Date of Filing: 19-01-2018
Date of Order:28 -10-2019
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM – I, HYDERABAD
P r e s e n t
HON’BLE Sri P.VIJENDER, B.Sc. L.L.B. PRESIDENT
HON’BLE Smt. D.NIRMALA, B.Com., LLB., MEMBER
Monday, the 28th day of October, 2019
C.C.No.45 /2018
Between
Sri S.Babu Rao, S/o.Mahadev,
Aged about 50 years, Occ: Service
R/o.H.No.2-4-638/1, Sunder Nagar,
Kachiguda, Hyderabad -27 ……Complainant
And
- India First Life Insurance Company Ltd.,
Road No.2, Banjara Hills,
Hyderabad – 500033
Rep. by its Branch Manager
- India First Life Insurance Company Ltd.,
Registered office, 301 B Wing, The Qube
Infinity Park Dindoshi – Film City Road,
Malad (East) Mumbai 400 097,
Rep. by its Managing Director /CEO ….Opposite Parties
Counsel for the complainant : Mr.M.Ramgopal Reddy
Counsel for the opposite Parties : Ms. Yasasvi. P (8660)
O R D E R
(By Sri P. Vijender, B.Sc., LL.B., President on behalf of the bench)
This complaint has been preferred under Section 12 of C.P. Act 1986 alleging that refusal to pay the policy amount with interest by the opposite parties amounts to unfair trade practice & deficiency of service hence a direction either to reinstate the policy or to pay policy amount with interest at 24% P.A from the date of receipt of the premium to the date of payment and to award compensation of Rs.1,00,000/- for causing mental agony to the complainant and a further sum of Rs.10,000/- towards cost of this complaint.
- Complaint averments in brief are that opposite party No.2 is company engaged in the business of Insurance policies and opposite party No.1 is branch office of it at Hyderabad. The complainant obtained insurance policy known as India First Maha Jeevan Plan policy in bearing No.10399913 for a period of 15 years for the period from 23-09-2013 to 23-9-2028 and annual premium payable is Rs.15,061/-. The said policy was obtained by the complainant through the authorized agent of the opposite parties namely Mr.Shiva Chinta who approached the complainant on 15-09-2013 and explained benefits of the policy and collected his signature on the proposal form for forwarding the same to opposite parties. The 1st premium of Rs.15,500/- was paid by way of a cash and collected receipts, the 2nd and 3rd premiums were paid by way of a cheques . Thus complainant paid three premiums amounting to Rs.45,567/-
While the matter’s stood thus all of sudden opposite parties informed complainant on 27-5-2016 that they declined the policy on the ground of complainant’s medical history which was made available by the complainant containing declaration of his good health and medical test. The action of the opposite parties declining the policy is contrary to the rules and regulations under clause 9 of the policy document. The opposite parties have no right to decline the policy without prior notice more particularly when the policy purchased by the complainant is not a medical policy and a life insurance policy. Opposite parties abruptly refused to issue reinstatement of policy and non issuance of the same is illegal, injustice and arbitrary amounts to unfair trade practice.
The complainant visited the opposite parties number of times with requests to reinstate the policy but there was no response. Hence got issued a legal notice to opposite parties calling upon them to reinstate the policy or else to pay the policy amount of Rs.3,70,000/- with interest at 24% P.a from the date of collecting the premium i.e, 13-09-2013 to the date of payment failing which he will be constrained to initiate the proceedings. But a reply was issued on 15-7-2016 denying the complainant’s claim either for reinstate the policy or payment of the policy amount. This action of the opposite parties amounts to deficiency of service. Hence the present complaint for the reliefs stated above.
- A common written version has been filed for the opposite parties denying the complainant’s allegations either unfair trade practice or deficiency of service on their part.
The stand of the opposite parties is the subject policy was issued to the complainant on 23-09-2013 on payment of 1st premium. The due date for the payment of second premium was 23-09-2014 but same was not paid on due date even after issuing several reminders then policy was got lapsed. In December 2014 complainant paid renewal premium with short age of Rs.170/- which was born by the company and to reinstate the policy. The complainant was in the habit of getting the policy revived instead of paying the premiums on due date. The due date for payment of 3rd premium for subject policy was 23-09-2015 and same was not paid by the complainant even in the grace period of 30 days. Hence the policy lapsed with effect from 23-10-2015. Thereafter he was willing to revive the policy in the year 2016 by paying due premiums with other relevant documents as required by the company.
