Punjab

StateCommission

FA/12/189

Swaranjit Kaur - Complainant(s)

Versus

ICICI Prudential Life Insurance Company Ltd. - Opp.Party(s)

Vivek Goyal

23 Feb 2015

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION, PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

 

First Appeal No.189 of 2012

 

                                                Date of Institution:   17.02.2012.

                                                Date of Decision:             23.02.2015.

 

1.      Swaranjit Kaur w/o Sarwan Singh @ Swaran Singh s/o Hans Singh r/o Kalyan Sukha Tehsil Nathana District Bathinda.

2.      Gurtej Singh S/o Swaran Singh

3.      Ritu Rani D/o Swaran Singh

4.      Shammi Rani D/o Swaran Singh

5.      Manpreet Kaur minor D/o Swaran Singh, minor through her     mother Swaranjit Kaur Guardian/Next friend of minor.

All residents of village Kalyan Sukha Tehsil Nathana, District Bathinda.

                                                     …..Appellants/complainants.

Versus

 

1.      ICICI Prudential Life Insurance Company Ltd. through its         Branch Manager, Railway Road, Bathinda Branch, Bathinda.

2.      Gurbhej Singh Agent/Advisor s/o Jaswant Singh r/o behind     Post Office Bhagta Road, Bajakhana, District Bathinda.

                                                     ….Respondents/opposite parties

 

First Appeal against order dated 08.12.2011 passed by the District Consumer Disputes Redressal Forum, Faridkot.

Quorum:-

 

     Shri J. S. Klar, Presiding Judicial Member.

             Shri Vinod Kumar Gupta, Member.     

 

Present:-

 

     For the appellants       :     Sh. Vivek Goyal, Advocate

For respondent No.1   :     Sh. K.S. Cheema, Advocate

For respondent No.2   :     None

     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                   The appellants (the complainants in the complaint) have directed this appeal against the respondents (the opposite parties in the complaint) assailing order dated 08.12.2011 passed by the District Consumer Disputes Redressal Forum Faridkot (in short, “the District Forum”), vide which, the complaint of the complainants was dismissed.

2.           The complainants have filed this complainant under under Section 12 of the Consumer Protection Act, 1986 (in short "Act") against the opposite parties on the averments that claimant no.5 is the minor daughter of the claimant no.1 and deceased Swaran Singh and has filed this complaint through the next friend her mother, who has no adverse interest against her. That late Swaran Singh, the predecessor in interest of the complainants, was made to sign some blank printed forms without explaining their nature by OP no.2, being agent of OP no.1 to take the policy. He deposited the first installment of Rs.25,000/- at Bajakhana, as premium of policy and deposited Rs.25,000/- on 07.12.2008. The policy called as Life Time Super and also called as Unit Link Plan with the combination of insurance-cum-investment. That late Swaran Singh could not deposit the third installment of Rs.25,000/- during his life time  and thereafter he expired. OP no.1 never intimated the deceased during his life time to deposit the third installment of premium. OP no.1 vide letter dated 16.03.2011 informed the complainant regarding the foreclosure of the policy and further intimated on December 7, 2010, that the value units of the policy was Rs.54822.03 paise, but OPs gave cheque of Rs.21,928.82 paise dated 15.03.2011 and withheld the remaining amount wrongfully. The complainants, being legal representatives of deceased have filed the complaint against the OPs directing them to refund the amount of Rs.50,000/- along with interest @18% p.a. w.e.f. 07.12.2006 till payment of actual amount besides Rs.50,000/- on account of deficiency in service and mental harassment and Rs.11,000/- as costs of litigation.
3.           Upon notice, OP no.1 appeared and filed the written reply and contested the complaint of the complainants. It averred that complaint is barred by time, the policy was issued on 12.12.2006 and complaint was filed on 18.05.2011 after 4 years and 5 months and hence, it is barred by time. The complaint is alleged to be false and frivolous. It was denied that there is any deficiency in service or negligence on the part of OP no.1. It was averred by OP no.1 that life assured Swaran Singh received the policy documents and vide clause 4.1 thereof, the premiums were payable without any obligation on the company to issue notice for the same.  That in case the policy holder failed to make the payment of the premium on due dates or during the days of grace, the policy would lapse and no benefit thereof his payable to policy holder or any person claiming through him. It was further pleaded that policy bearing no.03952023 was issued by OPs in the name of life assured commencing on 11.12.2006 with yearly frequency for paying premiums. That the life assured never approached the OPs or raised any objection for cancellation of policy during the free look period granted in this regard. The subject policy "life terms super" is a regular premium unit linked life insurance policy, which provides life insurance cover along with a choice of investments in the funds offered by the company. The premium paid by the policy holder is utilized to purchase the units in the funds after deducting applicable charges. The policy provides benefits linked to the fund performance payable in case of death or survival to maturity. The policy also provides for an option to surrender the policy during the term. It was further averred that Clause 9 of the policy is to this effect : "if the full premium for the first three policy years is not paid and the policy is not revived within the period of 2 years from the due date of the first unpaid premiums, then the surrender value, as described in clause 2.2 will be paid at the end of third policy year or at the end of the reinstatement period, whichever is later. The OPs further pleaded that since the life assured has not paid the third premium of Rs.25,000/- and as per Clause 2.2. of the contract of insurance, the surrender charges have to be applied in this case. That after applying the surrender charges as per the contract of the insurance and Clause 2.2, the remaining amount was remitted to the complainant.  OP no.1 has prayed for dismissal of the complaint of the complainants, as life assured failed to deposit the third installment of Rs.25,000/- as per the terms of the policy.  OP no.2 filed its separate written reply and it denied any concern with the case in hand. It vehemently denied that they never got the signatures of deceased Swaran Singh on blank printed forms. OP no.2 controverted the other averments of the complaint of the complainants.
4.           The complainants tendered in evidence, the affidavit of Swaranjit Kaur Ex.C-1 along with other documents Ex.C-2 to C-9 and closed the evidence. As against it, the OPs tendered in evidence affidavit of Gurbhej Singh Ex.R-1 along with documents Ex.R-2 to
   R-4 and closed the evidence thereafter. On conclusion of evidence and arguments, the District Forum dismissed the complaint of the complainants by virtue of order dated 08.12.2011. Dissatisfied with the order of District Forum, the complainants now appellants have preferred this appeal against the same.
5.           We have heard learned counsel for the parties, as none appeared for respondent no.2 and have also examined the record of the case. It is an undisputed fact in this case that Swaran Singh took the insurance policy from the OPs. The policy document Ex.R-2 is on the record. Life assured paid two premiums only and committed default in making the payment of third installment of premium in this case. The parties are strictly bound by the contract of insurance between them. The submissions of the complainants that the life assured was made to sign on blank documents by OP no.2, is without any substance in our opinion. Vide life time super policy document Ex.R-2, there is free look period of 15 days available to the policy holder to return it, in case he was not satisfied with it. No such option was exercised by the life assured to return the policy in the present under the free look period. Consequently, we do not find any substance in the contention of the complainants that the policy terms and conditions were not made known to the life assured. The parties are strictly governed by the contract of insurance Ex.R-2 on the record. Clause 9 of the policy document Ex.R-2 lays down as under:

