Chandigarh

DF-I

CC/82/2023

ASHWANI KUMAR DHINGRA - Complainant(s)

Versus

MAX LIFE INSURANCE COMPANY LIMITED - Opp.Party(s)

DEVINDER KUMAR

10 Sep 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                          

Consumer Complaint No.	:	CC/82/2023
Date of Institution	:	20.02.2023
Date of Decision	:	10/09/2024

Ashwani Kumar Dhingra son of Sh. K.L. Dhingra, aged about 60 years, r/o H. No. 2344, BSNL Colony, Sector 50-C, Chandigarh.

...Complainant

Versus

1.    Max Life Insurance Company Limited, SCO No.36-37-38, Madhya Marg. Sector 8-C, Chandigarh through its Branch Manager.

2.    Max Life Insurance Company Limited, 3^rd Floor, Operations Centre, 90-C, Udyog Vihar, Sector 18, Gurgaon-122 015 though its Managing Director.

...Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                               

ARGUED BY	:	Sh. Devinder Kumar, Advocate for the complainant along with complainant.
	:	Sh.Rajneesh Malhotra, Advocate for the OPs.

Per Pawanjit Singh, President

1.        The present consumer complaint has been filed by complainant against the opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-
   1. It transpires from the averments as projected in the consumer complaint that in the year 2004, agent of the OPs approached and allured the complainant to invest the amount in their company and on completion of the 20 years i.e. in the year 2024, they will pay the maturity amount along with bonus etc. Upon this the complainant deposited Rs.9,000/- with the OPs who issued Policy No.246870166 in the name of the Ms.Prem Lata i.e. wife of the complainant. The complainant was again allured by the aforesaid agent of the OPs and on this he purchased two more polices on the same terms by depositing his hard-earned money for securing the future of his family and also paid Rs.6,600/- & Rs.16,500/- as annual premium to the OPs and they issued Policy No.246870158 in the name of the complainant  and Policy No.247504392 in the name of his son –Sh.Tushar Dhingra (hereinafter referred to as the ‘subject policies’). As per the directions of the OPs, the complainant continuously deposited annual premium including govt. taxes from 2004 to 2022, without any default. In the month of July, 2022, the complainant approached OP No.1 to know about the status of the subject policies and on the enquiry, he was astonished to know that the subject policies were issued for 99 years. It was also informed by the officials of the OPs namely Mr.Satinder & Ms.Radika that in case of surrender of the subject policies, the OPs will pay the surrender value along with bonus and they have also given the copy of the bonus detail (Annexure C-1). Accordingly, the complainant surrendered the subject policies with the OPs but they paid only the surrender amount of Rs.1,00,898/- and Rs.3,29,720/-, without disclosing the calculation. Thereafter, the complainant raised the objection through e-mails dated 17.08.2022, 23.08.2022 & 31.08.2022 and by also sending registered letter dated 22.08.2022 to OP No.1 with a request to provide the calculation and to supply policy documents. The copies of the e-mails and register letter are Annexure C-2 (Colly). Later on, the OPs sent email dated 23.11.2022(Annexure C-3) and intimated the complainant that Rs.832/- has been charged on the ground that the subject policies were surrendered during grace period and the said deduction has also been wrongly made by the OPs. Aggrieved against the aforesaid act, the complainant also approached the Insurance Ombudsman, Chandigarh by filing the complaint but the same was dismissed vide order dated 07.12.2022. The aforesaid act amounts to deficiency in service and unfair trade practice on the part of OPs. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
   2. OPs resisted the consumer complaint and filed their written version, inter alia, taking preliminary objections of maintainability, jurisdiction, cause of action and concealment of facts.  On merits,  it is submitted the subject policies with the following details were issued to the complainant and his son:-

It is stated that the policy holders paid 18 annual premiums qua the policies till July, 2022 and the complainant submitted the policy surrender form (Annexure R-5) and accordingly on his request, an amount of ₹3,29,720.60P and ₹1,00,898.87P being the surrender value was refunded through NEFT to the complainant and intimation letters (Annexures R-6 & R-7) were also sent to him. The complainant has also filed a complaint with the Insurance Ombudsman, Chandigarh which was also dismissed and the complainant is bound by the terms and conditions of the subject policies and the surrender value was calculated as per the terms and conditions and thereafter the same was refunded to the complainant who himself approached with the request for release of the surrender value. Moreover, both the subject policies were taken by the complainant are different products, based on different terms and conditions with different premium amounts and premium paying terms and different benefits. Since the subject policies were surrendered by the complainant during the grace period and on the 19^th day of grace period, an “unpaid premium’ to the tune of ₹837.12P was deducted. All the allegations made against the OPs are wrong and denied. It is alleged that since the subject policies were surrendered by the complainant during the grace period and as per the terms and conditions of the subject policies, no bonus was payable. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.

