Chandigarh

DF-I

CC/690/2021

Avtar Singh - Complainant(s)

Versus

LIC of India Ltd. - Opp.Party(s)

In Person

24 Jul 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                    

Consumer Complaint No.	:	CC/690/2021
Date of Institution	:	11.10.2021
Date of Decision	:	24/7/2023

 

1.   Avtar Singh #5306 A, Sector 38 West Chandigarh.

 

… Complainants

V E R S U S

1. LIC of India Ltd. SCO 343-344, Sector 34-A, Chandigarh.
2. The Insurance Ombudsman, SCO 101-103, Batra Building, Sector 17-D, Chandigarh.  

.  … Opposite Parties

 

CORAM :	PAWANJIT SINGH	PRESIDENT
	SURJEET KAUR	MEMBER

                       

ARGUED BY		Complainant in person.
		None for OP No.1
		OP No.2 exparte.

 

Per SURJEET KAUR, Member

1. Briefly stated, the complainant purchased one policy Jeevan Saral Policy in the year 2012 from OP No.1 commencing from 28.7.2012. The maturity sum assured was Rs.91248/- and death sum assured was Rs.2,00,000/-. Due to personal reasons the complainant  surrendered the policy on 3.12.2020 and requested LIC to pay the amount of premium paid upto the date of surrender. It is alleged that the LIC transferred a sum of Rs.49,326/- only to the complainant in full and final settlement on 8.12.2021 whereas the updated premium amounting to Rs.81700/- was paid. The complainant represented the matter with the LIC but to no effect. Thereafter the complainant approached the OMBUDSMAN but it wrongly rejected the claim without giving any valid reasons. Alleging the aforesaid act of Opposite Parties deficiency in service and unfair trade practice on their part, this complaint has been filed
2. The Opposite Parties NO.1 in its reply while admitting the factual matrix of the case stated that  the complainant was duly informed regarding the loss in amount that he would suffer in case of surrender but he still insisted for surrender of the policy and gave the same in writing vide surrender letter dated 4.12.2020.  The surrender value as  the surrender value quotation was Rs.49326/- which was transferred to the complainant. The complainant himself vide letter dated 4.12.2020 insisted for surrender of the policy knowing fully the loss in case of withdrawal. It is averred that  the insurance policy is a legal contract between the parties and is governed by the terms and conditions approved by IRDAI. There is no promised whatsoever made to return the complete premium. It is averred that the amount under the policy cannot be refunded as no mortality charges, administrative expenses alongwith taxes to the government have already been paid by the answering OP. It is further averred that the complainant has utilized the policy in question and risk for death stood covered during the currency of the policy in question. Denying any deficiency on its part, all other allegations made in the complaint has been denied being wrong.
3. OP No.2 sent short reply through post wherein they stated that it is not the interested party in the case and its name be deleted from the list of OPs. However, since OP No.2 did not turn up to file evidence by way of affidavit therefore,  vide order dated 20.09.2022 it was proceeded against exparte.
4. Rejoinder was filed and averments made in the consumer complaint were reiterated
5. Contesting parties led evidence by way of affidavits and documents.
6. We have heard the complainant in person and gone through the record of the case.
7. The grouse of the complainant through the present complainant is that he paid updated premium of Rs.81700/-  but  when he surrendered the policy, he received only Rs.49326/- from OP No.1.  The allegations of the complainant is that the matter represented before the OMBUDSMAN  also but it wrongly rejected the same. Hence, the present complaint has been filed.
8. The stand taken by the OP No.1 is that it was the choice of the complainant to surrender the policy in question  and after due calculation as per term and conditions the surrender quotation value came to Rs.49326/-  and the same was transferred in the account of the complainant. Thus there is no deficiency on its part.
9. After going through the documents on record it is apparent that admittedly the complainant paid premium of Rs.81700/- towards the premium amount. Admittedly the complainant paid premiums towards the policy for 8 years.
10. We have gone through  Annexure R-2 placed on record by OP No.1  the insurance policy alongwith terms and conditions. Clause 7(a) of the terms and conditions of the policy is the relevant portion for the adjudication of the dispute, which is reproduced as under:-

“7 Surrender Value xxxxxxx

xxxxxx

xxxx

1. discounted value or accumulated value as the case may be  of the following:

80% of maturity sum Assured if less than 4 years premium have been paid, 90% of the maturity sum Assured, if 4  or more years but less than 5 years premium have been paid and 100% of the maturity sum assured, if 5 or more years premiums have been paid.
The maturity sum assured for this para will be maturity sum assured corresponding to the terms  for which premiums have been paid under the policy. If the premiums have been paid for a fraction of a year, the maturity sum assured shall be worked out way of at mathematical interpolation.

xxxx xx

xxxxx”

11. From the above extract it is clear that in case the policy is surrendered after paying premiums more than 5 years  in that eventuality the 100% maturity value is payable. Admittedly the complainant had paid premiums for 8 years and there is no document to show on record that the complainant had paid premium in fraction. Hence, the complainant was entitled for 100% maturity value.  As per policy document the sum assured was to the tune of Rs.91248/- whereas the OP No.1 only paid Rs.49326/- to the complainant, which is deficiency on their part.   
12.  In view of the forgoing the  we are of the view that the complaint has merit and the OP No.1 is indulged in unfair trade practice thereby caused harassment to the complainant. Thus the complaint is liable to be allowed.  
13.  In view of the above discussion, the present consumer complaint succeeds and the same is accordingly allowed. OP No.1 is directed as under:-

1. to pay Rs.41,922/- (Rs.91248/- minus Rs.49326/-(already paid))  to the complainant with interest @9% P.A. from the date of payment already made to the complainant till realization
2. to pay Rs.8000/- to the complainant as compensation for causing mental agony and harassment to him;
3. to pay Rs.7000/- to the complainant as costs of litigation.

 

14.      This order be complied with by the OP No.1 within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
15. Complaint against OP No.2 stands dismissed.  
16.      Certified copies of this order be sent to the parties free of charge. The file be consigned

			sd/- [Pawanjit Singh]
			President
			Sd/-
			[Surjeet Kaur] Member