pleading deficiency in service and adoption of unfair trade practice on the part of Ops and after serving legal notice dated 30.9.2014, prayer made for directing Ops to refund 1,25,000/- with interest @18% per annum. Compensation for mental harassment of Rs.2 lac and litigation expenses of Rs.11000/- more claimed.

2.                In written statement filed by Op1 and OP2 jointly, it is claimed that the complaint is not maintainable because there is no deficiency in service or adoption of unfair trade practice on the part of Ops. Besides, it is claimed that the complainant has no cause of action to file this complaint. Admittedly, the complainant purchased the policy in question on 15.4.2004, but other allegations of allurement denied. Admittedly, the complainant paid first premium installment of Rs.5000/-. Other premium installments paid by the complainant is matter of record because due entries in the account book in that respect reflected. Complainant is not entitled to alleged benefits because he himself failed to comply with the terms and conditions of the policy. It is not denied that the complainant paid installments of Rs.1,25,000/-. Even as per the version of complainant himself, he committed constant defaults in payment of premium to Ops. Premiums due after 15.6.2006 onwards have not been paid. Even the complainant never approached Ops for deposit of any premium due after 15.6.2006. It was only after lapse of policy on 20.9.2010 that the complainant submitted revival request and that is why revival quotation dated 20.9.2010 was issued for calling upon the complainant to pay further premiums, but with clear understanding that validity of the said quotations will be until 5.10.2010. In that quotation, it was mentioned that in case of revival of the policy after mentioned date, a fresh quotation would be applicable. Even then the complainant did not follow the revival quotation and he failed to get the policy revived. Complaint of the complainant being barred by limitation merits dismissal. Each and every other allegations of the complaint denied by praying for dismissal of the complaint.

3.                Complainant to prove his case tendered in evidence his affidavit Ex.CA1 along with documents Ex.C1 to Ex.C5 and thereafter, he along with his counsel closed the evidence.

4.                On the other hand, counsel for OPs tendered in evidence affidavit Ex.RA of Sh.Amit Khana, Deputy Manager Legal & Compliance along with documents Ex.R1 to Ex.R27 and thereafter, closed the evidence.

5.                          Written arguments submitted on behalf of complainant alone, but not by Ops. Oral arguments of counsel for both the parties heard. Records gone through minutely. 

6.                 Admittedly, the policy in question was purchased by the complainant. Copy of policy schedule produced on record as Ex.C1 as well as Ex.R1 by the parties. Perusal of both these documents reveals that policy terms to be governed by the laws applicable in India and final premium due is as on 15.3.2014. Term of the policy mentioned as 10 years both in Ex.C1 and Ex.R1. The Standard Policy provisions containing basic benefits plus any attaching bonuses detailed in the schedule annexed with Ex.C1 or Ex.R1. There is no dispute regarding the fact that amount of Rs.1,25,000/- in fact has been deposited by the complainant on account of premium installments because that fact has been virtually admitted in the written statement filed by Ops by not denying the same.

7.                Copy of Standard policy provisions produced on record as Ex.R2 by Ops. Perusal of clause 3 of Ex.R2 reveals that the first premium must be paid along with the submission of completed application, but subsequent premiums be paid in full on the dates as per frequency set out in the policy schedule. As per claim of Ops themselves, premiums due on or after 15.6.2006 have not been paid and as such, case in hand to be governed by clause 3 of the Ex.R2. Clause 3 regarding payment and cessation of premiums of Ex.R2 read as under:-

 “i)The first premium must be paid by you along with the submission of the completed application. Subsequent premiums are due in full on the date(s) (called here the “Due dates”) and at the frequency set out in your policy schedule. We will not accept part payment of the premium.

ii)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.

iii) If premiums cease your policy may acquire a surrender value to be determined by us at our sole discretion.

vi)If, however, you pay premium for a continuous period of 3 years, your policy will acquire a guaranteed minimum surrender value, which will be calculated in accordance with the provision 4 of these provisions”.

8.                After going through this clause 3 of Ex.R2, it is made out that if any premium remains unpaid 15 days after due date, then policy will lapse with effect from the due date of the first unpaid premium. However, it is not a case of lapse of the policy on account of first unpaid premium. Rather, it is a case, in which, the premiums paid for about 26 months and as such, applicable clause will be clause 3(iii) of Ex.R2. As per that clause, if premiums ceased to be paid, then policy will acquire a surrender value to be determined by the Ops in its sole discretion.   Clause 3(iv) is independent of clause 3(iii) of Ex.R2 because clause 3(iv) applicable if the premiums paid continuously for period of 3 years. As the premiums not paid continuously for 3 years and as such, policy in question after lapse not to acquire the guaranteed minimum surrender value. However, in view of clause 3(iii) of Ex.R2, the policy after lapse to acquire the surrender value as per determination of sole discretion of the company. Being so, complaint maintainable to the extent of entitlement of the complaint to claim for acquired surrender value as per determination to be made by Ops.

9.                Counsel for the Ops vehemently places reliance on clause 5              of Ex.R2 for arguing that once the policy is made paid-up, then it will cease to participate in profits. Certainly after lapse of the policy before continuity period   of 3 years, the complainant not entitled for the participation in earned profits qua the policy. However, in view clause 3(iii) of Ex.R2, the complainant is entitled to acquire a surrender value as per determination by Ops in their sole discretion. Guaranteed minimum surrender value is different than that of the surrender value to be determined by the Ops in their sole discretion and that is why, two different clauses i.e. clause no.3(iii) and clause 3(iv) specifically incorporated in Ex.R2. Even if the premium paying term may be 10 years as per Ex.C1 and Ex.R1 or Ex.R3, but despite that the complainant cannot be denied the acquired surrender value benefit in view of clause 3(iii) of Ex.R2.