3. The complainant chose not to file the rejoinder.

2.        In order to prove their respective claims the parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3.        We have heard the learned Counsel for the parties and also gone through the file carefully, including the written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that both the subject policies i.e. first policy No. 246870158 with sum assured of ₹4.50 lakhs in the name of the complainant and second policy No. 247504392 with sum assured of ₹3,23,713/- in the name of Sh.Tushar Dhingra were purchased from the OPs and the policy holder(s) paid the premium amount qua the subject policies w.e.f. 2004 to 2022 and in the month of July, 2022, the policy holder(s) decided to surrender the subject policies, as is also evident from the Policy Surrender Form (Annexure R-5) and the OPs had accepted the request of the complainant and transferred the surrender value assessed at ₹3,29,720.60P and ₹1,00,898.87P through NEFT in the account of the policy holder(s), the case is reduced to a narrow compass as it is to be determined if the OPs have wrongly made deduction of ₹832.12 on account of unpaid premium and not paid the bonus accrued on the subject policies to the complainant and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the OPs have calculated the surrender value of the subject policies as per the terms and conditions and there is no deficiency in service on the part of OPs and the complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. So far as the case of the complainant that the OPs have not issued the policy documents and in the month of July, 2022, when the complainant approached the office of OP No.1 to know about the status of the subject policies and he was astonished to know that the subject policies were issued for 99 years and immediately he decided to surrender the subject policies is concerned, the same stands falsified from the policy surrender form (Annexure R-5) duly filled and signed by him indicating that the complainant had applied for the surrender value by submitting all the policy documents and only then the OPs have considered his request regarding which he has also mentioned in para 6 of the complaint that when he approached the office of OP No.1 in the month of July, 2022, they calculated the amount on one white paper and the policy documents were retained by them, making further clear that the complainant  had tendered the policy documents to the OPs in order to get the surrender value of the subject policies.
   3. It is further case of the complainant that the OPs have not given the details of the calculation of the surrender value despite his repeated requests but the said plea of the complainant further stands falsified from the copy of the e-mail (Annexure R-8) which clearly indicates that on 21.01.2022, the OPs had given the complete details of the surrender value of each policy with deductions made as per the terms and conditions of the subject policies.
   4. The learned Counsel for the complainant submitted that as the OPs have agreed to give bonus to the complainant through Annexure R-1 and later on have not paid the bonus  as agreed upon, the complainant is entitled for the bonus. However, Annexure C-1 which is a photocopy of the document clearly indicates that the same does not bear the signature of any officials of the OPs and even the date is not legible on which date the said document was prepared. Moreover, the bonus benefit is only payable as per Condition No.13 of the subject policies. The relevant portion of Condition 13 of the terms and conditions of the policy is reproduced as under:-

POLICY HOLDER BONUS AND BONUS OPTIONS

 

No bonus is payable for the first two Policy years. Thereafter, a bonus as declared by the Company, will be paid from the surplus arising from the actuarial valuation of the participating life insurance fund. The amount of bonus to be paid will be as determined by the Company's Appointed Actuary from time to time

 

The bonus will be applied as per the options selected by the Policy Holder in the proposal.

 

5. The learned Counsel for the complainant further submitted that the OPs have paid the bonus in the policy No.246870158 but the same was not paid in Policy No. 247504392. On the other hand, the learned counsel for the OPs submitted that both the subject policies were different in their tenures as well as premium amounts, the OPs have strictly calculated the surrender value of each policy as per the premium paid and no bonus was paid in any of the policy. There is force in the contention of the learned counsel for the OPs as it is an admitted case of the parties that in policy No.246870158, the complainant paid the annual premium of ₹16,083/- and ₹6500.16 in another policy bearing No. 247504392 and the OPs have rightly calculated the surrender value as per the terms and conditions of the subject policies. Moreover, the policy document (Annexure R-2) pertaining to first policy clearly indicates that the premium amount was payable by the complainant upto 01.07.2062 whereas in policy document (Annexure R-4), the premium amount was payable upto 20.07.2057 and the policy holder(s) opted to surrender the subject policies with the OPs in order to get the surrender value in the year 2022. Even as per the terms and conditions of the subject policies, the policy holder(s) were not entitled for the bonus. Otherwise also, the OPs have calculated the surrender value strictly as per Condition No.12 of terms and conditions of the subject policies which is reproduced as under:-

