IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 10th day of February, 2021
Present: Sri. Manulal V.S. President
Smt. Bindhu R, Member
C C No. 33/2017 (filed on 02-02-2017)
Petitioner : James Abraham,
Pallivathukkal House,
Kanjirappally P.O.
Kottayam – 686507.
(Av. Nithin Sunny Alex)
Vs.
Opposite Parties : 1) Manager,
ICICI Prudential Life Insurance
Co. Ltd. ICICI PruLife Towers,
1089, Appasaheb Marathe Marg,
Prabhadevi, Mumbai – 400025.
2) Manager,
ICICI Prudential Life Insurance
Co. Ltd. Ground Floor,
Veeteel Estate,
Opp. Bharath Petroleum Pump,
Kottayam – 686 004.
(For Op 1 and 2 Adv. M.C. Suresh
and Adv. Raj Dev Singh)
O R D E R
Sri. Manulal V.S. President
1. Briefly stated the facts of the complaint of the complainant are that the complainant, is the policy holder bearing No. 13646531 of plan “ICICI PRU Health Saver” belonging to the opposite parties company. The said plan was taken on 24-3-2010 and the certificate for the same was issued on 7-6-2010 and afterwards three annual premium for the amount of Rs. 16,000/- each was paid to the opposite parties company before the due dates. That to the surprise and shock for the complainant, the complainant received a letter, in the month of June 2014 from opposite parties stating that the opposite parties had Foreclosed the policy on 31-3-2014 since the fund values was below 110% of annual premium. When the complainant approached the second opposite party it was instructed to the complainant to lodge a complaint, accordingly the complainant did so, but even after the end of financial year there was no response from the side of the opposite parties. Another complaint was lodged before the second opposite party on 19-3-2015 but for that too the response was cold and as such the complainant sought alternative measures at Kottayam office of the opposite party for which they instructed to email the compliant to the opposite parties and they provided the email id also.
2. Even after the complaint filed through email there was no serious initiatives from the part of the opposite parties to respond to the complaint rather they sent reply mails seeking time to resolve the matter. On 4-3-2016 the complainant again sent an email to the opposite parties stating the violations of the clauses in policy document. On 6-4-2016 the complainant approached the second opposite party in person and handed over a detailed complaint stating all the aforesaid matters but again the reaction from the part of the opposite parties were cold , even after two months they even did not reply to the complainant.
Thereafter the complaint approached the Insurance Ombudsman and on 19-7-2016 the Insurance ombudsman passed the award stating the opposite parties to pay an amount of Rs. 15,000/-as Ex-Gratia within a period of one month from the date of the award. In the award it was mentioned that the complainant had received a cheque for an amount of Rs. 17,617 along with the foreclosure letter but the same was not correct as the complainant did not receive the same. As such the complainant issued a letter vide email on 8-8-2016 to Asst. Secretary , office of the Ombudsman objecting the award and also stating the errors committed by the Insurance company.
3.Meanwhile the opposite parties issued a letter, dated 28-12-2016 vide email stating that the complainant has not complied with the award passed by the insurance Ombudsman and as such they are treating the complaint before the insurance ombudsman as closed. It is alleged in the complaint that the acts of the opposite parties show their malafide intention to make unlawful enrichment by somehow avoiding the genuine claim of the complainant.
4.The complainant had paid premium in accordance with stipulation laid forth by the opposite parties as such any matter regarding the said policy plan has to be intimated to the complainant. The opposite parties are continuously changing their stand as to cover up their errors. In replies provided to the complainant they had only stated that the fund value was below 110% of the annual premium for which foreclosure was initiated but the same was not put onto the notice of the complainant and before the insurance ombudsman they have stated the complainant had made three fund switches in the policy period. This is an utter false hood and the complainant never instructed them to do so. If any fund switches were made in the account of the complainant that would have been done behind the back of the complainant by the employees of the opposite parties by creating bogus email id of the complainant. The complainant is in every way entitled to continue with the policy and the unilateral act from the opposite parties is squarely to deny from the beneficial enjoyment of the policy by the complainant. If in any way the opposite party want to deny the policy claim of the complainant then also clause 26 of the policy document which elaborates the terms and conditions of the policy will stand applicable to the complainant. The complainant is entitled to continue with the insurance policy as there is no fault on his part on payment of premiums nor any violation of the policy. The opposite parties are denying the policy cover to the complainant for reasons best known to them. The opposite parties conduct clearly envisages deficiency in service and unfair trade practice. Hence, the complainant filed instant complaint praying for granting reliefs, as mentioned in the relief clause of the complaint.
