PER DR.(MRS.) MADANJIT KAUR SAHOTA, MEMBER

                Adumbrated in brief, the facts necessary for the disposal of the instant complaint are that the father of the Complainant purchased one life insurance policy from the OPs and deposited the premium amount upto 30.6.2007, despite severe health constraints & financial crunch. Her contention was that due to continuing ill health, her father was ultimately, declared as 40% disabled on 7.8.2009, due to which he could not pay the premiums. Upon this, the Complainant approached the OPs to refund the amount, which they refused taking ground of lock-in-period. After the lock-in-period of 3 years, they again approached the OP, but there was no positive result. Thereafter, even serving of legal notice upon the OPs, did not yield any desired results. Hence this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice.

2]             Notice of the complaint was sent to OPs seeking their version of the case. OP No.3 did not turn up despite due service of notice, therefore, it was proceeded against ex-parte. 

3]             OPs No. 1 & 2, in their reply, while admitting the factual matrix of the case, pleaded that as per the terms and conditions, non-payment of premium is a serious breach of the contract which results in lapsation of the policy leading to termination of all benefits under the policy. The mere fact that the Complainant had failed to make the payment on time resulting in the lapsation of the policy, thereby making her ineligible to the withdrawal benefit. All other material contentions of the complaint were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint.

4]             Parties led evidence in support of their contentions.

5]             We have heard the learned counsel for the parties and have also perused the record.

6]             The main grouse of the complainant is that her father of purchased one life insurance policy from the OPs and deposited the premium amount upto 30.6.2007, despite severe health constraints. Thereafter due his  & financial crunch and thereafter due to his continuing ill health, her father was ultimately, declared as 40% disabled on 7.8.2009 and could not pay the premiums but when they  approached the OPs to refund the amount they did not. In support her contention, she has placed on record the copies of the notice dated 14.01.2010 now marked as Annexure C-1 and Annexure now marked C-2 dated 30.11.2009, sent by her to the OPs regarding refund of the amount of the claim in question.

7]             On the other hand the OPs contended that there is a serious breach of the contract which results in lapsation of the policy leading to termination of all benefits under the said policy, as the complainant had failed to make the payment on time, thereby making her ineligible to the withdrawal benefit. In support of their contentions the OPs have placed on record the copy of the proposal form of the said policy Annexure R-1. Annexure R-2 is the copy of the policy terms and conditions. Annexure R-3 (colly) dated 14.01.2010 and 30.11.2010 are the copies of the letter which was received by them from the complainant for cancellation of her policy and refund of the amount under the policy.  The OPs have referred to various clauses of the terms and conditions of the contract agreed between the parties which are reproduced as under:-

Clause 3.2 – Withdrawal Benefit

        Withdrawal benefits are allowed only if all premiums   have         been         paid for three full years and the policy has         been in     force for the         full Sum Assured for these         years. No   withdrawal of Units, full or partial      withdrawal shall be    allowed in the first three policy years.          The withdrawal benefit shall be the Unit    Value of the Valuation         Date         following receipt of    withdrawal request.

Clause 4.1 – Payment of Premiums

i)                     Premiums are payable on the due dates and at the rates     mentioned in the Policy at the time of commencement        of the     policy.  However, a grace period of not more       than 30 days,    where the mode of payment is other         than monthly, and not       more than 15 days in the    case of monthly mode is allowed.  If the a premium is     not paid during the days of grace, after full years`      premium have been paid and the policy has been in     force for the full Sum Assured for those three policy years, the benefits payable under the policy shall be as     indicated in clause 4.4.

Clause 4.4 –Keeping the policy Inforce

If the Policyholder fails to pay the Premiums on the due date, or within the grace period of 30 days where the mode of payment is other than monthly and within the grace period of 15 days where the mode of payment is monthly the Charges shall be recovered by the Company through cancellation of Units.  The Policy and the riders shall continue till such time as the Unit Value is sufficient to pay the remaining charges.  The Policy and riders shall be terminated immediately upon the Unit Value under the policy becoming insufficient to pay those charges.

This automatic continuation of the policy will not be applicable for policies wherein the full years premiums have not been paid.  Such policies can be revived by paying arrears of premiums only within 5 years of first unpaid premiums.

8]             All the Clauses mentioned above has gone unrebutted by the complainant, which proves that the complainant was well aware of the fact that, if they fail to make the payment of premium on time or discontinue to pay it, then it would result in lapsation of the policy thereby making them ineligible to the withdrawal benefit.

9]             Admittedly, the payment of premium of the policy in question was paid by the complainant till May, 2007 and was further discontinued since, 2007. Therefore, in our opinion, it is a clear breach of terms and conditions of the contract by the complainant, which was agreed at the time of taking the policy in question, therefore, the complainant was not entitled for any refund/withdrawal benefits asked by her vide Annexure R-3 (Colly) because as per the terms and conditions she was required to pay the premiums for three policy years to get the benefits under the policy, which admittedly she failed to pay.  The policy has lapsed only due to non receipt of the premium within the requisite period from the complainant. The withdrawal benefit was applicable only if the policy was in force, whereas in the present case both the conditions first making the payment of the premium on time and secondly keeping the policy in force were not fulfilled by the complainant, therefore, the OPs have rightly put the policy in a lapsed state with no benefit payable, keeping in mind the terms and conditions of the clauses mentioned above and for this act, we cannot hold the OPs liable for any deficiency in service or unfair trade practice on their part.  

10]            In view of the above discussion, we are of the considered opinion that the complainant has not been able to prove any deficiency in service or unfair trade practice on the part of the OPs.  There is no merit in the present case and the same is accordingly dismissed.   

                Certified copies of this order be sent to the parties free of charge.  The file be consigned.