CONSUMER DISPUTES REDRESSAL FORUM – X
GOVERNMENT OF N.C.T. OF DELHI
Udyog Sadan, C – 22 & 23, Institutional Area
(Behind Qutub Hotel)
New Delhi – 110 016
Case No.618/2007
SH. SUNIL KUMAR SHARMA
R/O 103-C, POCKET-F,
MAYUR VIHAR, PHASE-II, DELHI-110091
…………. COMPLAINANT
Vs.
- M/S MAX NEW YORK LIFE INSURANCE CO. LTD.,
MAX HOUSE, 3RD FLOOR,
1-DR. JHA MARG, OKHLA, NEW DELHI-110020
- M/S MAX NEW YORK LIFE INSURANCE CO. LTD.,
12TH FLOOR, DLF SQUARE,
JACARANDA MARG, DLF PHASE II, GURGAON-122002
…………..RESPONDENTS
Date of Order:07.06.2016
O R D E R
A.S. Yadav – President
The case of the complainant is that he took a (Whole Life Participating) Life Insurance Policy of M/s Max New York Life Insurance Co. Ltd. vide Policy No.102008364 w.e.f. 30.9.2001 with a total sum assured of Rs.15 lakhs i.e. Basic Policy of Rs.5 lakhs, Dreaded Disease Rider i.e. Medical Policy of Rs.5 lakhs and Accident Rider of Rs.5 lakhs and certain other riders. The mode of premium was Semi Annual and the amount of Premium was Rs.11,419/- Semi Annual i.e. Rs.22,838/- per annum.
After one year, Term Rider, Spouse Rider & Waiver of Premium Rider were removed by complainant and the Bi-Annual Premium amount was reduced to Rs.9326/- payable after every six months. From September 2001 to November 2006(i.e. for five years) complainant has paid Rs.1,29,902/- to the OP towards life insurance and Riders premium.
Complainant became eligible for receiving bonus on Whole Life Policy after two years of taking the policy. Therefore, the OP informed complainant vide letters dated 15.9.2003, 02.10.2004, 04.10.2005 and 01.10.2006 that bonus and premium amounts of Rs.4245/-, 4370.24, 5429.72, 6832.74(Total Rs.20,877.70) has been allocated to complainant. In view of this OP owe a total amount of Rs.1,50,779/- to complainant alongwith its interest since last five years.
It is further stated that on many occasions, after receiving full amount of semi-annual premiums, the OP used to send letter to the complainant informing that due to non-payment of premium, the Policy and Riders have been terminated. This used to create lot of harassment to the complainant every time since the bank account reflected that payment of premium has been made whereas the OP used to terminate the policy(after receiving payment) For instance the OP received semi-annual premium of Rs.9,326/- on 13.11.2006 but on 14.11.2006 the OP informed the complainant that due to non-payment, his policy and riders have been terminated. Similarly, the OP received semi-annual premium of Rs.9,326/- on 26.10.2005 but on 30.10.2005, the OP informed the complainant that due to non payment, his policy and riders have been terminated. All this evident of the fact that there is absolutely no co-ordination between various branches/department of the OP and they terminated the policy at their own sweet will without checking up their own records as to the payment status of the life insurance policies.
It is further stated that when complainant received information about termination of his life insurance policy, even after the premiums stood fully paid, the complaint issued legal notice dated 07.12.2006 to the OP requesting them to send a written apology and restoration of policy.
In reply to that notice, complainant received a cheque for a sum of Rs.9326/- alongwith pre-dated letter dated 05.12.06 whereby complainant was informed that this cheque was towards refund of over payment of the premium. Since complainant did not hear anything from the OP, he issued another legal notice on 01.5.07 upon OP asking for the refund of entire amount. Thereafter complainant received the letter dated 31.5.07 from OP whereby OP admitted that they have received the premium in the above mentioned policy till March 2006 and further admitted that premium for September 2006 amounting to Rs.9326/- was erroneously refunded alongwith letter dated 05.12.2006 and in the said letter OP admitted that till date complainant has paid Rs.1,20,718/- towards premium. It is stated that it is clear cut case of deficiency in service on the part of OP.
It is prayed that OP be directed to refund Rs.1,20,576/- paid by complainant to OP towards Life Insurance and Riders Premiums, Rs.20,877.70 towards accrued bonus premiums etc. alongwith interest @ 24% plus Rs.50,000/- towards compensation and Rs.7,000/- towards litigation expenses.
OP in the reply took the plea that the complainant has opted for semi annual mode in the Proposal Form for the payment of the premium amount and premium amount that was due on 30.9.2006 was not paid by the complainant. Vide letter dated 30.10.2006 OP intimated complainant that due to non-receipt of the premium amount, in the grace period, the policy will continue in the Reduced Paid Up mode and all the riders stand terminated.
On 02.11.06, a premium of Rs.9,326/- was paid by the complainant but the same kept lying in the suspense account of the OP and was not allocated to the policy since the increased premium for Dread Disease Rider that increase after every five years as per Clause 7 of the Dread Disease Rider was not deposited by the complainant and the premium amount was short by Rs.626.60.
Since the amount was lying in the suspense account of the OP, a letter dated 14.112006 was sent inadvertently and the amount of Rs.9326/- was refunded to the complainant on 05.12.2006.