          "if full premium for the first three policy years is not paid and   the policy is not revived within a period of two years       from the     due date of the first unpaid premium, then surrender value as       described in Clause 2.2 will be paid at the end of the third           policy year or at the end of the reinstatement period, whichever       is later. If premium has been paid for three full policy years and     after three policy years have elapsed; and the fund value          across all funds under the policy falls below 110% of one full       year's premium, the policy shall be terminated by paying the   fund value after applying surrender charges, if applicable        as     per clause 2.2."

 

Clause 2.2 of the contract of insurance Ex.R-2 is also reproduced as under:

          "the policy acquired a surrender value after the payment of full         premium for the first policy year. However, the surrender value would be payable only after completion of three policy years or        whenever the policy is surrendered thereafter. The surrender    value payable is the fund value after deducting the following           surrender charges.

1. Applicable surrender charges where three full years premiums have not

Complete policy years for which premiums have been paid	Surrender charges as a % of the Fund Value
Less than one year	100%
One year	75%
Two years	60%

In case, the premium payments are discontinued within the first three policy years, all benefits shall cease after the expiry of the days of grace for payment from the due date of the first unpaid premium.

2.  Applicable surrender charge where three full years' premiums have been paid

No. of completed policy years	Surrender charge as a % of Fund Value
3 years	2%
4 years	1%
5 years and above	0%

The surrender shall extinguish all the rights, benefits and interest under the policy."

6.           We, thus, find that since there is default of payment of third installment by the life assured, therefore Clause 9 of the contract of insurance regarding foreclosure of the policy has been attracted in this case. The applicable surrender charges, as set out in Clause 2.2, are applicable by applying the surrender charges. The OPs have remitted the remaining amount to the complainant by means of cheque. The complainants are dissatisfied with the same and wanted to return the face value amount thereof. We do not find any substance in the submissions of the complainants. The contract of insurance Ex.R-2 is binding on the parties. There is nothing on the record that this contract is vitiated by fraud or undue influence and hence is void. Affidavit of Swaranjit Kaur Ex.C-1 has been duly examined by us on the record. Ex.C-2 has also been considered by us, the copy of cheque is Ex.C-3, vide which, the amount of Rs.21,982/- after applying surrender charges, was remitted to the complainants by the OPs. Ex.C-4 is renewal premium receipt for deposit of Rs.25,000/-. Affidavit of Ranjit Singh Ex.C-7 has also been examined by us and Ex.C-8 is the life time super contract of insurance. Affidavit of Gurbhej Singh Ex.R-1 is on the record and he denied such concern in this case. He controverted the case of the complainant. Ex.R-2 is the contract of insurance between the parties, which is fundamental document in this case. The parties cannot escape the contract of insurance, since option of free look period was not exercised by the policy holder, hence there is no reason to hold that the complainants are not bound by the contract of insurance by any means. The OPs have correctly applied the surrender charges in this case, as per clause 2.2 of the contract of insurance, as the policy stood foreclosed under Clause 9 of the contract of insurance, due to default in making the premium by the life assured. After deducting the admissible surrender charges, the amount has been duly remitted to the complainants by the OPs. We find that the District Forum has correctly recorded the findings that the policy document was sent to Swaran Singh on 14.12.2006, vide Airway Bill Number EM06313206IN through blue dart courier and second installment of premium was deposited by the Swaran Singh. The complainants have not disputed the receipt of policy document Ex.R-2. We also rely upon the judgment of this Commission in this regard in case ICICI Prudential Life Insurance Company Ltd. & anr. Versus  Inderjit Kaur Mela, First appeal No.1321 of 2011 instituted on 02.09.2011 and decided on 04.08.2014 about it. The order of District Forum is, thus, sustainable in this appeal in our view.
7.           In view of our above discussions, we find no merit in this appeal and the same is hereby dismissed.
8.           Arguments in this appeal were heard on 18.02.2015 and the order was reserved. Now the order be communicated to the parties.        The appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                         PRESIDING JUDICIAL MEMBER

                       

                                                                   (VINOD KUMAR GUPTA)

                                                                              MEMBER

 

February 23, 2015.                                                             

(MM)