FINAL ORDER/JUDGEMENT

Smt. SAHANA AHMED BASU, Member,

The case of the complainant in a nutshell is that , the complainant purchased a policy being Reg. Policy No. 02362449 , ID 54657545 on 05.09.2011 and premium of the said policy was Rs.3010 each  month and total amounting to [3010 x 36] Rs.1,08,360 was paid. The complainant was paying the policy amount without any lapse till 05.06.2015 and after that due to financial hardship and illness the complainant has stopped paying the premiums. The OP informed the complainant vide letter dated 27.01.2015 if the policy is not reinstatement within 6 months from the duedate the complainant will not entitle to get benefits. In reply the complainant requested the OP through letter dated 20.02.2015 to closethe policy and arrange to make payment of the amount paid by the complainant with accrued interest. Same request was made by the complainant on 30.11.2016, 25.01.2017 and17.04.2017 .  But till date the OP has not complied despite those letters including one legal notice . Having No other alternatives the complainant prays relief/reliefs before this Ld. Commission.

OP contested the case by filing written version assailing the maintainability of the case.  Denying all allegations against them the OP states that the case of the complainant is false , ambiguous and frivolous and not tenable in the eyes of law . The case of the OP is that , the complainant had applied for a policy plan namely ‘KotakAssuredIncomePlan’ by filing a Proposal Form dated 30.08.2011. Based on the said proposal the OP had issued an insurance policy bearing no. 02362449 alongwith Welcome Kit which includes Welcome Letter , First Premium Receipt , Copy of Proposal Form , Policy Terms and Conditions was issued by the OP in favour of the complainant .  The OP adhered with the Provisions of Section 6(2) of the IRDA regulation 2022, that every policy document sent by Company is accompanied by forwarding a letter . It has been clearly mentioned in the said letter that , in case the policy holder / Policy Proposer is not satisfied with the features / the terms and conditions of the policy then Policyholder / Proposer can withdraw / return the policy under Free Look Period provision . The complainant was also provided a copy of duly filled proposal form under provisions of Section 4(1) of the IRDA Regulation 2022 so that the complainant can once again check and confirm the information provided under the duly filled Proposal Form. The complainant had regularly paid 40 instalments of monthly premiums till 05.12.2014. The premium due in on 05.01.2015 was not paid by the complainant. The OP was in receipt of first  three year’s premium vide ECS mandate , since the complainant failed to deposit the further premiums under the subject policy thereafter as the ECS Mandate was cancelled on complainant’s request vide ECS Cancellation Form dated 26.12.2014 and the same was received by the branch officials of the OP on 20.01.205. The OP sent a letter dated 27.01.2015 to the complainant informing that due to non receiptof the said premiums complainant’s policy is now with in Reduced Paid Up mode from the aforesaid due date and for this reason the Basic Sum assured has been reduced to Rs.56,840.44/- and the Rider Benefits are not payable.  The complainant vide letter dated 19.02.2015 has accepted that she has paid the premiums upto year 2014 and due to her own financial conditions is unable to continue with the policy in question and requested for the refund of the deposited premium amount . Said letter was  duly replied by the OP vide letter dated 05.03.2015intimating that since the company has not received the premiums since 05.01.2015 the policy in question has turned into reduced paid up mode and the surrender value of the policy as on last business day was Rs.38,531.89/- . It is also informed to the complainant that if the complainant wishes to surrender the policy in question she/he can visit the Kotak Life Insurance Branch from where the policy was sourced and submit the documents mentioned in the said letter dated 05.03.2015. The OP has replied to all the letters and Legal Notices sent by or behalf of the complainant. If the complainant still desire to close the subject policy as per Surrender Clause, complainant is eligible to claim surrender Value as on date which may vary at the time of actual date of surrender. But the complainant has never opted for the same and has filed the present complain before this Hon’ble Forum. 

We have travelled over the complaint petition as well as the documents filed by the complainant in support of their contention together with the written version submitted by the OP in their support. Both the parties filed evidences supported by an affidavit and they have replied to their questionnaire vice versa.

