Punjab

Rupnagar

CC/17/23

Balwinder Kaur - Complainant(s)

Versus

MAx New York Life Insurance Company Limited - Opp.Party(s)

Manbir Singh Dhindsa

07 Nov 2017

ORDER

BEFORE THE DISTT. CONSUMER DISPUTES REDRESSAL FORUM, ROPAR

                                      Consumer Complaint No: 23 of 04.05.2017

                                       Date of decision            : 07.11.2017

 

 

Smt. Balwinder Kaur W/o Sadhu Singh, resident of House No.112, Village Garhbaga,  Tehsil  Anandpur Sahib, District Rupnagar.                                                                       ……Complainant

1.       Max New York Life Insurance Company Limited through its Managing Director and CEO and having its office at 12^th floor DLF Square, Jacaranda Marg, DLF phase-11, Gurgaon-122002.

          Registered Office: Max House, 3^rd Floor,1 Dr.Jha Marg, Okhla, New Delhi 110020.  

2.       Manpreet Singh Sahib S/o Sh. Dalbir Singh Sahi resident of Adarash Nagar Railon Road, Ropar, Manager Max New York Life Insurance Company Ltd.

                                                                             …..Opposite Parties

 

Complaint under section 12 of the Consumer Protection Act, 1986.

          QUORUM

                                                SMT. NEENA SANDHU, PRESIDENT

                                                SMT. SHAVINDER KAUR, MEMBER

 

          ARGUED BY

Sh. M.S.Dhindsa, Advocate, counsel for complainant

Sh. Varun Soni, Advocate, counsel for Opposite Parties No.1&2.

 

           ORDER

                                                SMT. NEENA SANDHU PRESIDENT  

          Smt. Balwinder Kaur through her counsel has filed this compliant under section 12 of  the Consumer Protection Act,1986(hereinafter referred to as 'the Act') against the Opposite Parties (hereinafter referred to as 'the O.Ps') praying for the following reliefs :-

          i)       To pay Rs.50,000/- of the insurance policy alongwith                     interest.

          ii)      To pay Rs.50,000/- as damages on account of harassment              caused to him.

          iii)     To pay Rs.20,000/- as litigation expenses.

 

2.           In brief, the case of the complainant is that the authorized persons of the O.Ps. approached her for purchase of insurance policy from the O.Ps. As per the assurance given by O.Ps, she paid Rs.50,000/- vide receipt No.449083872/2007-08/01 for purchase of a Life Invest Unit Linked Investment plan with the annual target premium of Rs.50,000/- having date of maturity 21.12.2025. In clause No.5 of the policy, it was mentioned that if the insured had chosen limited premium payment option then the insured by giving a written request, can surrender the policy at any time after the third policy anniversary provided the insured had paid an amount equal to one ATP. As per the terms and conditions of the insurance policy, the complainant is entitled for amount calculated on the basis of guaranteed surrender value, which is equal to the fund value. Fund value is defined in clause 1(d) i.e. total number of units held in unit account multiplied by the unit price, prevailing on the date of surrender minus the surrender charges as per the schedule. She requested the O.Ps. to pay the surrender value as per the terms and conditions of the insurance policy but the O.Ps. did not pay any amount. Hence, this complaint. 

3.           On being put to the notice, the O.Ps. No.1 & 2 has filed written version taking preliminary objections that no cause of action has arisen in favour of the complainant to the file the present complaint; that the complainant does not fall under the definition of the Consumer as per the Consumer Protection Act, this Forum has no jurisdiction to try and decide the present complaint; that the relief sought in the present complaint is in violation of terms and conditions of the policy; that the complainant has not come to this Hon’ble Forum with clean hands and that the present complaint is barred by limitation because the complainant had purchased the insurance policy in the year 2007 and as such, she could have filed the complaint within two years, but the present complaint has been filed by her after the lapse of many years, with a motive to grab money from the O.Ps. On merits, it is stated that the complainant herself approached the O.Ps. for purchase of the policy and the authorized representative of the O.Ps. explained to the complainant  about the different insurance plans and thereafter, she herself opted for Max Life Invest Unit Link Investment Plan, having total sum assured of Rs.5,00,000/- and annual target premium of Rs.50,000/-. The policy bearing No.449083872 was enforced on 19.12.2007 and only one premium was paid till date, as such, the policy was lapsed. It is further stated that only ATP was received from the complainant, thus, no surrender value is payable. Rest of the allegations made in the complaint have been denied and a prayer has been made for dismissal thereof, with cost. 

