KERALA STATE CONSUMER DISPTUES REDRESSAL COMMISSION

VAZHUTHACADU THIRUVANANTHAPURAM

APPEAL NO.862/2012

JUDGMENT DTD : 29.07.2013

PRESENT

SMT.A.RADHA                         : MEMBER

SMT.SANTHAMMA THOMAS    : MEMBER

1.HDFC Standard Life Insurance

Company Ltd, II Floor,

Appus Tower, Near New Bus

Stand, Payyannur – 670 307       

                                                                     APPELANTS

2. HDFC Standard Life Insurance

Regd Office: Ramon House,

HT Parekh Marg, 169 Back Bay

Reclamation, 400020,

Mumbai, Maharashtra

(By Adv.Saji Issac K.J)

Vs.

Mariyumma.P.K.C   

W/o. Abdul Hameed Haji,                             RESPONDENT

Mariyam Villa, Cheruvathur,

Kasargod District – 671 312

(By Adv.M.M.Anto )

JUDGMENT

SMT.A.RADHA : MEMBER

                               The Opposite parties are the appellants herein preferred this appeal against the order in CC.No.304/2011 on the file of Consumer Disputes Redressal Forum, Kannur. While allowing the complaint the Forum Below directed the opposite parties to pay back Rs.1,50,000/- along with Rs.1000/- as cost of litigation.

                               2.      It is the case of the complainant that the complainant was a subscriber of Unit Linked Pension Scheme of opposite parties and an amount of Rs.50,000/- is to be paid annually. The complainant paid the first installment on 24.05.2008. The payments for the second and 3^rd year were delayed and revived the scheme by the complainant on 11.08.2009 and on 22.06.2010 respectively. After three years the complainant approached the first opposite party for surrendering the policy. By that time, it was informed that a substantial amount would be deducted in case of policy surrender. The opposite parties insisted to retain the policy. It is also stated in the complaint that no reason was stated for the reduction of the amount. The complainant issued a lawyer notice, which was not replied. The complaint is filed to return the deposited amount with 6% interest and also for compensation of Rs.15,000/- towards mental agony along with cost of proceedings.

                               3.      The opposite parties filed version contending that the Unit Linked Pension Scheme was issued to the complainant as per the terms and conditions. The contract of insurance is based on specific terms and conditions while enrolling the complainant under the Pension Scheme. The scheme extended the Life Insurance during that period. It is stated that the complainant had not given any request for surrendering the policy. It is specifically contended that when there is a request for surrendering the policy, the policy will be surrendered and the fund value will be returned to the policyholder according to the terms and conditions. The opposite parties determine the surrender charges with prior approval from the Insurance Regulatory and Development Authority. Further contention is that opposite parties are willing to pay refund of the policy amount after deducting the charges payable by the complainant. This was intimated directly to the complainant. The opposite parties are not liable to pay compensation on the ground of deficiency in service.

                               4.      The complainant was examined as PW1 and documents were marked as Exts. A1 to A9 and B1 & B2 on the side of opposite parties.

                               5.      It is the submission of the counsel for the appellant that the Unit Linked Pension Scheme is a time barred scheme for 10 years and the premium has to be paid annually. The complainant was a subscriber of the Unit Linked Pension Scheme and estimated Rs.50,000/- per annum. He delayed the payment of 2^nd and 3^rd installment and later on it was revived. He remitted Rs.1,50,000/- as premium for three years and wanted to surrender the policy. When he approached the appellant it was informed that a substantial portion of the amount would be reduced as surrender value. The respondent had not given any written submission for surrender of fund value. Ext.B2 is produced by the appellant informing the complainant that the policy had attained“ Paid Up Status ’’. It is informed that the fund value would be payable on a request for surrender in line with IRDA norms and regulations. The contract of insurance is based on terms and conditions of the policy and the parties are bound by the terms of the policy. According to the terms of policy, the policy will be participated in the investment performance of the funds of the HDFC Standard Life Insurance Company Limited chosen by the complainant to the extend of allocated units. The units are allocated based on the premium and after deducting the charges as applicable while issuing the policy documents. It is specifically mentioned that on receipt of policy document the option to return the policy is within the free look period of 15 days. The respondent had not exercised the option of returning the policy and as much deemed to be accepted the policy. On acceptance of the policy the respondent is bound by the terms and conditions of the policy. The counsel also argued that no request was made for surrender of policy. When there had request on the part of the complainant directly he was informed of the refund value, which will be refunded to the complainant as per the policy after deduction of surrender charge as specified in the schedule of charges. It is also pointed out that the surrender charges are determined by the appellant with prior approval of the IRDA schedule of charges. During the course of the policy in force the complainant herein also enjoyed the benefit of life insurance cover under the Unit Linked Pension Scheme. The respondent is not entitled to the premium paid without the payment of surrender charges. The appellants were ready and willing to refund the value of the policy after deducting the surrender charges. The respondent is not entitled to any relief claimed in the complaint. The Forum Below has not taken this into consideration. The finding of the Forum is against the policy terms and conditions. Hence the appellant is to be absolved from the liability to pay the amount ordered by the Forum Below and allowed to pay the surrender value.