Version of opposite parties is as follows:
5.It is stated that present complaint is filed in respect of a policy bearing No.13197411 issued on 12.04.2010 which was issued on the basis of proposal bearing no. HSO1239253. The OPs were in receipt of duly signed and filled in proposal form from the complainant for issuance of insurance policy, as per the details contained in the said form. The opposite parties on believing the information given by the complainant in proposal form to be true and correct in all aspects and as per underwriting norms of the opposite party issued policy in favour of the complainant, details of which are as mentioned below :-
Policy Details.
Application Number HS01239253
Policy Number 13646531
Policy Plan ICICI Pru Health Saver U56.
Policy Status Foreclosed on 30-3-2014
Life Assured James Abraham.
Owner/proposer James Abraham
Sum Assured Rs.3,00,000 /-
Proposal Date 22-3-2010
Proposal Received Date 22-3-2010
R C D 24-3-2010
Policy Issue date 24-3-2010
Premium Rs.48,000/
Premium frequency Annual
Dispatch Details Welcome Kit Dispatched on 30-3-2010
6.The said policy was issued and duly dispatched by the opposite parties to the communication address mentioned in the proposal form informing him of free look period. The complainant retained the policy document and did not return the same to the opposite parties for cancellation of the policy during the Free Look Period thereby implying that he had agreed to all the policy terms and conditions mentioned therein. The opposite parties had already provided insurance cover on the life of the complainant and he had availed the insurance and as well as considerable time period and by not availing free look period option he complainant has forfeited his right to demand refund of premium or any other relief. The complainant has paid only three premiums and all subsequent premiums are unpaid. All the premiums since 24-3-2013 were unpaid.
7.The policy of the complainant got foreclosed as per clause 26 of the policy terms and conditions. The complainant had approached the opposite party three times for fund transactions. Fund switch was done on 11-10-2011,16-11-2011 and on 16-11-2012 which itself signifies that the complainant was well aware about the functioning of the opposite party as well as the terms and conditions of the policy. The above acts clearly depicts that the complainant was very well aware of the policy features and also has good understanding and knowledge of the market conditions. The policy of the complainant was foreclosed due to fall in fund value as per clause 26 of the terms and conditions of the policy. It has been held in a catena of judgments that an insurance policy is to be construed strictly as per the terms and conditions of the policy documents and no deviations from the same is permissible.
8. The complainant lodged a complaint through IRDA and the opposite party submitted a detailed reply denying the allegations raised by the complainant. The Ombudsman vide order dated19-7-2016 passed an award directing the opposite party to pay an amount of Rs. 15,000/- to the complainant as Ex-Gratia subject to the condition that the complainant shall furnish to the insurer a letter of acceptance of the award in full and final settlement of the claim as prescribed in Rule 16(5) of RPG Rules. The opposite party vide letters dated 17-8-2016 and 13-10-2016 duly informed the complainant that the requisite documents for the compliance of the award has not been received. The said fact was duly informed to the complainant vide email dated 28-12-2016 and despite that the complainant did not submit the requisite documents.
9. It is submitted that opposite party has also given insurance under the policy and have been providing coverage to the complainant from time to time of insurance policy. The complainant has availed the service of the opposite parties for all these years and is now claiming refund of amount. Since, the opposite party has performed all part of the contract by providing service, there is no deficiency in service, and as such the complainant is stopped from challenging the contract as such at such a belated stage. The opposite party wide letter dated 7-11-2014 duly replied to the queries raised by the complainant and informed that the policy was foreclosed in accordance with terms and conditions of the policy contract. The complainant himself has refused to accept the ombudsman award and the opposite party is ready and willing to comply with the ombudsman award.
10.Complainant filed proof affidavit in lieu of chief examination and Exhibit A1 to A5 were marked. Priyanka Otawkar who is the legal manager of the first opposite party filed proof affidavit for and on behalf of the opposite parties and exhibit B1 to B4 were marked. The document produced as per the direction of the commission is marked as X1.
On evaluation of complaint, version and evidence on record we would like to consider the following points.
- Whether there is any deficiency in service from the part of the opposite parties?
- If so what are reliefs?
For the sake of convenience we would like to consider the point number 1 and 2 together.
Point No.1 and 2
11. It is admitted by the parties that the complainant had availed the policy bearing No. 13646531 of plan “ICICI PRU Health Saver” from the opposite parties. The policy certificate along with the terms and condition is produced by the complainant and got marked as exhibit A1. The opposite parties contended that the policy was issued on 24-3-2010 and the same was dispatched to the complainant on 30-3-2013 complainant received the policy, for which there was a free look period of 15 days. On perusal of the letter addressed to the complainant which was annexed to exhibit A1 policy document we can see that it is dated as 7-6-2010. Thus, we cannot accept the contention of the opposite parties that the welcome kit along with policy document has dispatched on 30-3-2010.
