Karnataka

Mysore

CC/1334/2016

G.Saravanan - Complainant(s)

Versus

Max Life Insurance Co.Ltd. and another - Opp.Party(s)

M.Gopinath

16 Mar 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM MYSURU
No.1542 F, Anikethana Road, C and D Block, J.C.S.T. Layout, Kuvempunagara,
Kuvempunagara, (Behind Jagadamba Petrol Bunk), Mysuru-570023
 
Complaint Case No. CC/1334/2016
 
1. G.Saravanan
G.Saravanan, S/o M.Gurusamy, No.364, 6th Cross, Kamakshi Hospital Road, Kuvempunagar, Mysuru-570009.
...........Complainant(s)
Versus
1. Max Life Insurance Co.Ltd. and another
1. The Manager, Max Life Insurance Co.Ltd., 11th Floor, DLF Square, Jacaranda Marg, DLF Phase II, Gurgaon-122002.
2. The Manager
2. The Manager, Max Life Insurance Co.Ltd., No.1198, Bhyrava Complex, K.G.Koppal, Chamarajapuram under Bridge, Mysuru-570005.
............Opp.Party(s)
 
BEFORE: 
 HON'BLE MR. M S RAMACHANDRA PRESIDING MEMBER
 HON'BLE MR. Y S THAMMANNA MEMBER
 
For the Complainant:
For the Opp. Party:
Dated : 16 Mar 2018
Final Order / Judgement

BEFORE THE ADDITIONAL BENCH DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT

MYSURU.

Consumer Complaint (C.C.)No. 1334/2016

Complaint filed on 18.07.2016

Date of Judgement.16.03.2018

 

PRESENT                      :         1. Shri Ramachandra  M.S.,  B.A., LL.B.,

                                                   PRESIDENT

 

2. Shri  Thammanna,Y.S., B.Sc., LL.B., 

                                          MEMBER

 

 

 

 

Complainant/s       :             Sri. G.Saravanan

                                                S/o  M.Gurusamy

                                                Aged about 47 years,

                                                No. 364, 6th Cross,

Kamakashi Hospital Road,

Kuvempunagar

Mysuru-570009.

 

                          

 

(Sri.M. Gopinath., Advocate)

 

 

 

V/s

 

 

 

 

 

Opponent        /s             :       1.The Manager,

                                                Max Life Insurance Co. Ltd.,

                                                11th  Floor, DLF Square,

                                                Jacaranda Marg,

                                                DLF Phase II,

                                                Gurgaon-122002.

 

                                                2. The Manager,

                                                Max Life Insurance Co. Ltd.,

                                                No. 1198, Bhyrava Complex,

                                                K.G. Koppal, Chamarajapuram,

                                                Under Bridge, Mysore-570005.

                                               

                                                                                                 

 

(OP1 and 2 Sri. M.N. Premnath., Advocate)

 

 

                    

                                               

Nature of complaint

:

Deficiency in service

Date of filing of complainant

:

18.07.2016

Date of Issue notice

:

07.09.2016

Date of Order

:

16.01.2018

Duration of proceeding

:

1 year 7 month 28 days

 

 

     

 

 

 

 

 

 

          SHRI RAMACHANDRA . M.S.,

           PRESIDENT

 

             

                                                                       JUDGEMENT

 

The complainant filed the complaint Under Section 12 of Consumer Protection Act, 1986 against the opposite party seeking for relief of repayment of Insurance premium amount and prayed for other relief.

 

 

2. The brief facts of the complainant that the Max life insurance policy with the first opposite party by paying the premium amount of Rs. 50,000/- on 11.07.2013, the opposite parties issued the policy bond bearing No. 886497619 dated 11.07.2013, the term of the policy is 20 years and the premium paying terms is 6 years, which complainant has to pay Rs. 50,000/- every year (Approximate value)

 

3. That the complaint has paid the second instalment of Rs. 49,273/- towards premium on 07.07.2014 to the opposite parties for which opposite parties company official issued the premium receipt, dated 07.07.2014.

 

4. That opposite party company officials mis guided the complainant at the time of canvassing the policy hence complainant does not liked the attitude of the opposite parties company officials and decided to close the above said policy and requested to pay the amount paid by the complainant for that the opposite party company officials started keep on postponing the matter by telling cock and bull story every time and finally opposite party company officials stated that opposite party will not pay any amount in the middle of the policy period.