Admitted fact is that the complainant had purchased a policy namely Kotak assured Income Plan bearing No. 02362449 on 05.09.2011 and had regularly paid instalments of monthly premium of Rs.3057/- amounting to 1,10,052/- till 05.12.2014 . Fact remains that the complainant has stopped paying the premiums from 05.01.2015 and requested the OP to close the said policy arrange to make payment of the amount paid by the complainant with accrued interest by a letter dated 20.02.2015. Ld. Advocate for the complainant argued that several correspondence was made with the OP vide letter dated 30.11.2016. , 25.01.2017, 07.03.2017. , 10.03.2017. ,17.04.2017. , 25.04.2017. and 09.11.2017. in this regard . On perusal of the materials on record it is found that the OP intimated the complainant vide letter dated 27.01.2015 that due to non receipt of premium for policy no. 02362449 the said policy is converted into Reduced Paid Up  mode and the basic Sum assured has been reduced from Rs.3,40,909/- to 56,840.44/- and Rider benefits also ceased . Clause 5 of the said policy states that :

After the premiums have been paid for at least three consecutive years and after completion of three years from the date of commencement of the policy , if the policy holder stops paying premiums ( and the respective grace period has elapsed ) the policy would be converted into a reduced paid-up policy by default.

Ld. Advocate for the OP submitted that it was also apprised to the complainant vide reply dated 10.03.2017 that if the complainant wanted to close the subject policy as per Surrender Clause , the complainant is eligible to claim  the Surrender Value as on that date which may vary at the time of actual date of surrender . Clause 2 of the terms & conditions of the said policy states that:

The policy acquires surrender value after completion of three policy years and if three years’ are paid in full. The benefit will be higher of Guaranteed Surrender Value or Special Surrender Value . The Guaranteed Surrender Value will be 30% of all basic premiums paid less first year premium and Assured Annual Income already paid . The Company may consider paying a Special Surrender Value which will not be less than the Guaranteed Surrender Value but is subject to maximum of Basic Sum Assured and the same will be quoted in writing by the Company , on receipt of a written request from the policyholder.

Ld. Advocate for the complainant argued that OP has replied to all letters and legal notices dated 25.01.2017, 17.04.2017 and 09.11.201 sent by and on behalf of the complainant stating that the said policy as per the Clause 5 of the policy is in Reduced Paid Up Mode and as per Reduced Paid Up option , due to non-receipt of premiums the said policy is  converted to Reduced Paid Up Policy, which means Sum Assured of the Policy is reduced to Rs.56,840/- . If the complainant still desire to close the subject policy as per Surrender Clause , Complainant is eligible to claim the Surrender Value of  as on date which may vary at the time of actual date of surrender , but the complainant never opted for the same .

The Complainant has furnished a photocopy of a letter dated 21.09.2021 issued by the OP to the complainant wherein the OP informed the complainant that :

We wish to inform you that your policy is eligible for surrender . The surrender value for your policy as on 21/09/2021 is Rs.56471.11/- . The value payable to you shall be re-calculated on the date of receipt of surrender request .

In view of the above discussion it is observed that every time the OP reciprocate to the complainant and tried to resolve the dispute within terms and conditions of the said policy. Therefore no negligence in service is found on the part of the OP . Due to financial hardship and illness the complainant had  compelled to stop paying premiums after three years and requested the OP to close the said policy and to refund the amount paid by the complainant. In this regard we may refer the case of Life Insurance Corpn. Of India and OrsVs. Siba Prasad Dash (Dr.) and Ors. IV(2008)CPJ156(NC) where the Hon’ble  National Commission held that :

“The premium is given by an insured , to cover the risk for a given period, and the insurer covers the risk 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 that 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 already stated , that the risk stood covered for the period for which premium had been paid .”

In view of the above fact we are of the opinion that neither any  negligence and deficiency nor unfair trade practice on the part of the OP authority is found by us. The complainant is entitled to get the Surrender Value of Rs.56,471.11/- as mentioned in the letter dated 21.09.2021 issued by the OP to the complainant.

As such the prayer of the complainant is allowed in part for the ends of justice.

Based on the discussion above, we disposed of the consumer case in the following terms:-

1.         OP is directed to make payment of Rs56,471.11/-to the complainant

2.         Above payments shall be made within 30 days from the date of this order.

Consumer case is thus allowed in part on contest against the OP without any cost as per above observation.

Liberty be given to the complainant to put the order into execution if the O.Ps transgress to comply the order.

Copy of the judgement be supplied to the parties as per regulation. Judgement be uploaded on the website of this Commission forthwith for perusal of the parties.