10.              Ex.R5 is copy of Illustrative guaranteed benefit, non-guaranteed benefit and total death benefit payable on termination of the policy. It is not a case of accrual of non guaranteed benefit or guaranteed benefit or total death benefit because of case being governed by clause 3(iii) of Ex.R2 as discussed above and as such, benefit from the contents of Ex.R5 and Ex.R6 can’t be availed by the counsel for Ops.

11.              Ex.R7 is mandate form for direct debit issued by the complainant under his signatures. That mandate is for depositing the premium amount directly from the account of the complainant with HDFC Bank Limited as per contents of Ex.R7 itself. So, even if in Ex.R16 to Ex.R18, it may have been mentioned that the complainant undertook to revoke the standing instruction in the event of the policy being withdrawn/surrendered/lapsed/terminated, then the subsequent amount not to be debited from the account of the complainant, but he will be entitled to refund of such amount on demand without interest and compensation, despite that it cannot be held that the complainant became entitled to the refund of the entire paid amount of Rs.1,25,000/-. Rather, that undertaking contained in clause 7 of Ex.R16 and corresponding to similar clauses Ex.R17 and Ex.R18 is to the effect that in the event of surrender or lapse or termination of the policy, the mandate issued for debiting the premium amount from the account of the complainant through Ex.R7 to stand cancelled/revoked. That was actually not a mandate for Ops to refund the paid amount. Rather, mandate was for the bank. The claim is stacked by the complainant against insurance company and not against the bank and as such, benefit from these declared undertakings cannot be gained by the complainant.

12.              Ex.R9 is acknowledgement of initial deposit, whereas, Ex.R10 is application form of HDFC Savings Assurance Plan submitted by the complainant on 13.4.2004.

13.              Revival request forms Ex.R11 to Ex.R14 were submitted by the complainant on 3.2.2005, 20.5.2005 and 17.5.2006 and in pursuance of the same, final revival quotation Ex.R27=Ex.C2 was issued, whereby disclosing the complainant that said quotation is valid upto 5.10.2010 only. After issue of this final revival request Ex.R27=ExC2, complainant was called upon to make the payment on or before 5.10.2010 and in case, he failed to submit the revival payment by that date, then fresh quotation would be applicable. It is not the case of the complainant that he in response to issue of revival quotation submitted premiums because it is the case of the complainant himself that he was not in a position to pay the premiums after deposit of Rs.1,25,000/- in all. As revival of the policy has not been done by paying the revival premiums and as such,                 the policy actually has lapsed and that is why mention of revival policy was made in Ex.R27=Ex.C2.

14.              It is vehemently contended by counsel for Ops that this complaint is barred by limitation because the premiums not paid after April 2006 or after offer of payment of revival premium upto 5.10.2010 through Ex.C2=Ex.R27 and as such, complaint being filed on 27.8.2015 is barred by limitation. However, admittedly the date of maturity of the policy was 15.3.2014 and as such, complainant could have claimed the acquired surrender value as determined by the Ops after this maturity period even. Rather, it was the responsibility of Ops to issue notice to the complainant for disclosing that his policy has lapsed and he is entitled for due amount. No such notice shown to be issued by the Ops to the complainant. Rather, the complainant got issued legal notice dated 30.3.2014 Ex.C3 through counsel by sending the same through registered post as revealed by contents of postal receipts Ex.C4 and postal acknowledgement Ex.C5. Ops have denied the receipt of this notice, but acknowledgement Ex.C5 dated 21.10.2014 bear the sealed stamp of Mumbai Head Office of Ops and as such, certainly submissions advanced by counsel for complainant has force that despite repeated requests, due has not been paid. As denial of payment of due amount not made till date and as such certainly complainant has recurring cause of action for claiming the due benefits as per clause 3(iii) of Ex.R2 as referred above. Being so, complaint is not barred by limitation. However, the complainant is not entitled to any benefit except the one provided by clause 3(iii) of Ex.R2. As Ops failed to determine the due amount as per clause 3(iii) of Ex.R2 and as such, deficiency in service on the part of Ops is to this extent, due to which, complainant entitled for the compensation for mental harassment and litigation expenses and even to the due amount. However, Ops should pay the due amount by specified time and in case, they failed to do so, then certainly complainant will be entitled to the interest @8% per annum after lapse of stipulated period through succeeding para of this order.

15.              Therefore, as a sequel of the above discussion, complaint disposed of in terms that Ops will determine the surrender value of the policy in its sole discretion as per clause 3 (iii) of the Standard Policy Provisions Ex. R2 within 60 days from the date of receipt of copy of this order and thereafter, will pay the due amount (if any) within 30 days of such determination. In case payment not made within this stipulated period, then complainant will be entitled to interest @8% per annum after lapse of above said period of 60+30 days till payment. Compensation for mental harassment of Rs.5,000/- (Rupees Five Thousand only) and litigation expenses of Rs.3,000/- (Rupees Three Thousand only) allowed in favour of complainant and against Ops. Liability of Ops held as joint and several. Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of copy of order. Copies of order be supplied to parties free of costs as per rules.

16.                        File be indexed and consigned to record room.

 

                      (Param Jit Singh Bewli)                      (G.K.Dhir)

                       Member                                                 President

Announced in Open Forum

Dated:17.02.2017

Gurpreet Sharma.