SRI MARUTHI VADDAR

               MEMBER

This Complainant has been brought under Section 35 of the CP Act 2019 by the complainant Kishore N Jain R/at Vidyaranyapuram, Mysuru Against the Opposite parties M/s Aviva Life Insurance Co. Ltd Gurgeon, Haryana,Opposite party 2 M/s Kanyakaparameshwari Co-Operative Bank Limited, K.R.Circle, Mysuru alleging deficiency of Service praying this commission to pass order directing the opposite parties 1&2 to pay the surrender value of the policy of Rs. 53,425/- with achieved bonus, dividend etc payable to the complainant as per the terms of the policy and to award damages of Rs. 50,000/- and such other relief as this commission deems fit to grant in the circumstances of the case to meet the ends of Justice and equity.

1. Brief facts of the complaint in a nutshell is as here under:-

It is stated in the complaint that, the complainant is the policy holder of 1^st opposite party through 2^nd opposite party vide policy No. TOW 3133243 namely “ AVIVA DHAN VRIDHI” commencing  from 19/01/2012 by paying premium of Rs. 5,9,36.00 there after the complainant wanted to surrender/terminate the said policy as he doubted its performance and poor service as their office located at Mysuru city was closed abruptly & their agents including the 2^nd opposite party disappeared committing betrayal of trust.  As on date the complainant paid premium of Rs. 53,425/- to 1^st opposite party.  The 2^nd opposite party is the business promotes of 1^st opposite party informed the complainant to pay the premium through collection centre situated at New Kanthraj Urs road Mysuru, without having separate counter/premises for insurance business violating the IRDA regulations and bye-laws without taking valid permission from the Register of Co-Operative societies and both the opposite parties are duping the customers/policy holders in their cheating activities.

2. It is further stated that, the closure of the Mysuru Branch has resulted in deficiency in service as the complainant is deprived of the service rendered earlier to him and the complainant is doubting its survival and one fine day the company may vanish ransacking the public amount for the monetary gain of director and others as their line of business is not monitored by the concerned supervising authority.  After issuing legal notice this complaint was filed.
3. After registration of the complaint notices were ordered to be issued to both opposite parties and both opposite parties have filed their written version.  In this version opposite party 1 contended that the complainant is not entitled for any relief as prayed in the present complaint as the opposite party 1 has acted as per the terms of the policy that in accordance to clause 6(2) & 4(1) of the IRDA (Protection of Policy Holders Interest) Regulations 2002, every policy document sent by this opposite party is accompanied with a copy of the proposal form signed by the applicant and the forwarding seller which clearly mentions that in case policy holder is not satisfied with the features or the terms and conditions of the policy he can withdraw/return the policies within 15 days i.e., under free took cancellation period.  The complainant has not approached the opposite party for cancellation of the policy during the free look period thereby implying that he had agreed to all the terms and conditions of the policy.  This opposite party has sent the policy documents at the registered address of the complainant through Blue Dart courier via Way bill No. 43849930924 dated 20.01.2012 and the same was delivered to the complainant.
4. Opposite party 1 contended that the policy of insurance is a contract between the insured and the insurer and both parties are strictly bound to the terms and conditions of the policy.  The complainant opted for a policy term of 20 years and the premium paying term is 15 years to be payable annually.  The complainant paid the premiums till 19.01.2021 and the next premium was due on 19.01.2021 within the grace period of 30 days and hence the policy entered in paid up mode on 18.02.2021 i.e., sum assured and benefits under the policy gets proportionately reduced in the ratio of number of premiums paid to the total number of premiums copy of paid opposite party notification letter dated 18.02.2021 was sent to the complainant on 20.02.2021 via ordinary post.  However, on receipt of the surrender request the surrender value as per the terms and conditions will be paid to the complaint.  If the complainant fails to revive the policy, he will be entitled for paid up sum assured on maturity of the policy.  The complainant has already received 1^st instalment of survival benefits of Rs. 10,200/- in the year 2017 i.e., 20% of the sum assured.  In case customer opts to surrender his policy, he would be entitled to receive Rs. 21,667/- as surrender value and the policy will be terminated. The above surrender value has been calculated as per Article 5 of the policy contract which is reproduced below;
5. Surrender Value:

1. At the Commencement of fourth(4^th) Policy year, the Policy will acquire a surrender value if you have paid all premium due for the first three (3) Policy years
2. The surrender value will be the higher of the ‘Guaranteed surrender value’ and the ‘special surrender value’ where:

1. The Guaranteed Surrender Value is 30% of the total premium paid excluding:

1. The Premium paid in respect of the first policy year, and
2. Any premium payment made for any extra mortality rating, and
3. Any premium payment made for a Rider, if any the amount calculated above shall be further reduced by the amount of any survival benefit paid.