4.           On being called upon to do so, the learned counsel for the complainant has tendered documents Ex.C1 to Ex.C4 and closed the evidence. The learned counsel for the O.Ps. No.1&2 has tendered affidavit of Sh. Dhiraj Malik, Deputy Manager Legal of Max Life Insurance Company Ex.OP1 along with documents Ex.OP2 to Ex.OP8 and closed the evidence.

5.           We have heard the learned counsel for the parties and have gone through the record of the file, carefully.

6.           At the outset, the learned counsel for the O.P, has vehemently argued that since the complainant had purchased the unit linked policy in question, therefore, she is not a Consumer and the present complaint is not maintainable before this Forum.  In the case of "Paramjeet Kaur Vs Aviva Life Insurance Company India Limited, First appeal No.1173 of 2014 decided on 14.3.2016, The Hon’ble National Commission has held that “where insurance policy is Unit Linked Plan, the complaint is maintainable before the Consumer Forum” The Hon’ble State Commission, Punjab, by relying upon the above said order passed by the Hon’ble National Commission, in the case of  Labh Singh Vs Managing Director, M/s Birla Sun Life Insurance Company and another, which was decided on 12.1.2017 has also held that the complaint filed before the Consumer Forum, with regard to unit linked Policy is maintainable, In view of the law settled by the Superior courts this objection raised by the learned counsel for the O.Ps. is not tenable, hence rejected.

7.           The learned counsel for the O.Ps. has raised another objection that the present compliant is bared by limitation, as the complainant had purchased the policy in question in the year 2007 and as per Section 24A of the Consumer Protection Act, 1986, she could have filed the compliant within the period of two years from the date of purchase of the said policy whereas, the complainant has filed the present complaint in the year 2017, which is hopelessly time barred. To this effect, the learned counsel for the complainant has submitted that the policy in question is valid till the year 2027 and a sum of Rs.50,000/- is still lying with the O.Ps., as such, there is continuous cause of action and the complaint filed by her is within the period of limitation. From the policy documents, Ex.C4, it is evident that the insurance company had issued a Policy- Life Invest Unit Linked Investment Plan in favour of the complainant on 19.12.2007 and the due date for payment of final installment of premium is 19.12.2026. Admittedly, the complainant, after paying one installment of premium stopped making payment of rest of the installments. However, there is nothing on the record to show that the O.Ps. had ever sent any notice/letter to the complainant  regarding termination of the policy in question or no surrender value is payable as per the terms and conditions of the policy, therefore, the policy in question is still in force and there is recurring cause of action.  

8.           The learned counsel for the O.Ps. has further raised another objection that this Forum has no territorial jurisdiction to adjudicate upon the matter. From the page No.1 of the policy documents, Ex.C4, it is evident that against the column office MNYL Social and Rural Distribution, Ropar has been mentioned. And even from the receipt dated 19.12.2007, annexed alongwith Ex-O.P-3, was issued to the complainant from the aforesaid said office, as such cause of action arose within the territory of district Ropar therefore, this forum has territorial jurisdiction to adjudicate upon the matter.

9.           The question which falls for consideration is as to whether the complainant is entitled to get the surrender value.

10.         The learned counsel for the Complainant has submitted that as per terms and conditions of the policy, the complainant was entitled to get the surrender value after the completion of lock-in period of three years.  The stand of the O.Ps. is that since the complainant after paying premium for the one installment had stopped making payment of rest of the installments of the premium, therefore, as per terms and conditions of the policy, she was not entitled to get the surrender value.

