BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MYSORE-570023

CONSUMER COMPLAINT NO.1216-2014

DATED ON THIS THE 15^th July 2016

      Present:  1) Sri. H.M.Shivakumara Swamy

B.A., LLB., - PRESIDENT   

    2) Smt. M.V.Bharathi                    

                                   B.Sc., LLB., -  MEMBER

                     3) Sri. Devakumar.M.C.                  

                                                          B.E., LLB.,    - MEMBER

Sri Devakumar.M.C.

Member

1.     The complainant has filed the complaint under section 12 of the C.P.Act 1986, against the opposite parties, alleging deficiency in service and prays for a direction to the opposite party to pay a sum of `2,16,950/- as on 17.03.2014, and further interest at Bank rate till the date of payment of the entire amount, with cost of the proceedings and other reliefs.
2.     The complainant invested in opposite parties “single premium whole life plan” a sum of `1,00,000/-  on two policies each amounting to `50,000/-.  The policy period was 10 years and the opposite parties undertaken to repay a sum of `1,08,475/- on maturity, together with interest, for each policy.  The opposite parties issued a surrender value forms calling upon the complainant to discharge and surrender the policies for a sum of `81,977/- each, which is alleged as not correct, by reducing the promised maturity value by `26,498/- on each policy as per the terms and conditions stated in the policy.  The opposite parties failed to settle the claims.  Thereby the complainant alleges the deficiency in service by opposite parties and filed the complaint, seeking reliefs.
3.     Opposite party Nos1. And 2 filed the common version by denying the allegations.  Issue of two insurance policy admitted.  Further submits the complainant had requested for surrender value on 13.01.2014 i.e. two months prior to the 10^th Anniversary of the policy from the date of its commencement, i.e. 17.03.2004 and the surrender value was sent on 17.01.2014.  As per clause 14 of the policy document, opposite parties offered the surrender value at `81,977/-.  If the surrender value had been calculated on 30.07.2014, the surrender value would be `91,130/-.  Therefore, there is no deficiency in service nor caused any mental agony to the complainant.  As such, prays for dismissal of the complaint.
4.      To prove the facts, both parties filed their respective affidavit and relied on several documents.  Both parties filed written arguments and submitted oral arguments.  On perusing the material on record, matter posted for orders.
5.     The points arose for our consideration are:-

1. Whether the complainant established the deficiency in service on the part of opposite parties in not settling the sum assured in respect of the “single premium whole of life” policies and thereby he is entitled for the reliefs sought?
2.  What order?

6.    Our findings on the aforesaid points are as follows:

Point No.1 :- Partly in the affirmative.

Point No.2 :- As per final order for the following

:: R E A S O N S ::

7.    Point No.1:- The complainant invested in opposite parties insurance plan, on appraisal of the policy benefits, terms and conditions by the opposite party agent on 17.03.2004.  The policy period was 10 years with 7.5% interest p.a.  The brochure was depicting the investment of a single premium of `50,000/- and assured a sum of `52,632/- and also promised to repay a sum of `1,08,475/- on its maturity i.e. after the expiry of 10 years period of the policy.  The complainant approached the opposite party, two months prior to the maturity of the policy, who issued surrender value forms calling upon the complainant to discharge and surrender the policies for a sum of `81,977/- instead of `1,08,475/- as promised i.e. `26,498/- less than the promised amount.  Hence, alleged the deficiency in service by opposite parties, sought for the reliefs.
8.    The opposite parties contended that, based on the information duly filled in proposal forms, by the complainant, it had issued two policy documents.  The complainant had requested for surrender value vide requisition form dated 13.01.2014, which is prior to the 10^th Anniversary from the date of commencement of the policy, i.e. 17.03.2014 and the surrender value had been sent through a letter dated 17.01.2014.  Opposite party contended that, under clause 4 of the policy terms and conditions, if the policy is surrendered prior to 10^th Anniversary, the surrender value would be less than the basic sum assured and all bonus vested as on that day of surrender.  So the surrender value had been calculated as on the date of surrender quote.  In case, the complainant would have opted for surrender quote after the expiry of 1- years term, the surrender value would have been much higher than the guaranteed surrender value.  Further, the opposite party contended that, the complainant relied on the paper advertisement and the brochure which does not bear the seal of the opposite party company, as such, it is not liable for the claims based on such documents.  Hence, prays for dismissal of the complaint.
9.    On perusal of the record, the contention of the opposite party, regarding the paper advertisement and the information brochure, is not acceptable, because the same cannot be published without the consent and permission of the company.  However, the variation of maturity amount of `26,498/- cannot be accepted, just for two months early redemption of the policy benefits.  However, the complainant failed to place any evidence to establish that the opposite parties have promised to pay `1,08,475/-.  As such, the complainant is entitled for surrender value as submitted by the opposite party along with interest from the date of maturity of the policy i.e. from 17.03.2014.  The policy document, never disclosed the policy benefits except the sum assured.  This is definitely amounts to an unfair trade practice and deficiency in service on the part of opposite parties.  Hence, the opposite parties are liable to pay compensation to the complainant with policy maturity value and interest on the entire sum, from 13.01.2014.  Accordingly, the point No.1 is answered partly in the affirmative.
10. Point No.2:- In view of the above, we proceed to pass the following

:: O R D E R ::

1. The complaint is allowed in part.
2. The opposite parties are hereby directed to pay the two policy maturity value, each of `81,977/- to the complainant, along with interest at 18% p.a. from 17.03.2014 to till date, within 60 days of this order.
3. In default to comply, the opposite parties shall pay penalty of `100/- per day to the complainant, until compliance made.
4. The opposite parties shall pay `3,000/- towards the compensation for the deficiency in service and `2,000/- towards cost of the proceedings to the complainant, within 60 days of this order. Fails to comply, the opposite parties shall pay interest at 12% p.a. on `5,000/-, until compliance made.
5. In case of default to comply this order, the opposite party Nos. 1 and 2 shall undergo imprisonment and also liable for fine under section 27 of the C.P.Act, 1986.

Give the copies of this order to the parties, as per Rules.