The complainant submitted the documents and on a perusal of the same revealed that complainant has undergone percutaneous transluminal coronary angioplasty for unstable angina and single vessel disease in February 2011 which is prior to Declaration of good health submitted by the complainant on 6-5-2016 and the proposal date as well. Hence the opposite parties declined to revive the policy and intimated the same to the complainant by a letter dated 27-05-2016 and same was acknowledged by the complainant. The complainant paid Rs.15,005/- for reinstatement of the policy in 2016 and same was refunded after deduction of Rs.170/- which was short fall of reinstated the policy effected in 2014. The remaining premium amount of Rs.14,835/- was credited to the account of the complainant on 29-6-2016 and same was received by him and as a result of the liabilities of the company have been absolved.
The revival of the insurance policy is pure discretion of the company and assured cannot seek revival of lapsed policy as a matter of right. Revival cannot automatically follow after fulfillment of policy conditions. The revival operates as new contract and mere acceptance of premium by the company does not automatically ipso facto render the policy revived in absence of acceptance of revival to insured. Thus the rejection of the company to reinstate the policy is as per the settled provisions of law and complainant cannot claim benefits under the subject policy. Clause 4 of the terms and conditions of subject policy reinstatement can be done on fulfillment of requirements as raised by the company along with payment of all due premiums. In the case of the complainant the company required complainant’s medical documents which were submitted by him and on examination of the same revealed that the complainant suppressed factum of his health, hence request to reinstate the policy was rejected.
Originally the policy was issued the complainant basing on the proposal form duly filled and signed by the complainant on his life. Believing the details furnished by the complainant in the proposal form subject policy was issued to him on 23-09-2013. In fact the company had sent copy of the proposal form duly signed by him along with policy documents and he has an opportunity to view the contents of the same. The policy document contains a clause about the free look provision for cancelling the policy in a period of 15 days time if he is not agreeable for terms and conditions mentioned therein. The complainant was in the habit of delaying the payment of premiums despite service of notices demanding to pay the same. As such neither there is deficiency of service nor unfair trade practice on the part of the opposite parties. Hence the complainant is not entitled any reliefs prayed for in the complaint and same is liable to be dismissed.
In the enquiry the complainant got filed his evidence affidavit reiterating the material facts of the complaint and to support the same got exhibited Eight (8) documents. Similarly for the Opposite Parties evidence affidavit of one Mr. K.R.Viswanarayan stated to be Governance& Company Secretary from authorized representative of opposite party No.2 company is got filed and the substance of the same is in line with the stand taken in the written version. Eleven (11) documents are exhibited for the opposite parties. Both sides have filed written arguments.
On a consideration of material brought on record by both sides the following points have emerged for consideration.
- Whether the complainant could make out a case of either unfair trade practice or deficiency of service on the part of the opposite parties ?
- Whether the complainant is entitled for the amounts claimed in the complaint?
- To what relief?
Point No.1: Issuance of the Insurance Policy known as India First Maha Jeevan Plan to the complainant through an agent of the opposite parties in pursuance of the proposal form duly filled and signed by the complainant and collecting the 1st premium are not in dispute. The subject policy was issued for the period covering from 23-09-2013 to 23-09-2028 for 15 years of period to the complainant. The opposite parties specifically stated in the written version as well as in the evidence affidavit filed on their behalf that the complainant has not paid the 2nd and 3rd premiums by due date time though he was reminded by way of letters. The due date of 2nd premium was on 23-09-2014 and as he has not paid on the due date the policy was lapsed. Only in the month of December 2014 he paid the renewal premium which was short of Rs.170/- and the company accepted the same and reinstated the policy. The due date for the payment of the 3rd premium was 23-09-2015 and accordingly the complainant has not paid the same as a result the policy underwent lapsed mode with effect from 23-10-2015 and only in the year 2016 the complainant has come with a request to reinstate the policy by receiving the premium amount. This specific stand of the opposite parties has not been denied by the complainant in the evidence affidavit which was filed after fling of the written version by the opposite parties. Hence it amounts to admission of the opposite party version that 2nd and 3rd premiums were paid by the complainant after policy was lapsed.