11.         It may be stated that all the insurance Companies are governed by the Insurance Regulatory & Development Authority. The said authority issued notification i.e. (Linked Insurance Product Regulations), 2013, on 16.2.2013. In para No.1(c) of the said notification, it is mentioned that these regulations shall be applicable to all linked insurance products offered by life insurance companies. Further in the para No. 1(d), it is mentioned that unless otherwise provided by these regulations, nothing in these regulations coming into force. As per Regulation No.11, all linked insurance products shall have a lock in period of five years from the date of inception of the policy. Under Regulation No.15, the insurer is under obligation to pay the surrender value to the insured for the discontinued insurance policies, after the expiry of lock-in period. As per Regulation No.13(iv), of the said notification, reads as under:-

          “To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium or a percentage of single premium) do not exceed the limits specified below:-

 

          (1) For annual premiums:-

Where the policy is discontinued during the policy year	Maximum Discontinuance charges for the policies having annualized premium upto Rs.25,000/-	Maximum Discontinuance charges for the policies having annualized premium above Rs.25,000/-
1.	Lower of 20% * (AP or FV/policy account value) subject to a maximum of Rs.3000/-	Lower of 6% * (AP or FV/policy account value) subject to a maximum of Rs.6000/-
2.	Lower of 15% * (AP or FV/policy account value) subject to a maximum of Rs.2000/-	Lower of 4% * (AP or FV/policy account value) subject to a maximum of Rs.5000/-
3.	Lower of 10% * (AP or FV/policy account value) subject to a maximum of Rs.1500/-	Lower of 4% * (AP or FV/policy account value) subject to a maximum of Rs.4000/-
4.	Lower of 5% * (AP or FV/policy account value) subject to a maximum of Rs.1000/-	Lower of 2% * (AP or FV/policy account value) subject to a maximum of Rs.2000/-
5.and onwards	NIL	NIL

 

              AP- Annualized premium

              FV- Fund Value

              b.   Provided that where a policy is discontinued, only discontinuance charge and Fund management charge, which shall not exceed 50 bps per annum on discontinuance fund/policy account value, as applicable, may be levied by the insurer and no other charges by whatsoever shall be levied.

              c.   Provided that no discontinuance charges shall be imposed on top ups premium.

12.                   Admittedly, the policy in question was issued in favour of the complainant on 19.12.2007 and she had paid only a sum of Rs.50,000/- towards first installment of premium vide receipt No.449083872/2007-08/01, annexed alongwith the document, Ex.OP-3 and thereafter she stopped paying rest of the installments. As such, the policy in question was discontinued due nonpayment of the premium amount. Since the policy was issued in the year 2007, and the prescribed lock-in period of five years as per Regulation 11 of the above said notification dated 16.2.2013 has already expired. As per terms 13 (vi) as mentioned above, the insurer on discontinuance of the policy is under obligation to pay the insured, the surrender value i.e. Rs.44,000/- (Rs.50,000 – Rs.6000/-) as provided in the above quoted table.

13.                   In view of the above discussion, we allow the complaint and direct the OPs in the following manner:-

(i)       To pay Rs. 44,000/- as surrender value alongwith interest @ 7% per annum from the date of filing of the compliant i.e. 23.02.2015 till realization.

 (ii)    To pay Rs. 5000/- as litigation cost

(iii)    The O.Ps are further directed to comply with the said order within the period of 30 days from the date of receipt of the certified copy of this order.

14.                   The certified copies of this order be supplied to the parties forthwith, free of costs, as permissible under the rules and the file be indexed and consigned to Record Room.

 

ANNOUNCED                                         (NEENA SANDHU)

Dated: 07.11.2017                                      PRESIDENT

 

 

                                                (SHAVINDER KAUR)

                                                                    MEMBER.