Chandigarh

DF-II

EA/8/2015

Nasreen Begum - Complainant(s)

Versus

M/s Bajaj Allianz Life Insurance Co. Ltd. - Opp.Party(s)

Arun Sharma Adv.

26 Feb 2016

ORDER

 

 

District Consumer Disputes Redressal Forum-II, U.T., Chandigarh

EA/08/2015 IN CONSUMER COMPLAINT NO.556 OF  2013

Nasreen Begum   VS.   M/s Bajaj Allianz Life Insurance Company

BEFORE:

HON’BLE MR. RAJAN DEWAN         PRESIDENT                    MR. JASWINDER SINGH SIDHU       MEMBER                    MRS. PRITI MALHOTRA                   MEMBER

ARGUED BY:        Sh.Arun Sharma, Counsel for the complainant.                              Sh.Varun Chawla, Counsel for the OP.

Dated : 26th February, 2016

O R D E R

PER JASWINDER SINGH SIDHU, MEMBER

                  The complaint (No.556 of 2013) filed by the complainant, was allowed by this Forum, vide its order dated 29.8.2014 directing the Opposite Party in Para No.8, 9 & 10 of the above mentioned order, as under:-

“8.     We thus allow the present complaint and direct the Opposite Party to make payment of the surrender value to the Complainant as per the terms & conditions of the policy in the light of the extract given above. Opposite Party will also pay Rs.20,000/- as compensation for deficiency in service.

9.    The surrender value along with compensation amount be paid to the Complainant within 45 days from the date of receipt of certified copy of this order, failing which the Opposite Party will be liable to pay interest @9% p.a. on this decreed amount from the date of this order till actual payment.

10.   The opposite party will also pay Rs.5,000/- as costs of litigation to the complainant.”  

 

2]             The complainant has been paid an amount of Rs.67,874/- vide cheque No.80414, dated 26.2.2015, which included an interest calculated on the aforementioned above as well as the compensation component, as the compliance of the orders was beyond the stipulated period, admitted by the Opposite Party.  The said cheque was received by the counsel for the Opposite Party on 31.3.2015 in the Forum itself. 

 

3]             The complainant has preferred the present execution as the Opposite Party did not comply with the orders of this Forum within the stipulated period and as admitted by the Opposite Party.  The counsel for the complainant while receiving this amount, as part payment, also preferred to cross-check if the amount paid was as per the order 29.8.2014 of this Forum. 

 

4]             The counsel for the complainant continuously pressed for placing on record the detailed calculation from the side of the Opposite Party explaining as to how the figure of Rs.67,874/- was reached.  The counsel for the Opposite Party placed on record two applications dated 22.4.2015 & 22.5.2015, submitting the calculation of the amount of Rs.67,874/-, disclosure of Fund Value as Rs.1,40,373/- and with a prayer of disposing of the execution application as fully satisfied. This application of the Opposite Party is not supported by any affidavit of the official of the Opposite Party.          

 

5]             The counsel for the complainant has placed on record IRDA Regulation dated 16^th Feb., 2013 claiming that on the date of passing of the order, the said statutes had come into force and his policy stood modified to that extent and as the orders of this Forum dated 29.8.2014 came much later than this, therefore, the terms & conditions of the policy as mentioned in the order of this Forum already stood modified and only deductions as per such regulations could be effected from the fund value that had accrued on the date of order i.e. 29.8.2014.  The relevant clauses are reproduced as under:-

       

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as                                     follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

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

 

Where the policy is discontinued during the policy year.	Maximum Discontinuance charges for the policies having annualized premium up to Rs.25000/-	Maximum discontinuance charges for the policies having annualized premium above Rs.25000/-
1	Lower of 20% (AP or FV) subject to a maximum of Rs.3000.	Lower of 6% (AP or FV) subject to maximum of Rs.6000/-
2	Lower of 15% (AP or FV) subject to a maximum of Rs.2000.	Lower of 4% of (AP or FV) subject to maximum of Rs.5000/-
3	Lower of 10% (AP or FV) subject to a maximum of Rs.1500.	Lower of 3% (AP or FV) subject to maximum of Rs.4000/-
4	Lower of 5% (AP or FV) subject to a maximum of Rs.1000.	Lower of 2% (AP or FV) subject to maximum of Rs.2000.
5 and onwards	NIL	NIL

 

 AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

            8.         xxxxxxxxxxxxxx

9.             Every insurer shall send a statement of account, on a half yearly basis, within fifteen days, in respect of every policy in force including discontinued policies where the proceeds are yet to be paid to the policyholder or her nominee as the case may be, his last known address, which shall contain the following details :-

(i) The total premium paid by the policyholder

(ii) Next due date of the premium

(iii) Pattern of the investment chosen

(iv) Pattern of investment

(v) Status of the policy

(vi) Total fund value

(vii) Total units

(viii) Detail of charges recovered.

 

6]             As per the counsel for the complainant, the contents of Regulation-9 clearly indicate that these regulations are attracted even to the policies, which are in existence on 1st July, 2010 and also to the policies, which are in the discontinued mode and the proceeds of such policies had not been paid to the insured. Pleading that the case of the complainant is squarely covered under Regulation 9 of the IRDA Regulations, 2010, quoted above.