                               6.      The respondent’s counsel opposed the arguments made by the appellants. It is admitted that the respondent is a subscriber of the Unit Linked Pension Scheme and paid Rs.50,000/- for three years. The first payment date was 30.05.2008 and the policy maturity date was 30.05.2018. Due to the financial problems the respondent had to discontinue from the scheme and the respondent approached the appellant to surrender the policy. It was informed by the appellant that they would return the money after deducting the surrender value. It is argued that the first appellant informed the complainant that the policy could be surrendered after attaining three years. The complainant paid the initial payment of Rs.50,000/- as on 27.05.2008 evidenced by Ext.A1. The policy was issued to the complainant on 31.07.2008. The first opposite party persuaded the respondent to join the scheme and informed the complainant that the policy can be closed at his will after three years. Matter being so, respondent approached the first opposite party to surrender the policy against which the appellants informed that she will get only surrender value after deducting the amount as per terms and conditions of the policy. The respondent issued a lawyer notice, which was not replied and hence had to file the complaint before the Forum Below. Though the respondent produced Ext.B2, it was not proved in evidence. The envelope produced along with Ext.B2 had the endorsement date                       ‘ returned door locked ’ which otherwise means the respondent was not aware of the details of the contents of Ext.B2. The policy was received only after 35 days and the first respondent was not aware about the details properly. It is also asserted that the first appellant assured that the respondent would receive the deposited amount after three years. At present the complainant has not remitted the amount as she had financial problems. The counsel for the respondent also submitted that the annual unit statement issued by the opposite parties shows that the fund value as on 29.05.2013 is 1,42,253/-. No where it is stated the amount that will be reduced by the opposite parties. It was on compulsion of the first opposite party that the respondent remitted 2^nd and 3^rd installment in order to revive the policy. As the complainant was not informed of the details of the policy and also giving wrong information about the Unit Linked Pension Scheme, the first opposite party committed unfair trade practice, which leads to deficiency in service and it, is to be compensated. It is also argued that the appellants have no authority to reduce amount deposited by the respondent complainant is also entitled for the interest accrued on the remitted amount. The appellants are in dictating terms imposing terms and conditions at their whims and fancies.

                               7.      We have heard both the counsels in detail and also gone through the records. Admittedly, the respondent joined the ‘ Unit Linked Pension Scheme’ on payment of annual installment of Rs.50,000/- commencing from 30.05.08. The policy has the coverage of Life Insurance and the tenure is for 10 years from the commencement date. In this case the respondent delayed his 2^nd  & 3^rd installments, which was revived. It was the pleading of the complainant that he was informed by the first opposite party that he is at liberty to surrender the paid up amount on attaining three years. Hence the respondent approached the appellant to get surrendered the amount which in turn offered the surrender value with a reduced amount. No condition was mentioned regarding the reduced amount on surrender. The terms and conditions are covered by the IRDA Regulation and the appellant is liable to pay the surrender value on a reduced amount. In this context, we have to point out that the policy details are not informed by the first opposite party to the respondent properly or the paid up fund value was not informed properly to the complainant on initiation of the policy. It is a grave dereliction on the part of first opposite party in not informing the policy terms and conditions to the respondent. As per the statement issued to the complainant on 29.05.2013 the fund value shown is Rs.1,42,253/-. We have to point out that the complainant already paid Rs.50,000/- each in three installments and was not informed the details properly. The appellants are liable to pay the deposited amount to the respondent. The Forum Below rightly observed and ordered to pay back  the amount deposited with the appellant. We find deficiency in service on the part of the appellant and we uphold the order passed by the Forum Below. In this case an amount of Rs.61,250/- deposited by the appellant in CC.No.304/2011 was already allowed to be withdrawn by the complainant. Hence we hereby order to pay the balance amount due to the respondent in compliance of the order passed by the Forum Below.

                               In the result, appeal is dismissed. No order as to costs. The order is to comply within 30 days on receipt of this order.

                                The office is directed to send a copy of the order to the Forum Below with LCR.

 A.RADHA                                : MEMBER

SANTHAMMA THOMAS    : MEMBER

Be/