CASH SURRENDER VALUE

 

After the Policy has been in force for at least three years and provided all the Premiums have been paid for three full years, then the Company will grant a cash surrender value which will be not less than 30% of the Premium(s) (excluding the first year's Premium) received but never more than the base face amount of the policy. The cash surrender value payable will be subject to the condition that the Policy is in full force and that there are no statutory or other restrictions to the contrary. Indebtedness, if any, to the Company will be deductible from the cash surrender value.

The calculation of the cash surrender value made by the OPs as per the terms and conditions of the subject policies is reproduced as under:-

 Policy No.: 246870158

 

Please find below the surrender value calculation logic as on surrender effective date 22 July 2022:-

 

As mentioned in the policy contract, the policy shall acquire cash value if it has been in force for at least three years. The company will grant a cash surrender value which will not be less than 30% of the Premium(s) (excluding the first year's Premium) received but never more than the base face amount of the policy. The cash surrender value payable will be subject to the condition that the policy is in force and that there are no statutory or other restrictions to the contrary. Indebtedness, if any, to the company will be deductible from the cash surrender value. Here,

 

Guaranteed Cash Value/surrender value (GSV)

 

= 30% of premiums (excluding first)

=30% * (16,083.00* (18 - 1) )

 = 30% * 2 ,73,411.00 =

₹82023.3

 

Non-Guaranteed Cash Value/ Special Surrender Value = Base CSV + Base PUA Base CSV = Face Amount CSV Rate/1000

 

=4,50,000.00*CSV Rate/1000

= 83,333.39

Base PUA=Net PUA*PUA Rate/1000

5,36,127.37*PUA Rate/1000

Base PUA = 2,47,224.41

 

Special Surrender Value (SSV) = Base CSV + Base PUA

 

= 2,47,224.41 + 83, 333.39

= ₹3,30,557.8

 

As the policy was surrendered during the grace period, an Unpaid Premium amount of Rs 837.12 was charged. So, the surrender value payable is the Special Surrender Value (SSV) less Unpaid Premium.

 

Surrender Value payable SSV-Unpaid Premium

 

=Rs.3,30,557.8-837.12

=Rs. 3,29,720.68

 

Surrender Value paid = Rs.3,29,720.60"

 

Proof of Payment: XXXX

 

Policy No.: 247504392

 

Please find below the surrender value calculation logic as on surrender effective date 22 July 2022

 

As per Section 12 of the policy contract: "After the Policy has been in force for at least three years and provided all the Premiums have been paid for three full years, then the Company will grant a cash surrender value which will not be less than 30% of the Premium(s) (excluding the first year's Premium) received. Indebtedness, if any. to the Company will be deductible from the cash surrender value."

 

Guaranteed Surrender Value(GSV)

 

= 30% of total premiums received excluding first year premium

=30% * (6500.16*(18-1)

= 30% * 71,10,502.72

= ₹33,150.82

 

Cash Surrender Value (CSV) equals sum of Base Cash Value and PUA Cash Value less loan including interest accrued to date of surrender.

 

I. Base Cash surrender value as on NFO conversion date =Sum Assured multiplied by CSV rate

=3,23,713 CSV Rate/1000

= ₹34,896.26

II. PUA Cash Value

 

=(PUA sum assured) purchased multiplied by PUA CSV rate

=2,14,405.87 *PUA CSV rate/1000

Rs. 66,002.70

 

Final Surrender Value Base Cash surrender value + PUA Cash Value - Loan

 

=66,002.70+34,896.26

=1,00,898.96

 

Surrender Value Paid = 1,00,898,87"

 

Proof of payment: XXX

 

6. In view of the above, it is safe to hold that the complainant has miserably failed to prove any deficiency in service or unfair trade practice on the part of OPs and the present consumer complaint deserves dismissal. 

4.        In the light of the aforesaid discussion, the present consumer complaint, being devoid of any merit, is hereby dismissed leaving the parties to bear their own costs.
5.        Pending miscellaneous application(s), if any, also stands disposed off.
6.        Certified copies of this order be sent to the parties free of charge. The file be consigned.

10/09/2024			Sd/- [Pawanjit Singh] President
			Sd/-
			[Surjeet Kaur] Member
			Sd/-
			[Suresh Kumar Sardana] Member