BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Complaint  Case No  :1367 of 2009

Date of Institution :  07.10.2009

Date of  Decision   :  08.04.2010

Rajiv Kumar s/o Subhash Chand, H.No. 226, Tribune Colony, VPO Baltana, Tehsil Derabassi, District Mohali, Punjab – 140 604.

 ……Complainant

V E R S U S

(1)  Max New York Life Insurance Company Limited, SCO No. 36-37, 1^st & 2^nd Floor, Madhya Marg, Sector 8, Chandigarh – 160018.

(2)  Max New York Life Insurance Company Limited, Operations Center, 90-A, Udyog Vihar, Sector 18, Gurgaon – 122015, Haryana.

.…..Opposite Parties

CORAM:     SH.LAKSHMAN SHARMA              PRESIDENT

          SH.ASHOK RAJ BHANDARI       MEMBER

          MRS.MADHU MUTNEJA             MEMBER

PRESENT: Sh.Rajesh Sharma, Adv. for Complainant.

         Sh.Rajneesh Malhotra, Adv. for OPs.

PER ASHOK RAJ BHANDARI, MEMBER

        Concisely put, the Complainant had taken a Life Insurance Policy namely - Life Maker Premium Unit Linked Investment 10 Yrs. 5 Pay Plan, bearing No. 446439515, the premium of which was due on 06^th Sept. every year. The policy taken was a unit linked policy, where all transactions were done on the basis of NAV declared by the Company on daily basis. It was alleged that the OPs had been taking different standards, for premium deposited on different dates, so as to suit its interest and causing loss to Complainant, whereby allocation of units was less than it should have been and to illustrate this, the Complainant has cited some instances in Para 4 & 6 of the complaint. In this manner, by adopting different yardstick of allocation of unit, irrespective of the date of deposit, used by the OPs, the Complainant had suffered a loss of 801.584 units. When the matter was taken up with the OPs, they did nothing, which further aggravated the intensity of embarrassment suffered by the Complainant. Hence, this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice. In the end, the Complainant has prayed for the following reliefs:-

a)  OPs be held liable for its deficient services for wrongly allocated units, irrespective of the date of deposit.

b)  Additional 801.584 units be allocated to Policy No. 446439515.

c)  OPs be directed to pay Rs.50,000/- as damages plus litigation cost. 

2]      Notice of the complaint was sent to OPs seeking their version of the case. 

3]      OPs No. 1 & 2 in their joint written statement, while admitting the factual matrix of the case/reply, pleaded that the policy in question opted by the Complainant was a Unit Linked Plan and the amount of premium paid was invested as per the NAV. However, for any payment made after the grace period is over, the policy lapses as per the terms and conditions and the policy needs to be revived retrospectively from the date on which the policy premium was due and hence, the allocation was done from the due date of the policy of that particular year. It was submitted that the Complainant had deposited 3 premiums till date, out of which one was deposited after the policy got lapsed and the same was revived from the date of lapsation although the premium was paid on a subsequent date. The entire position has been made clear to the Complainant, whenever he made inquiries regarding the same. All other material contentions of the Complainant were controverted. Pleading that there was no deficiency in service on its part, a prayer has been made for dismissal of the complaint.

4]      Parties led evidence in support of their contentions.

5]      We have carefully gone through the entire case thoroughly, including the complaint and the relevant documents tendered by the complainant / OPs. We also heard the arguments put forth by the learned counsels for the Complainant and OPs. As a result of the detailed analysis of the case, the following points/issues have clearly emerged and certain conclusions/arrived at, accordingly:-

i]  The basic facts of the case in respect of the Complainant having taken a Life Insurance Policy namely - Life Maker Premium Unit Linked Investment 10 Yrs. 5 Pay Plan, bearing No. 446439515, with premium payable on 06^th Sept. every year and that the Complainant had paid 3 yearly installments of the premium, have all been admitted. The basic dispute between the parties is in respect of the 2^nd installment of the premium paid by the Complainant on 04.12.2008; whereas, the same was due for payment on 06.09.2008. The contention of the Complainant is that since he had made the payment of the premium on 04.12.2008, he should be allotted units based on NAV as on that date i.e. 04.12.2008. On the contrary, the contention of the OPs is that the Complainant had paid the 1^st installment of the premium well within time i.e. on 31.08.2007; whereas the due date was 6.9.2007. On the same lines, he had paid the 3^rd installment of the premium on 17.9.2009 i.e. with in the grace period of 30 days from the due date of payment and he was allocated units with the NAV existing on 17.9.2009 i.e. on both the occasions he was granted the benefit of the allotment of units on the day of deposit itself, which was, however, not possible in the case by 2^nd installment of premium, which was paid by the Complainant as late as 03 months after the due date.

ii] The Complainant has given the detailed calculations in respect of the units allocated to him in respect of the 2^nd installment of the premium and as per him, if the date for allocation had been taken as 04.12.2008, instead of 6.9.2008, he would have got 801.584 units more than what has been actually allocated to him by the OPs by taking the date of allocation as 6.9.2008. In support of its contention, the Complainant has quoted the relevant Rules of the OPs for allocation of units based on NAV and as printed on the payment receipt [Annexure-II], which are given as under:-

“A. In case premium for Unit Linked Insurance Policies is received in Max New York Life designated offices vide cash, local cheques and local demand drafts before 3.00 PM, Net Asset Value (NAV) of the same day will be applicable; in case premium is received after 3.00 PM, the NAV of the next business day will be applied. In case of premium received vide outstation cheques/ demand drafts, the NAV of the business day on which such cheques/ demand drafts are realized and credited in Company’s account will be applicable.