12. According to the complainant in the month of June 2014 he had received a letter from opposite parties sating that the opposite party had Foreclosed the policy on 31-3-2014 since the fund value was below 110% of annual premium. It is further submitted that though the complainant lodged a complaint as instructed by the second opposite party, there was no response from the side of the opposite parties even after the end of financial year. Another complaint was lodged before the second opposite party on 19-3-2015.Exhibit A3 is the letter dated 10-2-2016 issued by the opposite party to the complainant in reply to his email dated 22-1-2016. Not satisfying with the explanation in exhibit A3, on 4-3-2016,on 6-4-2016 the complainant approached the second opposite party and filed a detailed complaint stating all the details that too became vain.
13.Thereafter the complainant approached the Insurance Ombudsman and on 19-7-2016 the Insurance ombudsman passed Exhibit A2 award directing the opposite parties to pay an amount of Rs. 15,000/-as Ex-Gratia within a period of one month from the date of the award. On perusal of A2 we can see that it was mentioned that the complainant had received a cheque for an amount of Rs. 17,617 along with the foreclosure letter .According to the complainant it was not correct . As such the complainant issued Exhibit A4 letter vide email on 8-8-2016 to Asst. Secretary, office of the Ombudsman objecting the award and also stating the errors committed by the Insurance company. On 28-12-2016 vide Exhibit A5 email the opposite party informed the complainant that they have treated the complaint as closed stating that the complainant had not complied with the award passed by the insurance Ombudsman.
14.On the other hand opposite parties contended that the opposite parties had already provided insurance cover on the life of the complainant and he had availed the insurance as well as considerable time period and by not availing free look period option the complainant has forfeited his right to demand refund of premium or any other relief. The complainant has paid only three premiums and all subsequent premiums were unpaid. All the premiums since 24-3-2013 were unpaid. The policy of the complainant got foreclosed as per clause 26 of the policy terms and conditions.
15.The Clause 26 of terms and conditions of the Policy runs thus :-
"26. Foreclosure of the Policy: If premiums have been paid for three full policy years and after three policy years have elapsed since inception, notice will be given to the policyholder well before the total fund value reaches 110% of one full year's premium. Thereafter if the fund value reaches or falls below 110% of one full year's premium, the policy will be foreclosed. The foreclosure Fund Value (Fund Value as on foreclosure date based on that day's NAV) can be claimed within the next five years as Health Savings Benefit subject to a maximum of 50% of the foreclosed fund value. The maximum aggregate benefit that can be claimed over the five years is limited to the foreclosed Fund Value. On death of the Primary Insured during this period, foreclosed Fund Value minus any Health Savings Benefit paid during the period will be payable to the nominee. The amount paid out on death of the Primary Insured may be taxable in the hands of the nominee as per the prevailing tax regulations at that time. No other benefits shall be payable."
16. From bare perusal of the Clause 26 of the terms and conditions of the insurance policy, it appears that if premiums have been paid for three full policy years and after three policy years have elapsed since inception, notice will be given to the policyholder well before the total fund value reaches 110% of one full year's premium. Admittedly, complainant had paid three installments towards the policy.
17.The policy is a legal contract between the Policy holder and Insurance Company and parties to the said contract are bound by its terms and conditions. The terms of a policy are in the nature of a contract and their interpretation has to be made in accordance with a strict construction of the contract. Thus, the words in an insurance contract must be given paramount importance and interpreted as expressed without any addition, deletion or substitution.
In M/s. BHS Industries Vs. Export Credit Guarantee Corp. & Anr. III (2015) CPJ 1 (SC), Hon'ble Supreme Court, has observed that :-
"9. At the outset, it may be stated that contracts of insurance are contracts of uberimafide and every material fact is required to be disclosed”. In United India Insurance Co. Ltd. v. M.K.J. Corpn., (1996) 6 SCC 428 a two Judge Bench has observed :-
"It is fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non- disclosure) what he privately know, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, 'similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured."
Regard being had to these principles, the authorities cited by the counsel for the respondents are to be seen.