2. The special surrender value is calculated as follow;

6. Opposite party 1 further contended that it is trite law that the premium is given by an insured to cover risk for a given period and the insurer covers the risk for the period for which the premium has been paid.  It is not the case of the complainant that the risk was not covered for the period for which the premium was given.  In view of same the risk stood covered for the period for which premium had been paid hence there is no question of refunding the premium paid under the policy or paying any compensation or cost to the complainant and hence the complainant is liable to be dismissed.
7. Opposite party 2 also filed the written version contending that the complaint of the complainant is a classic example for the abuse of process of law and stands no merits and same is required to be rejected in limine.  Opposite party contended that every bank has tie up with the insurance company.  The opposite party 2 for the welfare of the customers have advised its customer to avail insurance and the opposite party 2 has never been intimated to surrender of the policy by the complainant.  The 2^nd opposite party has never asked to buy the insurance product to the complainant and has ever violated the norms of IRDA regulations.  Further opposite party 2 states that it has not duped its customers and the tie-up with the opposite party1 has been done by quorum in the meeting dated 30.06.2011 after taking all the necessary approvals and in compliance of all the formalities.
8. Opposite party 2 further states that no harm has been done to the complainant by the hands of opposite party 2 and opposite party 2 has no nexus as to monetary business of 1^st opposite party and further the agreement with the 1^st opposite party has not been extended since from the year 2014 and hence the opposite party 2 cannot be made liable after lapse of 9 years.  Hence prays to dismiss the complaint.
9. The complainant filed affidavit evidence, same is taken as put and got marked the documents as Ex.P1 to P4.  Per contra opposite parties 1 & 2 have filed their affidavit evidence same were taken Rw1 & Rw2 and got marked as Ex.R1 to R4
10. The complainant and the Opposite parties 1 & 2 have filed their written arguments.
11. Now the points that arise for the consideration of this commission are;

1. Whether the complainant proves the alleged deficiency of Service on the part of the opposite parties and thereby he is entitled to the reliefs as sought?
2. What order?

12. Our findings on the aforesaid points are as follows:

   Point No.1:- Party in the affirmative

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

:: R E A S O N S ::