(B)    Monies received would be adjusted against the due premium as per the policy contract. In case policy status is lapsed, the risk coverage is subject to the reinstatement of the Policy as per terms and conditions of the plan opted.”

In the light of the above stated rule as at (A), the Complainant says that he should have been allocated the Units as per the NAV on the date of payment i.e. 4.12.2008 and not as on the due date i.e. 6.9.2008.

iii] The contention of the Complainant has been denied by the OPs. In support of their case, the OPs have quoted the insurance policy document itself. The relevant clause 17 of the insurance policy document is quoted as below:-

    “17. Grace Period and Revival of lapsed Policy:

    A grace period of 30 days [15 days where premium payment mode is monthly] from the due date of payment of Annual Target Premium shall be allowed for payment of unpaid Annual Target Premium.

    The policy can be revived within 36 months of its date of lapse if:

i. You give us a written request to revive the policy and

ii. You have produced evidence of insurability acceptable to us as per our underwriting practices, and

iii. You pay us overdue Annual Target Premiums and unpaid charges.

On revival, the Insurance cover [sum assured] will be restored and the Unit Account re-opened. The amount of premium paid at the revival date, together with an amount equal to the fund value at the date of lapse, less any Premium allocation Charge attributable to the premium paid at the revival date, and according to the ratio in which the premium should be allocated in various Funds, as specified by you, will be used to purchase Units at the Unit Price as at the date of revival. An amount equal to the Policy Administration Charges falling due between the date of lapse and the date of revival will be levied at the date of revival by canceling Units in the Unit Account at their Unit Price.” 

iv] By placing reliance on the above stated Clause 17 of the Policy document, the OPs say that the 1^st and foremost condition of the acceptance of premium on a lapsed policy is the revival of the lapsed policy. In the present case, the insurance policy of the Complainant had already lapsed, as he had failed to pay the 2^nd installment of the premium even within the grace period of thirty days from the due date. In such a case, on payment of late premium, as per rules, the policy was first revived, the insurance cover/ sum assured was restored and the unit account re-opened. After completing this exercise, the units were allocated as on the date of revival of the Policy i.e. 6.9.2008, which is in full conformity with Clause 17 of the Insurance Policy document. In support of its case, the OPs have further said that in the year 2009, the due date for payment of the insurance premium was 6.9.2009; whereas, the payment of the premium was made by the Complainant late but as on 17.9.2009. Since this payment was made within the grace period of 30 days from the due date, full benefit of allocation of units was given to the Complainant as on 17.9.2009 i.e. the date of payment itself as the policy in question had not lapsed on that date. In the present case, however, the grace period was already over and hence, the policy lapsed and when the payment was actually received on 4.12.08, the policy was required to be revived and restored from the due date i.e. 6.9.2008. Had the Complainant paid the premium installment within the grace period i.e. upto 6.10.2008, he would have been given the full benefit of allocation of units on the date of the payment itself. But that was not the situation in the present case. 

6]      Further, detailed analysis of the entire case reveals that the Complainant has not been able to make out a solid case in his favour. He himself admits that he did not pay the 2^nd installment of the insurance premium on the due date and that the same was paid late by as many as 03 months and by that time his insurance policy had already lapsed, as the grace period of thirty days applicable in the case of yearly payment of premium had already gone by. Therefore, the Complainant had no claim in respect of the allocation of units to him on the date of payment of the belated premium, which was applicable only in case he had made the payment of premium either by the due date itself or well within thirty days from the due date. In the present case, as rightly stated by the OPs, the policy was lying in a lapsed condition, as on the date of payment of premium and hence, the same was required to be revived from the date of the lapse, the unit account was required to be opened and allocation of units needed to be done accordingly from the date of revival i.e. 6.9.2008. Hypothetically, even if we were to accept the contention of the Complainant that he should have been given the benefit of allocation of units, as on 4.12.2008, instead of 6.9.2008, in that case the insurance policy would have remained lapsed during this period of three months and as a result of which, the old policy would have been cancelled and a new policy issued. That was neither requested by the Complainant, nor done by the OPs and it was not even desirable to do such a thing, because any mishap could have happened during this period of three months and the Complainant would have remained completely uncovered during the intervening period. That would not have been even in the interest of the Complainant. Even otherwise, the revival of the insurance policy is always done in continuation of the due date and no gaps are to be allowed for the intervening period. Therefore, there is no deficiency of service or indulgence in any unfair trade practice on the part of the OPs. What the OPs have done is strictly in accordance with the Rules, as enshrined in the Insurance Policy document. It is quite clear that all the terms and conditions of the insurance policy document constitute a package and a contract of insurance, which has been duly accepted by the Complainant and is binding on both the parties. From all this, it is quite clear that the Complainant has no case at all and his complaint deserves rejection. We, therefore, dismiss the present complaint. However, respective parties shall bear their own costs.

7]     Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

08.04.2010                                       Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

                                              Sd/-

                                   (ASHOK RAJ BHANDARI)

MEMBER

                                                Sd/-

(MADHU MUTNEJA]

MEMBER

‘Dutt’