BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

C.C. No. 117/2009 Filed on 27.05.2009

Dated : 15.03.2012

Complainant :

Satheesh Lal, S/o Bhaskaran Nair, 'Nandanam', Punnamoodu, Varkala, Thiruvananthapuram.

(By adv. Narayan. R)

Opposite parties:

1. HDFC Standard Life Insurance, A. Narayanan Shopping Complex, 2^nd Floor, Opposite Dhanya Theatre, Kadappakada, Kollam-691 008 represented by its Manager.

    

2. HDFC Standard Life Insurance Company Limited, Ramon House, H.T. Parekh Marg, 169, Blackbay Reclamation, Mumbai – 400 020, represented by its Managing Director.

(By adv. Saji Isaac)

This O.P having been heard on 03.02.2012, the Forum on 15.03.2012 delivered the following:

ORDER

SRI. G. SIVAPRASAD: PRESIDENT

The facts leading to filing of the complaint are that attracted by the representations made by the agent of the HDFC Standard Life Insurance Co. Ltd., complainant decided to join “Young Star Plan Policy”, that complainant availed the said policy vide policy No. 10627025, that the said policy was for 20 years commencing from 6^th June 2006, that the yearly premium was Rs. 80,000/- and the same to be paid in two half yearly installments of Rs. 40,000/- each, that complainant paid Rs. 40,000/- in June 2006, Rs. 40,000/- in December 2006, that after that based on mutual understanding the terms of payment was fixed as quarterly installments, that accordingly a sum of Rs. 20,000/- was paid in March 2007, another sum of Rs. 20,000/- in June, a third installment of Rs. 20,000/- in September and last installment of Rs. 20,000/- in December 2007, thus Rs. 80,000/- was paid by the complainant in 2007 and the same was accounted by the opposite parties, that two installments for March and June 2008 for Rs. 20,000/- each was also paid by the complainant, thereby a total of Rs. 2,00,000/- was remitted by the complainant towards the premium by June 2008, that the next installment for the policy fell due in September 2008, that opposite parties failed to issue the reminder letter, as is done usually, so the installment could be paid in November 2008 only, that however in early December 2008, complainant was served with a cheque by opposite party for Rs. 1,14,290.52 together with the cheque of the complainant sent dated 08.11.2008, that complainant presumes that the cheque was returned because the opposite parties have prematurely and unilaterally closed the policy, that complainant accepted the premature closure under protest, that thereafter complainant sent letter to the opposite parties seeking the logic of closing the policy unilaterally and opposite parties just refunding Rs. 1,14,290.52 as against the paid sum of Rs. 2,00,000/- and demanded the balance amount together with interest at the rate of 12% per annum, that to the said letter there was no reply by the opposite parties. The action of the opposite parties amounts to unfair trade practice and deficiency in service which has caused much tension and financial strain to the complainant. Hence this complaint to direct opposite parties to refund to the complainant Rs. 85,709.48 being the amount illegally retained by opposite parties with interest at the rate of 12% per annum and pay compensation and costs to the complainant.

Opposite parties filed version contending interalia that contract of insurance is based on the terms and conditions of the policy and according to the conditions of the policy complainant is liable to pay the premium amount on or before the date it falls due, that opposite party is not liable to issue reminder letters to the complainant, that according to provision 4(vi) of the policy if any premium due during the first 3 years from the date of commencement remains unpaid, 15 days after the due date the company may cancel the policy as described in provision 5 of the policy, that the date for payment of the premium of the policy of the complainant fell due on 06.09.2008 and complainant failed to remit the premium amount within the due date. Hence according to the conditions of the policy, the policy lapsed, that according to provision 5 (i) of the policy, in the event of the policy being cancelled as per provision 4(vi), the company shall then pay the value of the units, after deducting cancellation charges as described in the schedule of charges in the policy schedule. A cancelled policy will not be reinstated under any circumstances. Since the policy had lapsed, opposite parties sent a cheque to the complainant for an amount of Rs. 1,14,290.50 which was the policy fund value as on the date of lapse less the surrender charges and the service tax and educational cess. The said amount was arrived at based on the conditions of the policy. As admitted by the complainant the cheque dated 08.11.2008 was also returned to the complainant as the policy had already lapsed on 26.09.2008. The averment in para 5 of the complaint that complainant decided to accept the premature closure under protest is false and hence denied. The amount was accepted by the complainant and no letter was sent by the complainant to the opposite parties, that having accepted the amount in final settlement the complaint ought to be dismissed. There has been no deficiency in service on the part of opposite parties. Complainant is not entitled to any of the reliefs claimed. Hence opposite parties prayed for dismissal of the complaint with costs.