The opposite parties has specifically mentioned in the written version as well as evidence affidavit that the complainant came up in the year 2016 for reviving the policy after collecting premium amount was required to submit the documents which includes his medical record relating to his health condition and complainant submitted the same. After going through the medical record of the complainant the opposite party refused to revive the policy. This version of opposite party also denied by the complainant. The opposite party has filed the medical record of the complainant under Ex.B8 issued from Department of Cardiology at Kamineni Hospital and it reveals that complainant was admitted with CAD-Unstable Angina in the said hospital on 8-2-2011 and was treated. After stabilization CAG was performed which revealed single vessel disease. Hence PTCA + Stenting was performed to LAD basing on this medical report and health condition of the complainant the opposite parties refused to revive the policy. The complainant has also not denied his medical history as presented by the opposite parties in Ex.B8.
Now it is to be seen whether a mere payment of the lapsed premium amount is sufficient for revival of the policy of an insured. Clause 4 of the said policy says reinstatement can be done on fulfillment of reinstatement requirements as raised by insurer along with payment of all due premiums along with interest as decided by the insurer. It further says that the insured will need to submit a declaration of health and he may also required to undergo medical examination at his own cost. The insurer may revive the policy at its discretion subject to satisfactory medical and financial under writing of the insured. The case law on this aspect as submitted by learned council for the opposite parties is as under:
Hon’ble National Commission in N.Raja Reddy Vs.Branch Manager of LIC of India and others in RP.No.3900 of 2013
Sheela Devi Vs. Life Insurance Corporation of India and others in R.P.No.4179 of 2012
Asha Garg & ors Vs.Life Insurance Corporation of India R.P.No.1423 of 2006
The Hon’ble National Commission in the above cases held that revival of lapsed insurance policy was not a matter of right and it would not automatically follow even after fulfillment of conditions laid down in the policy. The revival operates as a new contract and the rights and liabilities begin to run until new terms and conditions are accepted and complied with. Mere receipts of the premium by insurer do not ipso facto render the policy revived in the absence of acceptance of revival to insured by the company. Same is also law laid down by the Apex Court in the case of LIC of India Vs Raja Vasireddy Kamalavally Kamba & Ors reported in AIR 1984 SC 1014. In the light of this settled legal position the complainant cannot allege refusal to reinstate the lapsed policy by the opposite parties amounts to unfair trade practice or deficiency of service. Hence the point is answered against the complainant.
Point No.2: In view of the findings of this Forum to point No.1 the complainant could not make out a case of either unfair trade practice or deficiency of service he is not entitled for any amounts claimed in the complaint.
Point No.3: In the result, the complaint is dismissed. No order as to costs.
Dictated to steno, transcribed and typed by her, pronounced by us on this the 28th day of October , 2019.
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Exs. filed on behalf of the Complainant:
Ex.A1- proposal letter dated 26-09-2013
Ex.A2- first premium receipt
Ex.A3- policy schedule terms and conditions
Ex.A4- receipt dated 8-09-2013
Ex.A5- Bank statement
Ex.A6-request for reinstatement dated 27-05-2016
Ex.A7- legal notice postal receipt & Ack dated 22-6-2016
Ex.A8- reply notice dated 15-7-2016
Exs. filed on behalf of the Opposite parties
Ex.B1- copy of the proposal form
Ex.B2- first premium receipt
Ex.B3- copy of policy schedule
Ex.B4- copy of letter dated 26-09-2013
Ex.B5- copy of letters dated 25-08-2014, 08-10-2014 & 27-10-2014
Ex.B6- copy of letters in various dates
Ex.B7- copy of letter dated 6-5-2016
Ex.B8- copy of medical documents submitted by the complainant dt.6-5-2016
Ex.B9- copy of letter dt.27-05-2016
Ex.B10- copy of legal notice dated 22-6-2016
Ex.B11 – copy of reply notice dated 15-7-2016
MEMBER PRESIDENT
