(2)

Adv.Ravi Susha, Member.

Complainant has been working in Soudi Arabia for 12 years. On 28.07.2000 the complainant has taken a policy of opposite parties 2 & 3 under the compulsion of first opposite party. The complainant had paid the 1^st premium directly and 2 to 4^th premium amounts from his NRI account with 4^th opposite party. After that on his return from gulf, he engaged first opposite party to give the complainant’s standing instruction to 4^th opposite party to remit the premium amount in time from his NRI account with the 4^th opposite party. But when the policy became matured and on giving application to 2^nd and 3^rd opposite party for getting the insurance amount he could gather that the policy became lapsed. Opposite parties first and 2^nd were not ready to give the policy amount or the amount which the complainant had paid as premium. Hence the complainant filed this complaint for getting the policy amount or the remitted amount and compensation from the opposite parties.

(3)

2^nd and 3^rd Opposite Parties

        According to Form No.TR 228 received from A.Thangal Kunju in the year 2002 along with the proposal for Policy No.782664324, he first left India in June 1994 for employment abroad and  he has been working abroad for 8 years at that time .S.Manoharan Pillai (agent code No.1424796) was the agent who introduced A.Thangal Kunju’s policy). Date of commencement of the policy No.782664324 was on 28.07.2002 and premium have been remitted up to 07/2004 ( that is on 07/07/2004). The first unpaid premium being 01/2005. That means a total number of 5 premiums were paid, on Thangal Kunju’s policy. Sum assured under the policy was Rs.50,000/- and the half yearly premium under the policy was Rs.5,358 (Rupees.Five thousand three hundred and fifty eight only). Giving a standing instructionor any other kind of instructions to the Bank for making periodical remittance is an arrangement between a bank and its account holder. It is the responsibility of the policy holder to make regular remittance of premium to keep his policy in force. Premium should be paid in the right time for keeping the policy alive. According to the policy conditions, policy will acquire

(4)

paid up value only after at least three full years premiums have been paid. The above policy has not acquired the paid value because three full years premiums have not been paid under the policy. In the instant case the premium is half yearly. The first five premiums were paid. The first unpaid premium was on 01/2005. Since it was half yearly premium, a grace period of 30 days is available to the life assured. But no premiums were paid thereafter and the policy was lapsed. Section 50 of the Insurance Act 1938 provides about notice of options available to the assured on lapsing of a policy. According to this section, issue of premium notice to the policy holder is not  mandatory, if the options available to the policy holders are set forth in the policy. In this case the 2^nd condition of the terms of the policy clearly states that a grace period of one month but not less that 30 days will be allowed for the payment of yearly, half yearly or quarterly premiums and 15 days for monthly premiums. If the premium is not paid before the expiry of the dates of grace, the policy lapses. Here since the minimum period of three years is not completed the policy has not acquired any paid up value and hence there is nothing left to be paid back.

(5)

4^th Opposite Party   

        States that the complainant has an NRI account with 4^th opposite party and it has regular transaction also. The 4^th opposite party did not get any letter or information regarding to remit the complainant’s premium account to 2^nd and 3^rd opposite party from  his NRI Account. Hence they are not liable to pay any amount to the complaint as compensation.

Points

        There is no dispute that the complainant had taken an insurance policy from opposite parties 2^nd and 3^rd  and the complainant has paid premium up to 07/2000 ie a total number of 5 premiums were paid. Here the questions to be considered are whether the complainant is entitled to get either the maturity value of the policy Rs.50,000 with interest or to refund Rs.26790 paid by the complainant with interest from the opposite party along with compensation from the opposite parties. The main dispute is between the complainant and opposite parties 2^nd and 3^rd.

(6)

According to the complainant, he had paid 5^th installment and due to the default from the side of opposite party 1, he could not remit the further installments to opposite parties 2 & 3. According to the opposite parties 2 & 3 as per policy conditions, policy will acquire paid up value only after at least three full years premiums have been paid. According to them giving a standing instruction or any other kind of instructions to the bank for making periods and remittance is an arrangement between a Bank and its account holders. It is the duty of the policy holder to pay the premium in right time for keeping the policy alive. In this case policy has not acquired the paid up value because as per policy conditions three full years premium has not been paid under the policy. Since the policy was half yearly premium, a grace period of 30 days is available. But the complainant has  not paid premium in the grace period. Hence the policy was lapsed. The next argument of the Leranred Counsel of the Complainant is that no notice was sent to the complainant intimating about the non-remittance of premium. The learned counsel for the opposite party argued that as per section 50 of the Insurance Act 1938 provides about notice of options available to the

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assured on lapsing of a policy. According to this section issue of premium notice to the policy holder is not mandatory. If the premium is not paid before the expiry of the dates of grace, the policy lapses. Opposite party’s counsel in relying a decision of Andhra Pradesh State Cosumer Disputes to support his Redressal Commission in F.A.No.665,2003 .  

        In the said decision the Hon’ble State Commission held that if there is grace period it is the duty of the policy holder to take steps to renew the policy within that period. Here the complainant did not take any steps for renewal of the policy within that period. So the policy became lapsed. Opposite party is not liable to pay any amount to the complainant. Complainant is not entitled to get any policy amount. The next point is that the complainant is claiming compensation from opposite party 1 and 4 because of the negligence committed by the 1^st and 4^th opposite party by not complying the standing instruction of the complainant. But the complainant could not prove his said contention with proper evidence. Exhbit P6 is not to prove

(8)

the veracity of the complainant’s case. By considering the entire evidence the complainant failed to prove his case.

        In the result, complaint is dismissed without cost.

                Dated this the 31^st   day of July 2010.

K.Vijayakumaran     :Sd/-

Adv.Ravi Susha        :Sd/-

R.Vijayakumar         :Sd/-

// Forwarded by Order //

    Senior Superintendent

Date of Filing: 15.12.08

Date of Order:31.07.2010

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INDEX

List of witness for complainant

PW1                               - Siddique

PW2                               - Thangal Kunju

List of documents for complainant

P1                                  - Power of Attorney

P2                                  - Copy of Proposal Form

P3                                  - Copy of Record submitted by the complainant

                                   through Ist opposite party

P4                                  - Policy bond

P5                                  - Letter

P6                                  - Reply Notice

P7                                  - Bank statement          

List of witness for opposite party

DW1                               - N.Chandrasekharan

List of documents for opposite parties

D1                                  - Proposal Form

D2                                  - Policy Certificate