The points that arise for consideration are:-

1. Whether the complainant is entitled for refund of Rs. 85,709.48 with interest?

2. Whether there is deficiency in service on the part of opposite parties?

3. Whether the complainant is entitled to compensation and costs?

In support of the complaint, complainant has filed proof affidavit and has marked Exts. P1 to P5. In rebuttal, opposite party has not filed proof affidavit. Opposite party has marked one document as Ext. D1.

Points (i) to (iii):- Admittedly, complainant availed an insurance policy by name 'Young Star Plan Policy', floated by the opposite parties, vide policy No. 10627025 and policy was for 20 years from 06.06.2006. It has been the case of the complainant that the yearly premium was Rs. 80,000/- the same to be paid in two half yearly installments of Rs. 40,000/- each. Ext. P1 is the copy of the first page of the HDFC Unit Linked Young Star Plan dated 06.06.2006. As opposite party raised objection to marking the said document, it was marked subject to proof. As per Ext. P1 installment premium: Rs. 40,000/- payable half yearly from the date of commencement, term of the policy : 20 years. Ext. P2 and P3 are copies of the cheques dated 08.11.2008 and 17.11.2008 (marked subject to proof). Ext. P4 is the copy of the letter sent by the complainant to the opposite party claiming the balance amount. Ext. P5 is the copy of Renewal premium receipt dated 06.09.2008, marked subject to proof. Complainant has produced the original of Ext. P5 subsequently. As per Ext. P5 the renewal premium is Rs. 20,000/- and premium adjusted for the period 06.09.2008 to 06.12.2008, next premium due is on 06.12.2008. It has been contended by the complainant that he had paid an amount of Rs. 40,000/- in June 2006, and a sum of Rs. 40,000/- in December 2006, that in 2007, based on mutual understanding the terms of payment was fixed as quarterly installments and accordingly a sum of Rs. 20,000/- was paid in March 2007, another sum of Rs. 20,000/- in June, a third installment of Rs. 20,000/- in September and the last installment of Rs. 20,000/- in December 2007 and thus Rs. 80,000/- was paid in 2007. It has further been contended by the complainant that two installments for March and June 2008 for Rs. 20,000/- each was also paid by him and thus a total of Rs. 2,00,000/- was remitted by him towards premium by June 2008 and the same were accounted by the opposite parties. It has further been contended by the complainant that the next installment for the policy fell due in September 2008 but opposite party failed to issue reminder letter, so the installment could be paid in November 2008 only by way of cheque. But opposite party returned the said cheque together with a cheque for Rs. 1,14,290.52, thereby complainant presumed that the cheque was returned because the opposite parties have prematurely and unilaterally closed the policy. The very case of the complainant is that he had remitted Rs. 2,00,000/- towards policy premia, while the opposite parties have returned Rs. 1,14,290.52 only. According to complainant he is entitled to get Rs. 85,709.48 being the amount illegally retained by the opposite parties. Complainant has been cross examined as PW1 by the opposite party. In his cross examination, complainant admitted that he has not produced the full text of the policy before the court. On suggestion by the opposite party that policy was cancelled and money was refunded as per policy conditions 4(vi) & 5, PW1 has deposed that he got no information regarding the cancellation of the policy and the last cheque sent by him was returned by the opposite party. Complainant has produced the original of Ext. P5 renewal premium receipt dated 16.09.2008. On perusal of Ext. P5 it is seen that opposite party has acknowledged receipt of an amount of Rs. 20,000/- by Direct Debit towards renewal premium. It is seen stated further that “premium is adjusted for the period 06.09.2008 to 06.12.2008 and next premium due on 06.12.2008”. According to opposite parties, contract of insurance is based on terms and conditions of the policy and as per the conditions of the policy the complainant is liable to pay the premium amount on or before the date it falls due and that opposite party is not liable to issue reminder letters to the complainant. It has been contended by the opposite party that the date for payment of the premium of the policy of the complainant fell due on 06.09.2008 and the complainant failed to remit the premium amount within the due date and hence according to the conditions of the policy, the policy lapsed. Opposite party has produced the full text of the policy marked as Ext. D1. As per provision 4(vi), “if any premium due during the first three years from the date of commencement, remains unpaid 15 days after the due date we may cancel your policy as described in provision 5 of these provisions”. As per provision 5(1) “In the event of policy being cancelled as per provision 4(vi) all benefits will be cancelled, we shall then pay you the value