BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 16/08/2010

Date of Order : 29/10/2011

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 455/2010

Between

And

O R D E R

Paul Gomez, Member.

1. The facts of the complaint are :-

The complainant joined a life insurance scheme which is styled as Kotak Flexi Plan II (regular) Policy. It was a scheme floated by the opposite parties. As per the terms and conditions, the policy holder need pay 3 annual instalments of Rs. 10,000/- for coverage of certain risks. She remitted the 1^st instalment on 07-02-2008 and the second one was due on 09-02-2009. But due to some domestic problems, she could not pay the second instalment in time. When the 2^nd opposite party was contacted, he allowed to revive the policy after obtaining permission from the 1^st opposite party. Accordingly, the 2^nd opposite party received second premium on 07-09-2009. To his surprise, when she approached the 2^nd opposite party with the 3^rd year premium, they refused to accept the same on the ground that the previous premium was not accepted by the system and hence the policy lapsed. Later, she was asked to undergo medical check-up before their panel doctor, the result of which turned out to be against her. Hence, they refused to receive the 3^rd year premium. The complainant is seeking various reliefs in the complaint.

2. The opposite parties filed version . The premium pay term opted was 10 years, payable yearly. The terms of the policy was also 10 years. It is agreed that he submitted duly filled form dated 07-09-2009 for revival of the lapsed policy. The complainant submitted medical authorization form dated 17-02-2010 authorising the doctor for medical examination. The medical finding was adverse to her, she was informed of the rejection of request for revival of the policy vide letter 10-03-2010. The second premium of Rs. 10,000/- was also refunded. It is emphasized that the third premium was not accepted, since the policy was in lapsed mode. The opposite parties have acted only according to the clause 4 of policy contract. The 1^st year premium of Rs. 10,000/- cannot be refunded because corresponding benefit has already been granted by providing coverage of the risk over the period of that year. Hence, they are of the view that there is no deficiency of service on their part.

3. No oral evidence for the complainant. Exts. A1 to A3 were marked on her side. The opposite parties too have no oral evidence. Exts. B1 to B5 were marked for them. Learned counsel appearing on either side were heard.

4. The following points emerge for consideration are :-

1. Whether the opposite parties are justified in refusing revival of the lapsed policy?

2. What are the reliefs, if any?

5. Point No. i. :- The complainant is a policy holder of the life insurance scheme conducted by the opposite parties which is known under the name of Kotak Felxi Plan II (Regular). There is no dispute with regard to all these aspects which is proved by Exts. A1 to A3. The real dispute is on the question of revival of the policy. It is admitted that the second annual payment was due on 09-02-2009. She could not honour her obligation due to some domestic engagements, but ultimately she paid the amount on 07-09-2009. The amount was received by the 2^nd opposite party with the permission of the 1^st opposite party. The question of revival crop up only when she approached the company for remittance of the third year premium on 05-02-2010. It is pertinent to note that along with payment of 2^nd instalment, she had submitted filled up form of revival of the lapsed policy. It is noted that the complainant had remitted the 2^nd premium only after lapse of seven months. It is common place that in any contract, parties are bound by terms and conditions of the agreement. Clause 4 of the terms and conditions deals with revival of lapsed policy. The first limb speaks of revival in case the insured has paid the premium within six months from the due date of the first unpaid premium. In such occasion, no evidence of health is necessary. Suppose the insured pays the premium beyond the period of six months from the due date, the insured has to prove his good health to the satisfaction of the insurer. This part of the clause seems applicable in the instant case. Therefore, the opposite parties are well within their legitimate authority to refuse revival when they were not satisfied with the findings in the medical examination. Hence, we are of the opinion that the complaint cannot demand revival as she has made her efforts for the same belatedly as explained above.

6. Now, the only question requiring settlement is as to whether the opposite parties can retain the 1^st premium even if the policy has lapsed. We do not think that the opposite parties are on the safe ground this time because, they have not pointed out any term in the terms and conditions to which they relied on vehemently for the purpose of getting over the request for revival, in support their act of forfeiting the 1^st premium. We do not hold the view that they could do so on the ground that they have provided coverage for the 1^st year. Whether they would have given coverage in the event of any eventuality is only a matter of speculation. Whereas the insured has derived no substantial benefit out of payment of the 1^st year premium of the broken policy and in the absence of any stipulation governing refund of the paid premium of lapsed policy, we think the insured is entitled for the refund of the paid premium with reasonable interest. Of course as agreed by the opposite parties, they shall return the second premium also by issuing fresh cheque in favour of the complainant. The opposite parties shall pay costs of proceedings also.

7. In short, the complaint is allowed as follows :

1. The opposite parties shall jointly and severally refund the 1^st year premium of Rs. 10,000/- (Rupees ten thousand only) along with interest @ 9% p.a. from the date of remittance till realisation.

2. The opposite parties shall jointly and severally refund the 2^nd year premium of Rs. 10,000/- (Rupees ten thousand only) along with interest @ 9% p.a. from the date of remittance till realisation.

3. The opposite parties shall jointly and severally pay Rs. 1,000/-(Rupees One thousand only) towards litigation costs.

The order shall be complied with, within a period of one month from the date of receipt of a copy of this order.

Pronounced in open Forum on this the 29^th day of October 2011.

Sd/- Paul Gomez, Member. Sd/- A. Rajesh,President. Sd/- C.K. Lekhamma, Member.

Forwarded/By Order,

Senior Superintendent.

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-

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