13. Point No.1:-   To substantiate his case, the complainant filed affidavit evidence and reiterated the averments of the complaint in the said affidavit.  Ex.P1 is the copy of the insurance policy issued by 1^st opposite party dated 20 January 2012 and the Policy No. TWD3133243 and the said document also depicts the referral name & address of opposite party 2.  Ex.P2 copy of the legal notice dated 25/12/2020 issued by the complainant to the opposite parties 1 & 2, Ex.P3 are the postal receipts for having sent the legal notices to both the opposite parties, Ex.P4 are the two postal acknowledgements for having been served the legal notice on opposite parties 1 & 2 on the other hand opposite parties 1 & 2 filed affidavit evidence and reiterated the averments of the version in the affidavit Ex.R1 is the notice issued by opposite party 1 to the complainant for the renewal premium of the policy.  Ex.R2 copy of the proposal form dated 10/01/2012 Ex.R3 copy of the policy document dated 24/02/2021 issued to the complainant to reconsider the decision, Ex.P4 copy of the premium quotation issued by opposite party.
14. As per the complainant, he is the policy holder of 1^st opposite party through 2^nd opposite party vide policy No. TDW3133243 namely “AVIVA DHAN VRIDHI” commencing from 19/01/2012 by paying premium of Rs. 5,936/-.  The said statement of the complainant is corroborated with Ex.P1.  The complainant further stated that he wanted to surrender/terminate the said policy as he doubted its poor performance and service as their office closed at Mysuru and their agents including the 2^nd opposite party disappeared and as on date, the complainant paid premium of R. 53,425/- to 1^st opposite party.  The 2^nd opposite party is the business promoter of 1^st opposite party who informed the complainant to pay premium through collection centre without having separate counter/premises for insurance business violating the IRDA regulations & bye-laws without taking valid permission from the registers of co-operative societies and both are duping the customers/policyholders in their cheating activities and hence the complainant is doubted its survival.  Hence the complainant issued the legal notice as per Ex.P2 to P4.
15.  It is the contention of the opposite party No.1 that the complainant has opted for a policy term of 20 years and the premium paying term is 15 years to be payable annually.  The complainant paid the premium till 19/01/2021 and was due on 19/01/2021 within the grace period of 30 days and hence the policy entered in paid up mode on 15/02/2021 i.e., sum assured and benefits under the policy gets proportionately reduced in the ratio of number of premiums paid to the total number of premiums.  Copy of paid up notification letter dated 18/02/2021 was but to the complainant on 20/02/2021 via ordinary post.  On receipt of the surrender request the surrender value as per the terms and conditions will be paid to the complainant.  If the complainant fails to revive the policy, he will be entitled for the paid up sum assured on maturity of the policy.  The complainant has already received 1^st instalment of survival benefit of Rs. 10,200/- in the year 2017 i.e., 20% of the sum assured.  In case customer opts to surrender his policy he would be entitled to receive Rs. 21.667/- as surrender value and the policy will be terminated.
16. It is the contention of the opposite party 2 that every bank has tie up with the insurance company.  For the welfare of the customers opposite party 2 have advised its customers to avail insurance.  Opposite party No.2 never asked to buy the insurance product to the complainant.  The tie up with the opposite party 1 has been done by quorum the meeting dated 30.06.2011 after taking all the necessary approvals and in compliance with all the formalities opposite party No.2 has no nexus as to the monetary business of 1^st opposite party and further the agreement with the 1^st opposite party has not been extended since from the year 2014 and hence the opposite party 2 cannot be made liable after lapse of 9 years.
17. After perusing carefully the pleadings and documents submitted by the parties, it is observed that there is no dispute with regard to the issuance and taking of the life insurance policy between the parties.  But the only dispute with regard to the surrender benefits of the said policy.  As per complainant he attached the insurance policy from 1^st opposite party through 2^nd opposite party commencing from 19/01/2012 and paid premium of Rs. 5,936/- till 19/01/2021 for a period of 9 years.  The complainant paying the premium continuously for 9 years and he wanted surrender/terminated of the policy as the Branch office of the 1^st opposite party was closed.  On receipt of the surrender request by the opposite party 1, opposite party 1 assured that the surrender value as per the terms and conditions will be paid to the complainant and in case customer opts to surrender his policy he would be entitled to receive Rs. 21,667/- as surrender value and the policy will be terminated.  Though the complainant paid the premium for 9 years continuously when he opts for surrender/termination of the policy, it is the bounden duty of the insurer to honour the claim.  But the complainant wanted surrender/termination of the basic policy during the middle of the running of the policy.  Hence he is not entitled for bonus, dividend etc.  If he pays the premium as agreed for 15 years he would have get the total benefits.  The contention taken by the opposite party 1 that it is trite law that the premium is given by an insured to course risk for a given period, and the insurer covers the risk for the period for which the premium has been paid.  It is not the case of the complainant that the risk was not covered for the period for which the premium was given.  In view of same the risk stood covered for the period for which premium was paid hence there is no question of refunding the premium paid under the policy or paying any compensation or lost to the complainant is not acceptable.
18. It is the opposite party 2 through when the complainant has purchased the life insurance policy of opposite party 1.  For this the policy document Ex.P1 speaks about the referral name and address of opposite party 2.  The contention of the opposite party 2 that it never asked the complainant to buy the insurance product is not acceptable.  In its version opposite party 2 clearly admits that “For the welfare of the customers opposite party 2 has advised its customers to avail insurance”.  Opposite party 2 further admits that the tie up with opposite party 1 has been done by quorum the meeting dated 30.06.2011 after taking all the necessary approvals and in compliance with all formalities.  Such being the case, the contention taken by the opposite party 2 that it has no nexus as to the monetary business of 1^st opposite party and further the agreement with the 1^st opposite party has not been extended since from the year 2014 will not exonerate the opposite party 2 from its liability with opposite party 1.  For its contention no document has been produced.  Hence both the opposite parties 1 & 2 will be liable to compensate the complainant.  It would meet the ends of justice if the opposite party 1 & 2 are directed to pay the surrender value of not paid to the complainant with necessary compensation.  Hence are answered the point as partly in the affirmative.
19. Point No.2:- From the afore said reasons, we proceed to pass the following

:: ORDER ::

The complaint of the complainant is allowed in part.

The opposite party 1 & 2 are hereby joint by and severally liable to pay the surrender value to the complainant as per the terms and conditions of the policy it is not paid within two months from the date of passing of this order.Failing which the opposite party 1 & 2 are liable to prey interest at 6% per annum from the date of the order till payment.

Opposite parties 1 & 2 are also liable to pay Rs. 5,000/- towards compensation for deficiency of service and Rs. 5,000/- for the costs of the present proceeding within two months from the date of this order.Failing which said amount of 5,000+5,000=10,000/- shall carry interest at 6% per annum from the date of the order till its payment.

The complainant is at liberty to take action U/S 72 of Consumer Protection Act 2019 for non-compliance of this order from opposite party.

Furnish free copy of the order to both the parties.

         (Dictated to the Stenographer transcribed, typed by her, corrected by us and then pronounced in open Commission on this the           19^th March, 2023)