of the units after deducting cancellation charges as described in the schedule of charges in the policy schedule. Cancelled policy will not be reinstated under any circumstances”. On going through the complaint, Exts. P1 to P5 and version & Ext.D1, it can be said that opposite parties never denied the payment of premium till June 2008. Complainant never furnished the entire premium receipts issued by the opposite parties except Ext. P5 renewal premium receipt. Complainant admitted that the next installment for the policy fell due in September 2008, but the said installment could be paid in November 2008 only by Ext. P2 which was challenged by the opposite party and marked subject to proof. Admittedly, thus, there was delay in payment of the third quarterly installment fell in 2008. Ext. P5 renewal premium receipt dated 06.09.2008 was issued by opposite party wherein is it stated that premium adjusted for the period 06.09.2008 to 06.12.2008 and next premium due on 06.12.2008. Thereby, there is contradiction between the statements of the complainant that installment could be paid in November 2008 only and that of the opposite party that premium adjusted for the period 06.09.2008 to 06.12.2008. At this juncture, it should be mentioned that even if there was delay in paying the premium from the side of the complainant, it would have ensured natural justice, if the insured was informed prior to cancellation of the policy. In this case opposite party had never informed the insured regarding the cancellation of the policy within 15 days after the due date, to the extent of which, we find there is deficiency in service from the side of opposite parties. Further it should be mentioned that policy in dispute is one of HDFC Unit Linked Young Star Plan Policy schedule which is market based one, fund management of which would entirely upon the market fluctuation, that the performance of the fund invested in the market would never be in the hands of the opposite parties. It should further be noted that such a policy provides a combination of risk cover and investment, and the dynamics of the capital market have a direct bearing on the performance of the unit linked policy. In such a policy the investment risk in investment portfolio is borne by the policy holder. Depending upon the performance of the unit linked funds chosen the policy holder may achieve gains or loss on his/her investment. In view of the above, we find the claim of the complainant that opposite party had refunded Rs. 1,14,290.52 only as against the paid sum of Rs. 2,00,000/- has no logic or relevance in view of the nature of the policy availed by the complainant. Further opposite party has not furnished the statement of account to show how they have arrived at Rs. 1,14,290.52 nor has opposite party issued a letter to the complainant within 15 days from the due date of the policy calling upon him to pay the premium amount on or before the end of 15 days, failing which the policy will remain cancelled. Both the complainant and the opposite parties are equally responsible for the said circumstances which led to cancellation of the policy. Had opposite party sent a reminder letter to complainant, before cancellation of the policy, complainant would not have raised such a contention that opposite parties failed to issue reminder letter, as is done usually, and so the installment amount would be paid in November only and policy would not remain cancelled due to non-payment of the said premium and complainant would not have lost such a huge amount as claimed in the complaint. Opposite party has not filed proof affidavit to substantiate their stand in the version. In view of the foregoing discussions and evidence available on records, we are of the considered opinion that it will be expedient and justice will be well met if complainant is granted a lumpsum amount of Rs. 25,000/- towards compensation arising out of deficiency in service from the side of opposite parties.

In the result, complaint is partly allowed. Opposite parties shall jointly and severally pay the complainant a sum of Rs. 25,000/- within two months from the date of receipt of this order. Parties shall bear and suffer their respective costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 15^th day of March 2012.

Sd/-

G. SIVAPRASAD : PRESIDENT

Sd/-

BEENAKUMARI. A : MEMBER

Sd/-

S.K. SREELA : MEMBER

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C.C. No. 117/2009

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - Satheesh Lal

II COMPLAINANT'S DOCUMENTS :

P1 - Copy of first page of HDFC Unit Linked Young Star Plan

dated 06.06.2006

P2 - Copy of cheque dated 08.11.2008

P3 - Copy of cheque dated 17.11.2008

P4 - Copy of letter sent by complainant to opposite party

P5 - Copy of renewal premium receipt dated 06.09.2008

III OPPOSITE PARTY'S WITNESS :

NIL

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Copy of HDFC Unit Linked Young Star Plan Policy Schedule

Sd/-

PRESIDENT

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