 

5. That the complainant contacted the opposite parties several time personally and requested the opposite party to pay the amount paid by the complainant but the opposite parties failed to pay the above said amount to the complainant hence the complainant contacted the opposite party through e.mail for that also the opposite party gave a deaf ear and failed to pay the amount paid by complainant, hence the opposite party caused the deficiency in the service to the complainant, hence this complainant.

 

6. That the complainant issued the legal notice dated 24.11.2015 to the opposite parties through RPAD calling upon the opposite party to pay the amount paid by the complainant with 18% interest , the notice sent through RPAD is served to the opposite party no.1 on 26.11.2015 still the opposite party has filed to pay the premium amount to the complainant but the opposite party has sent the untenable reply for the notice.

 

7. Notice to the opposite party no.1 and 2 duly served represented by counsel they have filed version.

8. The complainant and opposite party no. 1 and 2 they have filed chief examination affidavit and filed documents arguments heard,  reserved for orders.

 

9. Heard arguments.

 

10. The points that arise for our consideration are;

 

 

  1. Whether the complainant proves that there is deficiency in service on the part of opposite party by not paying insurance premium amount and thereby proves that he is entitle for the relief sought?
  2. What order?

 

 

11. Our answer to the above points is as follows;

 

       Point No.1:   In the affirmative

Point No.2: As per final order for the following;

 

 

REASONS

 

12. Point no.1 :-  That the complainant obtain max life insurance policy with 1st opposite party by paying premium amount of Rs. 50,000/- on 11.07.2013  the opposite party issued policy bond bearing no 886497619. The term of the policy is 20 years and the premium paying term is 6 years which complainant has to pay Rs. 50,000 every year.

 

13. Further the complainant has to paid second instalment amount of Rs 49,273/- towards premium on 07.07.2014 to the opposite party for which company issued premium receipt. The complainant alleges that the opposite party company official mislead complainant at the time of canvassing the policy. Hence complainant does not like the attitude of the company and decided to close above said policy and requested to pay the amount for which the opposite party company dodged the matter by assigning one or other reason and finally company has refused pay any amount since the policy is lapsed as per the terms and condition of policy, they are not liable to refund the insurance premium amount. On this observation the opposite party has refused to refund the insurance premium amount to the complainant. Upon which complainant filed the complaint seeking for the relief of refund of entire premium amount which is paid by him.

 

14. The opposite party in their version statement has totally denied entire allegation and averments of complaint and also denied the deficiency in service on their part. The opposite party further contended that in accordance with clause 4(1) and 6(2) of IRDA (Protection of policy holder interest regulation act 2002 the policy documents comprising of policy terms and condition, In view of the terms and condition laid down the opposite party company is not liable to refund the insurance premium amount for the non compliance of conditions. It is also contended that the policy obtained by complainant is lapsed in the 3rd year for the non payment of premium amount. When such being the case the opposite party urged the question of  refund the premium insurance amount does not arise and prayed for the dismissal of the complaint.

 

15. The complainant in support of her contention relied on the judgment rendered by Hon’ble High Court of Karnataka in a case  between Hucchappa V/s Union of India reported in ILR 2007 KAR 602 in this ruling the lord ship justice H,V,G, Ramesh  has Laid down the principles  to refund the insurance premium amount which is paid by the aggrieved policy holder.

 

16. The gist of principle of above ruling is as follows:

The provision of section 23 of the Indian Contract Act. 1872, makes it clear that the very implied condition imposed to forfeit the amount of the premium paid as per the policy conditions amounts to unconscionable bargain as it causes injury to the other party to the contract and also opposed to public page 0370 policy as the relation between the insurer and the insured is a contract, in other words, it is a contract of insurance. Might be that, the insurer would undertake to indemnify the policy holders for the unexpected contingencies and to indemnify to pay the assured sum as per the policy. In so far as the persons who have entered into such contract if for one or the other reason the promisor or the insured or the policy holder could not perform his obligation by continuing to pay the premium towards the policy of  insurance regularly, there would be no obligation on the art of the insured to pay him the assured sum if it is prematurely determined. Under the circumstance, when the contract is seized as a matter of fairness to avoid unjust enrichment to the advantage of the insurer and to the disadvantage of the insured withholding of such premium amount paid would be definitely against the constitutional mandate as is envisaged under articles 38 and 39 of the constitution much less, such a contract is void as against the public policy being injurious to the person who is undertaking to participate in the contract of insurance. However, the respondent/insurer in all such case where the policy lapses prematurely, shall return the amount of premium received to the policy holders.

