BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.180 of 2014

Date of Instt. 29.05.2014

Date of Decision :12.03.2015

Ishwinder Preet Singh, aged about 50 years son of SPS Sethi, R/o House No.60, Link Colony, Abadpura, Jalandhar.

..........Complainant

Versus

1. ICICI Prudential Life Insurance Company Limited, having its registered office at ICICI Prulife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025 through its CEO/MD/Principal Officer.

2. ICICI Prudential Life Insurance Company Limited, Jalandhar Branch, Jalandhar through its Branch Manager.

.........Opposite parties

Complaint Under Section 12 of Consumer Protection Act,1986.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.Anand Pandit Adv., counsel for complainant.

Sh.KS Minhas Adv., counsel for opposite parties.

Order

J.S Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, 1986, against the opposite parties on the averments that in the month of April 2010, the officials of opposite parties approached the complainant to take a health policy from the opposite parties company and the complainant got allured by the talks of the officials of opposite parties and on 8.4.2010, the complainant took a health policy product name ICIC Pru Health Saver bearing No.133042845 from the opposite parties. The main purpose of this product is that it is a unit linked health insurance plan which provides reimbursement against actual medical expenses alongwith a savings mechanism for other health care expenses. The complainant was required to pay Rs.25,000/- towards yearly premium to get the benefits of the policy. If the complainant wants to get the same extended then the complainant can continue paying the premium amount and can get it extended to get the benefits of the policy, as and when required. The insured only signed the requisite papers but all the columns were filled up by the opposite parties of their own in the absence of the insured and after getting the insured thoroughly medically examined from their own panel of doctors and on their medical opinion, the opposite parties filled the requisite columns of the forms and then issued the policy to the insured. The insured fulfilled all the terms and conditions which were required to be complied on his part for getting the insurance policy and after the satisfaction of the opposite parties, the policy bond was issued to the complainant. Afterwards, the opposite parties issued a policy bond bearing No.13042845 after fulfilling all the formalities as required for issuance of the policy to the insured and acknowledging the acceptance of the proposal form of the insured. The commencement of risk under the said policy started from 8.4.2010. It is worthwhile to mention that the complainant regularly paid the premium amount of the policy for the year 2010 to 2013. When the complainant went to the office of opposite party No.2 to deposit premium amount of the policy in question on 10.4.2014 which became due for payment on 8.4.2014, the complainant was informed that his policy has been foreclosed. The complainant asked for the reason as to why the policy of the complainant has been foreclosed without any prior notice and intimation to the complainant but the official of the opposite party No.2 did not tell anything about the same to the complainant and asked the complainant to visit the office the next day. The complainant again visited the office of opposite party No.2 for clarifying the matter as to why the policy of the complainant has been foreclosed but the official of opposite party No.2 did not pay any heed to the genuine request of the complainant and kept on lingering the matter on one pretext or the other for the reason best known to the opposite parties. The complainant requested the opposite parties for reinstatement of the policy of the complainant and the opposite parties intimated the complainant vide letter dated 22.4.2014 that the premium of the policy has been revised from 24,000/- to 42,000/- as per norms of the policy and the complainant is required to deposit the amount of Rs.42,000/- with the opposite parties and he is required to submit the documents as asked for, so that the policy of the complainant could be reinstated. As per the letter of the opposite parties the complainant deposited the total amount of Rs.42,000/-(renewed amount) with the opposite parties and also submitted the documents as asked for, for the reinstatement of the policy, but even after the deposit of the said amount, the policy of the complainant was not reinstated and the policy of the complainant still stand foreclosed. The opposite parties vide their letter dated 29.4.2014 took a somersault that though the complainant has complied with all the formalities but still the policy of the complainant will stand foreclosed due to past medical history. Such contradictory statements of the opposite parties clearly reflects that the complainant has been befooled and the opposite parties have intentionally and willfully with malafide intention conspired against the complainant and snatched the money from the hands of the complainant and did not do the needful to the complainant. As per the terms and conditions of the policy, if the policy of the insured is to be foreclosed, then the opposite parties are legally bound to give a prior notice and intimate the insured as to why the policy of the insured is to be foreclosed and the complainant is to be given an opportunity to give the reply to the same, but in the present matter, the opposite parties never issued any prior notice/intimation to the complainant at any point of time and straight away foreclosed the policy of the complainant, which act of the opposite parties is totally against the terms and conditions of the policy which has been issued to the complainant as such the foreclosing of the policy of the complainant is totally void and not sustainable in the eyes of law. Without prejudice to the above, as per the clause 8.5 of the policy, it has been stated that if the insured is having any pre-existing disease and if the policy in dispute has been continued by the insured for a period of two years then the said pre-existing disease would be covered under the policy. In the present matter, the complainant continuously and regularly paid the premium amount of the policy for the period of four years and even if the complainant had any pre-existing disease or past medical history even then the said disease of the complainant was legally entitled to be covered under the policy in question, but the opposite parties did not take into consideration all these facts and foreclose the policy of the complainant which is totally illegal and against the terms and conditions of the policy. The complainant got admitted in a hospital and after thorough checkup it was detected that the complainant is suffering from heart trouble and the complainant will have to undergo stunting for the same and with no other option left, the complainant got himself admitted in the Joshi Hospital, Jalandhar on 8.5.2014, and the stunting was done by the doctors there only. Due to foreclosure of the policy of the complainant illegally and against the terms and conditions of the policy which were agreed between the parties to the lis, the complainant has suffered financial loss, as the same could have been covered under the policy, if the same had not been foreclosed. The burden of treatment of the complainant fell upon the shoulders of the complainant only and if the policy had not been foreclosed illegally by the opposite parties, then the complainant would not have suffered this financial loss and the opposite parties were bound to pay the same on behalf of the complainant. The total amount paid by the complainant due to the illegal foreclosure of the policy is Rs.1,25,000/-. The opposite parties are also liable to reimburse the said amount to the complainant. On such like averments, the complainant has prayed for directing the opposite parties to reinstate the policy of the complainant from the date it was foreclosed and to reimburse the amount of Rs.1,25,000/- which he paid on his treatment after foreclosure of the policy by the opposite parties. The complainant has also claimed compensation and litigation expenses.