 

7]             It was further argued that for the reasons best known to the insurance companies, they are not adhering to these guidelines, but after the passage of IRDA Regulations, 2013, that came into effect on 16th Feb., 2013. It is very unfortunate that the Opposite Parties do not have any respect for IRDA Instructions/Regulations/Guidelines, which are binding on them, therefore, in view of the IRDA Regulations, 2010 and 2013, governing the ULIP Policies, the orders of this Forum dated 29.8.2014 were to be complied with by the Opposite Parties in the light of these regulations, which had modified the terms & conditions of the policy issued to the complainant, on the date of passing of the order.

 

8]             The counsel for the Opposite Party while repeatedly visiting Para 8 of the judgment dated 29.8.2014 of this Forum, reproduced below:-

“8.  We thus allow the present complaint and direct the Opposite Party to make payment of the surrender value to the Complainant as per the terms & conditions of the policy in the light of the extract given above. Opposite Party will also pay Rs.20,000/- as compensation for deficiency in service.

 

has argued vehemently that in the light of terms & conditions of the policy, issued to the complainant, the clause for deduction existed and for such reason, an amount of Rs.1.00 lakh was deducted as foreclosure penalty, which according to them was allowed in terms of the order of this Forum. 

 

9]             In the light of submissions of both the parties interpreting the order of this Forum dated 29.8.2014 and claiming their version to be right and just, it has become necessary to mention that the order of this Forum did not  quote any relevant deduction clause from the terms & conditions of the policy with the direction to the Opposite Party to make such deduction, rather, the order plainly directs the Opposite Party to make payments of the surrender value, as per terms & conditions of the policy.  Though the Opposite Party has very smartly preferred to stick to the contents of the policy document, which was prepared in the year 2007, but has not placed on record any document nor any statement on oath by the official of the Opposite Party that the statute or the notifications issued thereafter by IRDA could be ignored or not made applicable to the case of the complainant while calculating the surrender value of the policy in question.  In the absence of any such document or sworn affidavit, by Sh.Rajinder Singh Kalsi, Zonal Legal Manager, (North), who has appended his stamp & signature on the document placed on record along with two applications dated 22.4.2015 & 22.5.2015, we are of the view that no deductions could be made beyond the limit as prescribed in the IRDA Regulation, dated July, 2010 and February, 2013, for the reason that all orders are to be read in the light of an existing statute and notifications, which have bearing on the existing terms & conditions.  Therefore, the act of the Opposite Party in deducting Rs.1.00 lacs from the fund value of the complainant, is wrong and does not sustain.  As the counsel for Opposite Party, during the course of arguments, has claimed that no amount is due to be paid and as per their calculation, nothing more is payable to the complainant, compels us to believe that the Opposite Party have turned a blind eye to the existing statute/IRDA Regulations only to deny the complainant his rightful due as ordered by this Forum vide order dated 29.8.2014, which amounts to stealth & willful default on their part.

 

10]           The above act of the OP can be rightly termed as the willful disobedience of the orders of this Forum and we declare the Opposite Party guilty of non-compliance of the order dated 29.8.2014 of this Forum. Therefore, the Opposite Party deserves to be adequately punished for non-compliance of the order as per provisions of Section 27 of C.P.Act.  We, therefore, convict the accused Rajinder Singh Kalsi, Zonal Legal Manager (North) Bajaj Allianz life Insurance Company Limited/Opposite Party, under whose signatures the calculations sheet has been filed by the Opposite Party, and the gravity of non-compliance of the order of this Forum, certainly requires that he deserves to be adequately punished. 

 

11]           We leave it to the Complainant to exercise his option to recover the amount due towards Opposite Party as awarded through order dated 29.8.2014 by taking recourse of the remedies available to him, as per law.  

 

12]           In view of the foregoing conclusions, we hold the Opposite Party guilty of the non-compliance of the orders of this Forum and punish the accused Rajinder Singh Kalsi, Zonal Legal Manager (North) Bajaj Allianz life Insurance Company Limited/OP, under whose signatures the calculations sheet has been filed by the OPs  with a fine of Rs.10,000/- and Imprisonment for a period of 1 years.

 

13]           Failure on the part of the guilty/OP in depositing the penal amount of Rs.10,000/- by him, within 30 days from the date of receipt of certified copy of this order, would attract another six months of imprisonment, which would begin to run after completion of One year imprisonment, as awarded and not concurrent to it.

 

14]           The fine of Rs.10,000/- should be deposited in the “Consumer Legal Aid Account” No.32892854721, maintained in the name of Secretary, Hon’ble State Commission UT Chandigarh with State Bank of India, Sector 7 Branch, Chandigarh, by intimating the office of this Forum with valid proof of its payment within the stipulated period. The execution application stands disposed of in above terms. 

                Certified copy of this order be communicated to the parties free of cost. After compliance file be consigned.

ANNOUNCED

26^th February, 2016            

                                                                                Sd/-

(RAJAN DEWAN)

PRESIDENT

 

 

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER

 

Om