 

17. Articles 21, 38 and 39 of the constitution on India envisages that no person shall be deprived of his life or personal liberty except in accordance with procedure established by law and further the directive principles of the state policy specifically provides that the state shall strive to promote welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. Article 39(b) and (c) of the constitution provides, as a matter of obligation on the part of the state that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production of the common detriment. A reading Article 21 and the directive principles under article 38 and 39 of the constitution makes it clear the condition imposed by the insurance company while assuring the life of the policy holders to forfeit the amount if the amount/premium is not paid for full three years, will be detrimental to the interest of the common man and it will be in clear violation of articles 21,38 and 39 of the constitution. Such practice being adopted by the corporation will be amassing the wealth of the public and thereby resulting in concentration of wealth, which does not legitimately entitle them to retain the amount premium paid by the policy holders whose polices have lapsed when due to the financial hardship they could not get their policy revived. Thereby the very imposition of the conditions no 4 at annexures A and B are more stringent, harsh, arbitrary and in negation of the principles canvassed in articles 38 and 39 of the constitution thereby depriving the policy holders their right to get back the amount of premium paid by them at the instance of the State agency. The respondent agency is not supposed to keep the said amount till the date of maturity without paying any inters, which would be opposed to the public policy and having regard to the price index of the market, it would rather work out hardship to the policy holder, even if the amount is returned with interest after such maturity period as it may not meet the prevailing market value of currency or as is paid in the regular course by the page 0371 regular banking companies. In that view of the matte, the implied condition of forfeiture clause provided  under condition no 4 by the respondents/authorities in the insurance policy of the respondents/institution is held to be void and without any bases. It is made clear in this order that hence forth the respondents/authorities shall take positive steps to call upon the policy holders to renew their policies by giving them sufficient notice and time to pay the arrears of premium and also interest thereon. In the event if the policyholders are unable to continue their polices by paying the premium, without invoking the forfeiture clause, the amount so paid by the policy holders be returned to them without waiting till expiry of the maturity period. Further, it is for the respondents/authorities to entertain all such claims which are not time barred and to return their premium amount paid forth with in cases where the policies are lapsed and further renewal is not accepted and also to pay the benefits accrued till such time.

 

18. Further in view of this ruling relied by complainant and by following the principles laid down by Hon’ble High court. It is observed that any terms and conditions imposed by opposite party company in contravention to the principles of above ruling, pertaining to refund of insurance premium amount, When once contract entered between parties became void ab  initio any  attempt to enforce such contract by imposing such conditions under the guise of policy terms and condition is unlawful under  section 23 of Contract Act. And it is also in violation of article 21, 38 and 39 of constitution. Here in the complaint the terms and conditions imposed by opposite party is against the contract act section 23 and it amounts to violation of settled principles of article 21,38 and 39 of constitution, in the light of these events the contract of insurance is held void ab initio. When such being the case the question of any breach of contract from the complainant side, does not arise as there is no valid contract. Under such circumstances the claim of complaint is valid and also tenable under law. The contention of opposite party is against the interest of public policy it is termed as unlawful. In view of above the compliant is entitle for relief of sought. Accordingly we answered point no.1 in the affirmative.

 

19. Point no.2:- From the above discussion we hereby proceed to pass the following :-

 

 

ORDER

 

  1. The complaint is hereby allowed in part.
  2. The opposite party is directed to pay sum of Rs. 99,273/- to the complainant within 60 days of this order with interest at the rate of 12% p.a. from the date 18.07.2016 till payment made.
  3. The opposite party is directed to pay of Rs. 5,000/- towards deficiency in service and Rs. 3,000/- towards cost of proceedings to the complainant within 60 days of this order.
  4. In default to comply the above order opposite party shall pay interest on the said amount of 8,000/- at the rate of 8% p.a. from the date of order till payment made.
  5. In case of default to comply this order, the opposite party shall     undergo imprisonment and also liable for fine under section 27 of  the CP Act, 1986.
  6. Give the copies of this order to the parties, as per Rules.

 

 

 

(Dictated to the stenographer transcribed, typed by her, transcript corrected by us and then pronounced in open court on the 16th  March 2018)  

 

 

 

Shri Thammanna. Y.S.,                                 Shri Ramachandra. M.S., 

  Member.                                                          President.   

 
 
[HON'BLE MR. M S RAMACHANDRA]
PRESIDING MEMBER
 
[HON'BLE MR. Y S THAMMANNA]
MEMBER

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