OP vide letter dated 31.5.07 informed complainant that the policy was continuing with a reduced paid up sum assured of Rs.1,20,718/- as on date. Complainant was again requested to pay the premium amount of Rs.18,652/- being the premium amount due on September 2006 and March 2007(excluding the increase of Rs.626.60) in the premium amount ill that date as per clause 7 of the Dreaded Disease Rider as a service gesture) for reinstating the policy to its original mode.
It is stated that complainant has defaulted in paying the premium. Complainant has paid a sum of Rs.1,07,145/- only. It is stated that there is no deficiency in service on the part of OP.
We have heard Ld. Counsel for the parties and carefully perused the record.
In para 10 of the complaint, complaint has stated that on many occasions, after receiving full amount of semi-annual premiums, the OP used to send letter to the complainant informing that due to non-payment of premium, the Policy and Riders have been terminated. This used to create lot of harassment to the complainant every time since the bank account reflected that payment of premium has been made whereas the OP used to terminate the policy(after receiving payment) For instance the OP received semi-annual premium of Rs.9,326/- on 13.11.2006 but on 14.11.2006 the OP informed the complainant that due to non-payment, his policy and riders have been terminated. Similarly, the OP received semi-annual premium of Rs.9326/- on 26.10.2005 but on 30.10.2005, the OP informed the complainant that due to non payment, his policy and riders have been terminated. All this evident of the fact that there is absolutely no co-ordination between various branches/department of the OP and they terminated the policy at their own sweet will without checking up their own records as to the payment status of the life insurance policies.
In reply to this para it is stated that the allegation made by the complainant are false, frivolous, baseless and uncorroborated. The OP has acted with diligence and never harassed the complainant. There have never been any instances of callous and careless approach. The OP has always cooperated as and when required by the complainant.
The deficiency on the part of OP is writ large. Even after receiving the premium on 13.11.04, OP has informed complainant on 14.11.04 that due to non-payment his policy and riders have been terminated. Similarly, after receiving premium on 26.10.2005 OP informed complainant on 30.10.2005 that due to non payment, his policy and riders have been terminated. Complainant was constrained to issue legal notice dated 07.12.2006.
In reply to that notice, complainant received a cheque for a sum of Rs.9326/- alongwith pre-dated letter dated 05.12.06 whereby complainant was informed that this cheque was towards refund of over payment of the premium. It is strange that on the one occasion OP is informing that the policy is terminated on account of non-payment of the premium and on the other hand OP is stating that the amount is being refunded as being over payment of the premium.
Complainant again issued a legal notice on 01.5.07 upon OP asking for the refund of the entire amount. In response to that legal notice, complainant received a letter dated 31.5.07 from OP whereby OP admitted that they have received the premium in the above mentioned policy till March 2006 and further admitted that premium for September 2006 amounting to Rs.9326/- was erroneously refunded alongwith letter dated 05.12.2006 and in the said letter OP admitted that till date complainant has paid Rs.1,20,718/- towards premium.
In the preliminary objections OP has taken a plea that on 02.11.06, a premium of Rs.9,326/- was paid by the complainant but the same kept lying in the suspense account of the OP and was not allocated to the policy since the increased premium for Dread Disease Rider that increase after every five years as per Clause 7 of the Dread Disease Rider was not deposited by the complainant and the premium amount was short by Rs.626.60.
In response to that complainant in the rejoinder stated that OP never informed the complaint that premium is short by Rs.626.60 nor demanded the same but simply cancelled the policy without giving any opportunity to deposit the deficient amount. Moreover, the policy has completed five years and it was supposed to continue even after no premium is paid as assured by the representative of the OP at the time of taking of the policy.
Insurance Company is a contract of utmost good faith. Firstly the OP has stated that the premium has not been received and when complaint brought it to the notice that the premium has been received Rs.9236/- was refunded being excess payment. Thereafter it was stated that this amount was kept pending as it was short by Rs.626.60. Not a single notice has been sent by the OP to the complaint asking him to pay further amount.
It is significant to note that the complaint has already paid premium for more than five years. As per the averment made in para ix of preliminary objections, OP stated this amount of Rs.626.60 was to be paid as increase in the premium amount as per Clause 7 of the Dreaded Disease Rider as a service gesture) for reinstating the policy to its original mode. This was never brought to the notice of the complainant. No unilateral action can be taken by the insurance company without bringing it to the notice of complainant. Insurance company is in dominant position and is therefore bound to bring it to the notice of complainant before taking any action.
It is clear cut case of deficiency in service on the part of OP. Complainant has proved beyond doubt that he has paid a sum of Rs.1,27,888/- plus Rs.20,877/- towards bonus i.e. total amount Rs.1,48,765/- out of which complainant has received Rs.9,326/- hence remaining balance comes out to be Rs.1,39,439/-.
The complainant is entitled for a sum of Rs.1,39,439/- alongwith interest @ 9% p.a. from June 2007 as the refund was sought by legal notice dated 01.5.2007. Complainant is also entitled for a sum of Rs.10,000/- towards compensation and Rs.5,000/- towards litigation expenses.
Let the order be complied within one month of the receipt thereof. The complaint stands disposed of accordingly.
Copy of order be sent to the parties, free of cost, and thereafter file be consigned to record room.
(D.R. TAMTA) (A.S. YADAV)
MEMBER PRESIDENT