In Polymer India (P) Ltd. and Another v. National Insurance Co. Ltd. and Others, (2005) 9 SCC 174, this Court has held thus :-
"19. In this connection, a reference may be made to a series of decisions of this Court wherein it has been held that it is the duty of the court to interpret the document of contract as was understood between the parties. In the case of General Assurance Society Ltd. v. Chandumull Jain, (1996) 3 SCR 500 : AIR 1966 SC 1644 it was observed as under :
"In interpreting documents relating to contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves."
Similarly, in the case of Oriental Insurance Co. Ltd. v.Samayanallur Primary Agricultural Coop. Bank, (1999) 8 SCC 543, it was observed as under :-
"The insurance policy has to be construed having reference only to the stipulations contained in it and no artificial far- fetched meaning could be given to the words appearing in it."
Therefore, the terms of the contract have to be construed strictly without altering the nature of the contract as it may affect the interest of the parties adversely."
In exhibit A5 we can see that it is stated that “with regard to your concern pertaining to notice before foreclosure of the above policy, we apologize for the inconvenience caused to you and we have noted and channelized your feedback to the concerned department to ensure that such lapses do not occur”. On a mere reading of this recital we can understand that the opposite parties has failed to issue notice before the foreclosure of policy to the complainant as envisaged in clause 26 of the policy terms and conditions.
17. Though the opposite party contended that complainant had approached them three times for fund transactions, they did not produce any evidence to substantiate this contention. Admittedly fund switch was done on 11-10-2011, 16-11-2011 and on 16-11-2012.More over in X1 statement of account it was stated that manual fore closure was done on 28-11-2013 and foreclosure reversal was done that day itself. It itself reveals the negligent manner in which the opposite parties managed the funds of the complainant after deducting charges for the fund management. This amounts to inadequacy and imperfection in the service rendered by the opposite parties to the complainant.
18. Admittedly Ombudsman vide order dated 19-7-2016 passed an award directing the opposite parties to pay an amount of Rs.15,000/- to the complainant as Ex-Gratia subject to the condition that the complainant shall furnish to the insurer a letter of acceptance of the award in full and final settlement of the claim as prescribed in Rule 16(5) of RPG Rules. It is further submitted by the opposite parties that vide letters dated 17-8-2016 and 13-10-2016 they duly informed the complainant that the requisite documents for the compliance of the award has not been received. However, they did not adduce any evidence to substantiate their contention.
The complainant pleaded for the revival of the policy. It is true that the complainant had paid premium and enjoyed the cover of insurance for the period for which he had paid the premium. Hon’ble NCDRC has held in Life insurance Corporation of India Vs Siba Prasad Dash (IV (2008)CPJ 156(NC) that “The premium is given by an insured, to cover the risk for a given period, and the insurer covers the risks for the period for which the premium has been paid. It is not the case of the complainant that the risk was not covered for the period for which the premium was given. If after the policy lapsed, under no provision of terms of policy or law, could any fora direct for refund of any premium for the simple reason, as stated, that the risk stood covered for the period for which premium had been paid”. Thus we are of the opinion that the prayer for the revival of the policy or refund of the premium amount cannot be allowed.
We all ready found that the opposite party has committed deficiency in service by foreclosing the policy without giving notice as envisaged in clause 26 of policy conditions and switching of the funds without the permission of the complainant. This caused some financial loss and hardship to the complainant. Considering the nature and circumstances of the case we are of the opinion that allowing a compensation for a tune of Rs. 30,000/- will meet the ends of justice.
In these circumstances we allow the complaint in part and pass the following order.
Opposite parties are directed to pay Rs. 30,000/- to the complainant as compensation for the deficiency in service on the part of the opposite parties.
Opposite parties directed to pay Rs.2000/- to the complainant as cost of this litigation.
Order shall be complied with within a period of 30 days from the date of receipt of Order. If not complied as directed, the award amount will carry 9% interest from the date of Order till realization.
Pronounced in the Open Commission on this the 10th day of February, 2021.
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 : Copy of insurance policy no.13646531 issued by ICIC Pru Health saver
A2 : Copy of award dtd.19-07-2016 passed by Insurance Ombudsman.
A3 : Copy of letter dtd.10-02-2016 issued by opposite party
A4 : Copy of letter issued by petitioner to Asst. Secretary, Office of the Ombudsman, Kochi.
A5 : Copy of e-mail dtd.29-12-2016 by opposite party.
Exhibits marked from the side of opposite parties
B1 : Copy of proposal form
B2 : Copy of policy certificate with terms and conditions
B3 : Copy of award dtd.19-07-2016 passed by Insurance Ombudsman.
B4 : Copy of letter
Court Ext.
X1 : Statement of account from ICICI Prudential life insurance
By Order
Senior Superintendent