2. Upon notice opposite parties appeared and filed a written reply raising preliminary objections regarding jurisdiction, no deficiency of service, the complaint being false etc. They further pleaded that the policy document was duly dispatched to the complainant alongwith a copy of proposal form, details of which are given below:-

3. On the basis of information and declarations provided in the said application form, the premium and as per the underwriting rules/guidelines of the company the proposal was accepted by the company at standard rates and policy was issued. The said policy documents were dispatched to the complainant and the same were duly received by him as admitted in the complaint. The complainant retained the policy document and did not approach the company with any discrepancies regarding premium payment, benefits, foreclosure, surrender, maturity benefits and the policy terms and conditions, neither did he approach the company for cancellation of the policy during the Free Look Period thereby implying that he had agreed to all the terms and conditions of the policy. It is pertinent to mention that the said policy got foreclosed due to fund value falling below 110% of one full year premium. Opposite party company duly sent communication, informing about the same. Thereafter the complainant requested for reversal of the foreclosure. It is submitted that initially the request of the complainant was denied due to past medical history but after reconsideration the policy has been revived and at present inforce. The opposite party company had duly communicated the complainant about the same vide emails but still the complainant has approached this Forum. The complainant has other policies from the opposite party company i.e policy No.01529925, 04867974, 09500550 and 12534409. From this fact alone it is clear that the complainant is not averse to the terms and conditions associated with the policies. Insurance bearing a contract between the policy holder and the company and both are governed by the terms and conditions mentioned in the policy document and all the benefits are payable strictly as per the policy terms and conditions. They denied other material averments of the complainant.

3. In support of his complaint, learned counsel for the complainant has tendered affidavit Ex.CW1/A alongwith copies of documents Ex.C1 to Ex.C29 and evidence of the complainant closed by order.

4. On the other hand, learned counsel for opposite parties has tendered affidavit Ex.OP1/A alongwith copies of documents Ex.OP1 and Ex.OP2 and closed evidence.

5. We have carefully gone through the record and also heard the learned counsels for the parties.

6. It is not disputed that complainant has obtained medicalim insurance policy from the opposite party insurance company. In para 1 of the written reply on merits, the opposite parties have given a table showing risk commencement date 8.4.2010, premium frequency annual and paid to date i.e 8.4.2015. The premium amount is mentioned as Rs.25,000/- revised to Rs.42,000/-. The dispute between the parties is regarding foreclosure of the policy by the opposite parties without giving any notice to the complainant. In their written reply opposite parties have pleaded that the said policy got foreclosed due to fund value falling below 110% of one full year premium. In their written reply they have admitted that the policy has been revived and present is inforce. Now the question which fall for determination is, whether foreclosure of the policy by the opposite party insurance company was justified? Ex.C17 are policy documents. The terms and conditions are attached with it. Condition no.26 deals with foreclosure of the policy, it lays down as under:-

" 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 policy holder well before the total fund value reaches 110% of one full year's premium. Thereafter if the fund value reaches or fall below 110% of one full year's premium the policy will be foreclosed. The foreclosure fund value (fund value as on the foreclosure date based on that day's NAV) can be claimed within the next five years as Health Savings Benefit subject to a maximum limit 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 this 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".

7. So from the perusal of this condition of the policy, it is evident that if the premiums have been paid for three full policy years and after three policy years have elapsed since inception, notice will be given to the policy holder well before the total fund value reaches 110% of one full year's premium. Thereafter if the fund value reaches or fall below 110% of one full year's premium the policy will be foreclosed. The opposite party insurance company has not shown, if any notice was given to the complainant at any stage before foreclosing his policy. The opposite parties have not produced any notice which they might have sent to the complainant before foreclosing his policy. So in our opinion, the foreclosure of the policy of the complainant without giving any notice to him is in violation of the principle of natural justice and thus illegal. However, policy has been reinstated by opposite party insurance company and it present is inforce. While the policy was lying foreclosed, the complainant was hospitalized on 8.5.2014 due to heart problem and stunting was done by the doctors. Due to foreclosure of the policy, the complainant could not prefer his claim. The complainant has paid Rs.1,25,000/- to the hospital authorities. This fact is evidence from the final bill of the hospital Ex.C10 to Ex.C13. So the opposite party insurance company is liable to pay this amount to the complainant.

8. In view of above discussion, the present complaint is accepted and policy of the complainant shall be deemed to have been reinstated from the date of its foreclosure and further opposite parties shall pay Rs.1,25,000/- to the complainant alongwith 9% interest from the date of filing of the present complaint till the date of payment. It is clarified that interest amount is being granted by way of compensation to the complainant. The complainant is also awarded Rs.3000/- on account of litigation expenses. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Jaspal Singh Bhatia

12.03.2015 Member Member President