BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 24/09/2011

Date of Order : 31/01/2013

Present :-

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 505/2011

Between

And

O R D E R

C.K. Lekhamma, Member.

1. The facts of the complainant are as follows :-

The complainant has joined an insurance policy with the 2^nd opposite party. Two annual instalments premium of Rs. 99,999/- each were remitted on 22-03-2007 and 21-04-2008 respectively. Unfortunately, the complainant could not remit the 3^rd premium due to his financial stringencies. Eventhough after the due date, the complainant approached the 2^nd opposite party to remit the premium, they declined to accept it. Thereafter, the complainant requested to return the remitted amount of Rs. 2 lakhs with interest, but the 2^nd opposite party returned only Rs. 94,805/- towards the full and final settlement of the policy on 18-01-2011. In these circumstances, the complainant approached this Forum for the following reliefs against the opposite parties :

1. To direct the opposite parties to refund the deposited amount with interest after deducting Rs. 94,805/- the amount paid by the 2^nd opposite party.

2. To pay compensation for mental agony and litigation costs to the complainant.

2. The version of the 1^st opposite party is as follows :-

The complaint is bad for mis-joinder of unnecessary party. The 1^st opposite party has no connection with the transaction alleged in the complaint. The 1^st opposite party had no occasion to enter into any dealings with the complainant. The 1^st opposite party did not know about the deposit of the premium by the complainant with the 2^nd opposite party. The 1^st opposite party never received any amount from the complainant. The complainant is not entitled to get any relief sought for in the complaint against the 1^st opposite party. The 1^st opposite party is entitled to get cost under Section 26 of the Consumer Protection Act.

3. The defense of the 2^nd opposite party is as follows :-

Contract of insurance is a contract based on the terms and conditions of the policy and the 2^nd opposite party is liable to compensate the complainant only according to its terms and conditions. The complainant had defaulted payment of the third instalment of premium. According to the terms and conditions of the policy, Rs. 94,804.95 which is the fund value of the policy as on the date on which the policy lapsed due to non-payment of the premium. The 2^nd opposite party invests the premium amount paid by the complainant in 100% share market based growth fund. After having taken the policy, the complainant further had an option to return the policy within a period of 15 days on receipt of the policy. The complainant has by his own action made the policy to lapse and cannot now claim that he is entitled to the profit. The complainant was paid the fund value as on the date of the lapse of the policy. There has been no deficiency in service on the part of the 2^nd opposite party.

4. The complainant was examined as PW1 and Exts. A1 to A4 were marked on his side. The 2^nd opposite party adduced only documentary evidence. Exts. B1 and B1 (a) were marked. Heard the respective counsel.

5. The points that arose for consideration are as follows :-

1. Whether the complainant is entitled to get the deposited amount after deducting the amount he received from the 2^nd opposite party?

2. Compensation and costs, if any?

6. Point Nos. i. and ii. :- The complainant contended that he is the policy holder of the 2^nd opposite party. The only allegation against the 1^st opposite party in the complaint is that under the influence of the 1^st opposite party, he has joined the scheme. The 1^st opposite party averred that they are an unnecessary party to the proceedings, since they have no business connection with the 2^nd opposite party. The 1^st opposite party is only a Housing Development Financial Institution granting housing loan. The 1^st and 2^nd opposite parties are entirely different institutions governed by different laws. The complainant did not adduce any evidence to prove the business link if any between the 1^st and 2^nd opposite parties . Therefore, we found that the 1^st opposite party is an unnecessary party to the proceedings.

7. The case of the complainant is that he remitted two annual instalment premium, but he could not remit the 3^rd instalment premium. After the due date, he approached the 2^nd opposite party to remit the same, but they did not accept the same. Eventhough, the complainant remitted Rs. 2 lakhs, the 2^nd opposite party returned Rs. 94,805.95 only.

8. The 2^nd opposite party averred that the complainant is entitled to get a sum of Rs. 94.804.95 as on the date on which the policy lapsed due to non-payment of the sub sequent year’s premium.

9. Firstly, the complainant dies not have a case that he has not received the terms and conditions of the policy from the 2^nd opposite party. And also not in dispute that the complainant paid two premiums. It is admitted by the complainant that as per the policy plan the premium has to be paid for a period of 3 years. Accordingly, the complainant paid two premium. On a perusal of Ext. B1 (a) proposal form, the complainant chose ’growth fund’ and the fund allocation is 100%. Exts. A1 and B1 are the policy terms and conditions. In which it is mentioned that after choosing the fund the premium will be used to allocate in the funds chosen by the applicant. Clause 5 (ii) (c) of the policy terms and conditions reads as follows :-

“If the lapsed policy is not revived, the utilised fund value, the Utilised Fund Value at the date of lapse less surrender charge as specified in the Schedule of Charges would be paid to the policy holder at th end of 2 years from the date of lapse or at the end of 3 years from inception whichever is later. Upon payment of the benefit, the policy terminates and no further benefits are payable. The Surrender Charge will be determined by us at our sole discretion from time to time with prior approval from the Insurance Regulatory and Development Authority, subject to the maximum as stated in the Schedule of charges.”

Secondly, the complainant received Ext. A1 on 10-07-2007. The first installment remitted on 22-03-2007. As per Ext. A1 a free look period of 15 days is stated which is as under :

“Option to return :

In case you are not agreeable to any of the provisions stated in the Policy and the details in the proposal form, you have the option of returning the policy to us stating the reasons thereof, within 15 days from the date of receipt of the Policy. On receipt of your letter along with the original Policy documents, we shall arrange to refund the Premium paid by you, adjusted for any decrease in the value of units allocated to your Policy, and subject to deduction of the proportionate risk Premium for the period on cover and stamp duty. A Policy once returned shall not be revived, reinstated or restored at any point of time and a new proposal will have to be made for a new policy”

The complainant has got every right to cancel the policy within the free look period. But the complainant opted to remain silent during the said period. Admittedly, the 2^nd opposite party paid Rs. 94,804.95 to the complainant as full and final settlement of the policy on 18-01-2011. For the forgoing reasons, we could not find any .deficiency in service on the part of the 2^nd opposite party. We are left with no option, but to reject the contention of the complainant. Ordered accordingly.

Pronounced in the open Forum on this the 31^st day of January 2013.

Forwarded/By Order, Sd/- C.K. Lekhamma, Member.

Sd/- Paul Gomez, Member.

Senior Superintendent.

A P P E N D I X

Complainant’s Exhibits :-

Opposite party’s Exhibits :-

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